Regal Rexnord Corp (RRX) 2023 Q2 法說會逐字稿

Good morning, and welcome to the Regal Rexnord Corporation Second Quarter 2023 Earnings Call. (Operator Instructions) Please note, this event is being recorded. I would like now to turn the conference over to Robert Barry, Vice President of Investor Relations. Please go ahead.

早上好，歡迎參加 Regal Rexnord Corporation 2023 年第二季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。現在我想將會議交給投資者關係副總裁羅伯特·巴里 (Robert Barry)。請繼續。

Great. Thank you, operator. Good morning, and welcome to Regal Rexnord's Second Quarter 2020 Earnings Conference Call. Joining me today are Louis Pinkham, our Chief Executive Officer; and Rob Rehard, our Chief Financial Officer. Before we get started, I'd like to note that we are experiencing some scattered blackouts in our area this morning. And in the event that we are disrupted during the earnings call, please know that we will rejoin the call shortly thereafter. We do thank you in advance for your patience in the event this disruption occurs.

偉大的。謝謝你，接線員。早上好，歡迎參加 Regal Rexnord 2020 年第二季度收益電話會議。今天加入我的是我們的首席執行官 Louis Pinkham；以及我們的首席財務官 Rob Rehard。在我們開始之前，我想指出，今天早上我們所在地區正在經歷一些零星的停電。如果我們在財報電話會議期間受到干擾，請注意我們將在不久後重新加入電話會議。如果發生這種中斷，我們提前感謝您的耐心等待。

I would like to remind you that during today's call, you may hear forward-looking statements related to our future financial results, plans and business operations. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in today's press release and in our reports filed with the SEC which are available on the regalrexnord.com website.

我想提醒您，在今天的電話會議中，您可能會聽到與我們未來財務業績、計劃和業務運營相關的前瞻性陳述。由於多種因素，我們的實際結果可能與預測或暗示的結果存在重大差異，我們在今天的新聞稿和向SEC 提交的報告中對此進行了更詳細的描述，這些報告可在regalrexnord.com 網站上獲取。

On Slide 3, we state that we are presenting certain non-GAAP financial measures that we believe are useful to our investors, and we have included reconciliations between the non-GAAP financial information and the GAAP equivalent in the press release and in these presentation materials.

在幻燈片 3 中，我們聲明我們正在呈現某些我們認為對投資者有用的非 GAAP 財務指標，並且我們在新聞稿和這些演示材料中納入了非 GAAP 財務信息與 GAAP 同等信息之間的調節表。

Turning to Slide 4. Let me briefly review the agenda for today's call. Louis will lead off with his opening comments. Rob Rehard will then provide our second quarter financial results in more detail and provide an update to our 2023 guidance. We will then move to Q&A, after which, Louis will have some closing remarks. And with that, I'd like to turn the call over to Louis.

轉向幻燈片 4。讓我簡要回顧一下今天電話會議的議程。路易斯將首先發表開場白。隨後，Rob Rehard 將更詳細地提供我們第二季度的財務業績，並更新我們的 2023 年指引。然後我們將進入問答環節，之後路易斯將發表一些結束語。說到這裡，我想把電話轉給路易斯。

Great. Thanks, Rob, and good morning, everyone. Thanks for joining us to discuss our second quarter earnings to get an update on our business and for your continued interest in Regal Rexnord. The second quarter was an exciting one for the Regal Rexnord team. Our first full quarter together with our new colleagues from Altra. Bringing together Altra and Regal Rexnord marks another significant milestone on what for the last 4-plus years has been a steady journey of profound transformation.

偉大的。謝謝羅布，大家早上好。感謝您加入我們討論我們第二季度的收益，了解我們業務的最新情況，並感謝您對 Regal Rexnord 的持續關注。第二節對於 Regal Rexnord 團隊來說是令人興奮的一節。我們與 Altra 的新同事一起度過的第一個完整季度。 Altra 和 Regal Rexnord 的合併標誌著過去 4 年多來穩步推進的深刻轉型之旅的另一個重要里程碑。

We have a simple but powerful concept at Regal Rexnord for charting our path forward and for driving a continuous improvement mindset. In short, what we call our From-To. We are regularly challenging our businesses, functions and associates to define their From-To, where they are, current state and where they plan to go, future state and then identifying the investments, the initiatives and the actions they must take to navigate that From-To journey. Or I should add, driven with an 80/20 prioritization mindset and supported by data.

Regal Rexnord 有一個簡單但強大的理念，用於規劃我們的前進道路並推動持續改進的心態。簡而言之，就是我們所說的“從-到”。我們定期要求我們的業務、職能部門和員工定義他們的“從-到”、他們在哪裡、當前狀態和他們計劃去往的地方、未來狀態，然後確定他們必須採取的投資、舉措和行動，以實現“從”到“從”的目標。 -去旅行。或者我應該補充一點，以 80/20 優先級思維方式驅動並由數據支持。

As I reflect on our RRX From-To and where we are today, I think about a legacy business that in 2020 had $2.9 billion in sales, which today has annual sales above $7 billion. A business where growth was stagnant to a business more focused on secular growth markets with significant focus on vitality, which we expect to double by 2025, after doubling from 2019 to 2022.

當我反思我們的 RRX 發展歷程以及我們今天所處的位置時，我想到了一項 2020 年銷售額為 29 億美元的傳統業務，如今其年銷售額超過 70 億美元。增長停滯的業務轉向更注重長期增長市場且高度關注活力的業務，我們預計在 2019 年至 2022 年翻一番後，到 2025 年將增長一倍。

A business that had adjusted gross margins about 27%, now on track to be a 35% gross margin business this year with adjusted gross margins just over 35% in quarter 2. A business that treated all products and customers equally to one that use customers, products, really all opportunities through an 80/20 lens. I could go on, but in short, a pretty dramatic From-To.

調整後毛利率約為 27% 的企業，今年毛利率有望達到 35%，第二季度調整後毛利率略高於 35%。 企業對所有產品和客戶與使用客戶的企業一視同仁、產品，確實是通過80/20 鏡頭看到的所有機會。我可以繼續說下去，但簡而言之，這是一個非常戲劇性的“從-到”。

The next steps on our transformation journey will be even more exciting, and I am pleased to share that through our first 3 months together with Altra, we are off to a great start. The teams have come together really well. Altra and Legacy Regal Rexnord are a great cultural fit. Operationally, the Legacy Altra business had a great second quarter, which exceeded our expectations. By the way, so did Legacy Regal.

我們轉型之旅的下一步將更加令人興奮，我很高興與大家分享，在與 Altra 合作的前 3 個月裡，我們有了一個良好的開端。團隊合作得非常好。 Altra 和 Legacy Regal Rexnord 在文化上非常契合。在運營方面，Legacy Altra 業務第二季度表現出色，超出了我們的預期。順便說一下，Legacy Regal 也是如此。

Integration activities and initial synergy actions are both well on track, and the teams have already started building a healthy pipeline of cross-marketing opportunities. In fact, we have already seen a few million dollars of wins just 3 months in.

整合活動和初步協同行動均進展順利，團隊已經開始建立健康的交叉營銷機會渠道。事實上，僅僅 3 個月我們就已經贏得了數百萬美元的勝利。

I look forward to sharing updates on our progress in future quarters and having you see the further benefits of the combination in our future results. In addition to all that we are doing with Altra, our teams also executed a very solid second quarter with performance on sales and adjusted EBITDA, both tracking modestly ahead of the expectations we laid out last quarter.

我期待著分享我們在未來幾個季度取得的最新進展，並讓您在我們未來的業績中看到合併帶來的更多好處。除了我們與 Altra 所做的一切之外，我們的團隊在第二季度的銷售業績和調整後的 EBITDA 方面也表現出色，均略高於我們上季度製定的預期。

Sales in the quarter were up 31.1% versus the prior year or down 5.7% on a pro forma organic basis. For context, this moderate organic sales decline was against a 2-year stack compare of 40%. The organic sales decline is being driven by fully anticipated weakness in our PES segment market as residential HVAC and parts of the general commercial channel are facing weaker demand and destocking headwinds. Putting PES aside, our other segments in aggregate posted low single-digit organic growth led by AMC.

本季度銷售額比上年同期增長 31.1%，預計有機銷售額下降 5.7%。就背景而言，這種適度的有機銷售額下降是與 2 年堆棧比較 40% 相比的。由於住宅暖通空調和部分一般商業渠道面臨需求疲軟和去庫存的不利因素，我們的 PES 細分市場的疲軟已被充分預期，導致有機銷售下降。撇開 PES 不談，我們的其他細分市場總體上實現了較低的個位數有機增長，其中 AMC 為首。

Turning to orders. Our daily orders were in line with our expectations, coming in down 12.7%. This performance should be considered in the context of a 2-year stack compare of 55% and is consistent with a normalizing global supply chain and a return to more typical customer stocking levels. Our orders and sales performance resulted in a quarter end backlog that is approximately 65% above our normal levels, with book-bill at approximately 1.0 in the quarter and on a year-to-date basis.

轉向命令。我們的每日訂單量下降了 12.7%，符合我們的預期。這一業績應在 55% 的 2 年堆棧比較的背景下考慮，並且與全球供應鏈正常化和恢復到更典型的客戶庫存水平一致。我們的訂單和銷售業績導致季度末積壓訂單比正常水平高出約 65%，本季度和年初至今的預訂賬單約為 1.0。

Margins in the quarter were strong. Our adjusted gross margin came in just over 35%. Margins continue to benefit from our 80/20 efforts and the launch of mix positive new products. The second quarter adjusted EBITDA margin was 21.5%, up 50 basis points versus the prior year or up approximately 80 basis points on a pro forma basis.

本季度的利潤率很高。我們調整後的毛利率略高於 35%。利潤率繼續受益於我們的 80/20 努力和混合積極新產品的推出。第二季度調整後 EBITDA 利潤率為 21.5%，比上年增長 50 個基點，預計增長約 80 個基點。

Finally, free cash flow was a standout positive in the quarter, coming in at $176.3 million, up significantly from the prior year period and continuing to reflect our team's focus on working capital management. The combination of our first half cash flow and deploying excess balance sheet cash allowed us to pay down $600 million in debt this quarter. In short, a very strong quarter and one that I think demonstrates solid execution by our teams whether it is executing our M&A integration and synergies or our base business performance. Everyone at Regal Rexnord is working very hard to advance our transformation by pursuing cross-marketing synergies, doubling our product vitality, raising our secular end market exposure and continuing to drive 80/20 and lean.

最後，本季度自由現金流表現突出，達到 1.763 億美元，比去年同期大幅增加，繼續反映了我們團隊對營運資本管理的關注。上半年的現金流和資產負債表上多餘的現金配置相結合，使我們能夠在本季度償還 6 億美元的債務。簡而言之，這是一個非常強勁的季度，我認為這展示了我們團隊的紮實執行力，無論是執行我們的併購整合和協同效應還是我們的基本業務績效。 Regal Rexnord 的每個人都在努力推進我們的轉型，通過追求跨營銷協同效應、使我們的產品活力加倍、提高我們的長期終端市場曝光率以及繼續推動 80/20 和精益。

We are becoming a faster-growing, higher-margin, more cash generative enterprise. I want to thank all our associates for their disciplined execution and for their dedication to making Regal Rexnord stronger every day. As I mentioned last quarter, one way we plan to help investors better appreciate how together with Altra, we are better positioned to accelerate profitable growth is to spend a few minutes introducing our principal AMC businesses.

我們正在成為一家增長更快、利潤率更高、現金產出能力更強的企業。我要感謝我們所有員工的嚴格執行力以及他們為使 Regal Rexnord 變得更加強大而做出的奉獻。正如我上個季度提到的，我們計劃幫助投資者更好地了解如何與 Altra 合作，更好地加速盈利增長的一種方法是花幾分鐘介紹我們的主要 AMC 業務。

This quarter, I will discuss Linear Motion. Our Linear Motion division within the AMC segment, which includes the well-established Thomson-Nook and Delevan brands self-actuators and related highly engineered components that enable precision movement in machines, devices and other applications. These are differentiated technology-rich products that fit perfectly inside Regal Rexnord's broader portfolio of automation and power transmission components and subsystems.

本季度，我將討論線性運動。我們 AMC 領域的線性運動部門，包括成熟的 Thomson-Nook 和 Delevan 品牌自執行器以及相關的高度工程化組件，可在機器、設備和其他應用中實現精確運動。這些是技術豐富的差異化產品，非常適合 Regal Rexnord 更廣泛的自動化和電力傳輸組件和子系統產品組合。

In this regard, the Linear Motion portfolio significantly advances our strategy of becoming a trusted adviser to our customers. On the right-hand side of this slide are examples of the end markets the Linear Motion business serves, including Intralogistics, Medical, Aerospace & Defense and Agriculture to name a few.

在這方面，線性運動產品組合極大地推進了我們成為客戶值得信賴的顧問的戰略。這張幻燈片的右側是線性運動業務所服務的終端市場的示例，包括內部物流、醫療、航空航天和國防以及農業等。

The yellow arrows in each picture illustrates the kind of precision movement our products enable, such as the automation of a packaging line or raising and lowering aircraft wing flaps. Some relevant common characteristics across these applications include an absolute need for reliability, often in harsh conditions, along with accuracy and precision.

每張圖片中的黃色箭頭說明了我們的產品能夠實現的精確運動，例如包裝線的自動化或升高和降低飛機機翼襟翼。這些應用的一些相關的共同特徵包括對可靠性（通常在惡劣條件下）的絕對需求以及準確性和精度。

In short, our Linear Motion components are critical to the proper functioning of the applications in which they reside, and in many cases, to the safety of the applications users. As indicated on the lower left-hand side of the slide, our Linear Motion business has established itself as a leading provider through its track record of performance achieved by leveraging proprietary technology, deep application expertise and a strong channel and online presence that supports high customer service levels.

簡而言之，我們的線性運動組件對於其所在應用程序的正常運行至關重要，並且在許多情況下對於應用程序用戶的安全至關重要。正如幻燈片左下側所示，我們的直線運動業務通過利用專有技術、深厚的應用專業知識以及支持高客戶的強大渠道和在線業務，取得了良好的業績記錄，從而確立了自己作為領先供應商的地位。服務水平。

Most of the businesses end markets also have strong secular growth tailwinds, some related to macro trends such as electrification, onshoring and automating labor-intensive processes and some to end market-specific factors such as growth in e-commerce or a rising global middle class that is driving demand for aircraft and agricultural products.

大多數企業終端市場也有強勁的長期增長推動力，其中一些與電氣化、在岸外包和勞動密集型流程自動化等宏觀趨勢有關，還有一些與電子商務增長或全球中產階級崛起等終端市場特定因素有關這推動了對飛機和農產品的需求。

The strength of our Linear Motion solutions and channels plus the secular tailwinds I mentioned supported a 5-year organic growth CAGR for this business of roughly 6%. We believe that we can accelerate that growth going forward into the high single digits by exploiting significant cross-marketing opportunities, leveraging our Regal Rexnord sales force and increasing our value-add to customers by offering a broader portfolio of adjacent automation, power transmission and high-efficiency electric motor solutions.

我們的線性運動解決方案和渠道的優勢，加上我提到的長期順風，支持了該業務 5 年有機增長約 6%。我們相信，通過利用重要的交叉營銷機會、利用我們的Regal Rexnord 銷售隊伍以及通過提供更廣泛的鄰近自動化、電力傳輸和高性能產品組合來增加我們為客戶提供的附加值，我們可以將這一增長加速到高個位數。 -高效電動機解決方案。

I want to take a moment to emphasize the power of the broader Regal Rexnord portfolio. For example, in Intralogistics, Legacy Regal already had a strong portfolio of power transmission and conveyance components and subsystems with strong and [best] customer relationships in play. The addition of our linear motion portfolio, along with other precision motion solutions from other AMC divisions enable a more complete and value-added offering engineered to our customers' specific needs.

我想花點時間強調一下更廣泛的 Regal Rexnord 產品組合的力量。例如，在內部物流領域，Legacy Regal 已經擁有強大的電力傳輸和輸送組件及子系統產品組合，並擁有強大且[最佳]的客戶關係。我們的線性運動產品組合以及來自其他 AMC 部門的其他精密運動解決方案的加入，可提供更完整、更具附加值的產品，以滿足客戶的特定需求。

Similar cost marketing opportunities exist to an even greater extent in the aerospace and defense market. And next quarter, we will dig deeper into AMC's now expanded Aerospace business which is approaching $350 million in annual revenue.

類似的成本營銷機會在航空航天和國防市場中存在得更多。下個季度，我們將更深入地研究 AMC 現已擴展的航空航天業務，該業務的年收入接近 3.5 億美元。

Lastly, I'd note that our medical market exposure, which has been a priority for us to expand has now reached 3% of Regal Rexnord sales. Our sales teams are discussing the power of the enhanced Regal Rexnord portfolio with customers and using an 80/20 approach, they have focused on [Quad one.] While it is still very early days, and many of these initiatives are, by nature, longer sales cycles, we have already begun building a sales opportunity funnel, and I am excited by what the teams are seeing.

最後，我要指出的是，我們的醫療市場份額一直是我們擴張的首要任務，目前已達到 Regal Rexnord 銷售額的 3%。我們的銷售團隊正在與客戶討論增強型 Regal Rexnord 產品組合的力量，並使用 80/20 方法，他們重點關注 [Quad one]。雖然現在還處於早期階段，但其中許多舉措本質上是，更長的銷售週期，我們已經開始建立銷售機會漏斗，我對團隊所看到的感到興奮。

I hope this provides a little bit more color on how we believe the scale of Regal Rexnord can help accelerate growth in Linear Motion and how differentiated Linear Motion technology enhance our ability to sell our broader power transmission, automation and high-efficiency motor portfolio.

我希望這可以讓我們更加了解 Regal Rexnord 的規模如何幫助加速線性運動的增長，以及差異化的線性運動技術如何增強我們銷售更廣泛的動力傳輸、自動化和高效電機產品組合的能力。

With that, I will now turn the call over to Rob to take you through our second quarter segment financial performance and discuss our latest guidance.

現在，我將把電話轉給 Rob，帶您了解我們第二季度的財務業績並討論我們的最新指導。

Thanks, Louis, and good morning, everyone. I'll also begin by thanking our global team. We have a lot going on, and the team's hard work and disciplined execution not only drove very strong second quarter performance but is helping build the higher-performing Regal Rexnord. Now let's review our operating performance by segment.

謝謝路易斯，大家早上好。首先我還要感謝我們的全球團隊。我們有很多事情要做，團隊的辛勤工作和嚴格執行不僅推動了第二季度的強勁業績，而且正在幫助打造表現更高的 Regal Rexnord。現在讓我們按部門回顧一下我們的經營業績。

Starting with Automation and Motion Control, or AMC, organic sales in the second quarter, pro forma for the Altra acquisition, were up 4% from the prior year, reflecting strength in the Aerospace, Medical and Data Center end markets tempered by project timing headwinds in the beverage market. Given project timing headwinds, it is useful to look at AMC's growth in the first half, which was 7.8% on a pro forma organic basis.

從自動化和運動控制(AMC) 開始，第二季度的有機銷售額（Altra 收購的預估）比上一年增長了4%，反映出航空航天、醫療和數據中心終端市場因項目時間不利因素而表現強勁在飲料市場。考慮到項目時間安排上的不利因素，了解一下 AMC 上半年的增長率是有用的，按預計有機增長率計算，增長率為 7.8%。

Adjusted EBITDA margin in the quarter was 25.3%, nicely ahead of our expectation and reflects favorable price cost and volume growth, along with a reinforcement that the product and technology at AMC which, as a reminder, is a combination of Altra's Automation and Control business along with Regal's Aerospace, Data Center and Conveyance businesses are highly valued by our customers and justifies strong gross margins.

本季度調整後的 EBITDA 利潤率為 25.3%，大大超出了我們的預期，反映了有利的價格成本和銷量增長，以及 AMC 的產品和技術的強化，提醒一下，AMC 是 Altra 自動化和控制業務的組合Regal 的航空航天、數據中心和運輸業務受到我們客戶的高度重視，並證明了強勁的毛利率是合理的。

Orders in AMC on a pro forma organic basis were down roughly 20% in the second quarter on a daily basis with book-to-bill at 0.9. This order reduction is as expected as supply chains normalize and lead times reduce. In July, book-to-bill tracked at roughly 0.95. For perspective, AMC's second quarter order decline is against a 2-year stack of 60% and the segment's backlog at the end of second quarter is roughly 55% above our normal level. So we feel good about the growth prospects for AMC in 2023 and into early next year.

第二季度，AMC 的預計有機訂單日均下降約 20%，訂單出貨比為 0.9。隨著供應鏈正常化和交貨時間縮短，訂單減少符合預期。 7 月份，訂單出貨比約為 0.95。從長遠來看，AMC 第二季度的訂單下降幅度與兩年來的 60% 相比，第二季度末該部門的積壓訂單比我們的正常水平大約高出 55%。因此，我們對 AMC 2023 年和明年初的增長前景感到樂觀。

Turning to Industrial Powertrain Solutions or IPS. Pro forma organic sales in the second quarter were up 60 basis points from the prior year. Growth in the quarter reflects strength in the Metals & Mining, Energy and Marine end markets, partially offset by weakness in the agriculture end market and impacts from the timing of renewable energy projects. Adjusted EBITDA margin in the first quarter for IPS was 23.6%, in line with our expectation and reflects benefits from volume and price cost.

轉向工業動力總成解決方案或 IPS。第二季度預計有機銷售額比去年同期增長 60 個基點。本季度的增長反映了金屬和採礦、能源和海洋終端市場的強勁，但部分被農業終端市場的疲軟和可再生能源項目時機的影響所抵消。 IPS 第一季度調整後 EBITDA 利潤率為 23.6%，符合我們的預期，反映了產量和價格成本帶來的效益。

I'll remind you, and as indicated on the right side of this slide, our Legacy Regal IPS business was 26.9% EBITDA in Q2 of 2022, before the Altra acquisition, which reinforces the strength of the PMC synergies and the opportunity to improve IPS EBITDA margins further with the Altra synergies. Our global supply chain and manufacturing scale, along with our 80/20 approach are the main drivers.

我要提醒您的是，正如本幻燈片右側所示，在收購Altra 之前，我們的Legacy Regal IPS 業務在2022 年第二季度的EBITDA 為26.9%，這增強了PMC 協同效應的強度和改善IPS的機會憑藉 Altra 的協同效應，EBITDA 利潤率進一步提高。我們的全球供應鍊和製造規模以及我們的 80/20 方法是主要驅動力。

Pro forma organic orders in IPS were down 4% in the second quarter on a daily basis, and book-to-bill was 1.0 in the quarter. In July, book-to-bill also tracked at roughly 1.0. For perspective, IPS' second quarter order decline is against a 2-year stack of nearly 50%, and the segment's backlog at the end of second quarter is roughly 65% above our normal level.

第二季度 IPS 的預計有機訂單日均下降 4%，本季度訂單出貨比為 1.0。 7 月份，訂單出貨比也接近 1.0。從長遠來看，IPS 第二季度的訂單下降幅度與兩年來的接近 50% 相比，第二季度末該部門的積壓訂單比我們的正常水平大約高出 65%。

Turning to Power Efficiency Solutions or PES. Organic sales in the second quarter were down 22.2% from the prior year. The decline was driven by significant channel destocking activity, along with weaker demand in the North America residential HVAC market and to a lesser extent, weakness in China. This destock pressure was fully anticipated and is directionally consistent with the expectations we outlined in our last earnings call.

轉向電源效率解決方案或 PES。第二季度有機銷售額比去年同期下降 22.2%。下降的原因是渠道庫存大幅去化、北美住宅暖通空調市場需求疲軟以及中國的疲軟（較小程度上）。這種去庫存的壓力是​​完全預料到的，並且與我們在上次財報電話會議中概述的預期一致。

Note that we expect further headwinds from destocking in the third quarter but to a somewhat lesser degree compared to the second quarter and expect destocking to be mostly behind us as we enter the fourth quarter. The adjusted EBITDA margin in the quarter for PES was 18.6%, which was modestly ahead of our expectations. Key contributors to the PES margin performance were favorable price/cost, mix and operational performance, partially offset by lower volumes.

請注意，我們預計第三季度去庫存將帶來進一步的阻力，但與第二季度相比，程度會稍輕，並且預計進入第四季度時，去庫存將基本結束。本季度調整後的 PES EBITDA 利潤率為 18.6%，略高於我們的預期。 PES 利潤率表現的主要貢獻者是有利的價格/成本、組合和運營績效，但部分被銷量下降所抵消。

We expect this level of margin performance to continue in the back half, potentially with moderate upside versus the second quarter level. Shifting to orders. Orders in PES for the second quarter were down 14.5% on a daily basis, slightly better than our expectation. Book-to-bill in the quarter was 1.1 and tracked at 1.0 in July. For perspective, the 2-year stack on second quarter orders is 70%.

我們預計下半年這種利潤率表現將持續下去，與第二季度的水平相比可能會有適度的上升。轉向訂單。第二季度 PES 訂單日環比下降 14.5%，略好於我們的預期。本季度的訂單出貨比為 1.1，7 月份為 1.0。從長遠來看，第二季度的 2 年期訂單量為 70%。

On the following slide, we highlight some additional financial updates for your reference. Notably, on the right side of this page, you'll see we ended the quarter with total debt of $6.68 billion, which is a $600 million reduction versus the end of the first quarter. Free cash flow in the quarter was very strong, coming in at $176.3 million, up from $91.6 million in the prior year period.

在下一張幻燈片中，我們重點介紹了一些其他財務更新供您參考。值得注意的是，在本頁右側，您會看到我們本季度末的總債務為 66.8 億美元，比第一季度末減少了 6 億美元。本季度的自由現金流非常強勁，達到 1.763 億美元，高於去年同期的 9160 萬美元。

The teams continue to do a great job improving free cash flow performance driven in part by improving working capital and in particular, by lowering inventories. We continue to see significant opportunities to increase our cash flow in 2023 by further lowering inventory. We are now on track to generate greater than $650 million of free cash flow this year, an increase of $50 million from our prior estimate. As we stated previously, capital allocation will remain heavily weighted to paying down our debt.

這些團隊繼續出色地改善自由現金流績效，部分原因是改善營運資本，特別是降低庫存。我們繼續看到 2023 年通過進一步降低庫存來增加現金流的重大機會。今年我們有望產生超過 6.5 億美元的自由現金流，比我們之前的估計增加 5000 萬美元。正如我們之前所說，資本配置仍將嚴重偏重於償還我們的債務。

Now moving to the outlook. We are making several adjustments to our guidance for adjusted earnings per share, which is now in a range of $10.20 to $10.60 versus the prior range of $10.20 to $11.10. You will see that the midpoint of our prior range is coming down by $0.25, which primarily reflects higher depreciation expense of approximately $10 million and higher net interest expense of roughly $9 million.

現在轉向展望。我們正在對調整後每股收益的指導進行一些調整，目前調整後每股收益的範圍為 10.20 美元至 10.60 美元，而之前的範圍為 10.20 美元至 11.10 美元。您會看到我們先前範圍的中點下降了 0.25 美元，這主要反映了約 1000 萬美元的折舊費用增加和約 900 萬美元的淨利息費用增加。

The depreciation expense change reflects both, a true-up to acquisition-related step-up depreciation along with an increase related to the latest anticipated cadence of footprint actions and capital investments, many related to Rexnord PMC synergy realization. The interest expense change reflects higher assumed rates, primarily based on the latest SOFR forward interest rate curve.

折舊費用的變化反映了與收購相關的逐步折舊的真實情況，以及與最新預期足跡行動和資本投資節奏相關的增長，其中許多與 Rexnord PMC 協同效應的實現有關。利息支出變化反映了較高的假設利率，主要基於最新的 SOFR 遠期利率曲線。

You will also see that we are lowering the high end of our range. Given we are now just over halfway through the year, we have better visibility into our expected performance. And we believe some of the modeling assumptions behind our prior ranges high end now appear less likely. In particular, we now assume a slower pace of recovery in U.S. consumer markets, including residential HVAC and pool as well as in certain short-cycle industrial markets.

您還會看到我們正在降低範圍的高端。鑑於今年剛剛過半，我們對預期業績有了更好的了解。我們認為，我們之前的高端範圍背後的一些建模假設現在看來不太可能。特別是，我們現在假設美國消費市場（包括住宅暖通空調和泳池以及某些短週期工業市場）的複蘇步伐較慢。

In addition, we are no longer expecting a meaningful recovery in China this year. Finally, at the bottom of this slide, we present our standard below-the-line modeling items. In summary, we are very pleased with our performance in the quarter. Both, the Legacy Regal Rexnord and the newly acquired Altra business performed well. We added roughly 40% of the top line through the acquisition, and our teams are effectively executing on both, cost and cross marketing synergies.

此外，我們不再預期中國今年會出現有意義的複蘇。最後，在這張幻燈片的底部，我們展示了我們的標準線下建模項目。總而言之，我們對本季度的表現非常滿意。 Legacy Regal Rexnord 和新收購的 Altra 業務均表現良好。通過收購，我們增加了大約 40% 的營收，而且我們的團隊正在有效地執行成本和交叉營銷協同效應。

We continue to have lots of levers under our control to accelerate profitable growth and drive meaningful value creation, ranging from doubling our product vitality to shifting into more secular markets and continuing to drive 80/20 and lean across our businesses. And with that, I would now like to turn the call back over to the operator so we can take questions. Operator?

我們繼續控制許多槓桿來加速盈利增長並推動有意義的價值創造，從使我們的產品活力加倍到轉向更長期的市場，以及繼續推動 80/20 和精益我們的業務。現在，我想將電話轉回給接線員，以便我們回答問題。操作員？

(Operator Instructions) Our first question comes from Mike Halloran with Baird.

（操作員說明）我們的第一個問題來自 Mike Halloran 和 Baird。

So could you just dig a little bit into what you're seeing from an underlying demand perspective and how you think orders are going to track as you look to the back half of the year with some granularity as you think about the big chunks of your business, whether it's the resi pieces, some of the short type industrial pieces and any new dynamics you see there?

因此，您是否可以從潛在需求的角度深入了解一下您所看到的情況，以及當您展望下半年時，您認為訂單將如何跟踪，同時考慮您的大部分業務業務方面，是否是Resi 部件、一些短型工業部件以及您在那裡看到的任何新動態？

Yes. Mike, this is Louis. To answer your question on -- to the answer the second half first and then go over how we're thinking about markets. So we're expecting orders in Q3 to be down year-over-year mid-single digits and Q4 to rebound to being up mid-single digits. That's how we're profiling the rest of the year. So how are we thinking about it from a market perspective? A little bit slower pace of recovery in the second half, specifically around resi, HVAC, pool and general commercial.

是的。邁克，這是路易斯。先回答你的問題——先回答下半場的問題，然後再回顧一下我們如何看待市場。因此，我們預計第三季度的訂單量將同比下降中個位數，而第四季度將反彈至中個位數。這就是我們對今年剩餘時間的分析。那麼我們如何從市場的角度來思考這個問題呢？下半年的複蘇速度有點慢，特別是在熱電聯產、暖通空調、泳池和一般商業領域。

What we like about our portfolio, though, is we're pretty balanced mid, early and late cycle. We have some nice markets, though, that are accelerating growth; Aerospace, Medical, Data Center, Strength. A view to Strength is Alternative Energy, but it tends to be a little lumpy, and we're forecasting strength in the second half in Alternative Energy. And non-res construction has been pretty solid for us, and we're expecting, other than we did see headwind pressure in China in non-res construction.

不過，我們喜歡我們的投資組合的一點是，我們在周期的中期、早期和後期都非常平衡。不過，我們有一些不錯的市場，正在加速增長；航空航天、醫療、數據中心、實力。替代能源的強勢觀點是，但它往往有點不穩定，我們預測替代能源下半年會強勢。非可再生能源建設對我們來說相當穩固，而且我們預計，除了我們確實看到中國非可再生能源建設面臨逆風壓力。

Our North American non-res construction is up nicely. From an industrial distribution standpoint, I'd tell you that we're still seeing the end steels growth because, as you know, we have strong relationships with our distributors. And so we share openly [filled] out as well as orders. And in the sales out from our distributors are still quite strong. There was a little bit of -- and we expect going into Q3, continued inventory management, so orders down.

我們的北美非資源建設進展順利。從工業分銷的角度來看，我想告訴您，我們仍然看到終端鋼材的增長，因為如您所知，我們與分銷商有著牢固的關係。因此，我們公開分享[填寫]的訂單以及訂單。我們經銷商的銷售仍然相當強勁。我們預計進入第三季度，持續的庫存管理會導致訂單下降。

But overall, I feel good about the demand profile in that industrial distribution space. So hopefully, that gives you a view of how we're thinking about our markets, how we're positioned. Again, Mike, I'd tell you, not one of our markets make up more than 20% of our sales. And we like that distribution of early, mid and late cycle exposure.

但總體而言，我對該工業分銷領域的需求狀況感到滿意。希望這能讓您了解我們如何思考我們的市場以及我們如何定位。邁克，我再次告訴你，我們的任何一個市場的銷售額都占我們銷售額的 20% 以上。我們喜歡早期、中期和晚期週期暴露的分佈。

No, that's very helpful. And if you think about that down mid-single digit 3Q transition to plus mid-single-digit orders in the fourth quarter, is this just destocking normalizing and then seeing relatively normal sequential trends with maybe a couple of markets you feel a little bit more confident in? Or is there an expectation that things are maybe a little stronger cumulatively as you hit the fourth quarter on a sequential basis, just from an underlying demand perspective?

不，這非常有幫助。如果你考慮一下第三季度中個位數訂單的下降到第四季度中個位數訂單的轉變，這是否只是去庫存正常化，然後看到相對正常的連續趨勢，也許有幾個市場你感覺有點多有信心嗎？或者，僅從潛在需求的角度來看，當您按順序進入第四季度時，是否預計情況可能會逐漸走強？

No, I think that's pretty spot on. We expect some continued destocking through 3Q. We expect that to be behind us by the end of 3Q, taking a little bit longer than we anticipated. We do not expect any significant strength going into Q4 necessarily from a demand perspective. And as I said before, we're really not expecting any strong recovery in China either, slight in fourth quarter, but we expect it to be pretty muted for the year. So overall, the way you summarized it is spot on.

不，我認為這是非常正確的。我們預計第三季度將繼續去庫存。我們預計到第三季度末，這種情況就會過去，所需時間比我們預期的要長一些。從需求角度來看，我們預計第四季度不一定會出現任何顯著的增長。正如我之前所說，我們確實預計中國也不會出現強勁復甦，第四季度略有復蘇，但我們預計今年的複蘇將相當溫和。總的來說，您總結的方式是正確的。

Great. And then last one, just maybe get some context on the cross-selling. What's working from an early perspective? And what kind of pace of progression do you think you can see here on a qualitative basis as you continue to merge these two businesses and put the R&D efforts on a more joint basis?

偉大的。最後一個，也許可以了解一些有關交叉銷售的背景信息。從早期的角度來看，什麼是有效的？當您繼續合併這兩個業務並將研發工作放在更加聯合的基礎上時，您認為在定性的基礎上您可以看到什麼樣的進展速度？

I'm excited, Mike. I thought we would be spending a lot more time on the industrial powertrain side, and there's definitely opportunity there. We rounded out our offering with -- in particular, with the clutch and brake and then strengthened our position in gearing geared motors with the Bauer brand, a great global brand and our coupling business. And so I'm excited there.

我很興奮，邁克。我認為我們會在工業動力總成方面花費更多的時間，而且那里肯定有機會。我們完善了我們的產品——特別是離合器和製動器，然後通過 Bauer 品牌（一個偉大的全球品牌）和我們的聯軸器業務鞏固了我們在齒輪減速電機方面的地位。所以我對此感到很興奮。

What I didn't expect to be as excited about so quickly is how we're going to be able to leverage the strength of the total Regal Rexnord with the traditional A&S business, so our AMC business. Our Aerospace business today is $350 million of Regal and its early cycle of growth. And we're now talking at a much higher level with our customers because of the portfolio and the offering that we have, and we think it's positioned to accelerate. So we're -- we -- I would say, that's been a big positive for us and an example of just now the scale and scope of Regal and the potential for our future.

我沒想到我們會這麼快就感到興奮的是我們將如何利用整個 Regal Rexnord 的實力與傳統的 A&S 業務（即我們的 AMC 業務）。如今，我們的航空航天業務是 Regal 價值 3.5 億美元的業務，並且處於早期增長周期。由於我們擁有的產品組合和產品，我們現在正在與客戶進行更高層次的對話，我們認為它有望加速。所以我們——我們——我想說，這對我們來說是一個很大的積極因素，也是 Regal 的規模和範圍以及我們未來潛力的一個例子。

Our next question comes from Julian Mitchell with Barclays.

我們的下一個問題來自巴克萊銀行的朱利安·米切爾。

Maybe trying to keep my questions a little concise, if possible. The first one, really, the second half guidance sales of sort of $3.5 billion and $5.60-ish of EPS. Any cadence you're calling out to us between sort of third and fourth quarter as we think about sales and margins?

如果可能的話，也許我會盡量讓我的問題簡潔一些。第一個目標是下半年指導銷售額約為 35 億美元，每股收益約為 5.60 美元。當我們考慮銷售和利潤時，您在第三季度和第四季度之間有什麼節奏嗎？

Sure, Julian. This is Rob. Let me give you a sense of what we think that looks like in the third quarter. And I'll go ahead and move through this -- through the segments to give you the best color possible. For the PES segment, in the third quarter, we would expect revenues in the range of $465 million to $485 million with margins in the high teens, so margins similar to the second quarter.

當然，朱利安。這是羅布。讓我向您介紹一下我們對第三季度的看法。我將繼續通過這些部分，為您提供盡可能最好的顏色。對於 PES 細分市場，我們預計第三季度的收入將在 4.65 億美元至 4.85 億美元之間，利潤率將達到高十位數，因此利潤率與第二季度相似。

On the revenue side, we do -- as I pointed out the number, you'll see that's a slight improvement versus the second quarter, based on better seasonality, less destocking and better mix. As you move to Industrial, we see Industrial at about $130 million to $145 million. So very similar to the second quarter and the margins there, low double digit.

在收入方面，我們確實這樣做——正如我指出的數字，你會發現與第二季度相比略有改善，這是基於更好的季節性、更少的去庫存和更好的組合。當你轉向工業時，我們認為工業價值約為 1.3 億至 1.45 億美元。與第二季度和利潤率非常相似，低兩位數。

Moving to AMC. Relatively -- relative to the second quarter, relatively flat from the top line, maybe revenues in the range of $445 million to $455 million. Now when I say relatively flat, you have to remember, there is an impact of the stub period in the second quarter that's obviously not repeated in the third. And when you think about that, it's fairly flat quarter-to-quarter. And that applies to both, AMC and IPS. But again back to AMC, margins in the mid-20s, so very similar to the second quarter. Synergy is driving a piece of that, although volumes down a bit.

搬到AMC。相對而言，相對於第二季度，營收相對持平，收入可能在 4.45 億美元至 4.55 億美元之間。現在，當我說相對平穩時，你必須記住，第二季度存根期的影響顯然不會在第三季度重複。當你考慮到這一點時，你會發現季度與季度之間相當持平。這適用於 AMC 和 IPS。但再次回到 AMC，利潤率在 20 多歲左右，與第二季度非常相似。協同效應正在推動這一進程，儘管數量有所下降。

Moving to IPS. Margin is about $655 million to $670 million. So -- and by the way, the margins on that low to mid-20s, top line down a bit because of the agricultural destock. Again, you don't have that stub period impact in the third quarter and short-cycle industrial continues to be a headwind there. So overall, in the third quarter, that's about $1.695 billion to $1.755 billion as a range on the top line with margins in the low 20s. So that's the way we're thinking about it in the third quarter.

轉向 IPS。利潤約為 6.55 億至 6.7 億美元。因此，順便說一下，由於農業庫存減少，利潤率在 20 多歲左右，收入略有下降。同樣，第三季度不會受到短時期的影響，短週期工業仍然是那裡的阻力。總體而言，第三季度的營收約為 16.95 億美元至 17.55 億美元，利潤率在 20 多歲左右。這就是我們在第三季度思考的方式。

And then, of course, the implied is that the fourth quarter absolutely would be stronger than the third. And so the next logical question might be: What gives us that confidence that the fourth can be up? And I'll answer that by saying that we do have elevated backlogs in most of our businesses as I talked about in my prepared comments, that gives us some pretty good visibility. I talked about the book-to-bill at 1.0 exiting July. That gives us some nice confidence that we're holding backlog as we're kind of now a month into the third quarter.

當然，這意味著第四季度絕對會比第三季度更強。因此，下一個邏輯問題可能是：是什麼讓我們有信心第四個可以上升？我的回答是，正如我在準備好的評論中談到的那樣，我們大多數業務的積壓確實有所增加，這給了我們一些相當好的可見性。我談到了 7 月份退出的 1.0 訂單到賬單。這讓我們對我們正在積壓的訂單充滿信心，因為現在距離第三季度還有一個月了。

Our supply chain continues to normalize, and that gives us some rising confidence that we can deliver that backlog. And then we do have better visibility, good visibility into some of our more lumpy project orders, things like -- that we talk about like Data Center and Renewables in that. And then finally, the PES destock, we believe, will be behind us in the third quarter, and we'll see some slight improvement in demand in the fourth. So that's the cadence of what we're seeing from Q3 to Q4 and the Q3 detail.

我們的供應鏈繼續正常化，這讓我們越來越有信心能夠交付積壓的訂單。然後，我們確實對一些較為不穩定的項目訂單有更好的可見性，良好的可見性，例如我們談論的數據中心和可再生能源。最後，我們相信，PES 去庫存將在第三季度結束，我們將在第四季度看到需求略有改善。這就是我們從第三季度到第四季度看到的節奏以及第三季度的細節。

That's very helpful. And then just a follow-up on the amount of destocking left in your sort of short-cycle Industrial markets. What are the main areas where inventories are still elevated today? And what's the pace at which you think we get through those? Are we sort of done by Q4 on the short-cycle industrial destocking and any areas it's most acute?

這非常有幫助。然後是對短週期工業市場中剩餘的去庫存量的跟踪。目前哪些主要領域庫存仍然較高？您認為我們完成這些任務的速度是多少？我們在第四季度之前是否已經完成了短週期工業去庫存及其最嚴重的領域？

Yes. Julian, this is Louis. We do expect to be through by the start of Q4. Yes, we're still working through really resi, HVAC, pool. Pool, of course, is a small part of Regal, but it has had a pretty significant destock. And so it has had an impact in Q2 and expecting continuing into Q3 and then back -- getting to normal in Q4. And then Industrial distribution, there's no question that there's some balancing of inventory levels. And like I said before, as our lead times are reducing as well, and we're being able to support a reduction in the distribution channel. But again, we expect that to clear up by the end of Q3.

是的。朱利安，這是路易斯。我們確實預計會在第四季度初完成。是的，我們仍在研究真正的Resi、HVAC、泳池。當然，Pool 只佔 Regal 的一小部分，但它的庫存已經大幅減少。因此，它在第二季度產生了影響，預計會持續到第三季度，然後又恢復到第四季度恢復正常。然後是工業分佈，毫無疑問，庫存水平存在一定的平衡。正如我之前所說，隨著我們的交貨時間也在縮短，我們能夠支持分銷渠道的縮減。但我們再次預計這一情況將在第三季度末消失。

The next question comes from Christopher Glynn of Oppenheimer.

下一個問題來自奧本海默的克里斯托弗·格林。

A lot of good information here and transparency, so pretty easy to digest. I was curious if there's any markets or channels that maybe have any unstable patterns. It doesn't really seem with the book-to-bill, and the residential situation is pretty transparent. But just curious if anything kind of surprised you in the quarter?

這裡有很多很好的信息，而且很透明，所以很容易消化。我很好奇是否有任何市場或渠道可能存在不穩定的模式。訂單到帳單似乎並沒有什麼問題，住宅情況也相當透明。但只是好奇本季度是否有什麼事情讓您感到驚訝？

Chris, nothing more than we've already commented on. Maybe China not seeing a bit faster rebound. At the beginning of the year, I was pretty bullish on China rebounding just based on my history with China over the years. I have been a little surprised by that. But our forward look doesn't have much of any forecast improvement there. Beyond that, everything really played to our expectations. So nothing more than that.

克里斯，我們已經評論過了。也許中國不會看到更快的反彈。今年年初，根據我多年來與中國的關係，我非常看好中國的反彈。我對此感到有點驚訝。但我們的前瞻性預測並沒有太大的改善。除此之外，一切都確實符合我們的預期。所以僅此而已。

Okay. And then any update on the industrial process?

好的。那麼工業流程有什麼更新嗎？

Yes. So we've made a lot of good progress, and we believe we'll be in a position to share more in the next couple of months.

是的。所以我們已經取得了很多良好的進展，我們相信我們將能夠在接下來的幾個月內分享更多。

(Operator Instructions) Our next question comes from Nigel Coe of Wolfe Research.

（操作員說明）我們的下一個問題來自 Wolfe Research 的 Nigel Coe。

Good details here, so not too much from my side. Just on that 3Q and back off color, Rob. Maybe can you just remind us the cadence of the cost synergies from -- obviously from Altra, but also from the PMC transaction. What should we be expecting for 3Q and 4Q? And then just a final point on IPS, you said low to mid-20s. So would that be sort of flattish with what we saw in 2Q?

這裡的細節很好，所以我這邊沒有太多。就在那個 3Q 上，然後退掉顏色，羅布。也許您能提醒我們成本協同效應的節奏嗎——顯然是來自 Altra，但也來自 PMC 交易。我們對第三季度和第四季度應該期待什麼？然後是關於 IPS 的最後一點，你說的是 20 多歲左右。那麼這與我們在第二季度看到的情況是否有些持平？

Similar to Q2, yes. And then let me give you the detail on the synergies. We saw about $14 million of incremental synergies in the second quarter, which includes both, PMC and Altra. If you break that down, you think PMC is about $10 million to $11 million, and then about $3 million to $4 million for Altra. So that's how you get that $14 million. So we expect incremental about $45 million from PMC to flow through the P&L in 2023 and about $20 million from Altra to flow through the P&L in '23 with the next.

與 Q2 類似，是的。然後讓我向您詳細介紹協同效應。我們在第二季度看到了約 1400 萬美元的增量協同效應，其中包括 PMC 和 Altra。如果你細分的話，你會認為 PMC 大約是 1000 萬到 1100 萬美元，然後 Altra 大約是 300 萬到 400 萬美元。這就是你獲得那 1400 萬美元的方式。因此，我們預計 2023 年 PMC 將增加約 4500 萬美元計入損益表，而 Altra 將在 2023 年增加約 2000 萬美元計入損益表。

So that means you get an exit rate there from Altra about $40 million annually. So the total P&L impact in '23 is about $65 million. You can count on the synergies coming through and increasing each quarter. We might expect that next quarter, we might see something closer to $2 million or $3 million maybe above what we saw in the second quarter and then improving to that exit rate that I commented on in the fourth.

因此，這意味著您每年可以從 Altra 獲得約 4000 萬美元的退出率。因此，23 年損益影響總額約為 6500 萬美元。您可以信賴每個季度都會產生並不斷增加的協同效應。我們可能預計，下個季度，我們可能會看到接近 200 萬美元或 300 萬美元的資金，可能高於第二季度的水平，然後提高到我在第四季度評論的退出率。

Okay. And then this depreciation pinch you highlighted, is the accounting now pretty much settled down now? You wouldn't expect them to be too many changes from here on?

好的。然後你強調的折舊壓力現在會計已經基本確定了嗎？您不會期望從現在開始會有太多變化嗎？

Yes. I would not expect additional true-ups to any material degree going forward. Might we see slight tweaks that could be, but it's not going to be anything material and something that I would expect us to absorb. So yes, the accounting is largely behind us at this time.

是的。我預計未來不會有任何實質性程度的進一步調整。我們可能會看到一些細微的調整，但它不會是任何實質性的東西，也不會是我希望我們吸收的東西。所以，是的，目前會計工作基本上已經落後了。

Okay. Great. And then my follow-on is, Louis, you've obviously seen a few cycles that we all have. But from your perch, when (inaudible) say we're seeing the weakness right now in some of the consumer durables and short-cycle Industrial, which is where you'd expect to see weakness emerging and therefore, this is then cascade into some of the longer cycle businesses. So based on your experience, are you seeing something different this time that maybe suggests that perhaps non-res, Energy, et cetera, can remain strong for longer?

好的。偉大的。然後我的後續是，路易斯，你顯然已經看到了我們都有的幾個週期。但從你的立場來看，當（聽不清）說我們現在看到一些耐用消費品和短週期工業的疲軟時，你預計會看到疲軟的出現，因此，這會級聯到一些屬於週期較長的業務。因此，根據您的經驗，您這次是否看到了一些不同的東西，這可能表明非資源、能量等可以保持更長時間的強勢？

Yes. It's obviously a great question, Nigel. It's something that we are thinking a lot about as we are moving right now into our strategic planning period and getting prepared for our thoughts on next year. For now, things look pretty good in the longer cycle businesses. Our backlogs are strong, and honestly, our orders are accelerating in some of the bigger projects and opportunities. I think -- as I think about what drivers for Regal, the trend towards electrification, the opportunity around regulatory driving performance and energy efficiency, onshoring and automation. These are major drivers. And then some of the stimulus has helped us. We can't directly pinpoint, but our mining business has been quite strong, and we believe we're getting benefits out of the Infrastructure Investment and Jobs Act.

是的。這顯然是一個很好的問題，奈傑爾。當我們現在進入戰略規劃期並為明年的想法做好準備時，我們正在思考很多事情。目前，較長周期業務的情況看起來相當不錯。我們的積壓訂單很豐富，老實說，我們的訂單在一些更大的項目和機會中正在加速。我認為——當我思考Regal的驅動因素、電氣化趨勢、圍繞監管推動績效和能源效率、外包和自動化的機會時。這些是主要驅動因素。然後一些刺激措施對我們有所幫助。我們無法直接確定，但我們的採礦業務相當強勁，我們相信我們正在從基礎設施投資和就業法案中受益。

And the -- we expect as we move forward, even the Science and CHIPS Act will help the AMC Automation and Conveyance businesses. So I think there are some things that should help keep later cycle businesses strong as our early cycles rebound and there's no question, we feel like we're pretty darn close to the bottom in resi and pool and commercial.

我們預計，隨著我們的前進，《科學與芯片法案》也將有助於 AMC 自動化和運輸業務。因此，我認為，隨著我們早期週期的反彈，有些事情應該有助於保持後期週期業務的強勁，毫無疑問，我們感覺我們在儲備金、礦池和商業方面已經非常接近底部了。

And then we have accelerating markets, as I said before, Aerospace, we're just really excited about the growth there, Medical, Alternative Energy. So all of these, hopefully, Nigel give you a perspective of how we're thinking. We do think '24 should be pretty solid year for us, and we'll provide more color and guidance on that as we progress into this -- into the end of this year and the beginning of next.

然後我們的市場正在加速發展，正如我之前所說，航空航天、醫療、替代能源的增長讓我們感到非常興奮。因此，奈傑爾希望所有這些都能讓您了解我們的想法。我們確實認為 24​​ 年對我們來說應該是相當堅實的一年，隨著我們的進展——今年年底和明年初，我們將提供更多的色彩和指導。

Our next question comes from Walter Liptak from Seaport.

我們的下一個問題來自 Seaport 的 Walter Liptak。

I wanted to ask on the working capital. The inventories came down a little bit stronger. And I remember from last quarter, you guys are -- you kind of beefed up the bonus compensation related to working capital. Is there still more that comes out? Was that kind of in line with what you were thinking or a little bit better? Any color there?

我想問一下營運資金。庫存略有下降。我記得從上個季度開始，你們加強了與營運資金相關的獎金補償。還有更多的東西出來嗎？這符合你的想法還是更好一些？那裡有什麼顏色嗎？

Yes. Thanks, Walt, and good to hear from you. We estimate for '23 now, somewhere in the range of $200 million to $225 million, specifically from inventory reductions. We saw, as a reminder, about $45 million of that benefit in the first quarter. We just saw another $64 million here in the second quarter. So we're largely on track, but even a little bit ahead of what we originally had expected to your point there.

是的。謝謝，沃爾特，很高興收到你的來信。我們現在估計 23 年的成本在 2 億至 2.25 億美元之間，特別是來自庫存削減。提醒一下，我們在第一季度看到了約 4500 萬美元的收益。我們剛剛在第二季度又看到了 6400 萬美元。因此，我們基本上步入正軌，但甚至比我們最初預期的要提前一點。

Now we also expect another $100 million to $150 million coming in 2024. So if you kind of add all that up, that's about $300 million to $375 million over the next 18 to 24 months. Obviously, the precise timing is out of our control since it's tied to supply chain normalizing and those sorts of things. But -- and also some of the challenges that we continue to have in the areas of electronics to a small degree and then castings as well.

現在，我們還預計 2024 年將再增加 1 億至 1.5 億美元。因此，如果將所有這些加起來，則在未來 18 至 24 個月內將增加約 3 億至 3.75 億美元。顯然，精確的時間是我們無法控制的，因為它與供應鏈正常化和諸如此類的事情息息相關。但是，我們在電子領域以及鑄件領域仍然面臨一些挑戰。

But overall, that's what the picture looks like. So we're excited about that, and we see that the ability to use that to continue to pay down our debt is a great benefit from a capital allocation standpoint.

但總的來說，這就是圖片的樣子。因此，我們對此感到興奮，並且我們看到，從資本配置的角度來看，利用它繼續償還債務的能力是一個巨大的好處。

The next question comes from Jeff Hammond of KeyBanc Capital Markets.

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

So just want to dig in a little bit on some of the margin differentials. It seems like IPS running a little lower. I don't know if that's mix of Altra doing better and your Legacy doing a little worse. And then PES, really nice step up there and just maybe a sense of what drove that versus your expectation?

因此，我只想深入了解一些利潤差異。看來 IPS 運行得有點低。我不知道這是否是 Altra 做得更好而你們的 Legacy 做得更差的結果。然後是實況足球，非常好的一步，也許只是感覺到是什麼推動了這與你的期望不同？

Yes. Let me take that, Jeff, and this is Louis. I'll start with PES. I couldn't be more pleased with the performance of PES. It really starts with our operations performing very well in Israel. Really indicative of the strong 80/20 and lean journey that we've been on. So even when volumes are down, we're executing well. Now we've had some additional benefits continue to get priced to cover our nonmaterial inflation. Mix has definitely helped us as the mix of the business through aftermarket and distribution versus OEM. And we've seen some benefit from new products that we've launched that is a mix positive to that segment overall.

是的。讓我接受，傑夫，這是路易斯。我將從 PES 開始。我對 PES 的表現非常滿意。這實際上是從我們在以色列的業務表現良好開始的。真正體現了我們一直以來的強勁 80/20 和精益之旅。因此，即使銷量下降，我們的執行情況也很好。現在我們已經有一些額外的福利繼續定價以彌補我們的非物質通貨膨脹。通過售後市場和分銷與 OEM 的業務組合，混合無疑對我們有幫助。我們已經看到我們推出的新產品帶來了一些好處，這對整個細分市場來說是積極的。

I think the business is doing very well and really nicely positioned for when demand does rebound. So a solid performance there. IPS -- so that was PES. I would tell you, IPS really performed pretty much as we expected. There was a bit of mix headwind, notably in the short cycle destocking that we talked about. And as you know, distribution tends to be a positive margin mix for us. We continue to see some pockets of inflation, labors, certain metal alloys, castings for sure, definitely casting [and] been a supply chain constraint. Overall, though, I'm really pleased with IPS' performance. We have many levers in the future to pull on to drive margin improvement, our synergies, 80/20 and then continued investment in doubling our vitality and launching more margin -- mix positive margin product. So overall, really spot on to our expectations.

我認為該業務表現非常好，並且在需求反彈時確實處於有利位置。所以那裡的表現很紮實。 IPS——這就是PES。我可以告訴你，IPS 的表現確實與我們預期的差不多。存在一些混合逆風，特別是在我們談到的短週期去庫存方面。如您所知，分銷對我們來說往往是一個積極的利潤組合。我們繼續看到一些通貨膨脹、勞動力、某些金屬合金、鑄件，肯定是鑄造[並且]是供應鏈的限制。但總的來說，我對 IPS 的性能非常滿意。未來我們有很多槓桿來推動利潤率的提高，我們的協同效應，80/20，然後繼續投資，使我們的活力加倍並推出更多的利潤率——混合正利潤率產品。總的來說，確實符合我們的期望。

Okay. Great. And then just the higher interest expense, I just want to understand, it looks like you paid down quite a bit of debt. I'm assuming your free cash, which is coming in better would pay down debt in the second half. Is it just something with the rate dynamic or something else?

好的。偉大的。然後就是更高的利息支出，我只是想了解，看起來你還清了相當多的債務。我假設你的自由現金會更好地在下半年償還債務。僅僅是利率動態還是其他什麼？

Yes, it's primarily related to the rate dynamic. I mean it's a -- we did raise it as I said, about $9 million for the year here. And I mean that's the net of both, the interest expense and the interest income. It's primarily related to the change in the interest in the SOFR curve that's inched up more steeply. There's a little bit of dust still settling in terms of getting everything tied down relative to the acquisition, but that was fairly small dollars.

是的，這主要與利率動態有關。我的意思是，正如我所說，我們確實籌集了大約 900 萬美元的資金。我的意思是，這是利息支出和利息收入的淨值。這主要與 SOFR 曲線的利息變化有關，該曲線的上升幅度更大。在將所有與收購相關的事情捆綁在一起方面，還有一些塵埃落定，但那隻是相當小的美元。

So it's primarily related to SOFR curve, true-up. And if we don't continue to see additional increases above and beyond what's built in today, I would expect that to come in where we see it with potential to actually beat it a bit based on some of the cash flow opportunities that we've been talking about.

所以它主要與 SOFR 曲線、校正有關。如果我們不繼續看到超出今天內置的額外增長，我預計根據我們已經獲得的一些現金流機會，我們認為有可能實際超過它。一直在談論。

Okay. And then just last one. Just on the charges and how they kind of flow through SG&A versus gross margin, I just want to be able to kind of get back to that kind of 35% gross -- adjusted gross margin you talked about.

好的。然後就是最後一張。就費用以及它們如何通過 SG&A 與毛利率相比，我只是希望能夠回到您所說的 35% 的調整後毛利率。

Yes. I would recommend on that one, Jeff, may we follow up offline. There are some schedules in the back of the workbook or the 8-K that we can certainly talk to. And I think that's the easier way to get through that. It's not as simple as -- it's not a simple answer. There are quite a few dynamics in play on that one.

是的。我會推薦這一點，傑夫，我們可以離線跟進嗎？作業本或 8-K 後面有一些時間表，我們當然可以討論。我認為這是解決這個問題的更簡單的方法。這不是那麼簡單——這不是一個簡單的答案。在這一點上有相當多的動力在發揮作用。

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Louis Pinkham for any closing remarks.

我們的問答環節到此結束。我想將會議轉迴路易斯·平卡姆先生髮表閉幕詞。

Thank you, operator. And thanks to our investors and analysts for joining us today. As you heard this morning, there are so many opportunities in front of us to enhance value creation for our key stakeholders. As a scale player in the markets we serve with differentiated technologies, strong channel positions, ample financial resources and a great team that continues to execute at a high level, we are excited about pursuing these opportunities with discipline, a sense of urgency and always in accordance with our Regal Rexnord values. Thank you again for joining us today, and thank you for your interest in Regal Rexnord. Have a good day.

謝謝你，接線員。感謝我們的投資者和分析師今天加入我們。正如您今天早上所聽到的，我們面前有很多機會來增強我們主要利益相關者的價值創造。作為我們服務的市場中的規模參與者，我們擁有差異化的技術、強大的渠道地位、充足的財務資源和一支持續高水平執行的優秀團隊，我們很高興能以紀律、緊迫感和始終如一的態度抓住這些機會。符合我們的 Regal Rexnord 價值觀。再次感謝您今天加入我們，並感謝您對 Regal Rexnord 的興趣。祝你有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。