Standard Motor Products Inc (SMP) 2023 Q1 法說會逐字稿

Good day, everyone, and welcome to the Standard Motor Products First Quarter 2023 Earnings Call. (Operator Instructions) Please note today's call will be recorded, and I will be standing by should you need any assistance.

大家好，歡迎來到 Standard Motor Products 2023 年第一季度財報電話會議。 （操作員說明）請注意，今天的通話將被錄音，如果您需要任何幫助，我將隨時待命。

And it is now my pleasure to turn the conference over to Tony Cristello, Vice President of Investor Relations. Please go ahead.

現在我很高興將會議轉交給投資者關係副總裁 Tony Cristello。請繼續。

Thank you, Chris. Good morning, everyone, and thank you for joining us on Standard Motor Products first quarter 2023 earnings conference call. I'm Tony Cristello, and with me today are Eric Sills, President and CEO; Jim Burke, Chief Operating Officer; and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview of our performance in the quarter, and Nathan will then discuss our financial results. Eric will then provide some concluding remarks and open the call up for Q&A.

謝謝你，克里斯。大家早上好，感謝您參加標準汽車產品公司 2023 年第一季度收益電話會議。我是 Tony Cristello，今天和我在一起的是總裁兼首席執行官 Eric Sills；吉姆·伯克，首席運營官；和首席財務官 Nathan Iles。在我們今天的電話會議上，Eric 將概述我們本季度的業績，然後 Nathan 將討論我們的財務業績。然後，Eric 將提供一些總結性評論並開啟問答環節。

Before we begin this morning, I'd like to remind you that some of the material that we'll be discussing today may include forward-looking statements regarding our business and expected financial results. When we use words like anticipate, believe, estimate or expect, these are generally forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they are based on information currently available to us and certain assumptions made by us, and we cannot assure you that they will prove correct.

在今天上午開始之前，我想提醒您，我們今天要討論的一些材料可能包括有關我們業務和預期財務結果的前瞻性陳述。當我們使用預期、相信、估計或預期等詞語時，這些通常是前瞻性陳述。儘管我們認為這些前瞻性陳述中反映的預期是合理的，但它們是基於我們目前可獲得的信息和我們做出的某些假設，我們無法向您保證它們將被證明是正確的。

You should also read our filings with the Securities and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward-looking statements.

您還應該閱讀我們提交給美國證券交易委員會的文件，其中討論了可能導致我們的實際結果與我們的前瞻性陳述不同的風險和不確定性。

I'll now turn the call over to Eric Sills, our CEO.

我現在將電話轉給我們的首席執行官 Eric Sills。

Thank you, Tony, and good morning, everyone, and welcome to our first quarter earnings call. Overall, we are pleased with our top line performance, especially considering the comparison. We were up 1.6%, and this is on top of last year's 17% growth.

謝謝托尼，大家早上好，歡迎來到我們的第一季度財報電話會議。總的來說，我們對我們的頂級表現感到滿意，特別是考慮到比較。我們增長了 1.6%，這是在去年 17% 的增長之上。

This will be the first quarter reporting by our new segments, so let me take a minute to remind you of the changes and then we'll review each one. And if you would like a more thorough explanation, please see our resegmentation press release issued this past February.

這將是我們新部門的第一季度報告，所以讓我花一點時間提醒您這些變化，然後我們將審查每一個。如果您想要更詳盡的解釋，請參閱我們今年 2 月發布的重新細分新聞稿。

Previously, we had 2 segments: Engine Management and Temperature Control, and both were a blend of aftermarket volume and sales into other markets. We have now separated these non-aftermarket sales into their own segment called Engineered Solutions. This has left the other 2 segments solely reflective of aftermarket business.

以前，我們有 2 個細分市場：發動機管理和溫度控制，兩者都是售後市場銷量和其他市場銷量的混合體。我們現在已將這些非售後市場銷售分成各自的部分，稱為工程解決方案。這使得其他 2 個部分僅反映售後市場業務。

The other change was the renaming of Engine Management to Vehicle Control. As we reflected on the product categories covered within it, we came to the determination that the name Engine Management was no longer suitable as we had significant sales in nonengine-related categories, notably in powertrain neutral, safety and electrical products. We've recast our historical numbers along these new lines to make for apples-to-apples comparisons.

另一個變化是將引擎管理重命名為車輛控制。當我們反思其中涵蓋的產品類別時，我們決定發動機管理這個名稱不再合適，因為我們在非發動機相關類別中有大量銷售，特別是在動力總成中性、安全和電氣產品方面。我們已經按照這些新路線重鑄了我們的歷史數據，以便進行同類比較。

So how are we doing, and I'll start with Vehicle Control, the largest of the 3. We saw strong performance here, up over 4%. There are various puts and takes here, including some benefits from pricing and some new business wins, offset by lower purchasing from a large bankrupt customer. But the overriding theme is ongoing demand strength in the marketplace. We are also pleased to see that customer POS remains positive for our large customers throughout the period, even against strong POS numbers last year. And this tends to be a good indication of their future purchases from us.

那麼我們的表現如何，我將從 3 個中最大的 Vehicle Control 開始。我們在這裡看到了強勁的表現，增長了 4% 以上。這裡有各種看跌期權，包括定價帶來的一些好處和一些新業務的勝利，但被大破產客戶的採購量減少所抵消。但最重要的主題是市場需求的持續增長。我們也很高興看到客戶 POS 在整個期間對我們的大客戶來說仍然是積極的，即使去年的 POS 數字很強勁。這往往是他們未來從我們這裡購買的一個很好的跡象。

Temperature Control sales were slightly behind last year, which was a very tough comparison as last year was up nearly 30% over 2021. But more importantly, this is mostly a warm weather seasonal business, and we always caution not to read too much into first quarter sales as they mostly reflect preseason orders and the real test is in the summer months.

溫度控制銷售額略低於去年，這是一個非常艱難的比較，因為去年比 2021 年增長了近 30%。但更重要的是，這主要是一個溫暖天氣的季節性業務，我們總是告誡不要首先過度解讀季度銷售，因為它們主要反映季前訂單，真正的考驗是在夏季。

Lastly, let me speak to where we are with Engineered Solutions. Here, we are off a couple of points from last year, but it is important to note that as compared to the aftermarket, we expect this business to vary slightly quarter-to-quarter. We are selling to vehicle and equipment manufacturers across a wide array of end markets. And as they vary their production schedules, they can move their purchases around a bit. It's also worth pointing out that last year's first quarter was a high watermark for this business, so it was a tough comparison. And if you compare this quarter to the quarterly average from last year were up 5%.

最後，讓我談談我們在工程解決方案方面的進展。在這裡，我們與去年相比有幾個點，但重要的是要注意，與售後市場相比，我們預計該業務的季度變化會略有不同。我們向廣泛的終端市場的車輛和設備製造商銷售產品。當他們改變他們的生產計劃時，他們可以稍微調整他們的採購。還值得指出的是，去年第一季度對該業務來說是一個高水位線，因此這是一個艱難的比較。如果將本季度與去年的季度平均值進行比較，則增長了 5%。

Overall, we continue to be very excited about Engineered Solutions. Now that we have launched our newly defined global strategy and are going to market with our combined portfolio, we are experiencing the cross-selling opportunities we had hoped for. Though as mentioned, new business awards can take some time before they show in revenue.

總的來說，我們仍然對工程解決方案感到非常興奮。既然我們已經啟動了新定義的全球戰略，並準備將我們的組合組合推向市場，我們正在體驗我們所希望的交叉銷售機會。儘管如前所述，新的商業獎勵可能需要一些時間才能體現在收入中。

Moving to profitability. Earnings have continued to present a challenge. I'll touch on it, and Nathan will delve deeper. For the past several quarters, we experienced elevated costs across many impacts. Overall, these costs have largely stabilized, though at an elevated level. It's important to note that due to the diversity of our product offering, we are impacted by a host of different commodities with no single one dominating. Therefore, while we have seen some commodities peak and begin to subside, such as metals, others such as electronics have remained elevated and needless to say labor costs continue to rise.

轉向盈利。收益繼續構成挑戰。我會稍微談一下，Nathan 會更深入地研究。在過去的幾個季度中，我們經歷了許多影響的成本上升。總體而言，這些成本雖然處於較高水平，但已基本穩定下來。值得注意的是，由於我們提供的產品種類繁多，我們受到許多不同商品的影響，沒有哪一種商品占主導地位。因此，雖然我們看到一些商品達到頂峰並開始回落，例如金屬，但其他商品（例如電子產品）仍然處於高位，不用說勞動力成本繼續上漲。

And interest rates, which have risen sharply since the middle of last year, have been affecting the cost of our customer factoring programs. The industry has been largely receptive to passing these costs through, though there is always a lag in timing.

自去年年中以來急劇上升的利率一直在影響我們客戶保理計劃的成本。儘管時間總是滯後，但該行業在很大程度上已經接受了轉嫁這些成本。

That represents the highlights of the quarter. I'll now turn it over to Nathan to review the numbers, after which I will speak to our views of the future. Nathan?

這代表了本季度的亮點。我現在將它交給 Nathan 來審查這些數字，之後我將談談我們對未來的看法。內森？

All right. Thank you, Eric, and good morning, everyone. As Eric noted earlier, we had a good first quarter of the year as sales were higher than last year and margins and operating profits were in line with the expectations we laid out at the beginning of the year. As we go through the numbers, I'll first give some color on the results by segment and at the consolidated level.

好的。謝謝你，埃里克，大家早上好。正如埃里克早些時候指出的那樣，我們今年第一季度表現良好，因為銷售額高於去年，利潤率和營業利潤符合我們年初制定的預期。當我們瀏覽這些數字時，我將首先按細分和合併級別對結果進行一些顏色說明。

And as I do, you'll see we've identified the cost of our customer factoring program separately, given the increasing size of the cost. I'll also cover some key balance sheet and cash flow metrics and finally, provide an update on our financial outlook for the full year in 2023.

和我一樣，你會看到我們已經單獨確定了客戶保理計劃的成本，因為成本規模不斷增加。我還將介紹一些關鍵的資產負債表和現金流量指標，最後提供我們 2023 年全年財務展望的最新情況。

First, looking at Vehicle Control, you can see on the slide that net sales there in Q1 were $184.6 million and up 4.1% versus the same quarter last year, with the increase driven primarily by continued strong demand for our products.

首先，看看 Vehicle Control，您可以在幻燈片上看到第一季度的淨銷售額為 1.846 億美元，比去年同期增長 4.1%，增長的主要原因是對我們產品的持續強勁需求。

Vehicle Controls adjusted EBITDA of $21.5 million in Q1, was 11.6% of net sales, down 2.2 points from Q1 last year. Looking at the pieces of adjusted EBITDA for Vehicle Control, gross margin was up 0.4 points from last year at 31.7%, helped by higher sales and favorable mix, while SG&A expenses remained well under control at 18.4% of net sales. However, the decline in adjusted EBITDA was primarily the result of a $4.2 million increase in the cost of our customers' factoring programs, which by itself accounted for the drop of 2.2 points in adjusted EBITDA.

車輛控制部門第一季度調整後的 EBITDA 為 2150 萬美元，占淨銷售額的 11.6%，比去年第一季度下降 2.2 個百分點。從車輛控制的調整後 EBITDA 來看，毛利率比去年上升 0.4 個百分點，達到 31.7%，這得益於更高的銷售額和有利的組合，而 SG&A 費用仍保持在淨銷售額的 18.4% 的良好控制之下。然而，調整後 EBITDA 的下降主要是由於我們客戶的保理計劃成本增加了 420 萬美元，這本身就導致調整後 EBITDA 下降了 2.2 個百分點。

Looking at Temperature Control, net sales there in Q1 2023 of $72.4 million, were down 0.9%, but this is up against Q1 last year when sales grew by almost 30%. We were pleased to see sales remain at higher levels, but also note that the first quarter is not indicative of the full year in the seasonal business. Temperature Controls adjusted EBITDA of $3.3 million in Q1, was down from last year and came in at 4.6% of net sales.

看看 Temperature Control，2023 年第一季度的淨銷售額為 7240 萬美元，下降了 0.9%，但這高於去年第一季度的銷售額增長近 30%。我們很高興看到銷售額保持在較高水平，但也注意到第一季度並不代表季節性業務的全年。 Temperature Controls 第一季度調整後的 EBITDA 為 330 萬美元，低於去年，占淨銷售額的 4.6%。

Looking at the pieces for Temp Control, gross margin rate in the quarter declined slightly to 26.5% and was impacted by inflation and costs and headwinds from lower production. But the biggest driver of the decline was the incremental $1.3 million in expenses from customer factoring programs, which accounted for a 1.8% drop in adjusted EBITDA in the quarter.

從 Temp Control 的情況來看，本季度的毛利率略有下降至 26.5%，並受到通貨膨脹和成本以及產量下降帶來的逆風的影響。但下降的最大驅動因素是客戶保理計劃增加的 130 萬美元支出，該支出佔本季度調整後 EBITDA 下降 1.8%。

Turning to Engineered Solutions. Sales there in the quarter of $71 million, were down 2% versus last year, and as noted before, were mainly impacted by changes in customer ordering patterns. Adjusted EBITDA for Engineered Solutions in the quarter came in at 11.6%, a decrease of 1.1 points from last year. The decline was mainly due to lower sales volume, but also the impact of cost inflation and the same lower production experienced by other segments, partly offset by lower SG&A expenses.

轉向工程解決方案。該季度的銷售額為 7100 萬美元，比去年下降 2%，而且如前所述，主要受到客戶訂購模式變化的影響。本季度工程解決方案的調整後 EBITDA 為 11.6%，比去年下降 1.1 個百分點。下降的主要原因是銷量下降，但也受到成本上漲和其他部門同樣產量下降的影響，部分被較低的 SG&A 費用所抵消。

Turning now to our consolidated results. Consolidated net sales mainly reflect the growth we saw in Vehicle Control with Q1 '23 finishing up 1.6% versus Q1 last year. Given the growth in consolidated sales and a higher margin rate in Vehicle Control, we reported higher consolidated gross margin dollars in Q1 and a margin rate flat with last year of 27.8%.

現在轉向我們的綜合結果。合併淨銷售額主要反映了我們在車輛控制方面看到的增長，23 年第一季度與去年第一季度相比增長了 1.6%。鑑於綜合銷售額的增長和車輛控制的更高利潤率，我們報告第一季度綜合毛利率更高，利潤率與去年持平，為 27.8%。

Regarding SG&A expenses, excluding the cost of customer factoring programs, which are shown separately on the page, SG&A expenses were well controlled and in line with last year at 18.5% of net sales.

關於 SG&A 費用，不包括頁面上單獨顯示的客戶保理計劃成本，SG&A 費用控制良好，與去年持平，占淨銷售額的 18.5%。

Looking at the bottom line. Consolidated operating income was 6.6% of net sales, down 1.7 points from Q1 last year, and adjusted EBITDA of $29 million was down $6.4 million from last year. With the decline in both metrics, the result of the combined $5.5 million increase in factoring expenses we experienced in the aftermarket segments.

看底線。合併營業收入占淨銷售額的 6.6%，比去年第一季度下降 1.7 個百分點，調整後的 EBITDA 為 2900 萬美元，比去年下降 640 萬美元。隨著這兩個指標的下降，我們在售後市場的保理費用總共增加了 550 萬美元。

As per diluted earnings per share, you can see our performance resulted in earnings of $0.61 per share versus $0.92 last year. And in addition to the drivers already discussed, was impacted by $3.1 million of higher interest expense resulting from a higher debt level, but mainly due to higher interest rates. Before I move to the balance sheet and cash flows, I want to make a few summarizing points on our results.

根據稀釋後的每股收益，您可以看到我們的業績導致每股收益為 0.61 美元，而去年為 0.92 美元。除了已經討論過的驅動因素之外，還受到更高債務水平導致的 310 萬美元更高利息支出的影響，但主要是由於更高的利率。在我轉向資產負債表和現金流量之前，我想對我們的結果做一些總結。

First, our gross margin performance reflects the fact that we continue to experience elevated, albeit moderating levels of inflation as well as headwinds from lowering production volumes to right size inventory levels as supply chains become more stable. While flat, the results showed the positive impact of pricing and cost savings initiatives are having in overcoming these pressures.

首先，我們的毛利率表現反映了這樣一個事實，即我們繼續經歷高漲但緩和的通脹水平，以及隨著供應鏈變得更加穩定而將產量降低至適當規模庫存水平的不利因素。雖然持平，但結果表明定價和成本節約舉措在克服這些壓力方面產生了積極影響。

Second, our SG&A expenses remain well under control across all segments. However, as I've said, we continue to face higher costs and customer factoring programs due to higher interest rates. And while the rates are out of our control, we're continuing to work on pricing and savings initiatives to address these costs.

其次，我們的 SG&A 費用在所有部門都得到了很好的控制。然而，正如我所說，由於更高的利率，我們繼續面臨更高的成本和客戶保理計劃。雖然費率超出了我們的控制範圍，但我們仍在繼續制定定價和節省計劃以解決這些成本問題。

Third, I noted we incurred higher interest expense mainly due to higher rates in the quarter. In order to address rising rates, we fixed the rate on $100 million or about 40% of our total debt on June 1 last year. We're also focused on reducing our debt by generating cash from inventory reductions.

第三，我注意到我們產生了更高的利息支出，這主要是由於本季度利率較高。為了應對不斷上升的利率，我們在去年 6 月 1 日將利率固定在 1 億美元或我們總債務的 40% 左右。我們還專注於通過減少庫存產生現金來減少債務。

So as you can see, while we're facing a lot of pressure from current interest rates and elevated inflation, our core business is performing well.

因此，正如您所看到的，雖然我們面臨著當前利率和通貨膨脹率上升的巨大壓力，但我們的核心業務表現良好。

Sales have continued to increase. We are executing programs to improve our results, and SG&A is under control, which has led to operating profit margins that, while down, are in line with historical levels despite unique challenges.

銷售額持續增長。我們正在執行改善業績的計劃，SG&A 得到控制，這導致營業利潤率雖然下降，但與歷史水平保持一致，儘管面臨著獨特的挑戰。

Further, we continue to see an adjusted EBITDA margin in our Engineered Solutions business that is in line with our aftermarket businesses and in the first quarter actually finished better than the aftermarket.

此外，我們繼續看到我們的工程解決方案業務的調整後 EBITDA 利潤率與我們的售後市場業務一致，並且在第一季度實際上比售後市場更好。

Turning now to the balance sheet. Accounts receivable of $210.8 million at the end of the quarter, were up $43.2 million from December 22, with the increase mainly a result of higher sales during the quarter.

現在轉向資產負債表。本季度末應收賬款為 2.108 億美元，比 12 月 22 日增加了 4320 萬美元，增加的主要原因是本季度銷售額增加。

Inventory levels finished Q1 at $522 million, down $6.7 million from December '22 and down $12.4 million from March 2022 as we focus on reducing inventories.

由於我們專注於減少庫存，第一季度的庫存水平為 5.22 億美元，比 22 年 12 月減少了 670 萬美元，比 2022 年 3 月減少了 1240 萬美元。

Note that we typically build inventories during the first half of the year in anticipation of the Temp Control selling season. And when viewed against average increases of $10 million in Q1, this reduction in inventory represents a significant improvement in cash flow of almost $17 million in the first quarter.

請注意，我們通常會在上半年建立庫存以應對 Temp Control 銷售旺季。與第一季度 1000 萬美元的平均增長相比，庫存的減少代表第一季度近 1700 萬美元的現金流顯著改善。

Turning to cash flows. Our cash flow statement reflects cash used in operations in the first quarter of $20.4 million as compared to $104 million last year, an improvement of $83.6 million, driven by a $74 million improvement in cash flows from inventory during the quarter. Our financing activities included $33.5 million of borrowings on our revolving credit facilities, which were used mainly to fund our seasonal working capital requirements and $6.3 million of dividends paid during the quarter.

轉向現金流。我們的現金流量表反映了第一季度運營中使用的現金為 2040 萬美元，而去年同期為 1.04 億美元，增加了 8360 萬美元，這是由於本季度庫存現金流量增加了 7400 萬美元。我們的融資活動包括 3350 萬美元的循環信貸額度借款，主要用於滿足我們的季節性營運資金需求和本季度支付的 630 萬美元股息。

Our borrowings in Q1 2023 were significantly improved and were $87 million lower than last year, driven by improved cash flow from inventory.

在庫存現金流改善的推動下，我們在 2023 年第一季度的借款顯著改善，比去年減少了 8700 萬美元。

Finally, I want to give an update on our sales and profit expectations for the full year 2023. Regarding our top line sales, we are maintaining expectations we laid out before and anticipate full year 2023 sales growth in percentage terms will be in the low single digits, in line with our historical growth rate. We're also maintaining our expectations for adjusted EBITDA, which we expect will be approximately 10% for the full year in 2023 and includes costs from customer factoring programs that will hit $45 million to $50 million at current rates.

最後，我想更新一下我們對 2023 年全年的銷售和利潤預期。關於我們的銷售收入，我們維持之前製定的預期，並預計 2023 年全年的銷售增長百分比將處於低位位數，符合我們的歷史增長率。我們還維持對調整後 EBITDA 的預期，我們預計 2023 年全年的 EBITDA 約為 10%，其中包括按當前匯率計算的客戶保理計劃成本將達到 4500 萬至 5000 萬美元。

In connection with adjusted EBITDA, we expect depreciation and amortization expenses and our income tax rate to be in line with 2022, but expect our interest expense on outstanding debt to be about $4 million to $5 million each quarter, given higher rates than average borrowings versus last year.

關於調整後的 EBITDA，我們預計折舊和攤銷費用以及我們的所得稅率將與 2022 年保持一致，但預計我們未償還債務的利息支出每季度約為 400 萬至 500 萬美元，因為利率高於平均借款去年。

Looking at operating cash flows in 2023. We expect to continue to reduce inventory levels and are on track to see operating cash flows return to healthy levels consistent with past years. As we maintain our expectation for the year, we were pleased to announce this morning that our Board has approved a quarterly dividend of $0.29 per share to be paid on June 1 of this year.

看看 2023 年的經營現金流。我們預計將繼續降低庫存水平，並有望看到經營現金流恢復到與過去幾年一致的健康水平。由於我們維持對今年的預期，今天上午我們很高興地宣布，董事會已批准將於今年 6 月 1 日支付每股 0.29 美元的季度股息。

To wrap up, we were pleased to report growing sales in the first quarter and bottom line results that were in line with our expectations. We thank all of our team members for helping us achieve these results in what continues to be a unique economic environment.

總而言之，我們很高興地報告第一季度的銷售額增長以及符合我們預期的底線結果。我們感謝所有團隊成員幫助我們在持續獨特的經濟環境中取得這些成果。

Thank you all for your attention. I'll now turn the call back to Eric for some final comments.

謝謝大家的關注。我現在將電話轉回 Eric 以徵求一些最終意見。

Thank you, Nathan. And before opening for questions, let me just talk a bit about what we've been seeing in the market and how we're thinking about the future. Start with our aftermarket business, which makes up about 80% of our total revenue. Market conditions continue to be favorable as most trends are positive. The vehicle age is increasing, and that's expected to continue as both the cost and availability of new cars remain a challenge for consumers. Miles driven are nearing historic levels and gas prices have normalized.

謝謝你，內森。在開始提問之前，讓我先談談我們在市場上看到的情況以及我們對未來的看法。從我們的售後市場業務開始，該業務約占我們總收入的 80%。由於大多數趨勢是積極的，市場狀況繼續有利。車輛的年齡正在增加，並且由於新車的成本和可用性仍然是消費者面臨的挑戰，因此預計這種情況將持續下去。行駛里程接近歷史水平，汽油價格也已正常化。

And while we appear to be heading into a difficult economic times, our industry tends to do well in that environment. Furthermore, as our categories are largely nondiscretionary, they tend to outperform other categories in such situations. Cars are essential transportation for most Americans. When they are not operating properly, they get repaired.

雖然我們似乎正進入困難的經濟時期，但我們的行業往往在這種環境下表現良好。此外，由於我們的類別在很大程度上是非自由裁量的，因此在這種情況下它們往往優於其他類別。汽車是大多數美國人必不可少的交通工具。當它們不能正常工作時，它們會得到維修。

Additionally, our relationships with our customers are stronger than ever. And while we can never be complacent, we believe that we have emerged from the last few years in an even better position than before. Our customers are looking for partners that can care for their needs going forward. We believe they are seeking suppliers whose supply chains have less reliance on the Far East and suppliers who are investing in the technologies of the future, and we fare both on -- fare well on both of those accounts.

此外，我們與客戶的關係比以往任何時候都更加牢固。雖然我們永遠不能自滿，但我們相信，我們在過去幾年中的表現比以往任何時候都更好。我們的客戶正在尋找能夠滿足他們未來需求的合作夥伴。我們相信他們正在尋找供應鏈對遠東的依賴程度較低的供應商，以及正在投資未來技術的供應商，我們在這兩個方面都做得很好——在這兩個方面都做得很好。

So while there will always be challenges, the marketplace and our position within it are very strong. We also remain excited about the momentum in our Engineered Solutions business. We came out of the gates this year with the formal launch of our strategy to pursue new business across a wide range of products, geographies and end markets. The opportunities are vast. And as we get our name and capabilities known to the customers in these channels, we are confident we will get more than our share of awards.

因此，儘管挑戰總是存在，但市場和我們在其中的地位非常強大。我們也對我們的工程解決方案業務的發展勢頭感到興奮。今年我們走出了大門，正式啟動了我們的戰略，以在廣泛的產品、地區和終端市場開展新業務。機會是巨大的。隨著我們在這些渠道中為客戶所知曉我們的名聲和能力，我們相信我們將獲得比我們應得的更多的獎項。

Our growth will be in gaining market share from our small base, and we have already started to see this here in the U.S. as well as in Europe and elsewhere. From a cash management standpoint, over time, we have adhered to a disciplined capital allocation strategy using cash flows to both invest in our business and provide returns to shareholders.

我們的增長將在於從我們的小基地獲得市場份額，我們已經開始在美國、歐洲和其他地方看到這一點。從現金管理的角度來看，隨著時間的推移，我們一直堅持嚴格的資本配置策略，利用現金流投資我們的業務並為股東提供回報。

We remain committed to this approach and now that we are seeing our supply chain stabilize, we have begun reducing our inventories and expect to show strong improvement in our cash flow.

我們仍然致力於這種方法，現在我們看到我們的供應鏈穩定下來，我們已經開始減少庫存，並預計我們的現金流會出現強勁改善。

And as our cash flows increase, we intend to reduce our outstanding debt level, return value to shareholders through the higher dividend we announced at the beginning of the year and invest in our future through purchases of tooling and equipment to support development of new technologies. And we were able to accomplish all of this due to the talented commitment of all of our employees globally, and we thank them for that.

隨著我們現金流量的增加，我們打算降低未償債務水平，通過我們在年初宣布的更高股息為股東回報價值，並通過購買工具和設備來支持新技術的發展來投資於我們的未來。由於我們全球所有員工的才華橫溢，我們能夠完成所有這一切，我們為此感謝他們。

With that, I'd now turn the call back to the operator, and we'll open it up for questions.

有了這個，我現在會把電話轉回接線員，我們會打開它來提問。

(Operator Instructions) Our first question comes from Daniel Imbro from Stephens Inc.

（操作員說明）我們的第一個問題來自 Stephens Inc. 的 Daniel Imbro。

Congrats on the quarter.

祝賀這個季度。

Thank you.

謝謝。

Eric, in the end of your prepared remarks, you talked about the customer relationship strengthening. You mentioned customers are wanting less reliance in the Far East. And I'm just curious, when we look at the 4% kind of organic growth in Vehicle Control, are there share gains in there? Is that actually manifesting into business yet? Or is this just conversations you're having that could lead to further share gains in the future? Just thinking about, obviously, a few years ago, there were some headlines, but just thinking, are you winning any of that share back yet? Or how does that shape out?

埃里克，在你準備好的發言的最後，你談到了加強客戶關係。你提到客戶希望減少對遠東地區的依賴。我很好奇，當我們看到車輛控制領域 4% 的有機增長時，那裡有份額增長嗎？這真的體現在商業上了嗎？或者這只是您正在進行的對話，可能會在未來帶來進一步的份額增長？想一想，很明顯，幾年前，有一些頭條新聞，但想一想，你贏回了那些份額嗎？或者結果如何？

Sure, Daniel. It's a very good question. And I think we look at share gains really in two ways. One is by getting additional business from our trading partners, and the other is what we see down channel in terms of how our brands and products are performing at the end user level. So let me speak to each of those separately.

當然，丹尼爾。這是一個很好的問題。我認為我們確實從兩個方面來看待股票收益。一個是從我們的貿易夥伴那裡獲得額外的業務，另一個是我們在終端用戶層面的品牌和產品表現方面看到的渠道。因此，讓我分別與他們中的每一個交談。

In terms of new awards, there's always some wins and losses, there always are. But there's no doubt that over these last few years, we have gained a lot more than we've lost. And I do believe that, that has a lot to do with the value proposition that we go to market with, which has proven to be very sticky, especially in these more difficult times.

就新獎項而言，總是有輸贏，總是有。但毫無疑問，在過去的幾年裡，我們得到的遠遠多於失去的。我確實相信，這與我們進入市場的價值主張有很大關係，事實證明這種價值主張非常有粘性，尤其是在這些更加困難的時期。

I highlighted just a couple of them in the prepared remarks in terms of supply chain stability, in terms of investing in technologies.

在供應鏈穩定性和技術投資方面，我在準備好的評論中只強調了其中的幾個。

But there are a lot of other pieces to it as well. And arguably the single biggest moat is the fact that we're a full line provider with tens of thousands of SKUs, and they're really looking for partners, who can provide that breadth of coverage and the capability to really take care of the entire vehicle part.

但它還有很多其他部分。可以說，最大的護城河是我們是一家擁有數万個 SKU 的全線供應商，他們真的在尋找合作夥伴，他們可以提供廣泛的覆蓋範圍和真正照顧整個產品的能力車輛部分。

As it relates to downstream market share, always a little bit more difficult to measure. However, the industry association over the last couple of years have really provided some nice insights into that, where they're able to show by product category, how our brands are performing compared to the overall market for the same product category. And they're measuring us, I think, on about a dozen or so different major categories that we're involved in. And on the vast majority of them, we're outperforming the competition.

由於它涉及到下游市場份額，因此總是更難衡量。然而，行業協會在過去幾年確實提供了一些很好的見解，他們能夠按產品類別展示我們的品牌與同一產品類別的整體市場相比的表現如何。我認為，他們正在衡量我們所涉及的大約十幾個不同的主要類別。在其中的絕大多數類別中，我們的表現都優於競爭對手。

So we believe that not only are we doing well directly with our partners, but by joining forces with them, I think, combined, we're doing very well downstream as well.

所以我們相信，我們不僅直接與我們的合作夥伴做得很好，而且通過與他們聯手，我認為，我們在下游也做得很好。

That's really helpful. I appreciate it, Eric. And then maybe Nathan, shifting over to SG&A. You mentioned continue to be well controlled. I guess the question, if you exclude the factoring cost increase year-over-year, are you guys actually levering SG&A as a percentage of sales due to that control right now? And if so, if factoring costs normalize, would we expect to see even better SG&A leverage in the back half of the year, given the underlying momentum?

這真的很有幫助。我很感激，埃里克。然後也許 Nathan，轉移到 SG&A。你提到的繼續得到很好的控制。我想這個問題是，如果你排除保理成本同比增長，你們現在是否真的將 SG&A 作為銷售額的百分比來利用這種控制？如果是這樣，如果保理成本正常化，考慮到潛在的勢頭，我們是否會期望在今年下半年看到更好的 SG&A 槓桿？

Yes, Daniel. So as I noted, if you look at our SG&A without the factoring costs in it in the quarter, I think, as a percentage of net sales, we were in line with last year. And so that really kind of just reflects, I think, more of the general inflation you see in those costs each year.

是的，丹尼爾。因此，正如我指出的那樣，如果您在本季度不考慮成本因素來查看我們的 SG&A，我認為，作為淨銷售額的百分比，我們與去年持平。因此，我認為，這確實反映了你每年在這些成本中看到的更多普遍通貨膨脹。

To your point, we would expect to see leverage in the core SG&A excluding factoring, as sales grow slowly over time. So whether the second half or in the future, that's what we always expect.

就您的觀點而言，隨著銷售額隨著時間的推移緩慢增長，我們預計核心 SG&A 中的槓桿作用不包括保理業務。所以無論是下半年還是未來，這都是我們一直期待的。

Got it. And then last one for me. On Temperature Control, obviously, the first quarter is always dependent on kind of inventory levels and stocking. It feels like it's been a decent start to spring here in April as things normalize. I guess where are inventories today on the customer side? Are you seeing too much inventory out there that could weigh on Temperature Control as we get into 2Q? Or would you expect to snap back given some of the commentary from your customers that April has improved?

知道了。然後最後一個給我。在溫度控制方面，顯然，第一季度始終取決於庫存水平和庫存種類。隨著一切正常化，4 月這裡的春天似乎是一個不錯的開始。我想今天客戶的庫存在哪裡？當我們進入第二季度時，您是否看到過多的庫存可能會對溫度控製造成壓力？或者，鑑於您的客戶對 4 月份有所改善的一些評論，您是否希望迅速恢復？

As we look at inventory in the channel, and we don't have visibility of all our customers. But for those that we do have visibility, I think, it's pretty representative. What we see is that their inventory at the end of the first quarter is roughly the same, maybe slightly elevated, but roughly the same as where they were same time last year. As you can imagine, we work very closely with them on planning preseason orders, and the preseason orders are roughly the same. They don't always land in the same months.

當我們查看渠道中的庫存時，我們無法了解所有客戶。但對於那些我們確實有知名度的人，我認為它非常具有代表性。我們看到的是，他們在第一季度末的庫存大致相同，可能略有上升，但與去年同期大致相同。可以想像，我們在規劃季前賽訂單方面與他們合作非常密切，季前賽訂單大致相同。他們並不總是在同一個月降落。

And so that's where you can see some swings quarter-to-quarter in preparation for the summer. But I think that they're in good position, and we're in a good position to be able to handle a hot summer. So now let's keep our fingers crossed that it gets hot.

因此，您可以看到每個季度都有一些波動，為夏季做準備。但我認為他們處於有利位置，我們也處於能夠應對炎熱夏季的有利位置。所以現在讓我們祈禱它會變熱。

(Operator Instructions) Our next question comes from Bret Jordan from Jefferies.

（操作員說明）我們的下一個問題來自 Jefferies 的 Bret Jordan。

You talked about POS color that you had early in the year. Could you talk about that POS sort of the composition of price versus units that you're seeing in the underlying market?

您談到了年初的 POS 顏色。你能談談你在基礎市場看到的那種 POS 價格與單位的組合嗎？

Yes. It's -- with the breadth of our offering, it's really a little bit hard to see what the different moving pieces are. There's no doubt, though, Bret, that price is a driver. And what we have seen -- again, I'm not really looking at Temperature Control because the first quarter POS is not particularly relevant. But on the Vehicle Control side, we have seen them being up in the mid-singles for the big guys. And I think that, that is -- it's a combination of units and price, but definitely price is a driver.

是的。它是 - 憑藉我們產品的廣度，真的有點難以看出不同的移動部分是什麼。不過，布雷特，毫無疑問，價格是一個驅動因素。我們所看到的——再一次，我並不是真的在看溫度控制，因為第一季度 POS 並不是特別相關。但在車輛控制方面，我們已經看到他們在大個子中處於單打中。我認為，那就是——它是單位和價格的結合，但價格絕對是一個驅動因素。

Okay. And then you talked about the customers being largely receptive to passing costs through. Could you give us maybe a feeling as to where we might see some relief from what has been higher factoring costs as those prices are passed through by you?

好的。然後你談到客戶在很大程度上願意接受成本轉嫁。您能否給我們一種感覺，即當這些價格由您傳遞時，我們可以從哪些地方看到更高的保理成本有所緩解？

I think what we've seen over the last 18 or so months, and it began really with commodity cost increases. And then as those stabilized, it was replaced more with the factoring or the interest rate increases. It's an iterative process with these guys. It is always a lag because it's hard to get ahead of it. It needs to be more reactive because we need to be able to go to them with the facts and not anticipation.

我認為我們在過去 18 個月左右的時間裡看到的情況，實際上是從商品成本增加開始的。然後隨著這些穩定下來，它更多地被保理或利率上升所取代。這是與這些人的迭代過程。它總是滯後的，因為很難超越它。它需要更具反應性，因為我們需要能夠帶著事實而不是預期去接近他們。

And so there is always that offset in timing. We feel as though we've been able to cover the majority of it either through pricing as well as we have a lot of cost reduction initiatives that we're always working on that helps to cover some of the balance of it. So again, it's continuing to be a dialogue with these guys. There continues to be receptivity when it's based in undeniable facts. And I think you're seeing that the marketplace continues to be rational in price as well. So we're cautiously optimistic that we'll be able to stay on top of it all.

因此，時間總是存在偏差。我們覺得好像我們已經能夠通過定價來涵蓋其中的大部分，而且我們有很多我們一直在努力的降低成本的舉措，這有助於彌補它的一些平衡。因此，再次與這些人進行對話。當它基於不可否認的事實時，就會繼續存在接受性。而且我認為你看到市場在價格上也繼續保持理性。因此，我們謹慎樂觀地認為，我們將能夠掌控一切。

Okay. And then just a quick question. You talked about reducing inventory levels now the supply chains are normalizing a bit. Could you talk about maybe where you see as a healthy inventory balance or maybe how much working capital can come out from current levels?

好的。然後只是一個簡單的問題。你談到現在供應鏈正在一點點正常化時降低庫存水平。您能否談談您認為健康的庫存平衡在哪裡，或者從當前水平可以產生多少營運資金？

Bret, this is Jim Burke. Yes, we're not prepared to state a number where we are there. But we -- over the last 2 years, we had increased inventory levels significantly. That was on purpose trying to protect our customers from fill REITs in that. And with the confidence level now that we're seeing with supplier purchases that are there, we're able to tighten up the lead time there to safety stocks, bring our inventories down.

布雷特，這是吉姆伯克。是的，我們不准備說明我們在那裡的數字。但是我們 - 在過去的兩年裡，我們的庫存水平顯著增加。那是故意試圖保護我們的客戶免受填充房地產投資信託基金的影響。現在我們看到供應商採購的信心水平，我們能夠縮短安全庫存的交貨時間，降低我們的庫存。

So without putting a hard number out there, we'll say we look for continued reductions in inventory as we go forward.

因此，在不給出硬性數字的情況下，我們會說我們會在前進的過程中尋求庫存的持續減少。

And our next question comes from Robert Smith from the Center for Performance Investing.

我們的下一個問題來自績效投資中心的羅伯特史密斯。

So I was wondering in China was on the ground with your partners. What do you hear from them as far as U.S.-China relations and how it might impact you?

所以我想知道在中國是不是和你的合作夥伴在一起。就美中關係而言，您從他們那裡聽到了什麼？這對您有何影響？

Well, it's certainly a hot topic. What we have seen on the ground at this point has really been business as usual. In relatively small players, our partners over there are Chinese. And so it really has been business as usual. But as you can imagine, we're paying very close attention to it and making sure that we have contingency plans and in anticipation of situation worsening.

嗯，這當然是一個熱門話題。我們目前在實地看到的情況確實一切如常。在比較小的玩家裡面，我們那邊的伙伴是中國人。因此，一切照舊。但正如你可以想像的那樣，我們正在密切關注它並確保我們有應急計劃並預料到情況會惡化。

But at this point, we have not really felt it or seen it. I think they're perhaps targeting larger companies, companies perhaps in different technologies and different verticals. So at this point, we have really not felt it, but we're paying close attention to it, for sure.

但在這一點上，我們還沒有真正感受到或看到它。我認為他們可能針對更大的公司，可能是不同技術和不同垂直領域的公司。所以在這一點上，我們真的沒有感覺到，但我們肯定會密切關注它。

And with respect to electric vehicles, I mean, there's so much on the burner here as far as the push to electric. What are you doing to study the aftermarket potential as it develops over the years? I mean what kind of studies have you undertaken? Or what do you see in that respect?

關於電動汽車，我的意思是，就推動電動汽車而言，這裡的燃燒器太多了。隨著多年來的發展，您正在做什麼來研究售後市場的潛力？我的意思是你進行了什麼樣的研究？或者你在這方面有什麼看法？

Well, it's certainly getting a tremendous amount of attention. And as you look at all the different forecasts of electrification first in terms of new vehicle sales and then the impact in the car park, most projections are still several years out before there's a significant impact. There's absolutely things that can accelerate that. You saw that announcement from the White House a few weeks ago, where through accelerating a rise in few economy standards, they're trying to get that adoption of new vehicles dramatically accelerated of electric vehicles.

好吧，它肯定得到了極大的關注。當你首先從新車銷售的角度來看電氣化的所有不同預測，然後是對停車場的影響時，大多數預測在產生重大影響之前還需要幾年時間。絕對有一些東西可以加速它。你看到了白宮幾週前的公告，通過加速提高一些經濟標準，他們正試圖讓新車的採用大大加速電動汽車。

So we do need to be prepared. We continue to see a very long tail for our combustion engine products and that part of our business continues to grow as the market and the car park and so on continues to grow. But we're certainly preparing our portfolio for a post-ICE world. That's one of the reasons why we went through the resegmentation and to provide better clarity into what categories have had the ability to be powertrain neutral.

所以我們確實需要做好準備。我們繼續看到我們的內燃機產品有很長的尾巴，並且隨著市場和停車場等的持續增長，我們的這部分業務繼續增長。但我們肯定正在為後 ICE 世界準備我們的產品組合。這就是我們進行重新細分並更好地了解哪些類別能夠保持動力總成中立的原因之一。

And on the Temperature Control side, what we've seen and we've been communicating is it's actually poised to benefit from electrification as there's a lot more systems that need cooling, the air conditioning, the passenger comfort part gets more expensive and more complicated. So we see a lot of upside there, and we continue to add product categories in the safety side of things and the electrical side of things that will absolutely be there for the long run.

在溫度控制方面，我們所看到的和我們一直在交流的是，它實際上準備從電氣化中受益，因為有更多的系統需要冷卻、空調、乘客舒適度部分變得更昂貴和更複雜.所以我們看到了很多好處，我們繼續在事物的安全方面和事物的電氣方面添加產品類別，從長遠來看，這些產品絕對會存在。

So we're really operating a two-pronged approach here, paying real close attention to the current while preparing for the future. And we're pretty -- we feel good about our position to handle it.

所以我們真的在這裡採用雙管齊下的方法，在為未來做準備的同時密切關注當前。而且我們很漂亮 - 我們對處理它的位置感覺很好。

With respect to the possibility -- probability now the softening economy, do you think that the Engineered Solutions, the possibilities are going to be more visible to you and you could strike some better deals, so to speak?

關於可能性——現在經濟疲軟的可能性，你認為工程解決方案的可能性對你來說會更加明顯，你可以達成一些更好的交易，可以這麼說嗎？

The way we're looking at Engineered Solutions is really about getting the attention of these customers by being able to go in with a much more robust portfolio and coherent strategy to be able to say Standard Motor Products, we're not just an aftermarket company, look at our ability to support you in your needs for your products. And so this is absolutely already opening doors for us. We're seeing cross-selling opportunities where one of the businesses that we acquired maybe had a customer, and we're now able to be talking to that customer about our products from a totally different part of our business and getting in the door that way.

我們看待工程解決方案的方式實際上是通過能夠採用更強大的產品組合和連貫的戰略來吸引這些客戶的注意力，從而能夠說標準電機產品，我們不僅僅是一家售後市場公司, 查看我們支持您滿足您的產品需求的能力。因此，這絕對已經為我們打開了大門。我們看到了交叉銷售的機會，我們收購的其中一家企業可能有一個客戶，我們現在能夠與該客戶談論我們業務完全不同部分的產品，並進入這扇大門方式。

So we see our growth potential here really through gaining market share, gaining visibility, gaining new business awards across such a broad array of different accounts, across different geographies, across different end markets. And so we're, I think, in the early days of this journey, but we're really excited about where it's going.

因此，我們真正通過在如此廣泛的不同客戶、不同地區、不同終端市場中獲得市場份額、獲得知名度、獲得新的業務獎項來看到我們在這裡的增長潛力。因此，我認為，我們正處於這段旅程的初期，但我們對它的發展方向感到非常興奮。

And with that, it appears that we have no further questions over the line at this time.

這樣一來，我們目前似乎沒有其他問題了。

Okay. We want to thank everyone for participating in our conference call today. We'd be happy to answer any follow-up questions you may have. Our contact information is available on our press release or Investor Relations website. Hope you have a great day. Thank you.

好的。我們要感謝大家今天參加我們的電話會議。我們很樂意回答您可能提出的任何後續問題。我們的聯繫信息可在我們的新聞稿或投資者關係網站上找到。希望你今天過得愉快。謝謝。

This does conclude today's program. Thank you for your participation. You may disconnect at any time.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連接。