Titan Machinery Inc (TITN) 2025 Q1 法說會逐字稿

Greetings. Welcome to Titan Machinery's first-quarter fiscal 2025 earnings conference call. (Operator Instructions) Please note today's conference is being recorded.

問候。歡迎參加泰坦機械 2025 財年第一季財報電話會議。（操作員指示）請注意今天的會議正在錄製中。

I'll now turn the call over to Jeff Sonnek with ICR. Jeff, you may now begin.

我現在會把電話轉給 ICR 的 Jeff Sonnek。傑夫，你現在可以開始了。

Thank you. Welcome to Titan Machinery's first-quarter fiscal 2025 earnings conference call. On the call today from the company are Bryan Knutson, President and Chief Executive Officer; and Bo Larsen, Chief Financial Officer.

謝謝。歡迎參加泰坦機械 2025 財年第一季財報電話會議。今天，公司總裁兼執行長 Bryan Knutson 接聽了電話；和財務長 Bo Larsen。

By now, everyone should have access to the earnings release for the fiscal first quarter ended April 30, 2024. If you've not received the release, it's available on the Investor Relations tab of Titan's website at ir.titanmachinery.com. This call is being webcast, and a replay will be available on the company's website as well.

到目前為止，每個人都應該可以查看截至 2024 年 4 月 30 日的第一個財季收益發布。如果您尚未收到該新聞稿，可以在 Titan 網站 ir.titanmachinery.com 的投資者關係標籤上找到該新聞稿。這次電話會議正在網路直播，並且公司網站上也將提供重播。

In addition, we're providing a presentation to accompany today's prepared remarks which can be found on Titan's website again at ir.titanmachinery.com. The presentation is directly below the webcast information in the middle of the page.

此外，我們還提供了一個演示文稿，以配合今天準備好的評論，您可以再次在 Titan 的網站 ir.titanmachinery.com 上找到該演示文稿。此簡報位於頁面中間網路廣播資訊的正下方。

We'd like to remind everyone that the prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. Statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them.

我們想提醒大家，準備好的言論包含前瞻性陳述，管理階層可能會針對您的問題做出額外的前瞻性陳述。聲明並不保證未來的表現，因此，不應過度依賴它們。

These forward-looking statements are based on current expectations of management and involve inherent risks and uncertainties including those identified in the Risk Factors section of Titan's most recently filed annual report on Form 10-K. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Except as may be required by applicable law, Titan assumes no obligation to update any forward-looking statements that may be made in today's release or call.

這些前瞻性陳述是基於管理層目前的預期，涉及固有風險和不確定性，包括 Titan 最近提交的 10-K 表格年度報告的風險因素部分中確定的風險和不確定性。這些風險因素包含對可能導致實際結果與任何前瞻性陳述中預測的結果有重大差異的因素的更詳細討論。除適用法律可能要求的情況外，泰坦不承擔更新今天的新聞稿或電話會議中可能做出的任何前瞻性陳述的義務。

Please note that during today's call, we may discuss non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater transparency into Titan's ongoing financial performance, particularly when comparing underlying results from period to period. We've included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures in today's release.

請注意，在今天的電話會議中，我們可能會討論非公認會計準則財務指標，包括調整後的結果。我們相信，這些調整後的財務指標可以促進對泰坦持續財務表現的更完整的分析和更大的透明度，特別是在比較不同時期的基本結果時。我們在今天的新聞稿中納入了這些非公認會計原則財務指標與其最直接可比較的公認會計原則指標的調節表。

At the conclusion of our prepared remarks, we will open the call to take your questions.

在我們準備好的發言結束後，我們將召開電話會議回答您的問題。

With that, I'd now like to introduce the company's President and CEO, Mr. Bryan Knutson. Bryan, please go ahead.

現在我想介紹一下公司的總裁兼執行長 Bryan Knutson 先生。布萊恩，請繼續。

Thank you, Jeff. Good morning, everyone. I'll begin today's call by providing a brief summary of the current market environment. Then, I will offer some thoughts on our results and updated fiscal 2025 outlook before passing the call to Bo for his financial review and incremental thoughts on our modeling assumptions.

謝謝你，傑夫。大家早安。我將在今天的電話會議開始時簡要概述當前的市場環境。然後，我將就我們的業績和更新的 2025 財年前景提出一些想法，然後再致電 Bo 進行財務審查和對我們的建模假設進行增量思考。

Our first-quarter results reflect an industry transition to a more challenging market environment. We have rapidly moved out of a period characterized by restricted supply and high demand into one that reflects lower demand and excess supply of inventory in many product categories.

我們第一季的業績反映出產業正在向更具挑戰性的市場環境過渡。我們已經迅速擺脫了供應受限和需求旺盛的時期，進入了許多產品類別需求下降和庫存供應過剩的時期。

This shift is mainly a product of two influencing factors. First, manufacturing delivery times have rapidly returned to normal, following multiple years of supply chain constraints that significantly limited their production volumes. Second, we are seeing a softening of demand across our geographic footprint as ag fundamentals weaken. The combination of suppressed net farm incomes, extended duration of higher interest rates, and broader macroeconomic uncertainty is impacting farmer sentiment and, in some cases, delaying equipment purchasing decisions.

這種轉變主要是兩個影響因素的產物。首先，在多年的供應鏈限制嚴重限制了生產量之後，製造業的交貨時間已迅速恢復正常。其次，隨著農業基本面的疲軟，我們發現整個地區的需求疲軟。農業淨收入受到抑制、利率上升持續時間延長以及宏觀經濟不確定性更廣泛，這些因素綜合在一起影響了農民的情緒，在某些情況下甚至推遲了設備購買決策。

As a result of these incremental headwinds, we experienced a slower-than-expected start to fiscal 2025, which contrasts with the strong demand for equipment purchases that persisted throughout fiscal 2024. So while the normalization of supply chains and production schedules among our suppliers has enabled us to convert sales from our backlog, which in some cases have been delayed by more than a year, we are sensitive to the increase of new equipment inventory available for sale, as well as used equipment stemming from trade-ins.

由於這些不斷增加的不利因素，我們 2025 財年的開局慢於預期，這與整個 2024 財年持續強勁的設備採購需求形成鮮明對比。因此，雖然供應商之間供應鏈和生產計劃的正常化使我們能夠從積壓訂單中轉化為銷售量（在某些情況下，積壓訂單已被推遲一年多），但我們對可供銷售的新設備庫存的增加很敏感，以及因以舊換新而產生的二手設備。

Therefore, we are adopting more aggressive tactics to manage our inventories down to healthier levels, more aligned with softening industry demand. Big picture and longer term, we are laser focused on managing to healthy inventory levels, which correspond with whole good inventory turns in the 2.2 to 3.2 times range, and minimizing our floorplan interest expense.

因此，我們正在採取更積極的策略，將庫存管理至更健康的水平，更符合疲軟的行業需求。從長遠來看，我們專注於管理健康的庫存水平，這與 2.2 至 3.2 倍範圍內的整體良好庫存週轉率相對應，並最大限度地減少我們的平面圖利息支出。

As we described on our Q4 FY24 earnings call, we believe the path to achieve targeted inventory levels will likely carry through into our fiscal year 2026. But we have a direct line of sight into what we need to do, and I will reiterate one more time, it is currently our highest priority and will remain so until we execute to these desired levels.

正如我們在 2024 財年第四季財報電話會議上所述，我們相信實現目標庫存水準的道路可能會持續到 2026 財年。但我們對需要做的事情有直接的認識，我將再次重申，這是目前我們的最高優先事項，並將一直如此，直到我們執行到這些期望的水平。

Turning to some comments on our Q1 results, although the first-quarter performance was below our expectations, we were pleased to deliver positive same-store sales growth in our agriculture segment. And despite demand being incrementally soft than we anticipated heading into the year, we were able to generate first-quarter revenue growth of over 10% to $629 million, a record number for the first quarter, even when excluding the contribution from the O'Connors acquisition.

談到對我們第一季業績的一些評論，儘管第一季業績低於我們的預期，但我們很高興在農業領域實現了積極的同店銷售成長。儘管今年的需求比我們預期的逐漸疲軟，但我們第一季的營收成長超過 10%，達到 6.29 億美元，創下第一季的創紀錄數字，即使排除奧康納斯家族的貢獻也是如此獲得。

We also experienced some margin compression due to our efforts to proactively manage inventory levels through this transition period. Although this was anticipated, when combined with higher operating expenses, higher floorplan interest expense, and lower sales demand, the combination resulted in an earnings and pre-tax margin performance below the levels we achieved over the last two years, albeit still significantly better than compared to the last down cycle.

由於我們在過渡期間積極主動管理庫存水平，我們的利潤率也受到了一些壓縮。儘管這是預料之中的，但當與較高的營運費用、較高的平面佈局利息費用和較低的銷售需求相結合時，該組合導致收益和稅前利潤率表現低於我們過去兩年實現的水平，儘管仍明顯優於我們與上一個下降週期相比。

That said, I want to emphasize that we are very cognizant of the impact that this cycle shift is having on our business, and we are scrutinizing all expenses while prioritizing our growth initiatives. For example, in the near term, we are being vigilant in the hiring of non-revenue generating positions while making sure that we are supporting those areas of the business that are strategically important over the long term, such as our ongoing focus on bolstering our capacity of our service departments.

也就是說，我想強調的是，我們非常清楚這種週期轉變對我們業務的影響，我們正在審查所有費用，同時優先考慮我們的成長計畫。例如，在短期內，我們在僱用非創收職位時保持警惕，同時確保我們支持那些具有長期策略重要性的業務領域，例如我們持續專注於加強我們的我們的服務部門的能力。

Attracting and retaining skilled technicians is of critical importance, given the industry-wide shortages and our desire to grow this reoccurring revenue aspect of our business. Nonetheless, throughout the duration of the cycle, we will continue to look for ways we can maximize operating leverage against the realities of the lower gross profit levels.

考慮到全行業的短缺以及我們增加業務經常性收入的願望，吸引和留住熟練的技術人員至關重要。儘管如此，在整個週期期間，我們將繼續尋找能夠在毛利水平較低的情況下最大化經營槓桿的方法。

In response to the softer-than-anticipated market environment, we felt it was prudent to adjust our full-year modeling assumptions. Bo will cover this in greater detail, but in summary, we are lowering our revenue assumptions modestly while adopting a more aggressive stance than we previously had with respect to equipment margins to further ensure success in managing inventory levels.

為了因應比預期疲軟的市場環境，我們認為調整全年模型假設是明智的。Bo 將更詳細地介紹這一點，但總而言之，我們將適度降低我們的收入假設，同時在設備利潤方面採取比之前更積極的立場，以進一步確保成功管理庫存水準。

Our rationale here is straightforward. Staying ahead of the demand curve puts us in a position to be efficient regardless of what happens to industry volumes in FY26. Given the sluggishness in equipment, we continue to lean into our customer care strategy to fuel our reoccurring parts and service businesses, and this is an area where we believe we can continue to drive growth this year and create sustainable growth longer term.

我們的理由很簡單。保持領先於需求曲線使我們能夠保持高效，無論 2026 財年的行業銷售如何。鑑於設備低迷，我們繼續依靠客戶服務策略來推動我們經常性的零件和服務業務，我們相信我們今年可以繼續推動這一領域的成長，並創造長期的可持續成長。

In terms of seasonal farming activity, at this stage in the year, planting progress among corn and soybeans is still in full swing. While some of our southern markets got off to a strong start with the early spring, recent precipitation slowed progress over the past few weeks. Within our European markets, both winter and spring crops look very healthy due to optimal moisture levels. And in Australia, while subsoil moisture levels are supportive of the growing season, recent precipitation has been sparse, and as such, rainfall is still needed in the near term to foster seed germination.

從季節性農耕活動來看，今年現階段，玉米、大豆種植工作仍緊鑼密鼓地進行中。雖然我們的一些南方市場在早春時取得了強勁的開局，但最近的降水減緩了過去幾週的進展。在我們的歐洲市場，由於最佳的濕度水平，冬季和春季作物看起來都非常健康。在澳大利亞，雖然底土濕度水平有利於生長季節，但近期降水量很少，因此短期內仍需要降雨來促進種子發芽。

Overall, on a global level, our farmer customers remain in pretty good shape, both in terms of growing conditions, as well as from a balance sheet perspective. Although net farm income is expected to decline this year, farmers' financial health remains strong with favorable land values further supporting grower balance sheets.

整體而言，在全球範圍內，我們的農民客戶無論是在生長條件還是從資產負債表的角度來看都保持著良好的狀態。儘管今年農場淨收入預計將下降，但農民的財務狀況仍然強勁，有利的土地價值進一步支撐了種植者的資產負債表。

In closing, as the cycle progresses, our entire team remains focused on advancing our customer care strategy to ensure we meet our customer's needs and continue to grow our more stable reoccurring parts service and precision businesses while controlling the aspects of the business that we can, such as our fixed overhead, and managing our inventory to align with demand. We believe that the combination of these levers will allow us to generate significantly improved financial results versus the prior down cycle, demonstrating the numerous strategic improvements we've made to our business over the past several years.

最後，隨著週期的進展，我們的整個團隊仍然專注於推進我們的客戶服務策略，以確保我們滿足客戶的需求，並繼續發展我們更穩定的重複零件服務和精密業務，同時控制我們可以控制的業務方面，例如我們的固定管理費用，以及管理我們的庫存以滿足需求。我們相信，這些槓桿的結合將使我們能夠比先前的下行週期顯著改善財務業績，展現出我們在過去幾年中對業務所做的眾多策略改進。

Before turning the call over to Bo, I want to sincerely thank our entire team who remain focused on serving our customers and operating the business with discipline as we face these shifting cycle dynamics. Additionally, our thoughts are with our employees and communities that we operate in that have recently been impacted by tornadoes and flooding. Safety and health for all of them and their families is our priority as they recover from these recent weather events. I said all of you keep them in your thoughts as well.

在將電話轉給 Bo 之前，我要真誠地感謝我們的整個團隊，在我們面臨這些不斷變化的周期動態時，他們仍然專注於為客戶服務並遵守紀律經營業務。此外，我們也與最近受到龍捲風和洪水影響的員工和我們營運所在的社區同在。他們所有人及其家人的安全和健康是我們的首要任務，因為他們從最近的天氣事件中恢復過來。我說你們也把它們記在心裡。

With that, I will turn the call over to Bo for his financial review.

這樣，我會將電話轉給 Bo 進行財務審查。

Thanks, Bryan. Good morning, everyone.

謝謝，布萊恩。大家早安。

Starting with our consolidated results for the fiscal 2025 first quarter, total revenue was $628.7 million, an increase of 10.4% compared to the prior year period. Growth was driven by contribution from our O'Connors and other acquisitions, with the balance reflecting a 1.1% increase in same-store sales, which was driven by our agriculture segment. Our equipment revenue increased 9%, parts revenue increased 12%, service revenue increased 29%, and rental and other revenue was down 16.1%, all versus the prior year period.

從 2025 財年第一季的綜合業績開始，總營收為 6.287 億美元，比上年同期成長 10.4%。成長是由我們的 O'Connors 和其他收購的貢獻推動的，餘額反映了同店銷售額成長 1.1%，這是由我們的農業部門推動的。與去年同期相比，我們的設備收入成長了 9%，零件收入成長了 12%，服務收入成長了 29%，租賃和其他收入下降了 16.1%。

Gross profit for the first quarter was $122 million. And as expected, gross profit margin contracted by 140 basis points year over year to 19.4%, driven primarily by lower equipment margins.

第一季毛利為1.22億美元。如預期，毛利率年減 140 個基點至 19.4%，主要是由於設備利潤率下降。

Operating expenses were $99.2 million for the first quarter of fiscal 2025, compared to $81.3 million in the prior year period. The year-over-year increase of 21.9% was led by acquisitions that we've executed in the last 12 months, but also reflects an increase in areas like salaries and benefits due to merit increases and incremental headcount as we continue to focus on increasing service capacity in support of our customer care strategy.

2025 財年第一季的營運支出為 9,920 萬美元，而上年同期為 8,130 萬美元。年成長 21.9% 是由我們在過去 12 個月內執行的收購帶動的，但也反映了由於我們繼續專注於增加績效和增加員工人數而導致工資和福利等領域的增長支持我們的客戶關懷策略的服務能力。

Floorplan and other interest expense was $9.5 million, as compared to $2.5 million for the first quarter of fiscal 2024, with the increase led by a higher level of interest-bearing inventory, including the usage of existing floorplan capacity to finance the O'Connors acquisition.

平面圖和其他利息支出為 950 萬美元，而 2024 財年第一季為 250 萬美元，增加是由於計息庫存水平較高，包括使用現有平面圖產能為 O'Connors 收購提供資金。

Net income for the first quarter of fiscal 2025 was $9.4 million, or $0.41 per diluted share, and compared to last year's first-quarter net income of $27 million, or $1.19 per diluted share.

2025 財年第一季的淨利潤為 940 萬美元，即稀釋後每股收益 0.41 美元，而去年第一季淨利潤為 2,700 萬美元，即稀釋後每股收益 1.19 美元。

Now, turning to our segment results for the first quarter, in our agriculture segment, sales increased 5.8% to $447.7 million. Growth was driven by same-store sales increase of 4.3%, which was further supported by contributions from the acquisition of Scott Supply in January 2024. Growth was constrained by softening of demand for equipment purchases due to the expected decline of net farm income this growing season, as well as the influence of other macroeconomic variables, including higher interest rates, which are weighing on farmer sentiment.

現在，看看我們第一季的部門業績，在農業部門，銷售額成長了 5.8%，達到 4.477 億美元。同店銷售額成長 4.3% 推動了成長，2024 年 1 月收購 Scott Supply 的貢獻進一步支撐了這一成長。成長受到設備採購需求疲軟的限制，原因是本生長季節農場淨收入預計下降，以及其他宏觀經濟變數的影響，包括利率上升，這些因素正在打壓農民的情緒。

However, underlying fundamentals remain sound, including efficiency gains from precision technology, elevated fleet age, and strong farmer balance sheets. Agriculture segment pre-tax income was $13 million, and compared to $24.2 million in the first quarter of the prior year.

然而，潛在的基本面仍然良好，包括精密技術帶來的效率提升、機隊年齡的延長以及強大的農民資產負債表。農業部門稅前收入為 1,300 萬美元，而去年第一季為 2,420 萬美元。

In our construction segment, same-store sales declined 0.7% to $71.5 million. The slight decrease was a product of modest growth in equipment sales, offset by lower parts sales. With lower snowfall this past winter, we saw a decrease in seasonal demand for snow removal equipment and parts.

在我們的建築部門，同店銷售額下降 0.7% 至 7,150 萬美元。略有下降是設備銷售溫和成長的結果，但被零件銷售下降所抵消。由於去年冬天降雪量減少，我們發現對除雪設備和零件的季節性需求減少。

However, underlying industry fundamentals remain stable, and as we look to the rest of the year, construction activity is expected to remain at healthy levels, supported by infrastructure projects, energy, livestock, and commercial construction. Pre-tax income for the segment was $0.3 million, which compares to $4.5 million in the first quarter of the prior year.

然而，行業基本面保持穩定，展望今年剩餘時間，在基礎設施項目、能源、畜牧業和商業建築的支持下，建築活動預計將保持在健康水平。該部門的稅前收入為 30 萬美元，而去年第一季為 450 萬美元。

In our Europe segment, sales decreased 12.5% to $65.1 million, which reflects a 1.3% favorable foreign currency impact. Net of the effect of these foreign currency fluctuations, revenue decreased 13.4%, reflecting a softening of new equipment demand, which was partially offset by growth in parts and service revenue.

在我們的歐洲部門，銷售額下降 12.5% 至 6,510 萬美元，反映出 1.3% 的有利外匯影響。扣除外匯波動的影響，收入下降 13.4%，反映出新設備需求疲軟，但部分被零件和服務收入的成長所抵銷。

Year-over-year comparables are expected to be more favorable in the back half of the year, as last year's second half saw a slowdown in demand, which was driven by drought conditions in Romania and Bulgaria. Pre-tax income for the segment was $1.4 million, which compares to $6.4 million in the first quarter of fiscal 2024.

預計今年下半年的年比情況將更加有利，因為去年下半年羅馬尼亞和保加利亞的乾旱導致需求放緩。該部門的稅前收入為 140 萬美元，而 2024 財年第一季的稅前收入為 640 萬美元。

In our Australia segment, sales were $44.4 million and a pre-tax loss of $0.5 million. This revenue was in line with expectations and represents year-over-year growth versus the same period in the prior year, which was pre-acquisition. As a reminder, our Australia business seasonal trends are fairly similar to our domestic ag business, with about 45% of revenue coming in the first half of the fiscal year and 55% coming in the second half of our fiscal year.

在我們的澳洲部門，銷售額為 4,440 萬美元，稅前虧損為 50 萬美元。該收入符合預期，並且與收購前的去年同期相比實現了同比增長。提醒一下，我們澳洲業務的季節性趨勢與我們國內的農業業務非常相似，大約 45% 的收入來自本財年上半年，55% 來自本財年下半年。

Now on to our balance sheet and inventory position. We had cash of $36 million and an adjusted debt to tangible net worth ratio of 1.6 times as of April 30, 2024, which is well below our bank covenant of 3.5 times.

現在我們來看看我們的資產負債表和庫存狀況。截至 2024 年 4 月 30 日，我們擁有 3,600 萬美元現金，調整後債務與有形淨值比率為 1.6 倍，遠低於我們銀行承諾的 3.5 倍。

Equipment inventory increased $132.5 million to $1.2 billion in the first quarter, in line with expectations we set on our last earnings call. Going into the year, we forecasted that the rapid normalization of lead times from our OEM partners would result in a significant portion of our outstanding orders to arrive in the first half of the fiscal year, while our seasonality generally has the back half of our fiscal year being our highest sales quarters. We continue to expect inventory levels to peak around the end of the second quarter, with modest decreases through the back half of the year and more substantial decreases as we work through fiscal year 2026.

第一季設備庫存增加 1.325 億美元，達到 12 億美元，符合我們在上次財報電話會議上設定的預期。進入今年，我們預測，我們的OEM 合作夥伴的交貨時間迅速正常化，將導致我們很大一部分未完成訂單在本財年上半年到達，而我們的季節性通常會影響我們財年的後半段。我們仍然預計庫存水準將在第二季末左右達到峰值，下半年將出現小幅下降，並在 2026 財年期間出現更大幅度的下降。

With that, I'll finish by reviewing our fiscal 2025 full-year guidance, which we are updating today to account for our year-to-date performance, as well as the industry's latest expectations of demand. In consideration of the incrementally softer demand than we initially anticipated when we provided our fiscal 2025 outlook, we are modestly reducing our revenue assumptions across each of our segments and modifying our underlying assumptions for equipment margin, variable operating expenses, and floorplan interest expense.

最後，我將回顧我們的 2025 財年全年指引，我們今天更新了該指引，以考慮我們今年迄今的業績以及行業對需求的最新預期。考慮到需求比我們在提供 2025 財年展望時最初預期的逐漸疲軟，我們正在適度降低每個部門的收入假設，並修改我們對設備利潤、可變營運費用和佈局利息費用的基本假設。

For agriculture, we have updated our revenue assumption to be in the range of down 2.5% to up 2.5%, which also includes the full-year contribution from our Scott Supply acquisition, which closed in January of 2024. As we've discussed, we remain focused on those areas that we can control while investing in our parts, service, and precision businesses, which all remain key priorities. For the full year, we expect this will translate to growth in the mid to high single-digit range for this portion of our business.

對於農業，我們將收入假設更新為下降 2.5% 至成長 2.5%，其中還包括我們於 2024 年 1 月完成的 Scott Supply 收購的全年貢獻。正如我們所討論的，我們仍然專注於那些我們可以控制的領域，同時投資我們的零件、服務和精密業務，這些仍然是關鍵優先事項。對於全年而言，我們預計這將轉化為我們這部分業務的中高個位數成長。

For the construction segment, our updated assumption is for revenue to be flat to up 5%, in line with the expectation of sustained demand levels in my previous comments.

對於建築領域，我們更新的假設是收入持平至成長 5%，這與我先前評論中對持續需求水準的預期一致。

For the Europe segment, our updated assumption is for revenue to be down 5% to flat. This revision is due to the softening of industry demand we have been discussing today.

對於歐洲部分，我們更新的假設是收入下降 5% 至持平。此次修正是由於我們今天討論的產業需求疲軟。

For the Australia segment, we now expect fiscal 2025 revenue to be in the range of $240 million to $260 million, with the change in assumption also incorporating the shifting farmer sentiment.

對於澳洲業務，我們目前預計 2025 財年收入將在 2.4 億至 2.6 億美元之間，假設的變化也考慮了農民情緒的變化。

Now, for some broader commentary, from a gross margin perspective, we remain committed to improving our inventory position, and as such, we are building in additional equipment margin compression of about 80 basis points compared to our prior expectation. We believe this is prudent, given the excess supply of dealer inventory in the channel, coupled with the industry's latest expectations for software equipment demand. The number one objective here is to manage the targeted inventory levels to match industry demand and achieve targeted KPIs that Bryan talked through earlier on the call.

現在，對於更廣泛的評論，從毛利率的角度來看，我們仍然致力於改善我們的庫存狀況，因此，與我們先前的預期相比，我們正在將設備利潤率進一步壓縮約 80 個基點。考慮到通路中經銷商庫存供應過剩，加上業界對軟體設備需求的最新預期，我們認為這是謹慎的做法。這裡的首要目標是管理目標庫存水平，以滿足行業需求並實現 Bryan 早些時候在電話會議中談到的目標 KPI。

Looking at operating expenses, we are focused on implementing cost controls where we can, optimizing resources, and being vigilant with any new headcount. Taking into account the full-year operating expense contribution from acquisition activity that has occurred over the last year, our guidance implies operating expenses as a percentage of sales to be about 40 basis points higher than was realized in fiscal 2024 across the company as a whole, consistent with our initial modeling assumptions that we laid out in March.

就營運費用而言，我們專注於盡可能實施成本控制、優化資源並對任何新員工保持警惕。考慮到去年發生的收購活動對全年營運費用的貢獻，我們的指導意味著整個公司的營運費用佔銷售額的百分比將比 2024 財年高出約 40 個基點，與我們三月份提出的初始建模假設一致。

Moving to interest expense, we are factoring in the reduced likelihood for interest rate cuts in the back half of the year to align with the market's latest expectations. However, we do continue to expect improvement of interest-free terms, which should benefit interest expense in the back half of the year relative to the first half.

說到利息支出，我們考慮到下半年降息的可能性降低，以符合市場的最新預期。然而，我們仍然預期免息條款會有所改善，這將有利於今年下半年相對於上半年的利息支出。

Taken together with our revised revenue expectations and the resulting impact on inventory that we are working to improve, we anticipate higher floorplan interest expense this year versus what was in our previous guidance. So rolling all this up, we are updating our fiscal 2025 EPS range to $2.25 to $2.75, which reflects the more aggressive strategy we are employing to improve our inventory levels as efficiently as possible to ensure we are well positioned moving forward.

考慮到我們修改後的收入預期以及我們正在努力改善的對庫存的影響，我們預計今年的平面圖利息支出將高於我們先前的指導。因此，將所有這些綜合起來，我們將2025 財年每股收益範圍更新為2.25 美元至2.75 美元，這反映了我們正在採用更積極的策略，以盡可能有效地提高庫存水平，以確保我們處於有利地位，繼續前進。

This concludes our prepared comments. Operator, we are now ready for the question-and-answer session of our call.

我們準備好的評論到此結束。接線員，我們現在已準備好進行電話問答環節。

(Operator Instructions) Ben Klieve, Lake Street Capital.

（操作員說明）Ben Klieve，Lake Street Capital。

All right. Thanks for taking my questions. Plenty to talk about; I'll just leave it with a couple here. First of all, Bo, you lined out expectations for inventory decreases, starting in the second half of this year with more substantial decreases, I think it's how you framed it in fiscal '26. I'm wondering if you can, first of all, help us frame your expectations for inventory levels ending this fiscal year, and maybe more notably ending fiscal '26.

好的。感謝您回答我的問題。有很多話可說；我就把它留給一對夫婦吧。首先，Bo，您列出了對庫存減少的預期，從今年下半年開始，庫存將出現更大幅度的減少，我認為這就是您在 26 財年的框架。我想知道您是否可以先幫助我們制定您對本財年結束（尤其是 26 財年結束）的庫存水準的預期。

So in terms of how we see inventory continuing to progress, and probably not inconsistent with what we talked about on our earnings call in March, we see inventory levels exiting the year similar to where we started the year. So again, it will climb in the first two quarters, as we saw in Q1, and then kind of take back some of those increases, get back to about where we started.

因此，就我們如何看待庫存持續成長而言，我們認為今年的庫存水準與年初的水準相似，這可能與我們在 3 月的財報電話會議上討論的內容並不矛盾。因此，正如我們在第一季看到的那樣，它將在前兩個季度攀升，然後會收回一些增長，回到我們開始的地方。

And then, in terms of FY26, the reason for the more substantial decreases is just the timing of inventory ordering and then when things are coming in. So going back to a year ago now, even before that, kind of anticipating and turning down the dial in terms of order activity, and then it was a matter of playing it out. So orders are coming in through the first half of this year pretty rapidly as lead times have compressed, then we start to see that slow down in the back half of the year.

然後，就 2026 財年而言，大幅下降的原因只是庫存訂購的時間以及進貨的時間。因此，回到一年前，甚至在那之前，就訂單活動而言，有點預期並拒絕了，然後就是將其付諸實施的問題。因此，隨著交貨時間的壓縮，今年上半年的訂單進入速度非常快，然後我們開始看到今年下半年訂單成長放緩。

And then, based on our order activity from here forward, that really dictates how much is coming in next year. And with really good visibility to where we think demand is, and where we want to see targeted inventory levels go, we're going to be able to see those levels decreasing faster, again, through FY26.

然後，根據我們今後的訂單活動，這實際上決定了明年的訂單量。透過真正清楚地了解我們認為的需求狀況以及我們希望看到的目標庫存水準的走向，我們將能夠在 2026 財年再次看到這些水準更快地下降。

In terms of the exact dollar figure, that's going to be dependent on our view on where industry demand is going. Because ultimately, the targets that we're looking for are exactly what Bryan laid out a little bit earlier. So one of the number one things is you want to make sure that you're not incurring floorplan interest expenses. That's not a value-added activity.

就確切的美元數字而言，這將取決於我們對產業需求走向的看法。因為最終，我們正在尋找的目標正是布萊恩早先提出的目標。因此，首要的事情之一是您要確保不會產生平面圖利息費用。這不是一項增值活動。

But from an inventory turns perspective, that range of 2.2 to 3.2, clearly, we want to be in the middle to the higher end of the range. But certainly, the lower end of the range is reflecting transitionary periods that are slower in which you need to adjust inventory levels. So as we work through '26, get a good feel on what industry demand is at that point, that's the kind of target that we're looking to hit exiting that year.

但從庫存週轉率的角度來看，2.2 至 3.2 的範圍，顯然，我們希望處於該範圍的中間到高端。但可以肯定的是，該範圍的下限反映了需要調整庫存水準的較慢的過渡期。因此，當我們在 26 年工作時，要充分了解當時的產業需求，這就是我們希望在當年實現的目標。

Okay, that's helpful. And then one other one for me, and I'll get back in line, regarding Australia. I understood all the various macro dynamics facing the entire industry broadly, and Australia specifically. Can you comment on the performance of Australia in this quarter versus your expectations, and in particular, if seasonality in this business is maybe more pronounced than you're maybe expecting?

好的，這很有幫助。然後再給我一份關於澳洲的信息，我會重新排隊。我了解整個產業，特別是澳洲面臨的所有各種宏觀動態。您能否評論一下澳洲本季的表現與您的預期相比，特別是該業務的季節性是否比您預期的更為明顯？

Well, I would say that from a seasonality perspective, it is -- the expectation is, and historically it has been the 45%-55% split, perhaps a bit more pronounced in terms of the difference between Q1 and Q2, and then the difference between Q3 and Q4. So Q2 and Q4 being kind of outsized quarters, and Q1 and Q3 being a little bit slower quarters there.

嗯，我想說，從季節性角度來看，預期是，歷史上一直是 45%-55% 的分裂，也許在第一季和第二季之間的差異方面更加明顯，然後Q3 和Q4 之間的差異。因此，第二季和第四季的季度規模較大，而第一季和第三季的季度速度稍慢。

But overall, the first quarter came very much in line with expectations. Entering the year, they had a significant amount of backlog in pre-sold equipment that was either on the ground or continuing to be delivered. So there's some good comfort in terms of a level of revenue that's going to be progressing through the year, and that's a matter of PDIing that equipment and getting it in customers' hands.

但整體而言，第一季的表現非常符合預期。進入今年，他們有大量預售設備積壓，這些設備要么已在現場，要么正在繼續交付。因此，就全年收入水準而言，這讓人感到很欣慰，這就是 PDI 設備並將其交到客戶手中的問題。

So thus far, in line with expectations, loving the leadership team, excited about the branding launch this summer, and just moving forward to be on that, talking about longer synergies with 24/7 service call centers and the like.

到目前為止，符合預期，熱愛領導團隊，對今年夏天推出品牌感到興奮，並且只是繼續前進，談論與 24/7 服務呼叫中心等的長期協同效應。

Ben, Bo covered it well. I would just add, we talked last call here and the call before about very recently in the back half of last year, and especially in the final quarter of last year, is when deliveries finally started catching up and really started rapidly increasing, and we've talked about how we'll see that continue through especially the first half of this year.

本、博很好地涵蓋了這一點。我想補充一點，我們在這裡討論了最後一次電話會議，以及之前大約在去年下半年的電話會議，特別是在去年最後一個季度，當時交付量終於開始趕上並真正開始迅速增加，我們我們已經討論了我們將如何看待這種情況持續到今年上半年。

Well, in Australia, there are still a couple product categories that have been the slowest to recover, and then you add in the transportation time as well. So as Bo pointed out, we do have some -- a good amount of order backlog there and good pre-sells that have just been delayed a little bit, and then also the time to get those through the shop as they're coming a bit delayed. So that'll all bode well for us for our Australia segment the rest of the year.

嗯，在澳大利亞，仍然有一些產品類別恢復得最慢，然後還要加上運輸時間。因此，正如 Bo 指出的那樣，我們確實有一些積壓的訂單和剛剛推遲了一點的良好預售，然後還有時間讓這些產品通過商店，因為它們即將到來。因此，這對我們今年剩餘時間的澳洲業務來說都是個好兆頭。

Very good. I appreciate that context. All right, very good. I'll get back in line. Best of luck here in coming quarters.

非常好。我很欣賞這種背景。好的，非常好。我會回去排隊。祝未來幾季好運。

Mig Dobre, Baird.

米格·多布雷，貝爾德。

Good morning. I got a couple of questions on ag and some on construction as well. I guess, I'm looking to clarify, first and foremost, your comments around equipment gross margin. Can you be maybe a little more specific in terms of how you're -- what's embedded in the guidance for the full year?

早安.我有幾個關於農業的問題，還有一些關於建築的問題。我想，首先也是最重要的是，我想澄清您對設備毛利率的評論。您能否更具體地介紹一下您的情況—全年指導中包含哪些內容？

Yeah, absolutely. As specific to ag, our equipment gross margins embedded in the guidance are about 9%, which is a step back year over year of about 320 basis points. If you look at that historically in the broader context, taking the past decade into consideration, that's really moving our assumed margins to the low end of what we've experienced over the last decade, with the exception of FY16 and FY17.

是的，絕對是。具體到農業方面，指引中包含的設備毛利率約為 9%，年減約 320 個基點。如果你在更廣泛的背景下回顧歷史，考慮到過去十年，我們假設的利潤率實際上已降至過去十年（除 2016 財年和 2017 財年之外）經歷的低端。

But those particular years, we were in a significantly different inventory health position. Specifically at that point in time, we had inventory that was aged greater than 12 months at 50%. So half of our inventory was sitting on the lot for more than 12 months, whereas today, that's 9%. So a significantly different health of inventory, and that's why those two are a bit more of an outlier. But taking that into context, and again, looking at the past decade, we're really moving our margins to the low end of the range of what we've experienced, all in the name of driving the top line and getting to a healthier inventory position.

但在那些特定的年份，我們的庫存健康狀況明顯不同。具體來說，在那個時間點，我們的庫存時間超過 12 個月，比例為 50%。因此，我們一半的庫存已存放超過 12 個月，而今天這一比例為 9%。庫存的健康狀況明顯不同，這就是為什麼這兩者有點異常。但考慮到這一點，再次回顧過去的十年，我們確實正在將利潤率移至我們所經歷的範圍的低端，所有這些都是為了推動營收並實現更健康的發展庫存位置。

I mean, could you theoretically maintain higher equipment margins and a little bit lower sales and perhaps end up in the same spot from an earnings perspective? Probably. But in terms of what's best for the company going forward, it's really getting that inventory level to targeted levels as quickly as possible. That's why we're embedding this in the guidance. That's why we're wanting to get a bit more aggressive.

我的意思是，從理論上講，您能否保持較高的設備利潤率和較低的銷售額，並且從盈利角度來看，最終可能會處於同一位置？大概。但就對公司未來最有利的方面而言，實際上是盡快將庫存水準達到目標水準。這就是我們將其嵌入指南的原因。這就是為什麼我們想要變得更有侵略性。

One more data point -- for the first quarter, and this is for the company as a whole, equipment margins were down about 230 basis points. Well, our guidance implies for the rest of the year that equipment margins will be down 330 basis points, so incrementally about 100 basis points the rest of the year. And again, that's reflective of the incremental softness on what we've seen on demand, but even more specifically, the actions that we want to drive to achieve our inventory outcomes.

還有一個數據——第一季度，這是針對整個公司而言，設備利潤率下降了約 230 個基點。好吧，我們的指導意味著今年剩餘時間設備利潤率將下降 330 個基點，因此今年剩餘時間將逐步下降約 100 個基點。再說一次，這反映了我們所看到的需求的增量疲軟，但更具體地說，反映了我們希望推動實現庫存結果的行動。

Understood. I guess what I'm personally struggling with a little bit, though, is if we're taking the gross margin on ag down to near decade lows, this is happening, though, as you're still not fully destocking in fiscal '25. I mean, you're basically saying that the destock is going to be a fiscal '26 event. So the margins are coming down while inventories are still going to be relatively elevated.

明白了。不過，我想我個人遇到的一點困難是，如果我們將農業毛利率降至近十年來的低點，這種情況就會發生，因為你在 25 財年仍然沒有完全去庫存。我的意思是，您基本上是說去庫存將成為 26 財年的事件。因此，利潤率正在下降，而庫存仍將相對較高。

I guess, how do you think about that? What's the incremental risk here at the margin going forward as you truly go into destock mode? Should we maybe expect another move lower as we contemplate fiscal '26 or not?

我想，你對此有何看法？當你真正進入去庫存模式時，未來邊際的增量風險是多少？當我們考慮 26 財年時，我們是否應該預期會再次走低？

Well, the difference here, I think, that maybe didn't quite articulate there is the order volume coming in year over year. So the significant amount of order volume as lead times collapsed from 18 to 24 months down to the normal 4 to 6-month timeframe is bringing in more than a year's worth of orders in a two- or three-quarter period of time.

嗯，我認為，這裡的差異可能沒有完全闡明是逐年增加的訂單量。因此，隨著交貨時間從 18 至 24 個月縮短至正常的 4 至 6 個月時間範圍，大量訂單量在兩到三個季度的時間內就帶來了超過一年的訂單量。

So now, as we drastically change the order flow, next year is more about playing that through and seeing a significantly less inflow, and then the outflow will be what it is based on demand to get you to your objectives. This year, what we're saying is that we want to take those more aggressive actions at the expense of margin to get to the best endpoint that we possibly can. So more of that hit is, this year, to absorb all of those orders that, again, is more than a year's worth of order activity in a shorter period of time.

因此，現在，隨著我們大幅改變訂單流，明年更多的是要徹底解決這個問題，並看到流入量顯著減少，然後流出量將根據需求而定，以幫助您實現目標。今年，我們要說的是，我們希望以犧牲利潤為代價，採取更積極的行動，以達到我們可能達到的最佳終點。因此，今年的衝擊更多的是在更短的時間內吸收所有這些訂單，這些訂單再次超過一年的訂單活動量。

Okay. Then, I guess, moving on to construction, there's -- on a slide where you're kind of talking about market conditions in the outlook, you mentioned in there that you're taking an aggressive stance, lower inventories, maybe you can comment a little bit on that. I also thought it was quite interesting that the rental fleet utilization has been down, has been lower, significantly lower actually, 500 basis points. So maybe a little bit of context as to what's going on there as well.

好的。然後，我想，轉向建築業，在一張幻燈片上，您在談論前景中的市場狀況，您在那裡提到您正在採取積極的立場，降低庫存，也許您可以發表評論對此有一點了解。我還認為非常有趣的是，租賃車隊的使用率已經下降，一直較低，實際上顯著降低了 500 個基點。也許還有一些關於那裡正在發生的事情的背景資訊。

So certainly, there's different extents across our segments. But from a CE perspective and then the industry in general, I mean, we are at that similar thematics in terms of moving past supply chain constraints and then equipment availability increasing significantly and the compression of lead time. So the same story applies to a different extent. So that's where we're just saying, similarly, we want to make sure that we get to the targeted inventory levels that we want for CE in similar fashion.

當然，我們的細分市場之間存在著不同程度的差異。但從 CE 的角度以及整個行業的角度來看，我的意思是，我們在克服供應鏈限制、然後設備可用性顯著增加和交貨時間壓縮方面處於類似的主題。因此，同一個故事適用於不同的程度。因此，這就是我們所說的，類似地，我們希望確保以類似的方式達到 CE 所需的目標庫存水準。

From a rental utilization perspective, maybe, Bryan, you want to add some comments?

從租金利用率的角度來看，布萊恩，也許您想添加一些評論？

Mig, just up in our footprint, combination of, as Bo talked about, the lack of snow -- obviously, up here in the upper Midwest, snow is a big part of what we do, and so that impacted the utilization. The lack of snow cover created some deep frost and cold temperatures we had throughout the winter, which caused a delay to a lot of the spring start to the construction season. That's now well underway in full swing.

Mig，就在我們的足跡中，正如 Bo 所說，缺雪的結合 - 顯然，在中西部北部，雪是我們工作的重要組成部分，因此影響了利用率。由於缺乏積雪，整個冬季都出現了深度霜凍和低溫，導致春季施工季節的大部分時間被推遲。目前該工作正在緊鑼密鼓地進行中。

And then just add in there some of the things around -- uncertainty around residential interest rates, some of the softening in commercial and the like, and so a little bit of softening there is also impacting. So a combination of a late start, so we expect a good uptick here in our rental as we go forward now, but also it is overall a little softer environment than the last two years.

然後加入一些周圍的因素——住宅利率的不確定性、商業利率的一些疲軟等等，所以一點點的疲軟也會產生影響。由於起步較晚，因此我們預計隨著我們現在的發展，租金會大幅上漲，但整體環境比過去兩年要軟一些。

Understood. Final question, maybe another clarification on the action that you're taking here. When we're seeing the impact on margin reflected in the guide and the discussion, so I understand that, but I'm sort of curious as to what the actions per se are. I mean, does that mean that you're essentially cutting price, or are there some incentives that are being offered in both construction and ag? How does that dynamic work on your end? What do you have to do to get this equipment moving off the line? Thank you.

明白了。最後一個問題，也許是對您在這裡採取的行動的另一個澄清。當我們看到指南和討論中反映的對利潤的影響時，我理解這一點，但我有點好奇這些行動本身是什麼。我的意思是，這是否意味著你們實質上是在降價，或者建築業和農業業都提供了一些激勵措施？這種動態對你來說是如何發揮作用的？您需要做什麼才能讓該設備下線？謝謝。

Mig, all the above; that's what's embedded in, a lot of different tools. As you know, I've been doing this a long time and been through downturns before, and I personally sold a lot of iron. We've got an extremely good team that we've put together now, our leadership team and our entire team that's experienced and been through this. It's a very scripted approach. You're going to pull different levers depending on what product category, what customer is, what their needs are.

米格，以上都是；這就是嵌入在許多不同工具中的內容。如你所知，我從事這一行已經很長時間了，之前也經歷過經濟低迷時期，我個人也賣過很多鐵。我們現在組建了一支非常優秀的團隊，我們的領導團隊和整個團隊都經驗豐富，經歷過這一切。這是一種非常腳本化的方法。您將根據產品類別、客戶類型以及他們的需求來拉動不同的槓桿。

But yeah, some of those examples would be some things you mentioned, whether it's an interest buy-down, interest waiver, a split rate program, whether it's an extended warranty, or just sometimes just straight-up price. But every one of those is going to ultimately map back in the accounting to the margins, and so that's what we've got embedded in.

但是，是的，其中一些例子就是您提到的一些事情，無論是利息購買、利息豁免、分割利率計劃，無論是延長保固期，還是有時只是直接定價。但其中每一項最終都會在會計中映射到利潤，所以這就是我們所嵌入的內容。

And it's just what is it that -- for the grower or contractor, works for them and their banker and makes their operation better by updating that piece of equipment. And again, a simple example can be moving from a current rate contract of a 4% fixed or something into an interest-free contract, or being out of warranty and moving into a machine that now has warranty, or technology advancements making them more efficient, et cetera.

這就是它的本質——對於種植者或承包商來說，為他們和他們的銀行家工作，並透過更新該設備來改善他們的運作。再一次，一個簡單的例子可以是從當前 4% 固定利率合約或其他利率合約轉為無息合同，或者超出保固期並更換為現在有保固的機器，或者技術進步使它們更加高效等等。

So we're very cognizant of arming our team with those tools, communicating those tools, and being very aggressive here. And as I mentioned in my prepared remarks, it is our single biggest initiative right now.

因此，我們非常清楚如何用這些工具武裝我們的團隊，溝通這些工具，並在此方面表現得非常積極。正如我在準備好的發言中提到的，這是我們目前最大的舉措。

Thank you.

謝謝。

Ted Jackson, Northland Securities.

特德傑克遜，北國證券。

All my questions have been asked and answered. Thanks very much.

我所有的問題都已被提出並得到解答。非常感謝。

Thank you. At this time, I will now turn the floor back to management for closing remarks.

謝謝。現在，我將請管理層發表閉幕詞。

Okay. Thank you for your time today, everyone, and we look forward to talking to you all again in our Q2 call.

好的。感謝大家今天抽出寶貴的時間，我們期待在第二季的電話會議中再次與大家交談。

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路，感謝您的參與。