Quanex Building Products Corp (NX) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Q2 2023 Quanex Building Products Corporation Earnings Conference Call.

美好的一天，感謝您的支持。歡迎參加 Quanex Building Products Corporation 2023 年第二季度收益電話會議。

(Operator Instructions)

（操作員說明）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Zuehlke, Senior Vice President, CFO and Treasurer. Please go ahead.

請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人，高級副總裁、首席財務官兼財務主管 Scott Zuehlke。請繼續。

Thanks for joining the call this morning. On the call with me today is George Wilson, our President and CEO. This conference call will contain forward-looking statements and some discussion of non-GAAP measures.

感謝您參加今天早上的通話。今天與我通話的是我們的總裁兼首席執行官喬治·威爾遜 (George Wilson)。本次電話會議將包含前瞻性陳述以及對非公認會計準則措施的一些討論。

Forward-looking statements and guidance discussed on this call and in our earnings release are based on current expectations. Actual results or events may differ materially from such statements and guidance, and Quanex undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

本次電話會議和我們的收益發布中討論的前瞻性陳述和指導基於當前的預期。實際結果或事件可能與此類聲明和指導存在重大差異，Quanex 不承擔更新或修改任何前瞻性聲明以反映新信息或事件的義務。

For a more detailed description of our forward-looking statement disclaimer and a reconciliation of non-GAAP measures to the most directly comparable GAAP measures, please see our earnings release issued yesterday and posted to our website. I'll now turn the call over to George for his prepared remarks.

有關我們的前瞻性聲明免責聲明以及非公認會計準則衡量標準與最直接可比的公認會計準則衡量標準的調節的更詳細說明，請參閱我們昨天發布並發佈在我們網站上的收益報告。現在我將把電話轉給喬治，聽他準備好講話。

Thanks, Scott, and good morning to everyone joining the call. All things considered, and with a tough comp to Q2 of last year, we are pleased with our results for the second quarter of this year.

謝謝斯科特，祝所有加入電話會議的人早上好。考慮到所有因素，並且與去年第二季度相比，我們對今年第二季度的業績感到滿意。

As mentioned on our last earnings call, we believe we were starting to see a return to normal seasonality in our business during Q1 of this year. and our results for the second quarter further reinforce that belief.

正如我們在上次財報電話會議上提到的，我們相信今年第一季度我們的業務開始恢復正常的季節性。我們第二季度的業績進一步強化了這一信念。

Solid operational performance during the second quarter was somewhat masked by index-related pricing pressure and continued customer inventory rebalancing in our fenestration segments.

第二季度穩健的運營業績在一定程度上被指數相關的定價壓力和門窗領域持續的客戶庫存重新平衡所掩蓋。

Although volumes were down across all segments versus the prior year record levels, we did realize EBITDA margin expansion versus prior year on a consolidated basis. Our strong operational performance also resulted in improved free cash flow, which enabled us to repurchase $5.6 million of our common stock and repay $20 million of debt in the quarter. I will now provide some general comments on each of our reporting segments.

儘管與上年創紀錄水平相比，所有細分市場的銷量均有所下降，但我們確實實現了 EBITDA 利潤率與上年相比在合併基礎上的擴張。我們強勁的運營業績還改善了自由現金流，使我們能夠在本季度回購 560 萬美元的普通股並償還 2000 萬美元的債務。我現在將對我們的每個報告部分提供一些一般性評論。

In our North American Fenestration segment, revenues and earnings were down versus prior year due to lower volumes, driven by softer market conditions weather-related softness in West Coast markets, customer inventory rebalancing for our spacer products and pricing pressures on lower raw material costs related to index pricing mechanisms.

在我們的北美門窗部門，由於銷量下降，市場狀況疲軟，西海岸市場天氣相關的疲軟，我們的間隔產品的客戶庫存重新平衡以及與原材料成本降低相關的定價壓力，導致收入和收益較上年下降。指數定價機制。

Operational performance remained strong in this segment, and we did a good job of controlling costs despite the lower volumes. In looking at the LMI acquisition we completed in November, I am pleased to announce that we have realized our announced synergy goal.

該領域的運營業績仍然強勁，儘管銷量較低，但我們在控製成本方面做得很好。回顧我們 11 月份完成的 LMI 收購，我很高興地宣布，我們已經實現了宣布的協同目標。

This business continues to perform very well, and we are evaluating growth opportunities. Moving on to our North American Cabinet Components segment. The decrease in revenues year-over-year was primarily a result of lower market demand and the rollback of hardwood related index pricing. We were able to realize solid margin expansion in this segment despite volume and index pricing pressures.

該業務繼續表現良好，我們正在評估增長機會。繼續我們的北美櫥櫃組件部分。收入同比下降主要是由於市場需求下降和硬木相關指數定價回落。儘管存在數量和指數定價壓力，我們仍能夠在該領域實現穩健的利潤增長。

Continued focus on cost controls, combined with capitalizing on the timing of lower cost hardwood purchases helped minimize volume impacts. In our European Fenestration segment, results were impacted by market softness, customer inventory rebalancing in our spacer business and foreign exchange impact, which more than offset the share gains in our U.K. vinyl extrusion product line.

持續關注成本控制，再加上利用低成本硬木採購時機，有助於最大限度地減少數量影響。在我們的歐洲門窗部門，業績受到市場疲軟、我們的間隔件業務中的客戶庫存重新平衡以及外匯影響的影響，這遠遠抵消了我們在英國乙烯基擠出產品線的份額增長。

Continued improvements in operational metrics, combined with sourcing initiatives and pricing carryover, all contributed to realizing margin expansion in this segment. Having said that, challenges related to higher energy costs, higher transportation costs and general inflation are ongoing in this market, and we continue to work with our customers regarding go-forward pricing expectations.

運營指標的持續改進，加上採購計劃和定價結轉，都有助於實現該細分市場的利潤增長。話雖如此，該市場仍面臨與能源成本上升、運輸成本上升和普遍通脹相關的挑戰，我們將繼續與客戶就未來的定價預期進行合作。

In summary, we continue to execute on our strategic and operational initiatives, and we are controlling what we can control. Near-term inflationary headwinds and index-related pricing pressures present challenges for revenue but the Quanex team continues to perform, and we remain confident in our ability to meet the net sales and adjusted EBITDA guidance ranges for this year.

總之，我們繼續執行我們的戰略和運營計劃，並且我們正在控制我們可以控制的事情。近期的通脹逆風和指數相關的定價壓力給收入帶來了挑戰，但 Quanex 團隊繼續表現出色，我們對今年實現淨銷售額和調整後 EBITDA 指導範圍的能力仍然充滿信心。

Optimizing return on invested capital and working capital remain top priorities for improved cash flow generation, which will support our growth initiatives and align well with our road to $2 billion strategy.

優化投資資本和營運資本回報率仍然是改善現金流生成的首要任務，這將支持我們的增長計劃，並與我們邁向 20 億美元的戰略相一致。

Although macro headwinds still exist for the entire Building Products segment, we feel we are very well positioned to execute on our strategy and create value for our shareholders. I will now turn the call over to Scott, who will discuss our financial results in more detail.

儘管整個建築產品領域仍然存在宏觀阻力，但我們認為我們處於非常有利的位置來執行我們的戰略並為股東創造價值。我現在將把電話轉給斯科特，他將更詳細地討論我們的財務業績。

Thanks, George. Before I get started, I want to reiterate that we reported record results in the second quarter of last year. So we did have a tough comp. However, business did improve in the second quarter of this year versus the first quarter of this year.

謝謝，喬治。在開始之前，我想重申，我們在去年第二季度報告了創紀錄的業績。所以我們確實有一個艱難的比賽。然而，今年第二季度的業務確實比今年第一季度有所改善。

On a consolidated basis, we generated net sales of $273.5 million during the second quarter of 2023, which represents a decrease of 15.3% compared to $322.9 million during the second quarter of 2022.

綜合來看，2023 年第二季度我們的淨銷售額為 2.735 億美元，與 2022 年第二季度的 3.229 億美元相比下降了 15.3%。

The decrease was largely due to softer demand caused in part by customer inventory rebalancing, lower pricing in North America and foreign exchange translation impact. Overall, our 2Q results further enforce our belief that we are seeing a return to normal seasonality in our business.

下降的主要原因是客戶庫存重新平衡、北美定價較低以及外匯換算影響導致需求疲軟。總體而言，我們第二季度的業績進一步強化了我們的信念，即我們的業務正在恢復正常的季節性。

Net income decreased to $21.5 million or $0.65 per diluted share for the 3 months ended April 30, 2023, compared to $26.5 million or $0.80 per diluted share for the 3 months ended April 30, 2022. After adjusting for onetime losses on damage to a couple of our manufacturing facilities due to inclement weather, coupled with onetime transaction and advisory fees, net income decreased to $21.7 million or $0.66 per diluted share for the quarter compared to $26.5 million or $0.80 per diluted share for the same period of last year.

截至2023年4月30日的三個月，淨利潤下降至2150萬美元，或稀釋後每股0.65美元，而截至2022年4月30日的三個月，淨利潤為2650萬美元，或稀釋後每股0.80美元。在對一對夫婦造成的一次性損失進行調整後由於惡劣天氣，加上一次性交易和諮詢費用，本季度淨利潤下降至 2170 萬美元，即稀釋後每股 0.66 美元，而去年同期為 2650 萬美元，即稀釋後每股 0.80 美元。

On an adjusted basis, EBITDA for the quarter decreased to $39.9 million compared to $45.2 million during the same period of last year. The decrease in earnings for the second quarter of 2023 was mostly attributable to lower volumes, decreased pricing, mainly due to surcharge rollbacks and raw material index pricing mechanisms in North America, foreign currency translation and higher interest expense.

經調整後，本季度 EBITDA 降至 3990 萬美元，而去年同期為 4520 萬美元。 2023年第二季度收益下降的主要原因是銷量下降、定價下降（主要是由於附加費回滾和北美原材料指數定價機制）、外幣換算和利息支出增加。

Now for results by operating segment. We generated net sales of $157 million in our North American Fenestration segment for the second quarter of 2023, a decline of 11.8% compared to $177.9 million in the second quarter of 2022, driven by a decrease in volumes due to softer market demand, customer inventory rebalancing in our spacer business and lower pricing.

現在按運營部門劃分的結果。 2023 年第二季度，我們的北美門窗業務淨銷售額為 1.57 億美元，與 2022 年第二季度的 1.779 億美元相比下降 11.8%，原因是市場需求疲軟、客戶庫存導致銷量下降。我們的墊片業務重新平衡並降低定價。

We estimate that volumes in this segment declined by approximately 9% year-over-year, with the remainder of the revenue decline versus Q2 of 2022 due to a decrease in price. Excluding the contribution from LMI, revenue would have been down 21.8% year-over-year in this segment.

我們估計該細分市場的銷量同比下降約 9%，其餘收入較 2022 年第二季度下降是由於價格下降。如果剔除 LMI 的貢獻，該細分市場的收入將同比下降 21.8%。

Adjusted EBITDA was $20.4 million in this segment or about 22% lower than prior year. We generated net sales of $53.5 million in our North American Cabinet Components segment during the quarter, which was 26.6% lower than prior year.

該部門調整後的 EBITDA 為 2,040 萬美元，比上年減少約 22%。本季度，我們的北美櫥櫃組件業務淨銷售額為 5,350 萬美元，比去年同期下降 26.6%。

This decrease was driven by lower volumes and lower index pricing for hardwood. We estimate the volumes declined by approximately 25% in this segment year-over-year and the remainder of the revenue decline versus Q2 of 2022 was due to a decrease in price.

這一下降是由於硬木銷量下降和指數定價下降所致。我們估計該細分市場的銷量同比下降約 25%，與 2022 年第二季度相比，收入下降的其餘部分是由於價格下降。

Adjusted EBITDA was $4 million for the quarter compared to $4.5 million in the second quarter of 2022. We did a good job of controlling costs in Q2 of this year, and we realized adjusted EBITDA margin expansion of 130 basis points in this segment compared to the second quarter of 2022.

本季度調整後 EBITDA 為 400 萬美元，而 2022 年第二季度為 450 萬美元。今年第二季度我們在控製成本方面做得很好，我們實現了該細分市場調整後 EBITDA 利潤率比去年同期增長了 130 個基點2022 年第二季度。

Our European Fenestration segment generated revenue of $63.8 million in the second quarter, which represents a decrease of 13.2% year-over-year, driven by lower volumes due in part to customer inventory rebalancing in our spacer business, and foreign exchange translation.

我們的歐洲門窗部門第二季度收入為 6380 萬美元，同比下降 13.2%，部分原因是我們的間隔件業務中的客戶庫存重新平衡和外匯換算導致銷量下降。

We estimate that volumes declined by approximately 10% year-over-year in this segment, with pricing up by approximately 4% and negative foreign exchange translation impact of about 7%.

我們估計該細分市場的銷量同比下降約 10%，定價上漲約 4%，外匯折算負面影響約 7%。

Adjusted EBITDA came in at $14.9 million for the quarter compared to $15.1 million in the second quarter of 2022. From an operational standpoint, this segment continues to perform well, and we realized adjusted EBITDA margin expansion of 270 basis points year-over-year. Moving on to cash flow and the balance sheet.

本季度調整後 EBITDA 為 1490 萬美元，而 2022 年第二季度為 1510 萬美元。從運營角度來看，該部門繼續表現良好，我們實現調整後 EBITDA 利潤率同比增長 270 個基點。轉向現金流和資產負債表。

Cash provided by operating activities improved to $35.3 million for the second quarter of 2023, which represents an increase of 78% compared to $19.8 million for the second quarter of 2022. We did a very good job managing working capital, and the value of our inventory decreased during the quarter due to easing raw material inflationary pressures, which had a positive impact on working capital.

2023 年第二季度經營活動提供的現金增至 3530 萬美元，與 2022 年第二季度的 1980 萬美元相比增長了 78%。我們在管理營運資本和庫存價值方面做得非常好由於原材料通脹壓力緩解，本季度有所下降，這對營運資金產生了積極影響。

Free cash flow was $27.8 million for the quarter, which was more than double $13.4 million we generated in the second quarter of last year. Our balance sheet continues to be strong, our liquidity keeps improving, and our leverage ratio of net debt to last 12 months adjusted EBITDA was 0.6x as of April 30, 2023.

本季度自由現金流為 2,780 萬美元，是去年第二季度產生的 1,340 萬美元的兩倍多。我們的資產負債表持續強勁，流動性不斷改善，截至 2023 年 4 月 30 日，我們的淨債務與過去 12 個月調整後 EBITDA 的槓桿率為 0.6 倍。

Excluding real estate leases that are considered finance leases under U.S. GAAP, our leverage ratio net debt to last 12 months adjusted EBITDA was 0.3x. As George mentioned, we were able to repay $20 million of debt and we repurchased $5.6 million of our common stock in the second quarter because of our free cash flow position.

不包括根據美國公認會計準則被視為融資租賃的房地產租賃，我們的槓桿率淨債務與過去 12 個月調整後 EBITDA 的比率為 0.3 倍。正如喬治提到的，由於我們的自由現金流狀況，我們能夠償還 2000 萬美元的債務，並在第二季度回購了 560 萬美元的普通股。

We will remain focused on generating cash, paying down debt and opportunistically repurchasing our stock. We will also maintain our focus on growing the company through organic, inorganic and innovative growth opportunities as they arise, while continuing to preserve our healthy balance sheet.

我們將繼續專注於產生現金、償還債務和機會性地回購我們的股票。我們還將繼續關注通過出現的有機、無機和創新增長機會來發展公司，同時繼續保持健康的資產負債表。

The goal is always to create shareholder value. As stated in our earnings release, we continue to be cautiously optimistic for the second half of our fiscal year and we believe the long-term underlying fundamentals for the residential housing market remain positive.

目標始終是創造股東價值。正如我們在財報中所述，我們對本財年下半年繼續持謹慎樂觀態度，我們相信住宅市場的長期基本面仍然樂觀。

Based on year-to-date results, conversations with our customers and recent demand trends, we are reaffirming our guidance for fiscal 2023, which is as follows: Net sales of $1.12 billion to $1.16 billion, although we are now more comfortable with the lower end of this range, and adjusted EBITDA of $130 million to $142 million, although we are now more comfortable with the mid- to upper end of this range.

根據年初至今的業績、與客戶的對話以及近期的需求趨勢，我們重申 2023 財年的指導，具體如下： 淨銷售額為 11.2 億美元至 11.6 億美元，儘管我們現在對較低的銷售額更滿意調整後的 EBITDA 為 1.3 億至 1.42 億美元，儘管我們現在更願意接受該範圍的中高端。

We previously guided to free cash flow of $50 million to $55 million for fiscal 2023. But based on year-to-date results, and the fact that we have done a good job managing working capital, we are increasing our free cash flow guidance to a range of $60 million to $65 million.

我們之前指導 2023 財年的自由現金流為 5000 萬至 5500 萬美元。但根據今年迄今的結果以及我們在營運資本管理方面做得很好的事實，我們正在將自由現金流指導提高到範圍為 6000 萬至 6500 萬美元。

From a cadence perspective, for the third quarter of this year versus the third quarter of last year, we expect revenue to be down 10% to 12% on a consolidated basis. By segment for the third quarter of this year compared to the third quarter of last year, we expect revenue to be down 5% to 7% in our North American Fenestration segment, down 30% to 32% in our North American Cabinet Components segment, and down 2% to 4% in our European Fenestration segment.

從節奏的角度來看，與去年第三季度相比，我們預計今年第三季度的合併收入將下降 10% 至 12%。按部門劃分，與去年第三季度相比，我們預計今年第三季度北美門窗部門的收入將下降 5% 至 7%，北美櫥櫃部件部門的收入將下降 30% 至 32%，我們的歐洲門窗領域下降了 2% 至 4%。

On a consolidated basis, adjusted EBITDA margin is expected to be flat to up 25 basis points in the third quarter of 2023, again, compared to the third quarter of last year. Operator, we are now ready to take questions.

綜合來看，與去年第三季度相比，預計 2023 年第三季度調整後 EBITDA 利潤率將持平，上漲 25 個基點。接線員，我們現在準備好回答問題。

(Operator Instructions)

（操作員說明）

Our first question comes from the line of Reuben Garner from The Benchmark Company, LLC.

我們的第一個問題來自 Benchmark Company, LLC 的 Reuben Garner。

Congrats on the strong quarter. So a couple of questions about the seasonality, I guess starting with the top line. I think the low end of the range would still imply a little pickup sequentially over the next 2 quarters, which I think is seasonally normal.

祝賀季度表現強勁。關於季節性的幾個問題，我想先從最重要的方面開始。我認為該範圍的低端仍意味著未來兩個季度會出現小幅回升，我認為這是季節性正常的。

Is there any risk to that? Or -- I guess, what would the risks be to that? Is it further inventory reductions or just general market declines? I mean what's kind of implied in the market, I guess, to get to those levels is probably a better way to ask it?

這樣做有什麼風險嗎？或者——我想，這樣做的風險是什麼？是庫存進一步減少還是市場整體下滑？我的意思是，我想，達到這些水平可能是更好的提問方式，市場隱含著什麼？

I'll take this. I'll start here, Reuben. From a consolidated level, I would say we're very confident in hitting that low range of the guidance. If there were concerns, it would be macro driven. I think we have some pretty good clarity now from our customer base.

我要這個。我就從這裡開始吧，魯本。從綜合水平來看，我想說我們非常有信心達到指導的較低範圍。如果存在擔憂，那將是宏觀驅動的。我認為我們的客戶群現在已經非常清楚了。

The order patterns and inventory levels seem to be stabilized across the supply chain and with our customers. So if there were a miss or upside to either, I think it's going to be mainly driven by macro conditions.

整個供應鍊和我們客戶的訂單模式和庫存水平似乎都很穩定。因此，如果其中任何一個出現失誤或上漲，我認為這將主要由宏觀條件驅動。

Okay. And in that same vein on the -- it looks like you're implying that the margins are going to be sequentially lower quite a bit from where you were in Q2. And I know Q2 was a pretty impressive quarter.

好的。同樣，您似乎在暗示利潤率將比第二季度的水平連續降低很多。我知道第二季度是一個非常令人印象深刻的季度。

But what would be the reason that you would see the sequential decline? I think historically, you see a bump up with the revenue in the latter half of the year.

但是，您會看到連續下降的原因是什麼？我認為從歷史上看，下半年的收入會有所增加。

Maybe -- I think you misheard me. So what we're saying is 3Q margins should be flat to up 25 basis points quarter-over-quarter.

也許——我想你聽錯了我的話。因此，我們的意思是，第三季度利潤率應持平，環比上升 25 個基點。

So then would that not -- would that -- wouldn't that imply a big reduction in the fourth quarter to get to the full year guidance (inaudible)?

那麼，這是否意味著第四季度的大幅削減才能達到全年指導（聽不清）？

No, if we're guiding to the lower end of revenue but the upper end of EBITDA, that's actually better profitability.

不，如果我們的目標是收入的下限，但 EBITDA 的上限，那實際上是更好的盈利能力。

Okay. I will work that and get with you offline on that one. The -- so then maybe last one for me. I'm going sneak one in that won't be exactly my best question. If you -- the gross margin performance in the second quarter in both Europe and cabinets was quite strong, was there anything kind of onetime there?

好的。我會處理這個問題，並在離線狀態下與您一起解決這個問題。那麼也許對我來說是最後一個。我要偷偷地問一個，這並不是我最好的問題。如果歐洲和櫥櫃第二季度的毛利率表現都相當強勁，那麼有什麼一次性的事情嗎？

Is this just finally getting completely past the price/cost issues that you've had? Or any color on those 2 segments in particular would be great.

這是否終於完全解決了您所遇到的價格/成本問題？或者這兩個部分上的任何顏色都會很棒。

Yes, I'll give you some color, and we'll break it down between the 2. In terms of the cabinet performance, it was really as expected, very much index driven. Last year, as we talked about almost every quarter, we were chasing the profitability because of the 90-day lag.

是的，我會給你一些顏色，我們將在兩者之間進行細分。就機櫃性能而言，它確實符合預期，很大程度上是由指數驅動的。去年，正如我們幾乎每個季度都會談論的那樣，由於 90 天的滯後，我們都在追逐盈利能力。

And as pricing was going up, we're kind of -- we're paying faster than we're able to pass it along. Well, it's -- the complete inverse happens as it's going down. So it's exactly what we anticipated. As the hardwood pricing are coming down, we're able to buy hardwood at lower prices faster than the index triggers. So we should be harvesting margins on the way down, and we've kind of alluded to that in past calls.

隨著價格的上漲，我們支付的速度快於我們能夠傳遞的速度。嗯，當它下降時，完全相反的情況就會發生。所以這正是我們所預期的。隨著硬木價格的下降，我們能夠以比指數觸發速度更低的價格購買硬木。因此，我們應該在下跌過程中收穫利潤，我們在過去的電話會議中已經提到過這一點。

So that's really what's driving that. I mean, the market itself is very defined in terms of pricing. So it's index related. In Europe, it's a combination. Operational performance has been very, very strong, and we're doing some good things from both the sourcing team and the operational teams. And then the other piece of it is some carryover pricing that we're starting to realize as the inflation levels in certain areas have kind of panned out.

所以這才是真正的推動力。我的意思是，市場本身在定價方面是非常明確的。所以它與索引相關。在歐洲，這是一種結合。運營績效非常非常強勁，我們的採購團隊和運營團隊都在做一些好事。另一部分是一些結轉定價，隨著某些地區的通脹水平已經達到預期，我們開始意識到這一點。

There are still pressures in Europe as it relates to inflation. So there's going to be some continued conversations with our customers because the European inflation levels, at least at this point because of energy cost and some of the higher levels of freight and logistics costs, are just ahead of what we're seeing in North America. So we think price will still be an important factor over in Europe, and we'll see what happens there.

歐洲仍然面臨通脹壓力。因此，我們將與我們的客戶進行一些持續的對話，因為歐洲的通脹水平，至少在目前，由於能源成本以及一些較高水平的貨運和物流成本，略高於我們在北美看到的通脹水平。因此，我們認為價格仍然是歐洲的一個重要因素，我們將看看那裡會發生什麼。

Our next question comes from the line of Steven Ramsey from the Thompson Research Group.

我們的下一個問題來自湯普森研究小組的史蒂文拉姆齊。

This is actually Brian Biros on for Steven. To start, I guess, on pricing, can you maybe -- you mentioned some givebacks largely attributable to the indexing. Any specific materials there to call out and the magnitude of the declines and maybe if there's any increases to call out as well?

這實際上是布萊恩·比羅斯 (Brian Biros) 為史蒂文 (Steven) 配音的。首先，我想，在定價方面，您可能提到了一些主要歸因於索引的回饋。有什麼具體材料可以指出以及下降的幅度，也許還有任何增加可以指出嗎？

And just kind of what you're looking for the rest of the year kind of pricing embedded in the guidance from here?

您正在尋找今年剩餘時間的指導中包含的定價嗎？

So -- as a reminder, the indexes are primarily in North America. So we'll start with our -- in North American Fenestration, the main commodities that are typically on index or vinyl PVC resins, aluminum and steel in our screen products, and then an oil-based index for our butyl based spacers.

因此，提醒一下，這些指數主要位於北美。因此，我們將從北美門窗行業開始，主要商品通常是我們的屏幕產品中的索引或乙烯基 PVC 樹脂、鋁和鋼，然後是我們的丁基墊片的油基索引。

So those have obviously had downward pressures across the board. Now as we progress through the year, I think we're starting to see that the pricing on a lot of those commodities are starting to stabilize and flatten out, in a couple of cases maybe even showing some signs of ticking back up.

因此，這些顯然都面臨著全面的下行壓力。現在，隨著今年的進展，我認為我們開始看到許多大宗商品的價格開始穩定並趨於平緩，在某些情況下甚至可能顯示出一些回升的跡象。

But they're pretty volatile, as you know. So we believe that the indexes are such that it will protect our margins and it's fair to both us and our customers. In the Quanex custom cabinet components group, it's very much hardwoods, soft maple, hard maple, Cherry, Red Oak, and a couple of other minor species, but those are the big ones.

但正如你所知，它們非常不穩定。因此，我們相信這些指數將保護我們的利潤，並且對我們和我們的客戶都是公平的。在 Quanex 定制櫥櫃組件組中，有很多硬木、軟楓木、硬楓木、櫻桃木、紅橡木和其他一些次要樹種，但這些都是大樹種。

And -- what we're seeing is the same thing there is that those hardwood species have dropped in price pretty significantly over the prior year, but we're now starting to see that their -- the rate of decreases is flattening and then at a couple of the species as well starting to level up to even maybe bumping up a little bit.

而且 - 我們看到的是同樣的事情，這些硬木樹種的價格比前一年大幅下降，但我們現在開始看到它們的 - 下降速度趨於平緩，然後達到一些物種也開始升級，甚至可能會略有提升。

So we think the rate of price givebacks as it relates to index will start to slow down. In Europe, it is all negotiated price. And it's very much based on the commodities, and we continue to have discussions with our customers as to when do we give back price as well as -- there's still a lot of inflationary pressures, as I just mentioned to Reuben, in other areas. So Europe tends to be a little more complicated and a little more specific negotiations with the customers.

因此，我們認為與指數相關的價格回饋速度將開始放緩。在歐洲，都是協商價。這很大程度上取決於大宗商品，我們繼續與客戶討論何時返還價格——正如我剛剛向魯本提到的，在其他領域仍然存在很大的通脹壓力。因此，歐洲往往與客戶進行更複雜、更具體的談判。

Okay. Helpful. And the second follow-up is, can you expand on what you guys are hearing from end markets and customers? I know you mentioned demand is improving sequentially, orders, back to normal seasonality. We've been hearing sentiment today is better than expected -- better than was expected at the beginning of the year.

好的。有幫助。第二個後續問題是，您能擴展一下你們從終端市場和客戶那裡聽到的信息嗎？我知道你提到需求正在連續改善，訂單恢復到正常的季節性。我們聽說今天的情緒好於預期——好於年初的預期。

So I'm just trying to parse out, are things getting better just because of this seasonality and the inventory rebalancing is over or are things actually getting better on the ground from the final customer perspective?

所以我只是想分析一下，情況是否只是因為這種季節性和庫存重新平衡結束而變得更好，還是從最終客戶的角度來看，情況實際上正在變得更好？

I think what we're seeing and what we've been impacted by is definitely more of a macro environment. The affordability of housing becomes an issue.

我認為我們所看到的以及我們所受到的影響肯定更多的是宏觀環境。住房負擔能力成為一個問題。

So if you can imagine, in our fenestration businesses, we're looking at new starts, that's an important metric. But also, the size of homes, the affordability piece comes into play. Then people are either building or buying smaller homes, which has smaller openings and less windows. I think those have been more of an impact over purely customer demand.

因此，如果你能想像，在我們的門窗業務中，我們正在尋找新的開始，這是一個重要的指標。而且，房屋的大小、負擔能力也發揮了作用。然後，人們要么建造或購買較小的房屋，這些房屋的開口較小，窗戶也較少。我認為這些對純粹的客戶需求的影響更大。

So the affordability piece in the market becomes an issue. And then for cabinets and then what we're seeing in Europe, it's really the discretionary income piece. So I mean, those tend to be a little more discretionary whether you redo your kitchen or your bathroom cabinets versus replacing a window and door.

因此，市場上的承受能力就成為一個問題。然後對於櫥櫃以及我們在歐洲看到的情況，這實際上是可自由支配的收入部分。所以我的意思是，與更換門窗相比，無論您重做廚房還是浴室櫃，這些往往更加自由裁量。

So I think that's why we're seeing volume hit a little more. In terms of overall expectations, I think the market is exactly where we anticipated it would be, and we've talked about that for the last couple of quarters. And I think we'll see some normal seasonality.

所以我認為這就是為什麼我們看到成交量有所增加。就總體預期而言，我認為市場正是我們預期的那樣，我們在過去幾個季度中已經討論過這一點。我認為我們會看到一些正常的季節性。

Again, it will be dependent upon macro conditions, what the Fed does, and different things of that nature will have more impact, but -- for us, we've been pretty pleased that the year is panning out exactly the way we forecasted and saw it to come out, at least at this point.

同樣，這將取決於宏觀條件、美聯儲的行動以及類似性質的不同事情將產生更大的影響，但是，對我們來說，我們很高興今年的進展完全符合我們的預測，並且看到它的出現，至少在這一點上。

Our next question comes from the line of Julio Romero from Sidoti & Company, LLC.

我們的下一個問題來自 Sidoti & Company, LLC 的 Julio Romero。

George and Scott, maybe to continue on price for a little bit, can you talk about price aside from anything on an index or anything surcharge related? Maybe speak to the efforts to maintain price across the 3 segments, and has that gotten any more or less challenging than maybe 3 months ago?

喬治和斯科特，也許繼續討論一下價格，除了指數或附加費相關的任何內容之外，您能談談價格嗎？或許可以談談維持 3 個細分市場價格的努力，與 3 個月前相比，這是否變得或多或少具有挑戰性？

Yes. I think -- we work very hard to be a fair supplier to all of our customers. And so we're open and transparent and continue to have those discussions with the customers.

是的。我認為——我們非常努力成為所有客戶的公平供應商。因此，我們保持開放、透明的態度，並繼續與客戶進行這些討論。

I think in areas that are non-indexed, the biggest impacts, in most cases, tend to be freight, and then packaging supplies, things of that nature. And we continue to go after price where we can, cognizant of the fact that we're also trying to support our customers in the market.

我認為在非指數化領域，在大多數情況下，最大的影響往往是貨運，然後是包裝用品，諸如此類的事情。我們將繼續盡可能地追求價格，同時認識到我們也在努力支持市場上的客戶。

So I think -- in North America, there's been -- all right -- I'd step back. Globally, there's much more pressure right now on either repealing price or at least holding prices flat. I think we're seeing the customers in the market begin to really start pushing back on further price increases.

所以我想——在北美，好吧——我會退一步。在全球範圍內，現在要么廢除價格，要么至少保持價格不變，面臨著更大的壓力。我認為我們看到市場上的客戶開始真正開始抵制進一步的價格上漲。

So -- to answer your question, it's absolutely much more of a challenge today than it was 6 months ago. There's no doubt. But I think our efforts to continue to be transparent and work with our customers to make us all successful, has worked for both sides.

所以，回答你的問題，今天的挑戰絕對比 6 個月前大得多。毫無疑問。但我認為，我們繼續保持透明並與客戶合作使我們取得成功的努力對雙方都有效。

Got it. That's helpful. And then maybe just turning to the cost side. You guys obviously did a good job controlling costs in the quarter. And you talked about some of the things that helped you were some favorable purchases while the index figures hadn't happened yet.

知道了。這很有幫助。然後也許只是轉向成本方面。顯然，你們在本季度的成本控制方面做得很好。您談到了一些對您有幫助的事情，即在指數數據尚未出現時進行一些有利的購買。

Were there other levers you were able to pull on the cost side within the quarter? And would those levers on the cost side be able to benefit you in the back half of the year?

本季度內您是否可以在成本方面採取其他措施？這些成本方面的槓桿能否在今年下半年使您受益？

Yes, absolutely. Great question. And the answer to that is, yes, there are other triggers that we pulled. And I think it highlights what we've said all along that our cost structure is built in such a way that when we do go up or down, we have the ability to be ahead of the game, probably more than most.

是的，一點沒錯。很好的問題。答案是，是的，我們還觸發了其他觸發因素。我認為這凸顯了我們一直以來所說的，即我們的成本結構是這樣構建的，即當我們確實上升或下降時，我們有能力領先於遊戲，可能比大多數人都領先。

And I think -- so for example, in cabinets, I would tell you, they're not easy discussions. But when volume starts dropping, the team was ahead of it and controlled our labor cost, controlled our supply cost and really focus on managing their inventory levels.

我認為，例如，在內閣中，我會告訴你，這些討論並不容易。但當銷量開始下降時，團隊走在了前面，控制了我們的勞動力成本，控制了我們的供應成本，並真正專注於管理他們的庫存水平。

And we have those kind of things in place in all the divisions. So we have triggers that we pull. We test our different models, if volume were to do this, here's what you do. And they were prepared and all the groups reacted very well. So it's really cost structure across the board that we're managing.

我們在所有部門都配備了這些東西。所以我們有觸發因素。我們測試了不同的模型，如果體積可以做到這一點，這就是您要做的。他們做好了準備，所有小組的反應都很好。因此，我們正在管理的實際上是全面的成本結構。

Got it. And then maybe turning to the LMI integration. It sounds like that's going well. Maybe just talk about that, if you could. And would there be a potential of maybe additional synergies beyond the target?

知道了。然後也許會轉向 LMI 集成。聽起來進展順利。如果可以的話，也許只是談談這個。除了目標之外是否還有可能產生額外的協同效應？

Yes. No, we've been extremely happy with the acquisition of that business. One, from a culture perspective, it fit in very, very well. The teams are working well together.

是的。不，我們對收購該業務感到非常高興。第一，從文化角度來看，它非常非常契合。各團隊合作良好。

It's opened us up to new and additional markets. So we're servicing not only the fenestration markets, it's through vertical integration supplying us, but we're now supplying a little bit into the automotive business, wire cable. We actually -- they supply materials into like dog toys and things of that nature.

它為我們打開了新的和更多的市場。因此，我們不僅為門窗市場提供服務，通過垂直整合為我們提供服務，而且我們現在也為汽車業務、電線電纜提供一些服務。事實上，他們為狗玩具和類似的東西提供材料。

So it's allowed us to get a view into a lot of different things. And we've been very, very thrilled with their performance, and continue to be. In terms of growth in more synergies, I think the answer is yes. I think that there's an opportunity to use other materials that we currently make. For example, in our spacer business, maybe expanding their sales team and giving them offerings in silicone and butyl types of rubbers and allowing them to be a full-service compound provider of not only EPDM, which is currently what they do.

所以它讓我們能夠看到很多不同的事情。我們對他們的表現感到非常非常興奮，並將繼續如此。就更多協同效應的增長而言，我認為答案是肯定的。我認為有機會使用我們目前製造的其他材料。例如，在我們的墊片業務中，也許可以擴大他們的銷售團隊，為他們提供有機矽和丁基橡膠的產品，並使他們成為不僅是 EPDM 的全方位服務化合物供應商，而這正是他們目前所做的。

So I do believe there's both cost synergies as well as potentially new sales opportunities, which will help us improve the utilization of current assets. We'll be able to do some of that without investing in any more CapEx. So we're pretty excited about the opportunities that lie within this business.

因此，我確實相信這既有成本協同效應，也有潛在的新銷售機會，這將有助於我們提高現有資產的利用率。我們將能夠做到其中一些，而無需投資更多的資本支出。因此，我們對這項業務中的機會感到非常興奮。

I would now like to turn the conference back over to George Wilson for closing remarks.

現在我想將會議轉回喬治·威爾遜致閉幕詞。

We'd like to thank you all for joining, and we look forward to providing you an update on our next earnings call in September. Have a great day.

我們感謝大家的加入，並期待為您提供 9 月份下一次財報電話會議的最新信息。祝你有美好的一天。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。