Standard Motor Products Inc (SMP) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to the Standard Motor Products Second Quarter 2023 Earnings Call and Webcast. (Operator Instructions). Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Tony Cristello, Vice President of Investor Relations. Please go ahead.

大家好，歡迎參加標準電機產品公司 2023 年第二季度財報電話會議和網絡廣播。 （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。現在我很高興將會議交給投資者關係副總裁托尼·克里斯泰洛 (Tony Cristello)。請繼續。

Thank you, and good morning, everyone, and thank you for joining us on Standard Motor Products Second Quarter 2023 Earnings Conference Call. I'm Tony Cristello, Vice President of Investor Relations. And with me today are Larry Sills, 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, Jim will comment on our new distribution and supply chain efforts, and Nathan will then discuss our financial results with an update on our annual guidance. Eric will provide some concluding remarks and open up the call for Q&A.

謝謝大家，大家早上好，感謝您參加標準電機產品公司 2023 年第二季度收益電話會議。我是托尼·克里斯泰洛，投資者關係副總裁。今天與我在一起的有總裁兼首席執行官拉里·希爾斯 (Larry Sills)、埃里克·希爾斯 (Eric Sills)；吉姆·伯克，首席運營官；和首席財務官內森·艾爾斯 (Nathan Iles)。在今天的電話會議上，埃里克將概述我們本季度的業績，吉姆將評論我們新的分銷和供應鏈工作，內森將討論我們的財務業績以及年度指導的最新情況。埃里克將提供一些總結性評論並開始問答環節。

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.

在今天早上開始之前，我想提醒您，我們今天將討論的一些材料可能包括有關我們業務和預期財務業績的前瞻性陳述。當我們使用“預期”、“相信”、“估計”或“期望”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掌握的信息和我們做出的某些假設，我們不能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.

您還應該閱讀我們向美國證券交易委員會提交的文件，了解可能導致我們的實際結果與前瞻性陳述不同的風險和不確定性的討論。

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

現在我將把電話轉給我們的首席執行官埃里克·希爾斯 (Eric Sills)。

Well, thank you, Tony, and good morning, everyone, and welcome to our Second Quarter Earnings Call. Overall, our revenues were down slightly in the quarter, while we remain essentially flat year-to-date. Importantly, there were certain short-term factors influencing sales softness in the quarter, which we believe will be overcome in time. First, the quarter was unseasonably cool, especially as compared to 2022, and this had an adverse effect on our air conditioning business. And second, one of our largest aftermarket customers declared bankruptcy in January, and we essentially sold them nothing throughout the entire first half.

好吧，謝謝你，托尼，大家早上好，歡迎參加我們的第二季度收益電話會議。總體而言，本季度我們的收入略有下降，但年初至今基本持平。重要的是，存在一些影響本季度銷售疲軟的短期因素，我們相信這些因素將及時得到克服。首先，本季度異常涼爽，尤其是與 2022 年相比，這對我們的空調業務產生了不利影響。其次，我們最大的售後市場客戶之一在一月份宣布破產，整個上半年我們基本上沒有向他們出售任何東西。

This business has now been sold at auction to other existing accounts, and we expect to rebound as they replenish the depleted shelves. I'll address these issues further in discussing the impacted segments.

該業務現已通過拍賣出售給其他現有客戶，我們預計隨著他們補充耗盡的貨架，業務將會反彈。我將在討論受影響的部分時進一步解決這些問題。

So let me review each division separately as each has slightly different dynamics. To remind you, we entered the year realigning our reported segments, carving out our non-aftermarket business into its own segment called Engineered Solutions, leaving the other 2 solely reflective of the aftermarket. I'll first speak to the aftermarket, starting with Vehicle Control, which, as a reminder, was previously called Engine Management.

因此，讓我分別回顧一下每個部門，因為每個部門的動態略有不同。提醒您的是，我們進入了重新調整報告細分市場的一年，將我們的非售後市場業務劃分為自己的細分市場，稱為工程解決方案，而其他兩個業務僅反映售後市場。我將首先談談售後市場，從車輛控制開始，提醒一下，它以前被稱為發動機管理。

We renamed Vehicle Control entering this year to better reflect the breadth of categories within the offering, especially as it relates to powertrain-neutral products. Vehicle Control was down 1.1% in the quarter but remains up 1.5% year-to-date. As noted in the release, the sales drop related to the customer bankruptcy was 2.2%. And so excluding that, we would have been up. And thankfully, this is now in our rearview mirror.

我們於今年重新命名了“車輛控制”，以更好地反映產品類別的廣度，特別是因為它與動力總成中性產品相關。 Vehicle Control 本季度下降 1.1%，但今年迄今仍增長 1.5%。正如新聞稿中所指出的，與客戶破產相關的銷售額下降了 2.2%。因此，如果排除這一點，我們就會上漲。值得慶幸的是，這一切現在就出現在我們的後視鏡中。

Furthermore, we are seeing an overall favorability in our large customer sell-through, and we believe this reflects ongoing health in the marketplace.

此外，我們看到大客戶的銷售總體上受到青睞，我們相信這反映了市場的持續健康發展。

Turning to Temperature Control. Sales were down 8.1% in the quarter, bringing first half results 5.2% lower than 2022. As you're well aware, this is a highly weather-dependent seasonal business. 2022 is an exceptionally strong early season and the second quarter was up 6.4% over 2021, making for difficult comparisons. By contrast, 2023 saw an unseasonably cool and wet start to the season. That said, weather trends changed dramatically entering July, which has now been declared the hottest single month on record, with customer POS up double digits over last year and the heat continues.

轉向溫度控制。本季度銷售額下降 8.1%，上半年業績比 2022 年下降 5.2%。如您所知，這是一個高度依賴天氣的季節性業務。 2022 年是一個異常強勁的早期季節，第二季度比 2021 年增長了 6.4%，因此很難進行比較。相比之下，2023 年的季節開局異常涼爽潮濕。儘管如此，進入 7 月後，天氣趨勢發生了巨大變化，現已被宣佈為有記錄以來最熱的單月，客戶 POS 比去年增加了兩位數，而且高溫仍在持續。

Next, I'll speak to our Engineered Solutions segment, our non-aftermarket business focused on selling to manufacturers of vehicles and equipment across various end markets globally. Sales in Engineered Solutions were up 6.2% in the quarter, reflecting a combination of generally strong demand from key accounts, the impact of a small acquisition late last year and the benefit of new business wins.

接下來，我將談談我們的工程解決方案部門，我們的非售後市場業務專注於向全球各個終端市場的車輛和設備製造商銷售產品。本季度工程解決方案的銷售額增長了 6.2%，反映出主要客戶普遍強勁的需求、去年年底小規模收購的影響以及新業務獲勝的好處。

We're very pleased with how this business is going. After several years working towards achieving critical mass, we believe we are now well positioned to take advantage of the combined strengths of the different pieces that we have assembled and are now achieving the cross-selling opportunities we have anticipated.

我們對這項業務的進展感到非常滿意。經過幾年的努力，以達到臨界規模，我們相信我們現在已經處於有利地位，可以利用我們所組裝的不同部分的綜合優勢，並且現在正在實現我們預期的交叉銷售機會。

Turning to profitability. There are a lot of moving pieces, and Nathan will get into the details in a few minutes. But from a high level, we are pleased to have been able to retain our margins though the sales shortfall and temperature control drops to the bottom line in terms of earnings.

轉向盈利能力。其中有很多令人感動的內容，內森將在幾分鐘內詳細介紹細節。但從高水平來看，我們很高興能夠保持我們的利潤率，儘管銷售短缺和溫度控制導致盈利下降到底線。

Inflation persists with costs remaining elevated across materials, labor, rent and so on. And we are now dealing with a relatively new issue of the weakening U.S. dollar in countries where we have manufacturing, most notably Mexico. And the single biggest cost increase continues to come from interest rates, impacting both our customer factoring programs and our borrowings. But through a combination of initiatives, we have largely been able to cover these cost increases, and I'm very proud of all of our people's efforts in this regard.

通貨膨脹持續存在，材料、勞動力、租金等成本仍然居高不下。我們現在正在處理一個相對較新的問題，即在我們擁有製造業的國家，尤其是墨西哥，美元疲軟。最大的成本增長仍然來自利率，這影響了我們的客戶保理計劃和借款。但通過一系列舉措，我們基本上能夠彌補這些成本的增加，我對我們所有人在這方面的努力感到非常自豪。

So with that, let me turn it over to Jim Burke, who will bring you up to speed on what's going on in our operations.

因此，讓我將其轉交給吉姆·伯克，他將向您介紹我們運營中的最新情況。

Good morning, and thank you, Eric. As we disclosed in our earnings release, we are excited to share our aftermarket distribution network strategy expansion plans. We signed a new lease in Shawnee, Kansas commencing on July 1, 2023. So why the expansion efforts now and why Shawnee, Kansas? We service our U.S. aftermarket customers, excluding forecast trading distribution, which is in Fort Lauderdale, Florida, with vehicle control and temperature-controlled products, from 3 primary distribution centers located in Disputanta, Virginia, Lewisville, Texas and Edwardsville, Kansas. The existing footprint of these 3 facilities is roughly 1.2 million square feet.

早上好，謝謝你，埃里克。正如我們在財報中披露的那樣，我們很高興分享我們的售後分銷網絡戰略擴張計劃。我們在堪薩斯州肖尼簽署了一份新租約，自 2023 年 7 月 1 日起開始。那麼為什麼現在要努力擴張，為什麼選擇堪薩斯州肖尼呢？我們為美國售後市場客戶（不包括位於佛羅里達州勞德代爾堡的預測貿易分銷）提供車輛控制和溫度控制產品，這些產品來自位於弗吉尼亞州迪普坦塔、德克薩斯州劉易斯維爾和堪薩斯州愛德華茲維爾的3 個主要分銷中心。這 3 個設施的現有佔地面積約為 120 萬平方英尺。

The new Shawnee DC is roughly 575,000 square feet, which adds an additional 211,000 feet bringing our new footprint to 1.4 million square feet once we exit the Edwardsville facility.

新的 Shawnee DC 面積約為 575,000 平方英尺，一旦我們退出愛德華茲維爾工廠，我們的新佔地面積將增加 211,000 平方英尺，使我們的新佔地面積達到 140 萬平方英尺。

Currently, we are approaching capacity in our existing footprint. And this addition will expand our throughput turnaround times. Our customers require the right part in the right place at the right time. We will be able to turn around customer orders in 3 days or less and ship thousands of emergency orders daily. This is an investment in our S&P value proposition to be the best full-line, full-service supplier of premium products.

目前，我們的現有足跡已接近產能。這一增加將延長我們的吞吐量周轉時間。我們的客戶需要在正確的時間、正確的地點提供正確的零件。我們將能夠在 3 天或更短的時間內處理好客戶訂單，並每天運送數千份緊急訂單。這是對我們標普價值主張的一項投資，即成為最好的全系列、全方位服務的優質產品供應商。

Other benefits include risk avoidance from our current single point distribution model to a modified multi-point distribution strategy for high-volume, fast-moving SKUs. So why Shawnee, Kansas. We were very fortunate to find the new Shawnee DC located less than 5 miles from our existing Edwardsville DC. We will be able to retain our existing well-trained associates and management team, which minimizes any risk from a new greenfield start-up.

其他好處包括避免風險，從我們當前的單點分銷模式到針對大批量、快速流通的 SKU 的改進的多點分銷策略。那麼為什麼是堪薩斯州的肖尼呢？我們非常幸運地發現新的肖尼特區距離我們現有的愛德華茲維爾特區不到 5 英里。我們將能夠保留現有的訓練有素的員工和管理團隊，從而最大限度地減少新初創企業的風險。

Our planned time line launch for the new DC will be to install some racking and equipment by the end of the first quarter 2024, which will provide relief to our other DCs. This will be on a small-scale basis, while the larger scale automation picking lines are being installed during 2024.

我們計劃的新配送中心啟動時間表是在 2024 年第一季度末安裝一些貨架和設備，這將為我們的其他配送中心帶來緩解。這將是小規模的，而更大規模的自動化揀選線將於 2024 年安裝。

Beginning at the start of 2025, we will phase in various product categories and brands and anticipate being fully operational by the end of 2025. Obviously, this will add some redundant costs during the transition and some incremental costs once complete for the additional capacity. We estimate 2.5 million added costs in 2023, a partial year and $7 million to $8 million added costs in 2024 on an annualized basis. However, we also anticipate some offsetting savings due to current inefficiencies exiting Edwardsville redundant costs and transportation cost savings. Over time, with added sales growth, we anticipate we can delever some of these net added costs.

從2025 年初開始，我們將分階段引入各種產品類別和品牌，並預計在2025 年底前全面運營。顯然，這將在過渡期間增加一些冗餘成本，並在額外產能完成後增加一些增量成本。我們預計 2023 年（部分年份）的成本將增加 250 萬美元，2024 年年化成本將增加 700 萬至 800 萬美元。然而，我們還預計，由於愛德華茲維爾目前的效率低下，多餘的成本和運輸成本節省，會產生一些抵消性的節省。隨著時間的推移，隨著銷售增長的增加，我們預計我們可以減少其中一些淨增加成本。

We will have incremental CapEx spending in '24 and '25 to outfit the new DC. Fortunately, we own the existing Edwardsville location and anticipate putting this facility up for sale in late 2025, which should help offset a large portion of the Shawnee investment. Overall, we are very excited about bringing this new Shawnee DC on board, adding capacity, minimizing risk, maintaining well-trained existing workforce and most importantly, better servicing our customers. I will also hit on a couple of supply chain topics.

我們將在 24 年和 25 年增加資本支出來裝備新的 DC。幸運的是，我們擁有愛德華茲維爾現有的場地，並預計在 2025 年末將該設施出售，這將有助於抵消肖尼投資的很大一部分。總的來說，我們非常高興能夠引入這個新的 Shawnee DC，增加容量，最大限度地降低風險，維持訓練有素的現有員工隊伍，最重要的是，更好地為我們的客戶提供服務。我還將談到幾個供應鍊主題。

Overall, supply chain bottlenecks and delays have subsided with more reliable deliveries and lower transportation costs. While some commodities like copper and aluminum have decreased over the first half 2022, we have seen increases in copper and steel-based products from '22 year-end levels. Overall, we are seeing inflationary costs persist primarily for electronics and labor costs, but at a slower pace than in 2022.

總體而言，隨著交付更加可靠和運輸成本降低，供應鏈瓶頸和延誤已經緩解。雖然銅和鋁等一些大宗商品在 2022 年上半年有所下降，但我們看到銅和鋼鐵產品較 22 年末水平有所增加。總體而言，我們看到通脹成本主要持續存在於電子產品和勞動力成本方面，但增速低於 2022 年。

The more reliable supply chain has allowed us to accelerate our inventory reduction efforts in the first half of '23. This has been a tremendous benefit to our cash flow generated this year, but also adds a slight drag on gross margins from under-absorbed overhead, which Nathan will highlight shortly.

更可靠的供應鏈使我們能夠在 23 年上半年加快庫存削減工作。這對我們今年產生的現金流來說是一個巨大的好處，但也因管理費用吸收不足而對毛利率造成了輕微的拖累，內森很快就會強調這一點。

Over the second half of the year, I see a slight build in inventory levels as we level load our manufacturing facilities and begin our seasonal build for temperature control products. I want to thank all of our SMP employees dedicated to servicing our customers.

在今年下半年，隨著我們對製造設施進行負載均衡並開始季節性生產溫度控制產品，我發現庫存水平略有增加。我要感謝所有致力於為客戶提供服務的 SMP 員工。

Thank you for your attention, and I will turn the call over to Nathan.

感謝您的關注，我會將電話轉給內森。

All right. Thank you, Jim. As Eric noted earlier, our sales were down in the second quarter with lower temp control sales impacting our bottom line, but we did see improvement in our gross margin rates, which at the consolidated level, offset factoring costs that continue to increase. We also made great progress reducing inventory levels, as Jim noted. As we go through the numbers, I'll give some more color on these items and other key drivers for the quarter and year so far as well as provide an update on our financial outlook for the full year in 2023.

好的。謝謝你，吉姆。正如埃里克早些時候指出的那樣，我們的銷售額在第二季度下降，較低的臨時控制銷售額影響了我們的利潤，但我們確實看到毛利率有所改善，這在綜合水平上抵消了繼續增加的保理成本。正如吉姆指出的那樣，我們在降低庫存水平方面也取得了巨大進展。在我們瀏覽這些數字時，我將對這些項目以及本季度和本年度的其他關鍵驅動因素進行更多說明，並提供 2023 年全年財務前景的最新信息。

First, looking at our Vehicle Control segment. You can see on the slide that net sales of $183.8 billion in Q2 were down 1.1% versus the same quarter last year with the decrease driven by a 2.2% decline from the impact of a bankrupt customer, partly offset by increases with other customers as we continue to see favorable sell-through trends.

首先，看看我們的車輛控制部分。您可以在幻燈片中看到，第二季度的淨銷售額為1,838 億美元，與去年同期相比下降了1.1%，下降的原因是破產客戶的影響導致2.2% 的下降，但部分被其他客戶的增長所抵消，因為我們繼續看到有利的銷售趨勢。

For the first 6 months in Vehicle Control, sales were up 1.5% despite the impact of the bankrupt customer, which was also a 2.2% drag on sales year-to-date, with the growth for the year so far as a result of continued demand for our products and favorable sell-through.

儘管受到破產客戶的影響，車輛控制領域的前 6 個月銷售額仍增長了 1.5%，這也拖累了年初至今的銷售額 2.2%，而今年迄今為止的增長得益於持續的對我們產品的需求和良好的銷售。

Vehicle Controls adjusted EBITDA was 12.6% of net sales and up 2 points from Q2 last year. But it's important to note that we were up against an easy comparison as this segment saw a large impact from cost inflation and factoring expenses in Q2 last year and this year's quarter showed profits at a more normal level.

車輛控制部門調整後的 EBITDA 占淨銷售額的 12.6%，比去年第二季度上升 2 個百分點。但值得注意的是，我們面臨著一個簡單的比較，因為去年第二季度該細分市場受到成本通脹和保理費用的巨大影響，而今年季度的利潤顯示出更正常的水平。

Vehicle Controls adjusted EBITDA in the quarter was driven by gross margin rate expansion as a result of pricing and savings initiatives, which overcame cost unfavorable overhead absorption from reducing inventories and a $3 million or 1.7 point increase in the cost of customer factoring programs. Vehicle Controls adjusted EBITDA for the first 6 months was 12.1%, basically flat with 12.2% last year, mainly as a result of the margin expansion this segment saw in the second quarter, which offset higher factoring expenses.

車輛控制公司本季度調整後的EBITDA 受到定價和節約舉措導致的毛利率擴張的推動，克服了因減少庫存而導致的成本不利的間接費用吸收以及客戶保理計劃成本增加300 萬美元或1.7 個百分點。車輛控制部門前 6 個月調整後 EBITDA 為 12.1%，與去年的 12.2% 基本持平，主要是由於該部門第二季度利潤率擴張，抵消了較高的保理費用。

Turning to Temperature Control. Net sales in the quarter for that segment of $97.1 million were down 8.1%, and sales for the first 6 months were down 5.2% as we saw a slow start to the selling season, as Eric pointed out. Temperature Controls adjusted EBITDA was 7.2% of net sales in the quarter and 6.1% of net sales for the first 6 months, with both periods down from last year, mainly due to lower sales and higher factoring expenses.

轉向溫度控制。正如埃里克指出的那樣，該部門本季度的淨銷售額為 9710 萬美元，下降了 8.1%，前 6 個月的銷售額下降了 5.2%，因為我們看到銷售季節開始緩慢。溫度控制調整後的EBITDA 佔本季度淨銷售額的7.2%，占前6 個月淨銷售額的6.1%，這兩個時期均較去年有所下降，主要是由於銷售額下降和保理費用增加。

Looking at it more closely, Temp Control gross margin rate was down 0.5 points in the quarter and 0.4 points for the first 6 months as lower sales and lower production related to inventory reductions more than offset pricing and savings actions for this segment. And with margin rates down slightly, the combination of significantly higher costs from customer factoring programs and lower SG&A leverage led to a reduction in adjusted EBITDA.

更仔細地看，溫度控制毛利率在本季度下降了0.5 個百分點，在前6 個月下降了0.4 個百分點，因為與庫存減少相關的銷售額和產量下降遠遠抵消了該部門的定價和節約行動。隨著保證金率略有下降，客戶保理計劃的成本大幅上升以及銷售、管理及行政費用槓桿率降低，導致調整後 EBITDA 減少。

Sales for our Engineered Solutions segment in the quarter of $72.2 million were up 6.2% and sales for the first 6 months of $143.3 million were up 2%. While we said sales could be lumpy for this new segment as it begins to grow, we were pleased to see our sales increase as a result of strong demand and new business wins. Adjusted EBITDA for Engineered Solutions in the quarter came in at 13%, an increase of 2.1 points from last year as strong sales growth and good channel and customer mix improved both the gross margin rate and SG&A leverage. For the first 6 months, adjusted EBITDA for Engineered Solutions was 12.3% and up 0.5 points from last year, mainly as a result of higher sales and improved SG&A leverage.

我們的工程解決方案部門本季度的銷售額為 7,220 萬美元，增長了 6.2%，前 6 個月的銷售額為 1.433 億美元，增長了 2%。雖然我們表示，隨著這個新細分市場的開始增長，其銷售額可能會出現波動，但我們很高興看到由於強勁的需求和新業務的成功，我們的銷售額有所增長。本季度工程解決方案的調整後 EBITDA 為 13%，比去年增長 2.1 個百分點，原因是強勁的銷售增長以及良好的渠道和客戶組合提高了毛利率和 SG&A 槓桿率。前 6 個月，工程解決方案的調整後 EBITDA 為 12.3%，比去年增長 0.5 個百分點，主要是由於銷售額增加和 SG&A 槓桿率改善。

Turning to our consolidated results. Net sales in the quarter declined 1.8%. And for the first 6 months were basically flat with both periods being impacted by a decline of 1.6% related to a customer bankruptcy which when excluded shows growth in sales that essentially offset a slow start to the season in Temp Control. While net sales were lower overall, our consolidated gross margin rate improved for both the quarter and first 6 months due to our initiatives that overcame other headwinds and resulted in gross margin dollar increases of 5.1% and 3.4% for the quarter and first 6 months, respectively.

轉向我們的綜合業績。該季度淨銷售額下降 1.8%。前 6 個月基本持平，這兩個時期都受到與客戶破產相關的 1.6% 下降的影響，如果排除這一點，則顯示銷售額的增長基本上抵消了 Temp Control 季節開局的緩慢。雖然淨銷售額總體較低，但由於我們克服了其他不利因素的舉措，本季度和前6 個月的綜合毛利率有所提高，導致本季度和前6 個月的毛利率分別增長5.1% 和3.4%，分別。

Regarding SG&A expenses, excluding the cost of customer factoring programs, which are shown separately on the page, expenses were well controlled in the quarter at 17.4% of net sales and in line with last year. Looking at the bottom line, consolidated operating income of 7.8% and adjusted EBITDA of 10% in the quarter were flat with last year as an improved gross margin rate was offset by $4.8 million of higher factoring costs. For the first 6 months, consolidated operating income and adjusted EBITDA were down as higher factoring costs were only partly offset by improvements in gross margin.

關於SG&A費用，不包括頁面上單獨顯示的客戶保理計劃的成本，本季度費用得到很好的控制，占淨銷售額的17.4%，與去年持平。從利潤來看，本季度綜合營業收入為 7.8%，調整後 EBITDA 為 10%，與去年持平，毛利率的提高被 480 萬美元的較高保理成本所抵消。前 6 個月，綜合營業收入和調整後 EBITDA 均下降，因為較高的保理成本僅被毛利率的改善部分抵消。

As for diluted earnings per share, you can see our performance resulted in earnings of $0.84 for the quarter and $1.44 for the first 6 months. Lower EPS was mainly due to lower temp control sales, which dropped through to the bottom line, but also interest expense that was higher by $1.5 million in the quarter and $4.5 million in the first 6 months, mainly due to higher interest rates.

至於攤薄每股收益，您可以看到我們的業績導致本季度收益為 0.84 美元，前 6 個月收益為 1.44 美元。每股收益下降主要是由於臨時控制銷售下降，從而影響了利潤，但利息支出在本季度增加了 150 萬美元，在前 6 個月增加了 450 萬美元，這主要是由於利率上升。

Finally, one last point on our results. As you know, we report the results of the discontinued operation each quarter, which relates to a business bought in 1986 and subsequently sold in 1998. As noted in our press release this morning, since March of 2019, the company was involved in a legal proceeding in connection with a breach of contract claim for this discontinued operation. In July, the court ruled in favor of the other party and we were found liable for approximately $11 million in damages. And as such, we incurred a charge for this amount during the quarter.

最後，關於我們的結果的最後一點。如您所知，我們每個季度都會報告已終止業務的結果，該業務涉及1986 年購買並隨後於1998 年出售的業務。正如我們今天上午的新聞稿中指出的，自2019 年3 月以來，該公司捲入了一項法律訴訟。就該已停止運營的違約索賠提起訴訟。 7 月，法院做出了有利於另一方的裁決，我們被判承擔約 1100 萬美元的損失賠償。因此，我們在本季度產生了這筆金額的費用。

Turning now to the balance sheet. The key item here is our inventory level which finished Q2 of $499.1 million, down $29.6 million from December last year and down $52.3 million from June last year as we continue to focus on reductions in this area. 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 $15 million in the first half of the year, this reduction in inventory represents a significant improvement in cash flow of almost $45 million in the first 6 months of this year.

現在轉向資產負債表。這裡的關鍵項目是我們的庫存水平，第二季度結束時為 4.991 億美元，比去年 12 月減少了 2,960 萬美元，比去年 6 月減少了 5,230 萬美元，因為我們繼續關注這一領域的減少。請注意，我們通常會在上半年建立庫存，以應對臨時控制銷售季節，並且與上半年平均增加 1500 萬美元相比，庫存的減少意味著現金流的顯著改善。今年前6 個月的收入接近4500 萬美元。

And looking at cash flows, our cash flow statement reflects cash generated from operations in the first 6 months of $39.4 million as compared to cash used of $95.3 million last year with the improvement driven by a $118.6 million improvement in cash flows from inventory in the first 6 months.

就現金流量而言，我們的現金流量表反映了前6 個月運營產生的現金為3,940 萬美元，而去年使用的現金為9,530 萬美元，這一改善是由前6 個月庫存現金流量改善1.186億美元推動的。 6個月。

Our financing activity shows significant progress made in paying down our revolving credit facilities by $16.5 million as a result of improved operating cash flows and $50 million of repayments made in the quarter. We also paid $12.5 million of dividends during the first 6 months. Our borrowings of $223 million at the end of Q2 were much lower than last year, and we finished the quarter with a leverage ratio of 1.4% lower than both June and December last year.

我們的融資活動顯示，由於運營現金流改善以及本季度還款 5000 萬美元，我們在償還循環信貸額度方面取得了重大進展，增加了 1650 萬美元。我們還在前 6 個月支付了 1250 萬美元的股息。第二季度末，我們的借款為 2.23 億美元，遠低於去年，本季度結束時，我們的槓桿率比去年 6 月和 12 月均低 1.4%。

Before I finish, I want to give an update on our sales and profit expectations for the full year of 2023. Regarding our top line sales, we expect full year 2023 sales growth in percentage terms will be in the low single digits, which includes a first half that was flat to last year and the second half that we'll see low single-digit growth rate is typical for the business. Adjusted EBITDA is expected to be approximately 9.5% and lower than our prior estimate of 10% as we noted in our release this morning. The lower estimate is a result of 4 things: First, as I just said, our second quarter sales were softer than expected, leaving us flat to last year through 6 months, and this will hurt our full year sales performance.

在結束之前，我想更新一下我們對 2023 年全年銷售額和利潤的預期。關於我們的營收，我們預計 2023 年全年銷售額增長百分比將處於較低的個位數，其中包括上半年與去年持平，下半年我們將看到較低的個位數增長率，這是該業務的典型特徵。正如我們在今天上午的新聞稿中指出的那樣，調整後的 EBITDA 預計約為 9.5%，低於我們之前估計的 10%。較低的預期是由於四件事造成的：首先，正如我剛才所說，我們第二季度的銷售低於預期，使我們在6 個月內與去年持平，這將損害我們全年的銷售業績。

Second, additional interest rate increases announced by the Federal Reserve in June when output factoring expenses at the top end of our prior range, and these costs are expected to be $48 million to $50 million using the current outlook for rates. Also, we anticipate the expansion of distribution capabilities in a new warehouse in Shawnee, Kansas will result in duplicate overhead and start-up costs beginning in the second half of the year. And finally, we've recently seen the U.S. dollar significantly weakened where the majority of our international operations are located, weakening against both the Mexican peso and Polish zloty and in turn, increasing our cost of production and inventory in those locations.

其次，美聯儲在 6 月份宣布額外加息，當時產出保理費用處於我們之前範圍的上限，根據當前的利率前景，這些成本預計為 4800 萬至 5000 萬美元。此外，我們預計堪薩斯州肖尼新倉庫的配送能力擴張將從今年下半年開始導致重複的管理費用和啟動成本。最後，我們最近看到我們大部分國際業務所在地的美元大幅貶值，兌墨西哥比索和波蘭茲羅提均走弱，進而增加了我們在這些地區的生產和庫存成本。

In connection with adjusted EBITDA, we expect depreciation and amortization expenses and our income tax rate to be in line with 2022. Further, we expect our interest expense on outstanding debt to be on average about $4 million each quarter given higher interest rates. Looking at operating cash flows in 2023, you can see we're well on track for operating cash flows to return to healthy full year levels consistent with years past.

就調整後的 EBITDA 而言，我們預計折舊和攤銷費用以及所得稅稅率將與 2022 年保持一致。此外，鑑於利率較高，我們預計未償債務的利息支出平均每季度約為 400 萬美元。看看 2023 年的運營現金流，您可以看到我們的運營現金流有望恢復到與往年一致的健康全年水平。

To wrap up, while sales were slower than we like, we were very pleased to report improved gross margin rates for the quarter and the year as well as a significant improvement in cash flow and very much appreciate the efforts of all of our team members in improving our business. Thank you for your attention.

總而言之，雖然銷售速度比我們希望的要慢，但我們非常高興地報告本季度和本年度的毛利率有所提高，現金流量也顯著改善，並且非常感謝我們所有團隊成員在改善我們的業務。感謝您的關注。

I'll now turn the call back to Eric for some final comments.

現在我將把電話轉回給埃里克，徵求一些最後的意見。

Well, thank you, Nathan. To conclude, let me spend a minute talking about current trends and how we're thinking about the future. Our aftermarket business, which makes up 80% of our total sales continues to march forward, stable and strong. The addressable market continues to show far more favorable trends than unfavorable. The car population continues to grow and to age with more vehicles entering the sweet spot in coming years. The combination of difficult economic times, elevated new vehicle pricing and high interest rates have car owners retaining their existing vehicles, thus requiring necessary repairs and nondiscretionary categories like ours.

嗯，謝謝你，內森。最後，讓我花一點時間談談當前的趨勢以及我們如何思考未來。佔總銷售額80%的售後業務繼續穩定、強勁地向前發展。潛在市場繼續呈現出有利的趨勢，而不是不利的趨勢。汽車保有量持續增長且老化，未來幾年將有更多車輛進入最佳狀態。經濟困難時期、新車價格上漲和高利率結合在一起，車主保留了現有車輛，因此需要必要的維修和像我們這樣的非自由裁量類別。

Our relationship with distributors have never been stronger as they seek capable, committed suppliers like us who execute at a high level for them. And while external factors like the weather can have short-term impact, the long view is favorable.

我們與經銷商的關係從未如此牢固，因為他們尋求像我們這樣有能力、忠誠的供應商，為他們提供高水平的執行服務。雖然天氣等外部因素可能會產生短期影響，但長遠來看是有利的。

Our Engineering Solutions business is now in the fast lane. We're getting ourselves known by the blue-chip accounts in these various end markets and the doors that are opening to us are very encouraging. We are receiving more quoting opportunities than we could have hoped for and expect to get our fair share. We're now back to generating solid cash flow. After a period of intentionally increasing our inventory to accommodate supply chain instability, we are now successfully working it down, allowing us to pay down debt return value to shareholders through dividends and reinvest in the company's manufacturing and distribution capabilities to prepare us for the future. And we're tackling it with the strongest team we've ever had, and so I thank all of our employees worldwide.

我們的工程解決方案業務目前正步入快車道。我們正在通過這些不同終端市場的藍籌賬戶來了解自己，而向我們敞開的大門非常令人鼓舞。我們收到的報價機會比我們期望的要多，並期望獲得我們的公平份額。我們現在又恢復了穩定的現金流。經過一段時間有意增加庫存以適應供應鏈不穩定之後，我們現在正在成功降低庫存，使我們能夠通過股息償還股東的債務回報價值，並對公司的製造和分銷能力進行再投資，為我們的未來做好準備。我們正在用我們有史以來最強大的團隊來解決這個問題，所以我感謝我們在世界各地的所有員工。

So that concludes our prepared remarks. With that, I'll turn it over to the moderator, and we'll open it up for questions.

我們準備好的發言就到此結束。這樣，我會將其轉交給主持人，然後我們將開放它以供提問。

(Operator Instructions) We'll take our first question from Bret Jordan with Jefferies.

（操作員說明）我們將回答 Bret Jordan 和 Jefferies 提出的第一個問題。

When you look at the 1.6% impact from that auto plus bankruptcy, does that abate in the second half where those assets haven't been acquired by somebody else? Are they back to being a customer?

當你看看汽車加破產帶來的 1.6% 的影響時，如果這些資產沒有被其他人收購，這種影響會在下半年減弱嗎？他們又重新成為客戶了嗎？

So that's a great question, Bret. And so yes, those -- all the pieces of the business have now been acquired. And as I said in the prepared remarks, they've been acquired by existing SMP accounts. We believe that in the long run, all that volume should return, but this bankruptcy was really very disruptive, as you can imagine, to the whole marketplace. And I think it could take a little while for all the dust to settle as the new acquirers assess what they have and look at the inventory that they have acquired and look at it within their own existing inventories, I think there could still be some period of absorption of that inventory and reconciling what they have.

所以這是一個很好的問題，布雷特。是的，所有業務現在都已被收購。正如我在準備好的發言中所說，它們已被現有的 SMP 賬戶收購。我們相信，從長遠來看，所有的交易量都會恢復，但正如你可以想像的那樣，這次破產確實對整個市場造成了很大的破壞。我認為，隨著新的收購者評估他們擁有的資產並查看他們已收購的庫存並在自己現有的庫存中查看它，所有塵埃可能需要一段時間才能塵埃落定，我認為可能仍然需要一段時間吸收該庫存並協調他們所擁有的。

So we think it could take a little while. But first, we're definitely very encouraged that the business is now back in business and by existing accounts that we have good relationships with. And so we are expecting to see it bounce back. I also think that there was a certain amount of that business that just over that period was absorbed by other accounts that kind of gets lost in the mix in terms of being able to track it. But in the long run, the end market that true demand is what it is, we'll get it back as the inventory works itself through the system.

所以我們認為這可能需要一段時間。但首先，我們確實感到非常鼓舞，因為業務現在已經恢復正常，並且與我們有良好關係的現有客戶。因此，我們期待看到它反彈。我還認為，在那段時期內，有一定數量的業務被其他賬戶吸收，這些賬戶在追踪業務方面迷失了方向。但從長遠來看，終端市場的真實需求就是這樣，當庫存通過系統自行運作時，我們將把它收回來。

And then on the redundant costs from the Shawnee, Kansas DC. I think you called out 7 to 8 in '24, but there would be some offset. Could you give us a feeling for what the net impact might be?

然後是堪薩斯州肖尼特區的多餘成本。我認為你在 24 年喊出了 7 到 8，但會有一些抵消。您能否讓我們了解一下可能產生的淨影響？

Bret, this is Jim Burke. The 7 to 8 is on an annualized basis because we'll be staffing up and bringing on different costs that are in there. So I think that will be on an annualized basis versus a full year impact. The savings that we have are inefficiencies that are there in our existing facility will exit Kansas fully, it will be in stages, but we'll exit it in 2025. So there'll be savings come up from that in transportation. When all said and done on a run rate basis, we believe that we could be incremental costs from a new DC that's there in the $3 million range, net $3 million to $4 million range. Again, that's -- we're talking by the end of 2025, and we'll be updating our estimates as we proceed through to that period.

布雷特，這是吉姆·伯克。 7 到 8 是按年計算的，因為我們將配備人員並承擔其中的不同成本。所以我認為這將是按年計算而不是全年影響。我們現有設施中效率低下的節省將完全退出堪薩斯州，這將分階段進行，但我們將在 2025 年退出。因此，運輸方面將會節省開支。總而言之，我們相信，新 DC 的增量成本可能在 300 萬美元範圍內，淨值在 300 萬美元到 400 萬美元範圍內。再說一遍，我們正在談論到 2025 年底，並且我們將在這一時期內更新我們的估計。

Okay. And then one last question on inventory levels for AC product. You commented on the soft start to the season. Could you talk about what retail inventories look like now on a maybe year-over-year basis?

好的。最後一個問題是關於空調產品的庫存水平。您對本賽季開局不利的情況發表了評論。您能談談現在零售庫存的同比情況嗎？

As we look at it for those, we have visibility and important to note that we only have that through June. So not sure what happens to their inventories in July, and their demand was very strong. Their sell-through in July was very strong. But at the end of June, what we saw was that it was essentially flat throughout the course of the entire year, a little bit of noise month-to-month, but the big players kept their inventory roughly flat throughout. And so now it's just a matter of that sell-through turning itself into replenishment orders to that. But yes, they didn't enter this quarter...

當我們尋找這些時，我們有可見性，重要的是要注意我們只能在六月之前看到。所以不確定他們七月份的庫存會發生什麼，而且他們的需求非常強勁。他們七月份的銷售量非常強勁。但到了 6 月底，我們看到的是全年基本持平，每個月都有一點噪音，但大型企業的庫存始終保持大致持平。因此，現在的問題只是將銷售轉化為補貨訂單。但是，是的，他們沒有進入這個季度......

We'll take our next question from Daniel Imbro with Stephens.

我們將回答丹尼爾·因布羅和斯蒂芬斯提出的下一個問題。

I want to follow-up maybe on Bret's last question, just around maybe some more near-term trends. We've heard some varying commentary on kind of how 2Q progressed. Can you talk about any notable trend shifts you saw in your sales results from April through June. And then could we dig into July a little bit more. We've had some pretty big heat waves coming through. Has that been a tailwind? Have trends accelerated here in third quarter? Any color on the monthly cadence would be great.

我想跟進布雷特的最後一個問題，也許是一些近期的趨勢。我們聽到了一些關於第二季度進展的不同評論。您能否談談您在 4 月至 6 月的銷售業績中看到的任何顯著趨勢變化？然後我們可以進一步深入了解七月嗎？我們經歷了一些相當大的熱浪。這是順風嗎？第三季度趨勢是否加速？每月節奏上的任何顏色都會很棒。

And the monthly cadence within the second quarter was nothing exceptional. And so anything can happen in a given month. I think when you look at the cadence for our distributors, that's going to be more about true end market demand cadence. For us is you're going to have the influence of their reorder pattern. So we didn't see anything notable in that quarter.

第二季度的月度節奏也沒有什麼異常。因此，在特定月份內任何事情都可能發生。我認為，當您查看我們經銷商的節奏時，您會發現更多的是真正的終端市場需求節奏。對於我們來說，您將受到他們的重新訂購模式的影響。所以我們在該季度沒有看到任何值得注意的事情。

Entering July, books are not closed yet on it, but what we have seen is a nice uptick, certainly on the Temperature Control side on their orders to us as would be expected, and you mentioned the heat. And but I think it's too early to make any real strong observations of how that plays out for the balance of the summer.

進入七月，書籍尚未關閉，但我們看到的是一個不錯的上升，當然是在溫度控制方面，正如預期的那樣，他們向我們發出的訂單，你提到了炎熱。但我認為現在就夏季剩餘時間的情況進行真正強有力的觀察還為時過早。

Got it. That's helpful. And then maybe shifting to the guidance. Anything as you look at the back half, obviously, guide implies pretty notable ramp in op margin, maybe as cost alleviate. And to Eric's point, top line gets a little bit better. How do you think about the sustainability of this high singles operating margin or low double as we look at '24, '25. Obviously, Jim just mentioned there's a few savings coming, but what do you think the right intermediate term margin should be for this? Are we -- can we get back to 10% next year?

知道了。這很有幫助。然後也許會轉向指導。顯然，從後半部分來看，指南意味著運營利潤率顯著上升，也許是因為成本減輕了。就埃里克而言，頂線變得更好了一些。當我們審視“24 年”和“25 年”時，您如何看待這種高單打運營利潤率或低雙打運營利潤率的可持續性。顯然，吉姆剛剛提到會節省一些資金，但您認為正確的中期利潤率應該是多少？明年我們能回到 10% 嗎？

Yes, Daniel. So as I mentioned in my remarks, we do have some headwinds coming at us in the second half of the year and at least one of those was related to currency. And as you know, those markets can swing around and you don't know exactly when those will turn. And so we can't be sure when headwinds will abate. That said, we're always working on savings programs, continuous improvement projects. And so as we go into 2024 and from there, we'll still look to have those projects in place and improve our margins like we've always said we would by 10 to 20 basis points as those programs come through successfully.

是的，丹尼爾。正如我在發言中提到的，下半年我們確實遇到了一些阻力，其中至少一個與貨幣有關。如您所知，這些市場可能會波動，但您並不確切知道這些市場何時會轉變。因此，我們無法確定逆風何時會減弱。也就是說，我們始終致力於節約計劃和持續改進項目。因此，當我們進入 2024 年時，我們仍將尋求落實這些項目並提高我們的利潤率，就像我們一直所說的那樣，當這些計劃成功實施時，我們將提高 10 到 20 個基點。

Got it. And last one for me. Eric, I think you mentioned in your prepared remarks, you're starting to realize the cross-selling within Engineered Solutions. Any more color or quantification you can provide on just how you're feeling about or capturing that opportunity?

知道了。最後一張給我。埃里克，我想您在準備好的發言中提到，您開始意識到工程解決方案中的交叉銷售。您可以提供更多的顏色或量化信息來說明您對這個機會的感受或抓住這個機會嗎？

Yes. Well, I can't get into specific business wins or specific accounts, but what we have really started to see over these last few quarters is that as we've talked about in the past, we've assembled a bunch of smaller companies into one. And each of those had their own customer with their own product, categories, in some cases, even their own geography. And so they were fairly -- they're good, but they're limited in what they were able to do.

是的。好吧，我無法談論具體的業務勝利或具體的客戶，但我們在過去幾個季度中真正開始看到的是，正如我們過去所討論的那樣，我們已經將一堆較小的公司整合為一。每個人都有自己的客戶，有自己的產品、類別，在某些情況下，甚至還有自己的地理位置。所以他們是公平的——他們很好，但他們能做的事情很有限。

Now 1 entities customer list gets opened up to the broader portfolio and it gives our people something to sell. So for example, just to give you one example. There was a large [Con-Agg] accounts that came with an acquisition a couple of years ago that we had never done any business with. Now we're selling them air conditioning because that was something that we had that customer needed it, that previous supplier before we had acquired them, obviously, couldn't service that type of product.

現在，1 個實體客戶名單向更廣泛的產品組合開放，這為我們的員工提供了可以銷售的東西。舉個例子，僅舉一個例子。幾年前的一次收購中，有一個龐大的 [Con-Agg] 賬戶，我們從未與之做過任何業務。現在我們向他們出售空調，因為這是我們的客戶需要的東西，在我們收購它們之前的先前供應商顯然無法為此類產品提供服務。

So we see those types of opportunities. And we're new in this space. So we're really just getting our name out there. And as we have these meetings with these accounts and they're able to see all of our capabilities and they're assessing their supply base, they are asking us to quote on quite a lot of product. Now it's a pretty long cycle from being asked to quote, to getting the award to actually seeing it start to show up in production and revenue. But even just over the course of this year, the number of new opportunities that we have on our plate to work on has grown dramatically. So we're pretty excited.

所以我們看到了這些類型的機會。我們是這個領域的新手。所以我們真的只是把我們的名字公之於眾。當我們與這些客戶舉行這些會議時，他們能夠看到我們所有的能力，並且他們正在評估他們的供應基礎，他們要求我們對相當多的產品進行報價。現在，從被要求報價，到獲得獎項，再到實際看到它開始出現在產量和收入中，這是一個相當長的周期。但即使就在今年，我們面臨的新機會數量也急劇增加。所以我們非常興奮。

We'll take our next question from Scott Stember with ROTH MKM. And Scott, you may be muted. Please unmute on your end.

我們將接受 ROTH MKM 的 Scott Stember 提出的下一個問題。斯科特，你可能會被靜音。請在您這邊取消靜音。

We'll go next to Robert Smith with the Center for Performance Investing.

接下來我們將邀請績效投資中心的羅伯特·史密斯。

I'm quite interested in the Shawnee move. And I just want to -- I heard that you said that going forward, saying beginning in 2026 that the efficiency would be a plus $3 million to $4 million, was that correct?

我對肖尼的舉動很感興趣。我只是想 - 我聽說您說從 2026 年開始，效率將增加 300 萬至 400 萬美元，對嗎？

Robert, this is Jim Burke. The net savings of the 7 to 8 that we said annualized after we achieved savings that in there, we believe the ongoing run rate will be in that $3 million to $4 million range. Now those savings will be achieved over the period of time, a small part of it in '24, more of it in '25 and then fully in '26 as we're fully operational.

羅伯特，這是吉姆·伯克。我們所說的 7 到 8 項的淨節省是在我們實現節省後按年計算的，我們相信持續的運行率將在 300 萬美元到 400 萬美元的範圍內。現在，這些節省將在一段時間內實現，其中一小部分將在 24 年實現，更多將在 25 年實現，然後在 26 年全面投入運營後全部實現。

So it seems rather a conservative figure, $3 million to $4 million from totally new facility with automation and robotics. I mean, am I missing something?

因此，這似乎是一個相當保守的數字，配備自動化和機器人技術的全新設施需要 300 萬至 400 萬美元。我的意思是，我錯過了什麼嗎？

Well, one of the pieces there, our Edwardsville DC that we have is fully owned, I believe it's mostly fully depreciated that's on there. We'll have the advantage of when we sell it and taking that capital that's in there to offset future impact. But the new lease on 575,000, you incur the cost there and the property taxes and that. So that's incremental whereas most of on the existing owned facility wouldn't have had costs that are in there.

好吧，其中一件，我們擁有的愛德華茲維爾特區是完全擁有的，我相信它大部分都已經完全折舊了。當我們出售它並利用其中的資本來抵消未來的影響時，我們將擁有優勢。但是 575,000 的新租約，你要承擔那裡的成本和財產稅等等。因此，這是增量的，而現有自有設施的大部分不會產生成本。

Got it. Is there any prospect of actually buying the facility?

知道了。是否有實際購買該設施的前景？

No, that's not our intent to be in the real estate. We are fortunate from years past that we own the other one there. We'll put that up for sale and that will be a nice favorable cash flow benefit.

不，這不是我們進入房地產行業的初衷。過去幾年我們很幸運，我們在那裡擁有另一處。我們將把它出售，這將是一個很好的有利的現金流效益。

Right. Are there any such possibilities with the other 2 facilities, DCs?

正確的。其他 2 個設施 DC 是否有這種可能性？

Well, that's where we'll wind up feeling achieving the efficiency savings that were in there, that we'll be able to scale down. Most of that will be where we have ramped up temporary workforce. So we really won't be even incurring any wind down costs for personnel in those areas there. And we'll staff up, what the one big benefit is in the new Shawnee facility, we bring over our full staff and management team knowing our systems, knowing the product categories, knowing the part numbers and everything. And we'll staff up gradually during that period of time.

好吧，這就是我們最終感覺實現了效率節省的地方，我們將能夠縮小規模。其中大部分將是我們增加臨時勞動力的地方。因此，我們實際上不會為這些地區的人員承擔任何縮減成本。我們將配備人員，新肖尼工廠的一大好處是，我們帶來了我們的全體員工和管理團隊，他們了解我們的系統，了解產品類別，了解零件編號和一切。我們將在這段時間裡逐步補充人員。

The savings will be achieved. Yes, there'll be some automation there, but a lot of the savings will be in the other 2 distribution centers, which are really at capacity at the moment now.

將會實現節省。是的，那裡會有一些自動化，但很多節省將在其他兩個配送中心，目前這些配送中心實際上已經滿負荷了。

And a significant portion, just to add to that, Robert, to give some color. As Jim described it, we're going to be moving some of the distribution out of the other DCs to go into this, Shawnee distribution center. And right now, a majority of our Vehicle Control is coming out of Virginia which has to ship all the way across the country to West Coast customers. This will now put that inventory in the middle of the country, which will allow us to service our customers better, certainly from a transportation time standpoint, but also from freight cost we're going to be halfway there already. So that's where you're going to see some nice benefits as well.

羅伯特，這是一個重要的部分，只是為了增加一些色彩。正如吉姆所描述的那樣，我們將把其他配送中心的一些配送轉移到肖尼配送中心。目前，我們的大部分車輛控制產品都來自弗吉尼亞州，必須穿越全國運送給西海岸的客戶。現在，這將使庫存位於該國中部，這將使我們能夠更好地為客戶提供服務，當然從運輸時間的角度來看，而且從貨運成本來看，我們已經達到了一半。因此，您也將看到一些不錯的好處。

I follow up. So later on in the -- toward the end of the decade, do you foresee possibility of doing something with the other 1 or 2 DCs. I mean expanding those -- or new structures?

我跟進。因此，在本世紀末，您是否預見到與其他 1 或 2 個 DC 合作的可能性？我的意思是擴大這些——或者新的結構？

I anticipate with this additional 200,000-plus square footage that we add and we'll have sufficient capacity for the future but I hope we grow significantly. At this point, we don't have initial plans for the other 2 locations, but that will be a good problem to be facing a couple of years out.

我預計，隨著我們新增的 200,000 多平方英尺，我們將擁有足夠的容量來應對未來，但我希望我們能夠大幅增長。目前，我們還沒有其他兩個地點的初步計劃，但這將是幾年後面臨的一個好問題。

As you expand in Engineered Solutions, the possibility of holding some of the distribution into the new Shawnee facility or your other 2?

當您擴展工程解決方案時，是否有可能將部分分配保留到新的 Shawnee 設施或您的其他 2 個設施中？

The majority of our Engineered Solutions business, Robert, is built to order. So we do not typically warehouse much of it at all. So most of that ships directly from our factories. There's some that we do hold a bit of safety stock for the accounts, but it's not like the aftermarket where you're stocking a significant amount of inventory for stock orders, it's all built to order for these key accounts.

羅伯特，我們的大部分工程解決方案業務都是按訂單生產的。所以我們通常根本不會儲存太多東西。所以大部分直接從我們的工廠發貨。有一些我們確實為客戶保留了一些安全庫存，但這不像售後市場那樣為庫存訂單儲備大量庫存，它都是為這些關鍵客戶訂購的。

Got it. And yes, give me an idea as to you're very optimistic about Engineered Solutions. What's on the landscape as far as possible additional acquisitions in the near term?

知道了。是的，請告訴我您對工程解決方案非常樂觀。短期內可能進行額外收購的情況如何？

Robert, this is Jim Burke again. And I've said -- as I've said many times, we -- we have a team that covers really the geographical space as we look worldwide and also functional product category lines. So we're evaluating always opportunities that are there. The last couple of acquisitions we did were in the engineering solutions space. We're optimistic about that category. We've seen growth, so we're focused on both our Vehicle Control, Temperature Control categories and Engineered Solutions, but nothing at this point to announce.

羅伯特，我又是吉姆·伯克。我說過——正如我多次說過的那樣，我們——我們有一個團隊，真正覆蓋了我們放眼全球的地理空間，也覆蓋了功能性產品類別線。因此，我們總是在評估存在的機會。我們最近進行的幾次收購都是在工程解決方案領域。我們對該類別持樂觀態度。我們已經看到了增長，因此我們專注於車輛控制、溫度控制類別和工程解決方案，但目前沒有任何可宣布的內容。

Any particular comments about Mexico or China?

關於墨西哥或中國有什麼特別的評論嗎？

Could you be more specific on what you're...

你能更具體地說明你是什麼...

There's a lot of ambiguity going on as far as the politics and what's happening in both countries. I was wondering what you guys are looking at from your viewpoint?

就兩國的政治和正在發生的事情而言，存在很多含糊之處。我想知道你們從你們的角度看什麼？

Well, we're pretty committed to our footprint in both of those countries. As I think you're aware, we have a lot more in Mexico than we do in China. We've been building out our manufacturing capabilities in Mexico for going on 30 years, I think. And while really the only thing we see adverse going on in Mexico is some of the cost increases, most notably related to labor costs. Right now, we're seeing it in currency, but that's hard to predict how long a trend that would be.

嗯，我們非常致力於在這兩個國家的足跡。我想你也知道，我們在墨西哥的數量比在中國多得多。我想，我們在墨西哥建立製造能力已有 30 年了。雖然我們在墨西哥看到的唯一不利的事情是一些成本增加，尤其是與勞動力成本相關的成本增加。目前，我們以貨幣形式看到了這一趨勢，但很難預測這種趨勢會持續多久。

But now, we're very pleased with our footprint in Mexico. We have excellent management teams there. We have pushing 2,000 people there. And one of the nice things we see is some of our big customers are growing their business in the Mexico market allows us to follow them in. So that's the Mexico story. China, we're there as well. We have 4 joint ventures as you're aware, I believe, 3 of them are on the Temperature Control side and one came with the acquisition of Trombetta to power management, power distribution products. They're really there for 2 purposes.

但現在，我們對我們在墨西哥的足跡感到非常滿意。我們在那裡擁有優秀的管理團隊。我們已經把 2000 人推到那裡了。我們看到的一件好事是我們的一些大客戶正在墨西哥市場發展業務，這使我們能夠跟隨他們。這就是墨西哥的故事。中國，我們也在那裡。如您所知，我們有 4 家合資企業，我相信其中 3 家從事溫度控制領域，一家是在收購 Trombetta 後成立的，專注於電源管理、配電產品。他們的存在實際上有兩個目的。

One is to continue to bring high-quality, low-cost product back here in North America, but also to sell Engineered Solutions business globally, and they're all doing well, and we're very pleased with how we're doing. We're obviously very aware of geopolitical complexity, and we pay close attention to that. And we look to mitigate some of that risk through vendor diversification, redundancy and so on. But we're pretty committed to what we're doing there, and we've seen very nice results.

一是繼續將高質量、低成本的產品帶回北美，同時也在全球範圍內銷售工程解決方案業務，他們都做得很好，我們對我們的表現感到非常滿意。我們顯然非常清楚地緣政治的複雜性，並且對此密切關注。我們希望通過供應商多元化、冗餘等來減輕部分風險。但我們非常致力於我們在那裡所做的事情，並且我們已經看到了非常好的結果。

Okay. How about your Eastern European operations?

好的。你們的東歐業務怎麼樣？

Eastern European, we have 2 manufacturing operations there, our largest and one that's been part of us, the longest is in Poland -- in Eastern Poland. And it's really just a fantastic plant, 700 people strong and an area where we're seeing potentially the biggest opportunities for Engineered Solutions quoting, due to the combination of high quality, high technology and low cost. And now more recently, we have a plant outside of Budapest in Hungary that came with the Stabil acquisition, and it's been terrific for us as well. Not only we are seeing a lot of opportunities to sell to third parties, what it brought to us was electronics manufacturing in Europe and now they've become a supplier to our Poland plant.

在東歐，我們在那裡有 2 個製造工廠，其中最大的一個是我們的一部分，最長的一個位於波蘭——波蘭東部。這確實是一家非常棒的工廠，擁有 700 名員工，由於高品質、高科技和低成本的結合，我們在這裡看到了工程解決方案報價的最大機會。最近，我們在匈牙利布達佩斯郊外擁有一家工廠，是隨著 Stabil 的收購而來的，這對我們來說也很棒。我們不僅看到了很多向第三方銷售的機會，它給我們帶來的是歐洲的電子製造，現在他們已經成為我們波蘭工廠的供應商。

So we're really pleased with how we're building out kind of moved from having manufacturing plant in Poland to have a European-wide business, and we're continuing to invest heavily there, and we're just very pleased with what we see.

因此，我們對如何從波蘭的製造工廠轉移到歐洲範圍內的業務感到非常滿意，我們將繼續在那里大力投資，我們對我們所做的事情感到非常滿意看。

Any reverberations from the Ukraine situation?

烏克蘭局勢有何影響？

No, it's really business as usual when the war first broke out 1.5 years ago or so we quickly mobilized to understand what the potential impact could be on the supply chain. We're fortunate to count that there was we had no suppliers in the region. We had no customers, except one very small one in the region. Hear was that it was going to potentially impact our utilities infrastructure there, it did not. This is now 1.5 years ongoing. And so it's really proven to be a nonevent, which is very good.

不，大約 1.5 年前戰爭首次爆發時，一切都一切如常，因此我們迅速動員起來，了解可能對供應鏈造成的潛在影響。我們很幸運地發現我們在該地區沒有供應商。除了該地區的一個很小的客戶外，我們沒有任何客戶。聽說這可能會影響我們那裡的公用事業基礎設施，但事實並非如此。現在已經持續了 1.5 年。所以這確實被證明是一件小事，這是非常好的。

We'll go next to Scott Stember with ROTH MKM. Scott, we still have you mute.

接下來我們將與 ROTH MKM 一起討論 Scott Stember。斯科特，我們仍然讓你保持沉默。

Yes. We'll follow up with Scott if he's not able to ask his question.

是的。如果斯科特無法提出問題，我們將與他聯繫。

Understood, thank you. (Operator Instructions) And we have no further questions at this time. I'll turn it back to management for any closing remarks.

明白了，謝謝。 （操作員說明）目前我們沒有其他問題。我會將其轉回管理層以供結束語。

Okay. We want to thank everyone for participating in our conference call today. We understand there was a lot of information presented, and we'll be happy to answer any follow-up questions you may have. Our contact information is available on our press release or Investor Relations website. We 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。我們知道其中提供了大量信息，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。我們希望您度過愉快的一天。謝謝。

This does conclude today's Standard Motor Products Second Quarter 2023 Earnings Call and webcast. You may disconnect your line at this time, and have a wonderful day.

今天的標準汽車產品公司 2023 年第二季度收益電話會議和網絡廣播到此結束。此時您可以斷開線路，度過美好的一天。