Titan Machinery Inc (TITN) 2026 Q1 法說會逐字稿

Greetings, and welcome to the Titan Machinery's first quarter fiscal 2026 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Mr. Jeff Sonnek with ICR. Thank you. You may begin.

您好，歡迎參加 Titan Machinery 2026 財年第一季財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。現在我想將電話轉給主持人，ICR 的 Jeff Sonnek 先生。謝謝。你可以開始了。

Thank you. Welcome to the Titan Machinery first quarter fiscal 2026 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 Titan Machinery 2026 財政年度第一季財報電話會議。今天參加公司電話會議的有總裁兼執行長 Bryan Knutson；以及財務長 Bo Larsen。

By now, everyone should have access to the earnings release for the fiscal first quarter ended April 30, 2025, which is also available on Titan's Investor Relations Web site at ir.titanmachinery.com. In addition, we're providing a supplemental presentation to accompany today's prepared remarks along with webcast and replay information, which can also be found on Titan's IR website within the Events and Presentations section.

到目前為止，每個人都應該可以看到截至 2025 年 4 月 30 日的第一財季收益報告，該報告也可在 Titan 的投資者關係網站 ir.titanmachinery.com 上找到。此外，我們還提供了一份補充演示文稿，以配合今天的準備好的發言以及網絡廣播和重播信息，這些信息也可以在 Titan 的 IR 網站的“活動和演示文稿”部分找到。

We would also 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. The statements do not guarantee future performance and therefore, undue reliance should not be placed upon them.

我們也想提醒大家，準備好的評論包含前瞻性陳述，管理階層可能會針對您的問題做出額外的前瞻性陳述。這些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 management's current expectations and involve inherent risks and uncertainties, including those identified in the forward looking statements section of today's earnings release and the company's filings with the SEC to include the Risk Factors section of Titan's most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q.

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，包括今天的收益報告的前瞻性陳述部分和公司向美國證券交易委員會提交的文件中確定的風險和不確定性，包括 Titan 最近提交的 10-K 表年度報告和 10-Q 表季度報告中的風險因素部分。

These risks and uncertainties 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.

這些風險和不確定性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。除適用法律可能要求外，Titan 不承擔更新今天發布或電話會議中可能做出的任何前瞻性聲明的義務。

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.

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全面分析和更透明的了解，特別是在比較不同時期的基本結果時。

We have included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures in today's release and supplemental presentation. At the conclusion of our prepared remarks, we will open the call to take your questions. And with that, I'd now like to turn the call over to the company's President and CEO, Bryan Knutson. Bryan, please go ahead.

在今天的發布和補充報告中，我們已將這些非 GAAP 財務指標與最直接可比較的 GAAP 財務指標進行了對帳。在我們準備好的發言結束後，我們將開始回答您的問題。現在，我想將電話轉給公司總裁兼執行長布萊恩·克努森 (Bryan Knutson)。布萊恩，請繼續。

Thank you, Jeff. And good morning to everyone on the call. I'll start today by covering our performance for the quarter followed by an update on our strategic initiatives and operational focus points for the year. I'll then discuss the current market environment and performance across each of our operating segments before turning the call over to Bo for his financial review and comments on our fiscal 2026 modeling assumptions.

謝謝你，傑夫。各位來賓早安。今天我將首先介紹我們本季的業績，然後介紹我們今年的策略舉措和營運重點。然後，我將討論我們每個營運部門的當前市場環境和業績，然後將電話轉給 Bo，請他進行財務審查並對我們的 2026 財年模型假設發表評論。

Our first quarter results demonstrated our ability to advance our short-term goals in a challenging market environment. And while headwinds persist across the agricultural sector, our team remains focused on continuing to execute upon our initiative to optimize inventory and navigate through the trough of the cycle. We continue to anticipate a very subdued retail environment given the ongoing likelihood of weak farmer profitability with government support programs remaining an important but still very much undefined variable.

我們第一季的業績證明了我們有能力在充滿挑戰的市場環境中推進我們的短期目標。儘管農業領域仍然面臨阻力，但我們的團隊仍然專注於繼續執行我們的計劃，以優化庫存並度過週期的低谷。由於農民獲利能力持續疲軟的可能性較大，且政府支持計畫仍然是一個重要但尚未確定的變量，我們預計零售環境將繼續非常低迷。

While challenges persist in the marketplace, our team's relentless focus on disciplined execution of our inventory reduction initiatives and our customer care strategy is allowing us to manage key variables to the business that will improve our position as we navigate this cycle. With that, I will now transition to our current inventory position.

儘管市場依然面臨挑戰，但我們的團隊堅持不懈地專注於嚴格執行庫存減少計劃和客戶關懷策略，這使我們能夠管理業務的關鍵變量，從而改善我們在此週期中的地位。有了這些，我現在將轉到我們當前的庫存狀況。

As you can see on our balance sheet, total inventories were $1.1 billion as of April 30, 2025, essentially flat compared to fiscal 2025 year end. This is very much in line with our previously communicated expectations as we've been receiving pre-sold units from the factory for delivery to customers in the first half of the year while simultaneously taking in trades as we deliver those new units to customers.

正如您在我們的資產負債表上看到的，截至 2025 年 4 月 30 日，總庫存為 11 億美元，與 2025 財年末相比基本持平。這與我們之前傳達的預期非常一致，因為我們在上半年已經從工廠收到預售的設備並準備交付給客戶，同時在向客戶交付新設備時也進行交易。

Overall, I'm quite pleased with our inventory progress, which has significantly improved our overall position over the last three quarters. Our customer care initiative remains a key focal point for us, with parts and service providing a stable foundation even as equipment sales face cyclical pressure.

總體而言，我對我們的庫存進展感到非常滿意，這顯著改善了我們過去三個季度的整體狀況。我們的客戶關懷計畫仍然是我們的重點，即使設備銷售面臨週期性壓力，零件和服務也能提供穩定的基礎。

This stability is critical in environments such as this as parts and service will make up about a quarter of our total revenue mix but well over half of our gross profit dollars this year. We are leveraging our scale and service capacity across our footprint, which is helping us maintain strong customer engagement. CNH recently validated these efforts by recognizing tight machinery with two of their top dealer awards, both centered around superior customer service, which is something that we take great pride in.

在這樣的環境下，穩定性至關重要，因為零件和服務將占我們今年總收入的四分之一左右，但將占我們毛利的一半以上。我們正在利用我們的規模和服務能力，這有助於我們保持強大的客戶參與。CNH 最近透過向 Tight Machinery 頒發兩個頂級經銷商獎項來認可這些努力，這兩項獎項均以卓越的客戶服務為中心，這是我們引以為豪的事情。

In our domestic agriculture segment, while industry equipment demand remains subdued, the first quarter revenue was stronger than initially expected due to the timing of pre-sold equipment deliveries. On our last call, we mentioned that Q1 domestic ag could be down 40% to 45%, but noted that high volumes of pre-sales could significantly impact results.

在我們的國內農業部門，雖然產業設備需求仍然低迷，但由於預售設備交付的時間安排，第一季的收入強於最初的預期。在我們上次電話會議上，我們提到第一季國內農業銷售額可能下降 40% 至 45%，但指出大量的預售可能會對業績產生重大影響。

Indeed, we received and delivered a substantial amount of pre-sold equipment in Q1, which includes a pull forward of revenue we had in our plan for the second quarter. In the near term, we are still working through our backlog of pre-sold units.

事實上，我們在第一季收到並交付了大量預售設備，其中包括我們計劃在第二季度實現的收入提前。短期內，我們仍在處理積壓的預售單位。

However, the back half of the year appears challenging with lower visibility and currently sluggish order activity. Farmers remain in a wait and see mode with near term sentiment hinging on commodity prices, moisture levels and the potential of government farm aid.

然而，由於能見度較低且目前訂單活動低迷，下半年似乎充滿挑戰。農民仍處於觀望狀態，近期情緒取決於商品價格、濕度水平和政府農業援助的潛力。

We are encouraging OEM partners to enhance programming for Q3 and Q4 to help stimulate demand in this environment. But absent that, it will remain challenging in the near term. It is helpful that spring planting across our domestic footprint has gone relatively well for our customers. However, we have received below average precipitation in much of our footprint. So timely rains throughout the growing season will remain critical.

我們鼓勵 OEM 合作夥伴加強第三季和第四季的規劃，以幫助刺激這種環境下的需求。但若沒有這一點，短期內仍將面臨挑戰。我們國內的春季播種工作進展相對順利，這對我們的客戶很有幫助。然而，我們大部分地區的降水量都低於平均值。因此，整個生長季節的及時降雨仍然至關重要。

Before turning to construction, I'd also like to welcome the team from farmers implement and irrigation. We closed on this two store acquisition on May 15 and it allows us to expand our New Holland presence in the productive Eastern South Dakota region.

在談到施工之前，我也想歡迎移工實施和灌溉團隊​​。我們於 5 月 15 日完成了這兩家店的收購，這使我們能夠擴大 New Holland 在物產豐富的南達科他州東部地區的影響力。

In our construction segment, performance was largely in line with our expectations and we anticipate that to continue throughout the year. Revenue showed modest growth over the prior year period, reflecting relative stability in this segment despite broader economic uncertainty as infrastructure projects continue to provide a base level of demand.

在我們的建築領域，業績基本上符合我們的預期，我們預計這種狀況將持續全年。與去年同期相比，收入呈現溫和成長，反映出儘管經濟存在較大不確定性，但由於基礎設施項目持續提供基本需求，該領域仍保持相對穩定。

However, as we experienced in domestic ag, we are seeing customers take a more cautious approach to capital expenditures given interest rate concerns and broader economic uncertainty. Our European segment was a bright spot, particularly in Romania where EU stimulus funds have increased buying activity, which we expect will extend through the September.

然而，正如我們在國內農業領域所經歷的那樣，考慮到利率問題和更廣泛的經濟不確定性，我們看到客戶對資本支出採取了更謹慎的態度。我們的歐洲市場是一個亮點，特別是在羅馬尼亞，歐盟刺激基金增加了購買活動，我們預計這種趨勢將持續到 9 月。

While we anticipate a lift, the degree to which was hard to determine. However, it is clear that support will be meaningful for our operations in Romania. Our business in Ukraine is also continuing to drive growth despite the ongoing conflict with Russia. It has been impressive what our team is able to accomplish given those circumstances.

雖然我們預期會出現提升，但提升的程度卻很難確定。然而，很明顯，這種支持對我們在羅馬尼亞的業務來說意義重大。儘管與俄羅斯的衝突仍在持續，但我們在烏克蘭的業務也持續成長。在這樣的情況下，我們的團隊能夠取得這樣的成績，真是令人印象深刻。

Planting conditions across our European footprint are off to a good start and industry volumes in Europe are expected to be more stable than in The United States. In our Australia segment, we're navigating through market conditions similar to our domestic ag segment.

我們在歐洲的業務範圍的種植條件開局良好，預計歐洲的產業產量將比美國更穩定。在我們的澳洲分部，我們正在經歷與國內農業分部類似的市場狀況。

Additionally, the normalization of self-propelled sprayer deliveries that we discussed last quarter is playing out as expected, with this segment transitioning from working through nearly three years of delayed order backlog to selling in line with subdued retail demand.

此外，我們上個季度討論過的自走式噴霧器交付正常化正在按預期進行，這一領域從近三年的延遲訂單積壓過渡到根據低迷的零售需求進行銷售。

New order activity is modestly weaker than we had anticipated due to dry conditions combined with low commodity prices, and as a result we are revising down our full year revenue expectations as Bo will discuss further.

由於乾旱天氣和大宗商品價格低迷，新訂單活動略低於我們的預期，因此我們下調了全年收入預期，Bo 將進一步討論。

Sowing is well underway in Australia's winter crop season, but as previously mentioned, conditions are currently quite dry in much of our footprint and thus precipitation is very much needed to initiate crop development. In closing, while we are operating in a down market, the progress we've made on our inventory reduction and optimization initiatives reinforces our beliefs that we'll be well positioned by fiscal year end.

澳洲冬季作物的播種工作正在順利進行，但如前所述，目前我們大部分地區的情況都相當乾燥，因此非常需要降水來啟動作物的生長。最後，雖然我們正處於低迷的市場中，但我們在庫存減少和優化計劃方面取得的進展強化了我們的信念，即到財政年度末我們將處於有利地位。

Our confidence stems from the disciplined execution throughout our organization, the continued success of our parts and service businesses and the progress we've made in positioning Titan to manage through this phase of the cycle.

我們的信心源於整個組織的嚴格執行、零件和服務業務的持續成功以及我們在幫助泰坦度過這一周期階段方面取得的進展。

I want to express my sincere gratitude to our entire team for their tremendous focus and dedication during this more challenging period. Their ability to execute while maintaining exceptional customer service has been a key differentiator for us. Consequently, we remain steadfast in emerging from this period as a stronger company and delivering long-term value to our shareholders. With that, I will turn the call over to Bo for his financial review.

我要向我們整個團隊表達最誠摯的感謝，感謝他們在這個更具挑戰性的時期所展現的巨大專注和奉獻精神。他們在保持卓越客戶服務的同時執行的能力一直是我們的關鍵差異化因素。因此，我們堅定不移地走出這段時期，成為一家更強大的公司，並為股東創造長期價值。說完這些，我將把電話轉給 Bo 進行財務審查。

Thanks, Bryan. And good morning, everyone. Starting with our consolidated results for the fiscal 2026 first quarter. Total revenue was $594.3 million compared to $628.7 million in the prior year period, reflecting a 5.5% decrease in same store sales driven by the factors that Bryan discussed earlier.

謝謝，布萊恩。大家早安。從我們 2026 財年第一季的綜合業績開始。總收入為 5.943 億美元，而去年同期為 6.287 億美元，反映出同店銷售額下降 5.5%，這是由 Bryan 先前討論的因素造成的。

Gross profit for the first quarter was $90.9 million compared to $121.8 million in the prior year period and gross profit margin was 15.3%. These decreases were primarily driven by lower equipment margins, particularly in our domestic ag segment, resulting from our continued efforts to manage inventory to targeted levels.

第一季毛利為 9,090 萬美元，去年同期為 1.218 億美元，毛利率為 15.3%。這些下降主要是由於設備利潤率較低，特別是在我們的國內農業部門，這是由於我們不斷努力將庫存管理到目標水準。

Operating expenses were $96.4 million for the first quarter of fiscal 2026 compared to $99.2 million in the prior year period. The year-over-year decrease of 2.8% was driven by lower variable expenses associated with the year-over-year decline in revenue and profitability. Floorplan and other interest expense was $11.1 million as compared to $9.5 million in the prior year period.

2026 財年第一季的營運費用為 9,640 萬美元，而去年同期為 9,920 萬美元。年減 2.8% 是由於收入和獲利能力較去年同期下降導致的變動費用降低。平面圖和其他利息支出為 1,110 萬美元，而去年同期為 950 萬美元。

However, on a sequential basis, floorplan and other interest expense decreased 15.3%, reflecting our continued efforts to reduce interest bearing inventory over the past few quarters. Floorplan interest expense is expected to continue to decline as we make additional progress on inventory reduction and mix optimization, and this is building toward a more meaningful decrease in floorplan interest expense next fiscal year.

然而，與上一季相比，平面圖和其他利息支出下降了 15.3%，這反映了我們在過去幾季中持續努力減少有息庫存。隨著我們在減少庫存和優化組合方面取得進一步進展，預計樓面利息支出將繼續下降，這將有利於下一財年樓面利息支出更有意義的下降。

Net loss for the first quarter of fiscal 2026 was $13.2 million or $0.58 per diluted share compared to last year's first quarter net income of $9.4 million or $0.41 per diluted share.

2026 財年第一季淨虧損為 1,320 萬美元，即每股攤薄虧損 0.58 美元，而去年第一季淨收入為 940 萬美元，即每股攤薄虧損 0.41 美元。

Now turning to a brief overview of our segment results for the first quarter. Our agriculture segment realized a same store sales decrease of 14.1% to $384.4 million and benefited from a pull forward of presold equipment deliveries, as Bryan already mentioned.

現在來簡要概述我們第一季的分部業績。我們的農業部門實現同店銷售額下降 14.1% 至 3.844 億美元，並受益於預售設備交付的提前，正如 Bryan 已經提到的那樣。

Agriculture segment pretax loss was $12.8 million compared to pretax income of $13 million in the first quarter of the prior year, resulting from softer retail demand and continued efforts to manage inventory at the targeted levels, both of which impacted equipment margins, although, to a lesser degree than the more intense margin contraction we experienced in the fourth quarter of last year.

農業部門稅前虧損為 1280 萬美元，而去年第一季的稅前收入為 1300 萬美元，這歸因於零售需求疲軟以及持續努力將庫存管理在目標水平，這兩者都對設備利潤率產生了影響，儘管影響程度低於去年第四季度我們經歷的更劇烈的利潤率收縮。

In our construction segment, same store sales increased 0.9% to $72.1 million. As Bryan mentioned, we continue to see relative stability in this segment despite broader macro uncertainty. Pretax loss was $4.2 million compared to pretax income of $0.3 million in the first quarter of the prior year. In our European segment, sales increased 44.2% to $93.9 million, which reflects a same store sales increase of 44%, partially offset by a slight negative foreign currency impact.

在我們的建築部門，同店銷售額成長 0.9%，達到 7,210 萬美元。正如布萊恩所提到的，儘管宏觀環境存在不確定性，但我們仍然看到這一領域相對穩定。稅前虧損為 420 萬美元，而去年同期的稅前收入為 30 萬美元。在我們的歐洲分部，銷售額成長 44.2%，達到 9,390 萬美元，反映出同店銷售額成長 44%，但部分被輕微的負面外匯影響所抵銷。

On a constant currency basis, revenue increased 47.5% and was led by Romania, which was bolstered by EU stimulus programs. Pretax income for the segment was $4.7 million compared to pretax income of $1.4 million in the first quarter of last year. In our Australia segment, same store sales decreased 1% to $44 million, which included a 4.6% negative foreign currency impact.

以固定匯率計算，收入增長了 47.5%，其中羅馬尼亞的收入增長最為顯著，這得益於歐盟刺激計劃的推動。該部門的稅前收入為 470 萬美元，而去年第一季的稅前收入為 140 萬美元。在我們的澳洲分部，同店銷售額下降 1% 至 4,400 萬美元，其中包括 4.6% 的負面外匯影響。

On a constant currency basis, revenue increased $1.6 million or 3.6%. Despite these results, retail demand was somewhat softer than we had anticipated and we expect that that incremental softness will continue throughout the rest of the year.

以固定匯率計算，收入增加了 160 萬美元，即 3.6%。儘管取得了這些成果，但零售需求比我們預期的要弱一些，我們預計這種逐漸疲軟的勢頭將在今年剩餘時間內持續下去。

Additionally, the quarterly comparables get more challenging in this segment as we progress through the year, as last year was bolstered by nearly three years' worth of sprayer backlog. Pretax loss was $0.6 million compared to pretax loss of $0.5 million in the first quarter of last year.

此外，隨著一年的推進，這一領域的季度可比性變得更具挑戰性，因為去年有近三年的噴霧器積壓訂單。稅前虧損為 60 萬美元，而去年第一季的稅前虧損為 50 萬美元。

Now on to our balance sheet and inventory position. We had cash of $22 million and an adjusted debt to tangible net worth ratio of 1.8 as of April 30, 2025, which is well below our bank covenant of 3.5 times. Regarding inventory, in the first quarter, we reduced our equipment inventory by approximately $13 million sequentially to $913 million, bringing our cumulative equipment inventory reduction to approximately $406 million from peak levels in Q2 of the prior year.

現在來看看我們的資產負債表和庫存狀況。截至 2025 年 4 月 30 日，我們擁有現金 2,200 萬美元，調整後債務與有形淨值的比率為 1.8，遠低於我們的銀行契約 3.5 倍。關於庫存，在第一季度，我們的設備庫存環比減少了約 1300 萬美元，降至 9.13 億美元，使我們的累計設備庫存從去年第二季度的峰值減少至約 4.06 億美元。

This was consistent with our expectations at the beginning of the year. The $100 million of additional equipment inventory reductions we discussed last quarter remains our target with most of that reduction expected to come in the second half of this fiscal year.

這與我們年初的預期一致。我們上個季度討論的 1 億美元額外設備庫存削減仍然是我們的目標，預計大部分削減將在本財年下半年實現。

We continue to maintain strong corporate oversight and controls around inventory management, working to stay ahead of the aging curve created by the heavy influx of equipment shipments as supply chains normalized post pandemic.

我們持續對庫存管理保持強有力的企業監督和控制，努力在疫情後供應鏈恢復正常時，避免因設備大量湧入而造成的老化曲線。

Throughout this process, we continue to optimize our inventory composition by reducing aged inventory, while building toward an optimal mix that better aligns with customer demand, which will have the added benefit of further reducing floor plan interest expense.

在此過程中，我們透過減少陳舊庫存來持續優化庫存結構，同時建立更符合客戶需求的最佳組合，這也有助於進一步降低樓層平面圖利息支出。

With that, I'll finish by commenting on our fiscal 2026 full year guidance, which we are reiterating from an adjusted loss per diluted share perspective but modifying in terms of revenue modeling assumptions for our international segments.

最後，我將對我們的 2026 財年全年指引進行評論，我們將從調整後每股攤薄虧損的角度重申這一指引，但會根據我們國際部門的收入模型假設進行修改。

Starting with our top line assumptions. For domestic agriculture segment, we continue to expect revenue to be down in the range of 20% to 25%. North America large ag industry volume is still expected to be down approximately 30% year over year, which aligns with the midpoint of our expectations for cash crop new equipment revenue.

從我們的首要假設開始。對於國內農業領域，我們繼續預期收入將下降 20% 至 25%。北美大型農業產業產量預計仍將年減約 30%，這與我們對經濟作物新設備收入預期的中點一致。

Our parts and service business continued to perform well and we expect flattish revenue in these areas. For the construction segment, we are maintaining our expectations to be in the range of down 5% to down 10%. The federal infrastructure bill continues to provide healthy support for industry fundamentals, but near term economic uncertainty is impacting construction activity.

我們的零件和服務業務持續表現良好，我們預計這些領域的收入將持平。對於建築業，我們預計其降幅將在 5% 至 10% 之間。聯邦基礎設施法案繼續為該行業基本面提供健康支持，但近期的經濟不確定性正在影響建築活動。

We are updating revenue assumptions for our international segments based on localized dynamics. Our European segment is now expected to be up 23% to up 28%. This improved outlook is led by the aforementioned strength in Romania.

我們正在根據本地化動態更新國際部門的收入假設。我們歐洲部分的銷售額預計將成長 23% 至 28%。這種前景的改善是由前面提到的羅馬尼亞的實力所推動的。

For our Australia segment, we are updating our expected revenue to be down 20% to down 25% as market conditions remain challenging and farmer sentiment is lower given dry conditions across much of our footprint. From a margin perspective, our fiscal 2026 assumptions for consolidated full year equipment margin are to be approximately 8%.

對於我們的澳洲分部，我們將預期收入下降 20% 至 25%，因為市場條件依然嚴峻，而且由於我們大部分業務區域乾旱，農民情緒較低。從利潤率的角度來看，我們對 2026 財年全年合併設備利潤率的假設約為 8%。

Now turning to the ag segment specifically. In the first quarter, equipment margins came in lower than expected at 3.3% and we expect that the ag segment will have similar equipment margins in the second quarter. However, we expect their margins will improve in the back half of the year as we optimize our inventory mix and work toward our year end targets.

現在具體談談農業領域。第一季度，設備利潤率低於預期，為 3.3%，我們預期農業部門第二季的設備利潤率將與預期相似。然而，隨著我們優化庫存組合併努力實現年終目標，我們預計他們的利潤率將在下半年提高。

We are pleased with the progress we are making on this important initiative and we are prioritizing this proactive approach to reducing used equipment levels. Consistent with our prior expectations, operating expenses are expected to decrease year-over-year on an absolute basis, which is expected to translate to approximately 17% of sales due to the lower revenue base we are forecasting as compared to the prior year.

我們對這項重要措施所取得的進展感到滿意，並優先考慮採用這種積極主動的方法來降低二手設備水準。與我們先前預期的一致，營業費用絕對值將年減，由於我們預測的收入基數與前一年相比較低，預計營業費用將佔銷售額的約 17%。

In summary, while we are making some refinements to Europe and Australia's revenue assumptions, we remain on track with our expectations for adjusted diluted loss per share in the range of $1.25 to $2. We remain focused on ensuring we're well positioned heading into fiscal 2026 where we expect to drive toward more normalized levels of profitability relative to the demand environment at that time. This concludes our prepared comments.

總而言之，雖然我們對歐洲和澳洲的收入假設進行了一些改進，但我們仍然預期調整後的每股攤薄虧損將在 1.25 美元至 2 美元之間。我們將繼續致力於確保我們在進入 2026 財年時處於有利地位，我們預計屆時我們的盈利水平將相對於需求環境更加正常化。我們的準備評論到此結束。

(Operator Instructions)

（操作員指示）

Liam Burke, B. Riley Securities.

Liam Burke，B. Riley 證券。

I know the agricultural environment is tough, weather is bad and at least the -- I know government subsidies do not support equipment sales. But is there any positive outlook on the agricultural sector -- I mean, are you seeing any positive moves here or is it still just continues to be tough?

我知道農業環境很艱難，天氣惡劣，至少──我知道政府補貼不支持設備銷售。但是農業領域的前景是否樂觀——我的意思是，您是否看到這裡有任何積極的舉措，還是仍然很艱難？

There has been some of the government payments that have started to come through. So if you look at, traditionally there would be about $10 billion is the traditional level of government payment, which is at this point what has been approved. Some of our growers are starting to see those checks, Liam. So that is helping provide some stability.

部分政府付款已開始到位。因此，如果你看一下，傳統上政府支付的傳統水準大約是 100 億美元，這是目前已批准的金額。我們的一些種植者開始看到這些支票，利亞姆。這有助於提供一定的穩定性。

Also as different trade negotiations are going on and we see more deals get done here that will further help as well. Recent rains we've received here in the Upper Midwest have also helped with sentiment and that will help with crop development. Australia is at a critical point. There is some rain in the forecast there, so that could help.

此外，隨著不同貿易談判的進行，我們看到這裡達成了更多協議，這也將進一步提供協助。最近我們中西部北部地區的降雨也有助於改善市場情緒，並有助於農作物生長。澳洲正處於關鍵時刻。天氣預報說那裡會下雨，這可能會有幫助。

But again if you look at the USDA net farm income projections that they came out with earlier in the year those were really heavily predicated around the government subsidies. And so that remaining what they have projected to be up to an additional $30 billion-some is still very much an unknown. And so where that falls in whether it's $10 billion or $45 billion here or where in between is really going to have an impact this year frankly.

但如果你再看看美國農業部今年稍早發布的淨農場收入預測，你會發現這些預測很大程度上是基於政府補貼的。因此，他們是否能剩下預計的 300 億美元左右仍是一個未知數。坦白說，無論是 100 億美元還是 450 億美元，或者介於兩者之間的金額，都會對今年產生影響。

And on the construction side, there seems to be another area, the sector in general is cautious because of all the macro headwinds and uncertainties. But I would expect that construction would be a little more optimistic in terms of end markets potential, it seems to be just as challenging as agriculture?

在建築方面，似乎還有另一個領域，由於各種宏觀不利因素和不確定性，該行業總體上持謹慎態度。但我預計，就終端市場潛力而言，建築業會更加樂觀一些，它似乎與農業一樣具有挑戰性？

It is certainly more positive. We've -- in talking with a lot of our contractor customers, the start to the year was a little bit slower but their backlog of work, they're starting to get projects. It is starting to get filled up for them. Their attitudes are becoming more positive. It's certainly not what it was the past two years that's for sure. It's definitely very heavily dependent on a rate environment.

這當然是更為積極的。在與許多承包商客戶交談時，我們發現今年年初的進度稍微慢了一點，但他們積壓的工作已經開始得到專案了。它開始被填滿了。他們的態度變得越來越積極。可以肯定的是，現在的情況肯定與過去兩年不同。這肯定嚴重依賴利率環境。

So any positive movement we did see in interest rates even just a slightest bit would certainly help there as well. And again any stability around trade talks and general broader economy would help as well. But we definitely see more stability in the construction environment right now.

因此，我們看到的利率的任何積極變動，哪怕只是一點點，肯定也會有所幫助。貿易談判和整體經濟的任何穩定也會有所幫助。但我們目前確實看到建築環境更加穩定。

I mean, maybe reiterating the same thing just for some perspective, right. Construction is coming off of some really good years and for us record years and we're talking about kind of a modest step back off of that given some of the uncertainty in the higher interest rate environment.

我的意思是，也許只是為了某種觀點而重複同樣的事情，對吧。建築業剛剛經歷了一些非常好的年份，對我們來說也是創紀錄的年份，考慮到高利率環境下的一些不確定性，我們正在談論一種適度的回落。

You compare that to ag where we're really talking about trough level and kind of historically low industry volumes, quite a bit different outlook, I would say. And so yeah, overall, down slightly, but putting that in perspective being coming off of those highs, a much different spot for construction than ag.

如果將其與農業進行比較，我們實際上談論的是低谷水平和歷史最低的行業產量，我想說，前景相當不同。是的，整體而言，略有下降，但從高點來看，建築業與農業的處境截然不同。

Ted Jackson, Northland Securities.

北國證券公司的泰德傑克森。

I wanted to circle back into, first of all, in some of the government support. So the USDA is looking for an additional $37 billion and $1 billion has been put out. What kind of programs are USDA looking to have happen, how do they get funded and how do we follow that as analysts to see that it's indeed competitive?

首先，我想回顧一下政府提供的一些支持。因此，美國農業部希望額外撥款 370 億美元，目前已撥款 10 億美元。美國農業部希望開展哪些類型的項目，這些項目如何獲得資金，以及我們作為分析師如何追蹤這些項目以確保其確實具有競爭力？

So they are putting specifics behind this and you can find that on the USDA webpage and they have a timeline for the rest of the year. And a lot of the additional payments coming out this year are specific to natural disaster type events that actually happened in 2023 and 2024.

因此，他們正在為此制定具體細節，您可以在美國農業部網頁上找到這些信息，他們還提供了今年剩餘時間的時間表。今年發放的許多額外款項都是針對 2023 年和 2024 年實際發生的自然災害類型事件。

So specific to droughts and supporting livestock industry and then specific to other dry areas or wildfires supporting the ag industry, kind of what they need to do is go state by state, who qualifies, how much money is going to be allocated in that region, how much gets allocated to an individual grower.

因此，具體到乾旱和支持畜牧業，然後具體到其他乾旱地區或支持農業的野火，他們需要做的就是逐個州地了解誰有資格，在該地區分配多少錢，分配給單一種植者多少錢。

So all of that remains to be seen. But if you want to look at that timeline, it's available. There are a lot of specifics out there. So I would say it's pretty structured and we're all going to wait and see how this plays out and how much of that ultimately flows to customers that are on our footprint.

所以這一切還有待觀察。但如果您想查看該時間線，它是可用的。其中有很多具體細節。所以我想說，它的結構非常合理，我們都將拭目以待，看看它如何發展，以及最終有多少會流向我們足跡中的客戶。

And Ted, the main one that has really happened so far for the grain growers has been is what they call ECAP for the Emergency Commodity Assistance Program. And that was just under $10 billion, which is again in line with what the annual traditional level would be. And so yes, we'll remain to be watching here on the rest of the year.

特德，到目前為止，對糧食種植者來說，最主要的援助計畫是所謂的「緊急商品援助計畫」（ECAP）。這一數字略低於 100 億美元，與年度傳統水準一致。是的，我們會在今年剩餘時間繼續關注。

But a lot of times what that does is that certainly at normal yield levels that these prices would essentially get them close to a breakeven for the average grower or just help mitigate their loss. So in general that's why you're hearing us and Deere and CNH all saying that that won't by itself drive equipment demand or equipment purchasing.

但很多時候，在正常產量水準下，這些價格基本上可以讓普通種植者接近損益平衡，或只是幫助他們減輕損失。所以總的來說，這就是為什麼你會聽到我們、迪爾和 CNH 都說這本身不會推動設備需求或設備購買。

They'll typically use those dollars to pay down debt and again just to fight another year, if you will. But that said, again anything incremental beyond that will help and they can't defer that income. So there is a point here where it does start to help with demand and help allow them to update some much needed machinery updates.

他們通常會用這些錢來償還債務，然後再繼續奮鬥一年，如果你願意的話。但話雖如此，任何超出此範圍的增量都會有所幫助，而且他們不能推遲這筆收入。因此，它確實開始幫助滿足需求，並幫助他們更新一些急需的機械更新。

Number two, when you go into your commentary, you're actually using the word trough instead of decline. I mean, would you -- is there something that you write in that? Do you feel that at this point, we're kind of knocking along the bottom of the cycle? I mean, I'm not talking for a turnaround, but more or less that there's more, I don't know, maybe predictability, stability is probably too much of a word, but predictability or stability with regards to the ag markets in the US?

第二，當您發表評論時，您實際上使用的是低谷這個詞，而不是衰退這個詞。我的意思是，你會──在裡面寫了一些東西嗎？您是否覺得，目前我們正處於週期的底部？我的意思是，我並不是在談論轉機，而是或多或少還有更多，我不知道，也許可預測性、穩定性這個詞可能有點誇張，但對於美國農業市場來說，可預測性或穩定性呢？

Yeah, I mean, I guess what we would say about that is certainly not trying to call this specific year or a specific quarter as being bottom. But if you're just looking at history, right, and specifically going back through the year 2000, with large ag expected to be down 30% year over year that really puts us about 36% below the average from 2024 back to the year 2000 and just a little bit below the previous low point, which was that 2016, 2017 time period.

是的，我的意思是，我想我們對此的看法肯定不是試圖將這一特定年份或特定季度稱為底部。但如果你只看歷史，特別是回溯到 2000 年，大型農業預計將同比下降 30%，這實際上比 2024 年至 2000 年的平均水平低 36%，略低於之前的低點，即 2016 年、2017 年期間。

So it certainly aligns with it is at or slightly below the trough of the last couple of decades, which gives some support to the fact that we're somewhere near that and operating toward the bottom of the cycle here. Again, whether that changes in the next couple of quarters or its next year, we're not making that call. But that's kind of what we're alluding to, right? We're comparing that to history, seeing that we are at those similar levels and not necessarily making the call on when it turns upward from here.

因此，它肯定與過去幾十年的低谷相一致或略低，這在一定程度上支持了我們正接近該水平並處於週期底部的事實。再說一次，無論這種情況是在接下來的幾個季度還是明年發生變化，我們都不會做出決定。但這正是我們所暗示的，對吧？我們將其與歷史進行比較，發現我們處於相似的水平，並且不一定能預測何時會從現在開始上漲。

Okay. I got a couple more, but I'm going to step aside and I'll jump back in line if they don't get asked.

好的。我還有另外幾個，但如果沒有人問的話，我就走開並重新排隊。

(Operator Instructions)

（操作員指示）

Mig Dobre, Baird.

米格·多布雷，貝爾德。

I want to go back to discussing inventory, and it was encouraging to see additional progress this quarter, especially on the used side. So I guess I'm curious to get an update from you gentlemen in terms of regionally how you think about inventories.

我想重新討論庫存，看到本季取得更多進展令人鼓舞，特別是在二手方面。所以我很好奇想從各位先生那裡了解你們在地區層面上對庫存的看法。

You mentioned that for your Europe business you expect inventories to remain flattish. Maybe give us a little insight on what's going on with Australia. And then as you think about the North American footprint, are there particular areas where you still need to work this down? I mean, are there specific product lines or either regions or states where maybe you have a little more wood to chop than others?

您提到，對於您的歐洲業務，您預計庫存將保持穩定。也許可以讓我們稍微了解一下澳洲的情況。然後，當您考慮北美足跡時，是否還存在一些特定領域需要您繼續努力？我的意思是，是否存在特定的產品線、地區或州，在這些地方您可能需要砍伐的木材可能比其他地方多一些？

So just to clarify a couple of points. In that $100 million target, I would say is certainly a minimum that we look to achieve. Certainly looking to do better than that, but we're at expectations through Q1. So let's get another three months in and see what we can do before we would revise that.

只是想澄清幾點。我想說，1 億美元的目標肯定是我們希望實現的最低目標。當然希望做得更好，但我們對第一季的預期已經達到了。因此，讓我們再花三個月的時間看看在修改之前我們能做些什麼。

And what I would say from that 100s, painting it a little broadly here, CE was in pretty good shape and really within a range overall, certainly some optimization but not really 100 -- I wouldn't prescribe any of that 100 million decrease to them. Australia also, I mean, you're talking single digits probably in terms of the target. And then really mostly it would be about 60% ag and then 40% in Europe.

從這 100 億美元來看，我想說的是，在這裡大致描述一下，CE 的狀況相當不錯，總體上確實在一個範圍內，肯定有一些優化，但實際上並不是 100 億美元——我不會建議他們減少 1 億。澳洲也是如此，我的意思是，就目標而言，您說的可能是一位數。那麼實際上大部分情況下，農業佔比約為 60%，歐洲佔比約為 40%。

So we're certainly expecting to see and driving a decrease in inventory in Europe this year and expecting that to unfold as we work through the rest of the year. Now within those from an ag perspective, I would say that most of what we prescribe on there is focused on reducing used inventory levels and optimization across new and used.

因此，我們當然預計今年歐洲的庫存將會減少，並且預計這種情況將在今年剩餘時間內逐漸顯現。現在從農業的角度來看，我想說我們提出的大多數建議都集中在降低二手庫存水準以及優化新舊庫存。

So you're asking areas that you need to focus on. We still have an aging of seasonal products that we got large quantity at the same time kind of post pandemic normalizations. We need to work through those so that we can dedicate more of that balance sheet to the high horsepower tractors, for example.

所以你問的是你需要關注的領域。我們仍有一些季節性產品的老化，這些產品在疫情後恢復正常化的同時，我們也獲得了大量的供應。我們需要解決這些問題，以便我們可以將更多的資產負債表用於大馬力拖拉機等。

So that's the optimization that we're talking about. On the Europe side, they do a lot less used business than on the ag side. So there's not a whole lot there and it's more about reducing the overall level and also working on that optimization. So yeah, I guess I'd pause there to see if you had a follow-up.

這就是我們正在談論的優化。在歐洲，他們的二手車業務比農業業務少得多。因此，這裡沒有太多內容，更多的是降低整體水平並致力於優化。是的，我想我會暫停一下，看看你是否有後續行動。

That's very helpful. I want to talk a little bit about Europe. And look, I mean, the increase in revenue guidance, I'm having a hard time wrapping my head around that, in terms of what is happening in Romania and how big Romania could be in order to generate this sort of swing. So I guess I'd like more detail there. And I'm also curious how you think about margin. I mean, margin here was 5% in Q1. And if you're raising the guidance to this extent, how do you think about the rest of the year?

這非常有幫助。我想談歐洲。看看，我的意思是，收入預期的增加，我很難理解這一點，就羅馬尼亞正在發生的事情以及羅馬尼亞要達到多大的規模才能產生這種轉變而言。所以我想我希望了解更多細節。我也很好奇您對利潤有何看法。我的意思是，第一季的利潤率為 5%。如果您將指導幅度提高到這種程度，那麼您對今年剩餘時間的表現有何看法？

So first off, some more perspective for Romania. It represents about half of our business in Europe. So it is pretty substantial. And last year given the significant of the droughts, we actually saw Europe business -- our Romanian business decreased 34% year over year.

首先，讓我們從更多角度來了解羅馬尼亞。它約占我們在歐洲業務的一半。所以這是相當可觀的。去年，由於乾旱嚴重，我們的歐洲業務—羅馬尼亞業務年減了 34%。

And that was most of the decrease for the whole Europe segment. So from a -- because of those droughts, actually industry and country essentially got cut in half, I mean a significant drop, right. So what we're alluding to with the European Union funds is some European Union funds dedicated to Romania subvention bonds specifically to support the industry, it's a broader piece.

這是整個歐洲地區下降幅度最大的部分。因此從某種程度上來說——由於這些乾旱，實際上工業和國家基本上減少了一半，我的意思是大幅下降，對吧。因此，我們提到的歐盟基金是指一些專門用於羅馬尼亞補貼債券的歐盟基金，用於支持該產業，這是一個更廣泛的部分。

But as it relates to our business, initially that was about EUR150 million dedicated to providing essentially assistance for farmers to buy certain types of equipment. So that's helping us drive significant increase in the interest and buying of certain types of equipment, maybe a little bit in terms of from an inventory perspective. It doesn't necessarily help us address all areas of inventory.

但就我們的業務而言，最初約有 1.5 億歐元專門用於為農民購買某些類型的設備提供基本援助。因此，這有助於我們大幅增加對某些類型設備的興趣和購買量，從庫存角度來看可能有點幫助。它不一定能幫助我們解決所有庫存問題。

And certainly, we need to order some more to keep up with that demand as orders are coming in. But that's why you're seeing the swing from saying flat to up 5 to up 23 to 28. It's really getting Romania kind of swinging back to where it was and actually growing from about two years ago, given the significance of these funds and the opportunity it's providing for growers in the region.

當然，隨著訂單的增加，我們需要訂購更多以滿足需求。但這就是為什麼你會看到從持平到上漲 5% 再到上漲 23% 再到 28% 的波動。鑑於這些資金的重要性以及它為該地區種植者提供的機會，羅馬尼亞確實恢復到了原來的狀態，並且實際上比大約兩年前有所增長。

And the margin?

還有利潤嗎？

So from -- that also is helpful from an equipment margin perspective in Europe. We talked about overall for the year consolidated equipment margin being 8%. For Europe, expecting about 15.5%. They have historically quite a bit higher margin than the US side. So I would say strength in margin on the Europe side but a little weakness in margin on the domestic ag side.

因此，從歐洲的設備利潤率角度來看，這也是有幫助的。我們談到了全年綜合設備利潤率為 8%。對於歐洲來說，預計約為 15.5%。從歷史上看，他們的利潤率比美國高得多。因此，我認為歐洲方面的利潤率較高，但國內農業方面的利潤率略低。

So domestic ag, you saw the 3.3% expecting something similar in Q2 and then improving from there. In terms of overall priorities for us, what I'd just take the opportunity to reiterate is we've got confidence in executing the plan and bringing inventory down and thus the $100 million being a minimum and looking to build off of that.

因此，國內農業成長率預計為 3.3%，與第二季類似，然後從那裡開始改善。就我們的整體優先事項而言，我只想藉此機會重申，我們有信心執行該計劃並降低庫存，因此 1 億美元是最低限額，並希望在此基礎上繼續努力。

And that is the first priority, right? So in terms of actions we're taking incrementally, it proposes some potential compression on margin domestically. But on the Europe side, this is beneficial and we're seeing that helpful.

這是首要任務，對嗎？因此，就我們逐步採取的行動而言，它可能會壓縮國內的利潤率。但從歐洲方面來看，這是有益的，而且我們看到它很有幫助。

Last question, so on your domestic ag business. Again, I'm trying to figure out exactly how to get to your same store sales guidance given timing of shipments. So can you help us out in terms of what Q2 looks like relative to the back half? And if we are seeing pretty sustained pressure on the back half, like it looks to me like your guidance implies, what gets the margin to be better than this negative 3% in the back half, like what has to happen in order for you to get there?

最後一個問題，關於您的國內農業業務。再次，我試圖弄清楚如何在給定發貨時間的情況下準確獲得同店銷售指導。那麼，您能否幫助我們了解第二季相對於下半年的情況？如果我們看到下半年持續的壓力，就像您指導所暗示的那樣，怎樣才能使下半年的利潤率比-3%更好，為了達到這個目標，您必須做什麼？

So a lot of it comes down to discipline on our side and ordering activity. We're mostly focused on any orders we're placing or pre-sales. So the pressure that all came in through last year and ramped up as we progressed through the year was because we had a bunch of stock inventory available that's interest bearing, right? And so we're working through that and we've made really good progress on that.

因此，很大程度上取決於我們這邊的紀律和有序活動。我們主要關注的是我們所下的訂單或預售。所以，去年出現的所有壓力以及隨著一年的進展而不斷增加的壓力是因為我們有大量可產生利息的庫存，對嗎？因此，我們正在努力解決這個問題，並且已經取得了很好的進展。

And we're going to continue to make progress, we did in Q1, we'll continue to in Q2, Q3 from there. So by the time we get to Q4, we're going to be in a drastically different position in terms of inventory health year over year, which helps us with that margin improvement.

我們將繼續取得進展，就像我們在第一季所做的那樣，我們將在第二季、第三季繼續這樣做。因此，到第四季度時，我們的庫存健康狀況將與去年同期相比有顯著不同，這有助於我們提高利潤率。

But it's to me absolutely, I agree that it's a challenging backdrop. The benefit is the significantly less order volume we have coming in and specifically all of that being pre-sold and just the progress we've made and we'll continue to make on inventory optimization.

但對我來說，我絕對同意這是一個具有挑戰性的背景。好處是我們的訂單量明顯減少，特別是所有訂單都是預售的，而且我們在庫存優化方面已經取得了進展，並且將繼續取得進展。

Because right now, right, in order to make that progress, we certainly are getting more aggressive with internal programs and promotions to get that progress done. And we're -- as we achieve that, there's less of that that we have to do in the back half and setting us up as we exit FY26 to really operate at more of a normalized margin relative to the point of the cycle that we're in.

因為現在，為了取得這項進展，我們肯定會更積極地進行內部規劃和促銷活動，以取得這項進展。而且，當我們實現這一目標時，我們在下半年需要做的事情就會減少，並且當我們退出 26 財年時，我們就能真正以相對於我們所處的周期點更加正常的利潤率來運營。

But just to clarify, just for Q2, same store sales in agriculture, should we be thinking down 25, down more, the timing versus Q1 versus Q2 of delivery? That's what I'm looking to clarify.

但需要澄清的是，僅就第二季而言，農業同店銷售額，我們是否應該考慮下降 25% 甚至更多，與第一季相比，與第二季相比，交貨時間是否下降？這就是我想要澄清的。

And just to start with also in terms of same store. So the acquisition that we just did in Brookings and Watertown, we're really excited about. But in the press release, we had mentioned last year, it was $20 million in sales. This year, obviously, they're reflecting the market that we are.

首先從同一家商店的情況來看。因此，我們對剛剛在布魯金斯和沃特敦完成的收購感到非常興奮。但在新聞稿中，我們提到去年的銷售額是 2,000 萬美元。顯然，今年他們反映了我們的市場狀況。

So it's not really -- when you're looking at growth numbers, it's not really blurring the lines on the same store, just to clarify that for you. And then in terms of what we're expecting, going into the second quarter, we still have some backlog we're executing on.

所以，當你查看成長數字時，它實際上並沒有模糊同一家商店的界限，只是為了向你澄清這一點。就我們的預期而言，進入第二季度，我們仍有一些積壓的工作正在執行。

And certainly, as we look at the back half of the year, the next couple of months are going to be really important in terms of what that order writing activity is. But that said, sort of as a base case, I've got from an equipment perspective, Q2, Q3, Q4, each being down about 30% year over year for domestic ag.

當然，當我們展望下半年時，接下來的幾個月對於訂單撰寫活動將非常重要。但話雖如此，作為基本情況，從設備角度來看，第二季、第三季、第四季，國內農業產量年均下降約 30%。

And then you mix in your parts and service it's more flattish, that's what I would prescribe for you. So then if you really -- I'm zooming back out and I'll talk on a consolidated basis. Last year, we were more 45%, 46% of our total revenue was in the first half of the year. This year is going to be closer to 50%, because of exactly what you're alluding to. Sort of the pre-sales in the first half of the year and then we're looking at and projecting forward more challenging order activity in the back half of the year.

然後你混合你的零件和服務，它會變得更加平坦，這就是我為你開的建議。那麼如果你真的——我會縮小範圍，並在合併的基礎上進行討論。去年，我們上半年的總收入佔比超過 45% 至 46%。今年這一比例將接近 50%，正如您所暗示的那樣。上半年的預售大致如此，然後我們正在研究並預測下半年的訂單活動將更具挑戰性。

Ben Klieve, Lake Street Capital Markets.

Ben Klieve，Lake Street Capital Markets。

First, I want to ask about your comments regarding hopeful initiatives from OEM partners on kind of stimulating demand in the second half of the year. I'm wondering if you can talk a bit about this from the perspective of kind of specifically what you would most like to see, the degree to which you have these embedded within your guidance and then the degree of confidence you have that these will come to pass?

首先，我想問您對 OEM 合作夥伴在下半年刺激需求方面所採取的積極舉措的看法。我想知道您是否可以從具體角度談談這個問題，您最希望看到什麼，您在指導中將這些目標嵌入到多大程度，以及您對這些目標實現的信心程度？

So first of all, we're looking at another year of weak farmer profitability as we mentioned and uncertainty on exports with our global trading partners, and as we see those continue to evolve and as I mentioned watching moisture levels and crop development.

首先，正如我們所提到的，我們預計農民獲利能力將再度疲軟一年，而且我們與全球貿易夥伴的出口也存在不確定性，我們看到這些情況將繼續發展，正如我所提到的，我們正在關注水分含量和作物生長情況。

And so all that will further determine farmer sentiment and net farm income. But as it currently sits the net farm income as we mentioned is very challenging. So that's where the OEMs -- those discussions happen and looking to pull many different levers whether it's through financing programs, additional incentives and what have you.

所有這些將進一步決定農民情緒和農場淨收入。但正如我們所提到的，目前的農場淨收入非常具有挑戰性。這就是 OEM 進行討論的地方，他們希望採取多種不同的手段，無論是透過融資計劃、額外激勵措施還是其他什麼方式。

So we'll continue to -- a lot of the front half of the year is already baked as we've been talking about a lot of those pre-sales coming in, and you heard Bo talk about that. But -- so we're really looking at back half of the year and as we get into order boards for next year here. And there's been a lot of price increases that have happened with the equipment post COVID here or even over the last 10 years.

因此，我們將繼續進行——今年上半年的大部分工作已經完成，因為我們一直在談論大量預售的到來，你聽到 Bo 談到了這一點。但是 — — 因此，我們實際上正在關註今年上半年的情況，並著眼於明年的訂單板。疫情過後，甚至在過去 10 年裡，設備價格都大幅上漲。

And there's been a lot of improvements and a lot of technology advancements with the equipment as well that really are driving that ROI on the equipment. So how the OEMs look to pull those different levers to keep their factories at level that work for them and also from a dealer perspective to keep our sales up and keep the fleet to a certain level of aging as well out there.

而設備也得到了許多改進和技術進步，這確實推動了設備的投資報酬率。那麼，原始設備製造商 (OEM) 如何利用這些不同的槓桿來保持其工廠處於適合他們的水平，同時從經銷商的角度來看，如何保持我們的銷售額，並將車隊保持在一定的老化水平。

As we are at, as Bo mentioned, 20 year trough levels here in demand, the further we go through the cycle at these levels we'll continue to age the fleet and continue to increase replacement demand even as you go farther.

正如 Bo 所提到的那樣，我們的需求處於 20 年來的最低水平，隨著週期的進一步推進，我們的船隊將繼續老化，更換需求將繼續增加。

So we'll continue to work with them on just various incentives to help stimulate demand, help bridge what is currently a gap for growers as you look at their net farm income levels compared to what the certain payments or cash flow levels of the equipment are in the trade prices right now. So various levers and tools we'll pull and look to team up together with the OEMs to bridge that gap right now.

因此，我們將繼續與他們合作，提供各種激勵措施，以幫助刺激需求，幫助彌合種植者目前的差距，你可以將他們的農場淨收入水平與目前貿易價格中設備的某些付款或現金流水平進行比較。因此，我們將利用各種手段和工具，與 OEM 合作，彌補目前的差距。

And in terms of, you asked the question what's embedded in the guidance, I would say kind of a consistency with what we've seen from our strategic OEM partners over the going on 50 year relationship. So we try to provide as much clarity and transparency to them in terms of what we're seeing.

至於您問到指導中包含什麼內容，我想說的是，這與我們在過去 50 年的合作關係中從策略 OEM 合作夥伴那裡看到的一致。因此，我們盡力向他們提供盡可能清晰和透明的信息，讓他們了解我們所看到的情況。

And right now, the pinch point is weak farmer profitability along with softer used values creating a gap in that boot or the cash price that they need to bring and working with the OEMs to find a way to make those deals that work for the grower, the OEM and ourselves.

而現在，關鍵在於農民獲利能力較弱，加上二手價值較低，導致他們需要提供的啟動資金或現金價格出現缺口，並與原始設備製造商合作，找到一種對種植者、原始設備製造商和我們自己都有利的交易方式。

And then I guess I have a follow-up to this, maybe more for you Bo, around these initiatives. I mean, it would seem to be that if this does come to pass, it would be an overwhelming positive for you. But I'm wondering if you can outline if there's any kind of resulting margin compression that you would see need to lean into the floorplan payable in a more material manner, any kind of offsetting effect that those kind of initiatives would provide?

然後我想我會對此進行跟進，也許更多是為你博，圍繞這些舉措。我的意思是，如果這件事真的發生了，對你來說將是一件非常有利的事情。但我想知道您是否可以概述一下是否會導致任何類型的利潤壓縮，您是否認為需要以更實質性的方式傾向於支付建築平面圖，這些舉措會產生什麼樣的抵消效應？

Well, to the extent that there's further support there, again, for a perspective, right, we're talking about historically low equipment margins for ourselves in domestic ag. So to the extent that there's more support there, it helps support the view that we have or potentially a little bit of upside in terms of where revenue could be. It could improve margins coming up off of really the floor of where we've been but still well below normal that we should be operating at, so progress in that direction.

好吧，就進一步的支持而言，再次從某個角度來看，我們正在談論國內農業歷史上較低的設備利潤率。因此，如果能獲得更多支持，將有助於支持我們的觀點，或在收入方面可能帶來一點上行空間。它可以提高利潤率，使其脫離目前的最低水平，但仍然遠低於我們應該營運的正常水平，因此要朝著這個方向發展。

And then, yes, absolutely, as we free up cash flow, one of our main capital allocations is going towards interest bearing debt. So that could help pay that down faster. Overall, again, the priority is inventory reduction and we're doing what we need to and just working with our partners on support so that we can all get there as efficiently as possible.

是的，當然，當我們釋放現金流時，我們的主要資本配置之一就是用於有利息的債務。這樣可以幫助更快償還債務。總的來說，我們的首要任務是減少庫存，我們正在做我們需要做的事情，並與我們的合作夥伴一起提供支持，以便我們都能盡可能高效地實現目標。

Steve Dyer, Craig-Hallum Capital Group.

克雷格-哈勒姆資本集團的史蒂夫戴爾。

This is Matthew Raab on for Steve. Two questions on parts and service here. Firstly, are we still expecting a slight increase year over year in the service gross margin? And then secondly, Bo, you noted last quarter traffic was a little bit slower to start the year. Any update on how the quarter trended and then any expectations for traffic through year end?

我是馬修‧拉布 (Matthew Raab)，代替史蒂夫報道。這裡有兩個關於零件和服務的問題。首先，我們是否仍預期服務毛利率較去年同期會略有成長？其次，博，您注意到上個季度的流量相對於年初來說有點慢。有關於本季趨勢的最新消息嗎？對年底的流量有什麼預期嗎？

So from a margin perspective, yes, similar levels, slightly positive levels that still remains the expectation. In terms of what unfolded in the first quarter, I recall talking about it, we were expecting parts and service to be down mid to single digits in Q1. Same store growth last year Q1 was almost 20%, it was like 18.9%. So that was part of what was going into it. We ended up down low single digits.

因此，從利潤率的角度來看，是的，類似的水平，略微積極的水平仍然是預期。就第一季的情況而言，我記得我們曾經談論過，我們預計第一季的零件和服務費用將下降到中位數至個位數。去年第一季同店銷售額成長率接近20%，達18.9%。這就是其中的一部分。我們最終落後個位數。

So certainly within the realm or maybe even on the better side of what our expectations were there and still expecting kind of a flattish viewpoint there in a world where equipment is down 30%. To us, that's a real positive and just how sustainable that parts and service can be as long as -- it takes a ton of work. So it's not a given at all. But everything that we put behind it to be able to maintain sort of a flattish view there when the equipment is down 30, hats off to the team on the great job that they do to execute.

因此，這肯定在我們的預期範圍內，甚至可能比我們預期的要好，而且在設備數量下降 30% 的情況下，我們仍然預計會出現持平的前景。對我們來說，這確實是一個積極的方面，只要付出大量的工作，零件和服務就可以持續下去。所以這根本就不是一件理所當然的事。但是，當設備下降 30 度時，我們所做的一切都是為了能夠保持那裡的平坦視野，向團隊的出色執行表示敬意。

A lot of work to still get done this year to make that happen, but that's an important part of our business. I think we already talked about that, but a quarter of our revenue, upward to 60% of the gross profit dollars this year. You can see why we talk about it so much, why our customer care strategy is one of our number one strategic objectives and why it will be critically important going forward as we continue to move the business in the right direction.

要實現這一目標，今年還有很多工作要做，但這是我們業務的重要組成部分。我想我們已經討論過這個問題了，但今年我們的收入的四分之一，毛利的 60% 左右。您可以看到為什麼我們如此頻繁地談論它，為什麼我們的客戶關懷策略是我們的首要策略目標之一，以及為什麼它對我們繼續朝著正確的方向發展業務至關重要。

Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Knutson for any final comments.

謝謝。女士們、先生們，我們的提問時間到此結束。我將把發言權交還給克努森先生，請他發表最後的評論。

Thank you for your interest in Titan, and we look forward to updating you with our progress on our next call. And again, I just want to thank all of our employees for their execution and their efforts, and have a great day.

感謝您對 Titan 的關注，我們期待在下次電話會議上向您通報我們的進展。我再次感謝我們所有員工的執行力和努力，祝大家有美好的一天。

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。現在您可以斷開線路。感謝您的參與。