Trex Company Inc (TREX) 2023 Q1 法說會逐字稿

Good afternoon, and welcome to the Trex Company First Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

下午好，歡迎來到 Trex 公司 2023 年第一季度收益電話會議。 （操作員說明）請注意正在記錄此事件。

I would now like to turn the conference over to Viktoriia Nakhla. Please go ahead.

我現在想將會議轉交給 Viktoriia Nakhla。請繼續。

Thank you, Kate, and thank you, everyone, for joining today's call. With us on the call are Bryan Fairbanks, President and Chief Executive Officer; and Dennis Schemm, Senior Vice President and Chief Financial Officer. Joining Bryan and Dennis is Amy Fernandez, Vice President, General Counsel; as well as other members of Trex management. The company issued a press release today after market close containing financial results for the first quarter of 2023. This release is available on the company's website. This conference call is also being webcast and will be available on the Investor Relations page of the company's website for 30 days.

謝謝凱特，也謝謝大家參加今天的電話會議。與我們通話的有總裁兼首席執行官 Bryan Fairbanks；高級副總裁兼首席財務官 Dennis Schemm。加入 Bryan 和 Dennis 的是副總裁兼總法律顧問 Amy Fernandez；以及 Trex 管理層的其他成員。公司今天在收盤後發布了一份新聞稿，其中包含 2023 年第一季度的財務業績。該新聞稿可在公司網站上獲取。此電話會議也進行網絡直播，並將在公司網站的投資者關係頁面上提供 30 天。

I would now like to turn the call over to Amy Fernandez. Amy?

我現在想把電話轉給 Amy Fernandez。艾米？

Thank you, Viktoriia. Before we begin, let me remind everyone that statements on this call regarding the company's expected future performance and conditions constitute forward-looking statements within the meaning of federal securities laws. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of such risks and uncertainties, please see our most recent Form 10-K and Form 10-Qs as well as our 1933 and other 1934 Act filings with the SEC.

謝謝你，維多利亞。在我們開始之前，讓我提醒大家，本次電話會議中關於公司預期未來業績和狀況的陳述構成聯邦證券法意義上的前瞻性陳述。這些陳述受某些風險和不確定性的影響，這些風險和不確定性可能導致實際結果與前瞻性陳述中表達的結果存在重大差異。有關此類風險和不確定性的討論，請參閱我們最近的 10-K 表格和 10-Q 表格以及我們向美國證券交易委員會提交的 1933 年和其他 1934 年法案文件。

Additionally, non-GAAP financial measures will be referenced in this call. A reconciliation of these measures to the comparable GAAP financial measure can be found in our earnings press release at trex.com. The company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

此外，本次電話會議將參考非 GAAP 財務指標。這些措施與可比的 GAAP 財務措施的對賬可以在我們在 trex.com 上發布的收益新聞稿中找到。公司明確否認有義務公開更新或修改任何前瞻性陳述，無論是由於新信息、未來事件或其他原因。

With that introduction, I will turn the call over to Bryan Fairbanks.

通過這個介紹，我將把電話轉給布萊恩費爾班克斯。

Thank you, Amy, and good evening. Thank you for joining the first quarter of 2023 earnings call to review our financial and operating performance. Our solid start to 2023 highlights the Trex Company's market leadership position, supported by our best-in-class brand, broad product portfolio and our industry-leading channel partners. These strengths, together with our low-cost manufacturing, new product and materials innovation and our highly skilled employees, enable Trex to effectively navigate a dynamic macro environment. We have executed at a high level and are emerging an even stronger company that creates value for our customers, investors and other stakeholders.

謝謝你，艾米，晚上好。感謝您參加 2023 年第一季度財報電話會議，回顧我們的財務和經營業績。在我們一流的品牌、廣泛的產品組合和行業領先的渠道合作夥伴的支持下，我們到 2023 年的穩健開局凸顯了 Trex 公司的市場領導地位。這些優勢，加上我們的低成本製造、新產品和材料創新以及我們高技能的員工，使 Trex 能夠有效地駕馭動態的宏觀環境。我們的執行力很高，正在成為一家更強大的公司，為我們的客戶、投資者和其他利益相關者創造價值。

Through March, channel and end market demand for decking was in line with our expectations after completion of the pro channel inventory recalibration last year and cautious purchase patterns by the channel due to softening economic conditions. The outdoor living category has long represented one of the fastest-growing categories within the repair and remodel sector, which itself is more resilient than other sectors during economic swings.

整個 3 月，渠道和終端市場對裝飾的需求符合我們去年完成專業渠道庫存重新校準以及由於經濟狀況疲軟導致渠道謹慎採購模式的預期。長期以來，戶外生活類別一直是維修和改造行業中增長最快的類別之一，在經濟波動期間，該行業本身比其他行業更具彈性。

Our data indicate that the North American consumer remains active in undertaking outdoor living projects and that generally, contractors have strong backlogs entering into the busiest part of the season. Additionally, the conversion to composites from wood continues at an accelerated pace and further strengthens our industry leadership. Our channel partners and contractors continue to report that the gains made by Trex composites over wood are not being diminished as the price of wood has fallen.

我們的數據表明，北美消費者仍然積極參與戶外生活項目，而且一般來說，承包商在進入旺季時有大量積壓訂單。此外，從木材向複合材料的轉化繼續加速，進一步加強了我們的行業領導地位。我們的渠道合作夥伴和承包商繼續報告說，隨著木材價格的下跌，Trex 複合材料相對於木材的收益並未減少。

We executed to plan during the first quarter, continuing our production at our stated $1 billion level. Our successful early buy season with demand indicators from our channel partners reinforce our conclusion that we're producing at the right level. Nevertheless, we have the ability to quickly flex production up or down depending upon demand. We are taking advantage of this period of lower utilization to implement cost reduction initiatives which we are unable to execute when running at full utilization.

我們在第一季度執行了計劃，繼續按照我們規定的 10 億美元的水平生產。我們成功的早期購買季節以及我們渠道合作夥伴的需求指標強化了我們的結論，即我們的生產水平是正確的。然而，我們有能力根據需求快速調整生產。我們正在利用這段利用率較低的時期來實施我們在滿負荷運行時無法執行的成本削減計劃。

The strong sequential improvement in gross margin that we reported in the first quarter was aided by our continuous improvement mindset and fast-return projects that streamline production processes and reduced our input costs. Our cost reduction efforts are primarily centered on process efficiencies, raw material optimization, enhanced energy efficiency and improvements to raw material processing. Our focus on continuous improvement and capital investment supports our long-term margin improvement goals.

我們在第一季度報告的毛利率連續強勁改善得益於我們持續改進的心態和簡化生產流程並降低投入成本的快速回報項目。我們降低成本的努力主要集中在流程效率、原材料優化、提高能源效率和改進原材料加工方面。我們對持續改進和資本投資的關注支持我們的長期利潤率提高目標。

In the first quarter, Trex continued to invest in the brand and marketing programs to help drive consumer demand for existing and newly launched Trex products and strengthen our relationship with our channel partners. We've seen robust web volume for trex.com and decks.com with both up strong double digits over the prior year. This is also an indicator that the Trex consumer remains healthy despite economic uncertainty. Our robust portfolio of outdoor living products is designed to work together seamlessly, enabling contractors and homeowners to create a cohesive, stylish and sustainable living area.

第一季度，Trex 繼續投資於品牌和營銷計劃，以幫助推動消費者對現有和新推出的 Trex 產品的需求，並加強我們與渠道合作夥伴的關係。我們看到 trex.com 和 decks.com 的網絡流量都比上一年增長了兩位數。這也表明儘管經濟存在不確定性，但 Trex 消費者仍保持健康。我們強大的戶外生活產品組合旨在無縫協作，使承包商和房主能夠創造一個有凝聚力、時尚和可持續的生活區。

Over the last 12 months, we've introduced 2 major decking products, Trex Transcend Lineage and Trex Signature. Both product lines strengthened our market leadership position and have earned positive feedback from contractors and consumers, underscoring our reputation for innovation that meets the evolving needs of the marketplace.

在過去的 12 個月裡，我們推出了 2 款主要的甲板產品，Trex Transcend Lineage 和 Trex Signature。這兩條產品線鞏固了我們的市場領導地位，並贏得了承包商和消費者的積極反饋，凸顯了我們在滿足市場不斷變化的需求方面的創新聲譽。

Our leadership in both brand and sustainability was once again recognized by the industry. Trex was named the most sustainable decking brand for the 13th consecutive year by Green Builder Media while also earning the highest trust rating among 9 decking brands for the third consecutive year, according to a survey by Lifestory Research.

我們在品牌和可持續發展方面的領先地位再次獲得業界認可。根據 Lifestory Research 的一項調查，Trex 連續第 13 年被 Green Builder Media 評為最具可持續性的裝飾品牌，同時還連續第三年在 9 個裝飾品牌中獲得最高信任度。

Trex also earned top honors in the composite decking and railing categories in Builder Magazine's 2023 Brand Use Study for the 16th consecutive year, reinforcing its unparalleled prominence and preference among trade professionals. Lineage decking was recognized as a 2023 sustainable product of the year by Green Builder Media based on a sustainability composition as well as its refined aesthetics and enhanced performance.

Trex 還連續第 16 年在 Builder Magazine 的 2023 年品牌使用研究中獲得複合地板和欄杆類別的最高榮譽，鞏固了其在貿易專業人士中無與倫比的知名度和偏好。 Lineage decking 被 Green Builder Media 認定為 2023 年度可持續產品，基於可持續性構成以及其精緻的美學和增強的性能。

The entire portfolio of Trex composite decking is made from a blend of 95% recycled polyethylene film and reclaimed wood fibers. Each year, the company diverts more than 1 billion pounds of these materials from landfills for use in our high-performance, low maintenance, eco-friendly decking. Sourcing with sustainability in mind remains a priority for Trex as today's more eco-conscious consumers consider how to reduce their own environmental impact.

Trex 複合地板的整個產品組合由 95% 的再生聚乙烯薄膜和再生木纖維混合製成。每年，公司都會從垃圾填埋場轉移超過 10 億磅的這些材料，用於我們高性能、低維護、環保的裝飾板。考慮到可持續性採購仍然是 Trex 的首要任務，因為當今更俱生態意識的消費者正在考慮如何減少自身對環境的影響。

As we continue to elevate our commitment to staff and organizational development, in April, we announced the appointment of Human Resources Executive Melkeya McDuffie as a new independent member of our Board of Directors. I'm pleased to welcome Melkeya to the Trex Company Board. Her experience in corporate strategy, management and talent development make her a great fit for our company.

隨著我們繼續提高對員工和組織發展的承諾，4 月份，我們宣布任命人力資源主管 Melkeya McDuffie 為我們董事會的新獨立成員。我很高興歡迎 Melkeya 加入 Trex 公司董事會。她在企業戰略、管理和人才發展方面的經驗使她非常適合我們公司。

Now I'll turn the call over to Dennis.

現在我會把電話轉給丹尼斯。

Thank you, Bryan, and good evening, everyone. Before I start the financial review, please note that my prepared remarks will compare our first quarter 2023 results to first quarter 2022 Trex residential performance given the sale of Trex Commercial at the end of last year. We believe such comparisons provide more meaningful financial information and enhance investors' and analysts' ability to compare period-to-period financial results. We have posted all relevant GAAP and non-GAAP quarterly data in our earnings release.

謝謝你，布萊恩，大家晚上好。在我開始財務審查之前，請注意我準備好的評論將比較我們 2023 年第一季度的業績與 2022 年第一季度的 Trex 住宅業績，因為去年年底出售了 Trex Commercial。我們相信這種比較提供了更有意義的財務信息，並增強了投資者和分析師比較不同時期財務結果的能力。我們已在收益發布中發布了所有相關的 GAAP 和非 GAAP 季度數據。

We've had a good start to the year and are pleased to deliver first quarter results that were broadly consistent with our plan, as channel inventory levels and market expectations were in line with our projections. Channel inventory drawdown experienced in the second half of 2022 was completed by the year-end and was effective in rightsizing channel inventory levels. We saw proof of this as we experienced positive broad-based early buy activity as our channel partners look to replenish their low inventory levels. While channel inventories for distribution and especially dealers are lighter than historical levels, we are confident that with our production capabilities and existing inventories, we will adequately support the market through the season.

我們今年開局良好，很高興第一季度的業績與我們的計劃基本一致，因為渠道庫存水平和市場預期符合我們的預測。 2022 年下半年經歷的渠道庫存縮減在年底前完成，有效地調整了渠道庫存水平。我們看到了這一點的證據，因為我們的渠道合作夥伴希望補充他們的低庫存水平，我們經歷了廣泛的積極早期購買活動。雖然分銷渠道庫存，尤其是經銷商庫存低於歷史水平，但我們有信心憑藉我們的生產能力和現有庫存，我們將在整個季節充分支持市場。

Net sales were $239 million, which reflected more cautious purchase patterns by the channel due to softening economic conditions in the first quarter of 2023. Recall, the prior year first quarter included a channel inventory build that was relieved later in the year. We generated a 350 basis point sequential increase in gross margins to 39.6% in the first quarter. This increase was driven by process efficiencies, raw material optimization, enhanced energy efficiency and improvements to raw material processing. In the year ago period, Trex residential gross margin was 40.9%.

淨銷售額為 2.39 億美元，這反映出由於 2023 年第一季度經濟狀況疲軟，渠道的採購模式更加謹慎。回想一下，去年第一季度包括渠道庫存增加，該庫存在今年晚些時候得到緩解。第一季度，我們的毛利率環比增長 350 個基點，達到 39.6%。這一增長是由工藝效率、原材料優化、能源效率提高和原材料加工改進推動的。去年同期，Trex 住宅毛利率為 40.9%。

Selling, general and administrative expenses were $37 million or 15.7% of net sales in the first quarter of 2023 compared to $37.4 million or 11.4% of Trex Residential net sales in the first quarter of 2022. The year-over-year variance reflects our return to more normalized branding spending and increased R&D spend to support future sales. 2023 first quarter net income was $41 million or $0.38 per diluted share compared to $72 million or $0.63 per diluted share in the year ago quarter, and EBITDA was $69 million or 28.8% of net sales. This quarter's performance puts us on track to achieve our full year 2023 EBITDA margin in the range of 26% to 27%.

2023 年第一季度的銷售、一般和管理費用為 3700 萬美元，占淨銷售額的 15.7%，而 2022 年第一季度為 3740 萬美元，佔 Trex Residential 淨銷售額的 11.4%。同比差異反映了我們的回報更規範的品牌支出和增加研發支出以支持未來的銷售。 2023 年第一季度淨收入為 4100 萬美元或攤薄後每股收益 0.38 美元，而去年同期為 7200 萬美元或攤薄後每股收益 0.63 美元，EBITDA 為 6900 萬美元或淨銷售額的 28.8%。本季度的業績使我們有望實現 2023 年全年 EBITDA 利潤率在 26% 至 27% 的範圍內。

Cash used in operations was $115.5 million during the first quarter of 2023, primarily related to the timing of accounts receivable collections which were more aligned with the timing of collections in first quarters prior to 2022. We anticipate the timing of collections in the second and third quarters of 2023 will be more comparable to those in the second and third quarters of 2022, and that cash flow from operations will be a source of cash as sales strengthen on a seasonal basis and working capital needs diminish.

2023 年第一季度運營中使用的現金為 1.155 億美元，主要與應收賬款收款時間相關，這與 2022 年之前第一季度的收款時間更加一致。我們預計第二和第三季度的收款時間2023 年的季度將與 2022 年的第二和第三季度更具可比性，並且隨著季節性銷售額的增加和營運資金需求的減少，運營現金流將成為現金的來源。

Capital expenditures in the first quarter were $39 million, primarily related to the construction of our third manufacturing facility in Arkansas and manufacturing improvement initiatives into our core facilities. We expect to continue to prioritize projects to drive further operating efficiencies while making incremental progress on the construction of our Arkansas plant.

第一季度的資本支出為 3900 萬美元，主要與我們在阿肯色州的第三個製造工廠的建設以及我們核心設施的製造改進計劃有關。我們希望繼續優先考慮項目，以進一步提高運營效率，同時在我們的阿肯色州工廠建設方面取得漸進進展。

Additionally, given our continued financial and operating strength and confidence in the company's long-term growth prospects, the Trex Board of Directors adopted a new stock repurchase program of up to 10.8 million shares of Trex's outstanding common stock and terminated the existing stock repurchase program. This program has no expiration date. As we turn to our outlook, we anticipate second quarter 2023 net sales to be in the range of $310 million to $320 million. Recall that the prior year included an inventory build during the second quarter. Excluding that build, our guidance is down low single digits as compared to the prior year.

此外，鑑於我們持續的財務和運營實力以及對公司長期增長前景的信心，Trex 董事會通過了一項新的股票回購計劃，回購多達 1080 萬股 Trex 已發行普通股，並終止了現有的股票回購計劃。該程序沒有到期日期。當我們轉向展望時，我們預計 2023 年第二季度的淨銷售額將在 3.1 億美元至 3.2 億美元之間。回想一下，上一年包括第二季度的庫存增加。不包括該構建，我們的指導與上一年相比下降了低個位數。

Additionally, for every $100 million in incremental revenue that we produce, we expect to see gross margin increase in the range of 100 to 150 basis points. Operationally, we continue to prioritize projects to drive further operational efficiencies and generate industry-leading margins and profitability and are well positioned to deliver on our fiscal year 2023 guidance, which includes SG&A in the range of 15% to 16% of net sales, an effective tax rate of approximately 25% to 26%, interest expense in the range of $8 million to $9 million, depreciation in the range of $45 million to $47 million, and capital expenditures in the range of $130 million to $140 million which primarily relates to the modular build-out of our Arkansas facility calibrated to demand trends.

此外，對於我們每產生 1 億美元的增量收入，我們預計毛利率將增加 100 至 150 個基點。在運營方面，我們繼續優先考慮項目以進一步提高運營效率並產生行業領先的利潤率和盈利能力，並有能力實現我們的 2023 財年指導方針，其中包括占淨銷售額 15% 至 16% 的 SG&A，實際稅率約為 25% 至 26%，利息支出在 800 萬至 900 萬美元之間，折舊在 4500 萬至 4700 萬美元之間，資本支出在 1.3 億至 1.4 億美元之間，主要涉及我們阿肯色州設施的模塊化擴建已根據需求趨勢進行校準。

With that, I'll now turn the call back to Bryan.

有了這個，我現在將電話轉回給布萊恩。

Thank you, Dennis. The Trex Company has entered 2023 in a position of market and financial strength, which we plan to leverage to exit the year in an even stronger competitive position. Looking to the long term, we remain focused on converting consumers to the performance advantage of composites over wood. This represents a substantial runway for Trex as the expansion of composite penetration from the current 25% to 50% of the decking market equates to an incremental $2 billion in composite sales. And with a 50% share of the composite market, this road map clearly positions Trex for robust long-term growth.

謝謝你，丹尼斯。 Trex 公司以市場和財務實力進入 2023 年，我們計劃利用這一優勢以更強大的競爭地位退出這一年。從長遠來看，我們仍然專注於讓消費者接受複合材料相對於木材的性能優勢。這代表了 Trex 的重要跑道，因為複合材料滲透率從目前的 25% 擴展到裝飾市場的 50% 相當於增加了 20 億美元的複合材料銷售額。憑藉在復合材料市場 50% 的份額，該路線圖明確定位 Trex 以實現強勁的長期增長。

I want to recognize the hard work and dedication of the entire Trex team as well as the continued support of our dealers, retailers, distributors and contractors, all of whom continue to be great partners and key to our growth.

我要感謝整個 Trex 團隊的辛勤工作和奉獻精神，以及我們的經銷商、零售商、分銷商和承包商的持續支持，他們仍然是我們發展的重要合作夥伴和關鍵。

Lastly, I want to thank our Senior Vice President, Chief Legal Officer and Secretary, Bill Gupp, who is retiring. Bill has provided valued legal counsel to the Trex team for over 22 years. We wish him and his family the best. Replacing Bill in that role is Amy Fernandez, Vice President, General Counsel and Secretary, who joined Trex in 2022.

最後，我要感謝即將退休的高級副總裁、首席法務官兼秘書 Bill Gupp。 Bill 為 Trex 團隊提供重要的法律顧問已超過 22 年。我們祝愿他和他的家人一切順利。接替比爾擔任該職務的是副總裁、總法律顧問兼秘書艾米·費爾南德斯 (Amy Fernandez)，她於 2022 年加入 Trex。

Operator, I'd now like to open the call for questions.

接線員，我現在想打開問題電話。

(Operator Instructions) The first question is from Jeffrey Stevenson of Loop Capital.

（操作員說明）第一個問題來自 Loop Capital 的 Jeffrey Stevenson。

Congrats on the nice quarter.

恭喜這個漂亮的季度。

Thanks, Jeff.

謝謝，傑夫。

So gross margin came in better than expected in the first quarter and is tracking ahead of your fiscal '23 expectations of 37.5% to 38%. Just wondered how we should think about the cadence of gross margin moving forward? And is there a potential upside to your original expectations due to improved manufacturing efficiencies and cost reduction initiatives?

因此，第一季度的毛利率好於預期，並且超出了 23 財年 37.5% 至 38% 的預期。只是想知道我們應該如何考慮未來毛利率的節奏？由於提高製造效率和降低成本的舉措，是否有可能超出您最初的預期？

Yes. Thanks, Jeff. This is Dennis. It's a great question. If I remember, in Q4, we saw gross margins at 36%. And we suggested we'd be in that range of 150 to 200 basis points better in '23. And so we came in at 39.6%. Our teams within R&D, supply chain, manufacturing facilities, they continue to deliver very, very strong results, working really well together.

是的。謝謝，傑夫。這是丹尼斯。這是一個很好的問題。如果我記得，在第四季度，我們的毛利率為 36%。我們建議我們在 23 年更好地處於 150 到 200 個基點的範圍內。所以我們的得分是 39.6%。我們在研發、供應鏈、製造設施中的團隊，他們繼續提供非常非常強大的結果，並且合作得非常好。

I'm very proud of the team and the management team for delivering these gross margins. The improvement came across several dimensions, process efficiencies, raw material optimization, raw material utilization as well. And so as I look to Q2, I'm expecting to see gross margin slightly north of 40%. And so as we look to the back half, so I would call it a little early to comment on whether or not we're going to continue to -- what those gross margin trends look like. We are committing to our 26% to 27% EBITDA margins.

我為實現這些毛利率的團隊和管理團隊感到非常自豪。改進涉及多個方面，包括工藝效率、原材料優化和原材料利用率。因此，當我展望第二季度時，我預計毛利率將略高於 40%。因此，當我們展望後半部分時，我會過早地評論我們是否會繼續——這些毛利率趨勢是什麼樣的。我們致力於實現 26% 至 27% 的 EBITDA 利潤率。

Okay. That's very helpful, Dennis. And then my second question is just on how sell-through demand trended through the first quarter and whether there is any impact from wet weather. And then if you could provide an update on kind of what you've seen so far in the spring selling season, that would be very helpful as well.

好的。這很有幫助，丹尼斯。然後我的第二個問題是關於第一季度的銷售需求趨勢如何以及潮濕天氣是否有任何影響。然後，如果您可以提供有關春季銷售旺季迄今為止所見情況的最新信息，那也將非常有幫助。

We've been very pleased with the sell-through demand that we saw through the first quarter and even moving up through the month of April as well, roughly speaking, on a flattish basis compared to prior year. From a wet weather perspective, absolutely. The West Coast, we saw an impact from the weather out there. It was offset by good weather in the Midwest and Northeast.

我們對第一季度的銷售需求感到非常滿意，甚至在 4 月份也有所上升，粗略地說，與去年同期相比持平。從潮濕天氣的角度來看，絕對是。在西海岸，我們看到了那里天氣的影響。中西部和東北部的好天氣抵消了這一影響。

The next question is from Ryan Merkel of William Blair.

下一個問題來自威廉·布萊爾的賴安·默克爾。

I wanted to follow up on the margin question. Can you just walk through, it sounds like EBITDA margin is going to be the high watermark in the first quarter. Can you just talk about why that is?

我想跟進保證金問題。你能走過去嗎，聽起來 EBITDA 利潤率將成為第一季度的高水位線。你能談談為什麼會這樣嗎？

We haven't provided any updated guidance on EBITDA margin by quarter, Ryan. When I'm thinking about Q2, I'm seeing gross margins higher, again, slightly higher than 40%. So that will be higher than the gross margin in Q1. The consideration would be SG&A in Q2 will probably be the highest amount of SG&A spend that we would see during the year, but I would expect growth -- oh, sorry, EBITDA margins to be correspondingly very strong in Q2. But again, we're just fully committing to the 26% to 27% for the full year just because of the murkiness in the macroeconomic outlook in the back half.

Ryan，我們還沒有按季度提供任何關於 EBITDA 利潤率的最新指導。當我考慮第二季度時，我看到毛利率略高於 40%。所以這將高於第一季度的毛利率。考慮因素是第二季度的 SG&A 可能是我們在這一年中看到的最高 SG&A 支出，但我預計增長——哦，抱歉，第二季度 EBITDA 利潤率相應非常強勁。但同樣，由於下半年宏觀經濟前景不明朗，我們只是完全承諾全年 26% 至 27%。

Yes. Understand that. Okay. And then it looks like the ramp into 2Q sequentially is a little bit bigger than normal. Correct me if I'm wrong on that, but maybe just explain why that is? And just confirm that the channel isn't restocking here, right? They're still being pretty cautious on inventory.

是的。明白。好的。然後看起來進入第二季度的斜坡比正常情況要大一點。如果我錯了，請糾正我，但也許只是解釋為什麼會這樣？只需確認該頻道不在此處補貨，對嗎？他們對庫存仍然非常謹慎。

Due to the conservative inventory build that the channel took during the first quarter and because the market is still remaining relatively healthy at this point, it does require more product moving in during the second quarter.

由於該渠道在第一季度進行了保守的庫存建設，並且由於此時市場仍然相對健康，因此確實需要在第二季度投放更多產品。

During our last call, we talked about the year having a steeper curve than what we had seen historically because of lower inventory going into the second quarter, and now we're seeing that impact as we move into the second quarter.

在我們上次電話會議中，我們談到今年的曲線比我們以往看到的曲線更陡峭，因為進入第二季度的庫存較低，現在我們在進入第二季度時看到了這種影響。

The next question is from Stanley Elliott of Stifel.

下一個問題來自 Stifel 的 Stanley Elliott。

Congratulations. And just a quick point of clarification. So on the EBITDA margin, 26% to 27%, what exactly are you all baking in, in terms of sell-through there?

恭喜。只是一個快速的澄清點。那麼在 EBITDA 利潤率上，26% 到 27%，就銷售率而言，你們到底在烘烤什麼？

And then Bryan, also, I thought I heard you said sell-through was kind of flattish in the quarter, but just to make sure I heard that correctly.

然後布萊恩，我想我聽說你說本季度的銷售量有點持平，但只是為了確保我聽到的是正確的。

Yes, that's correct. Flattish during the quarter. And at this point, as we see Q2, flattish, maybe down 1% or 2%, but overall holding in there pretty well. It's really the back half of the year that gives us some questions still of the strength of the consumer. So on a full year basis, it's a mid-single-digit type decline with Trex numbers.

對，那是正確的。本季度持平。在這一點上，正如我們看到的第二季度，持平，可能下降 1% 或 2%，但總體持有量相當不錯。確實是下半年讓我們對消費者的實力產生了一些疑問。因此，從全年來看，Trex 數字出現了中等個位數的下降。

Right. Perfect. And then interesting on the raw material efficiency, can you talk about some of the things you're doing? Is that strictly the Lineage and the new products that are driving that? Is -- are you making other efficiencies to some of the legacy products? And how should we think about that trajectory longer term?

正確的。完美的。然後有趣的是原材料效率，你能談談你正在做的一些事情嗎？是嚴格意義上的 Lineage 和推動它的新產品嗎？是 - 您是否正在提高某些遺留產品的其他效率？我們應該如何長期考慮該軌跡？

One example of a program we've been working on, it started, I guess, in our last year. And it's how we go about processing our dirtier recycled material into product that we can use on our manufacturing line. And much likely, we called it the hyper line concept for decking all the way back in 2017. It took us a number of years to fully optimize that technology. That's the technology that we installed with our new building in Winchester, but this is on the processing side of things.

我們一直在進行的一個項目的一個例子，我猜它是在我們去年開始的。這就是我們如何將較髒的回收材料加工成我們可以在生產線上使用的產品。很可能，早在 2017 年，我們就將其稱為超線甲板概念。我們花了很多年才完全優化該技術。這是我們在溫徹斯特的新大樓中安裝的技術，但這是在處理方面。

There's a significant amount of improvement that we've seen in that process, and we continue to expect there's quite a bit more. So we've always expected it. It would be a number of years to gain everything, but we are seeing that improvement coming along, and it is providing us meaningful cost improvements.

我們在該過程中看到了顯著的改進，並且我們繼續期望會有更多改進。所以我們一直期待它。獲得一切可能需要很多年，但我們看到這種改進正在發生，它為我們提供了有意義的成本改進。

The next question is from Trey Grooms of Stephens.

下一個問題來自 Stephens 的 Trey Grooms。

So I guess -- well, first off, it looks like the year is starting off a pretty decent pace here. I guess you mentioned that your contractors still had pretty good, good backlogs, things -- but could you give any more color on maybe the kind of lead times that they're seeing out there and maybe how that compares to kind of a more normal kind of spring selling season?

所以我想——好吧，首先，看起來今年的開局步伐相當不錯。我想你提到過你的承包商仍然有很好的積壓工作，但你能不能給他們更多的顏色來說明他們在那裡看到的那種交貨時間，也許這與更正常的交貨時間相比如何？什麼樣的春季銷售旺季？

So you'll find isolated cases where you've got contractors 12, 16 weeks out, and you'll find isolated cases where a contractor is 0 to 2 weeks out. But for the most part, moving into the busier part of the season, we're seeing contractors that are 3 to 6 weeks out on the projects, which is generally normal, especially coming through the pandemic where contractor lead times were extended.

所以你會發現一些孤立的案例，你的承包商有 12、16 週的時間，你會發現一些孤立的情況，承包商有 0 到 2 週的時間。但在大多數情況下，進入本賽季較繁忙的時期，我們看到承包商的項目有 3 到 6 週的時間，這通常是正常的，尤其是在承包商交貨時間延長的大流行期間。

Okay. Got it. And then switching to the balance sheet real quick. Your inventory level, and how are you thinking about that as we go through the year? And maybe what would you say is kind of an ideal level where you'd like to be by year-end and maybe an ideal level maybe in a more normalized environment?

好的。知道了。然後快速切換到資產負債表。您的庫存水平，以及我們在這一年中如何看待它？也許你會說什麼是你希望在年底前達到的理想水平，也許是在更規範化的環境中達到的理想水平？

Trey, this is Dennis. So it's a great question. So from Q4 to Q1, we saw an increase in our inventory as we again prepare for the spring decking season. Now as we move into Q2 and Q3, we would expect those inventory balances to come down fairly significantly. And then we would start building those back up again in Q4.

特雷，這是丹尼斯。所以這是一個很好的問題。因此，從第 4 季度到第 1 季度，我們再次為春季裝飾季做準備，庫存有所增加。現在，隨著我們進入第二季度和第三季度，我們預計這些庫存餘額將大幅下降。然後我們將在第四季度再次開始構建這些備份。

So the goal is to have roughly speaking here around 6 to 8 weeks of inventory at year-end, and this would compare favorably to what we saw last year, probably around 10 weeks of inventory. So have a nice pickup there from a working capital perspective.

因此，目標是在年底時粗略地說大約 6 到 8 週的庫存，這將比我們去年看到的情況要好，可能是大約 10 週的庫存。因此，從營運資金的角度來看，那裡有一個不錯的選擇。

The next question is from John Lovallo of UBS.

下一個問題來自瑞銀的 John Lovallo。

This is actually Spencer Kaufman on for John. I wanted to start on first. It seems like there's a fair amount of conservatism in the second half guide here, particularly to fall back into the EBITDA margin range if 2Q was going to be as good, if not better than the first quarter. So can you just help paint that picture for us as to what would need to happen for margins to fall off a couple of hundred basis points to get into that range?

這實際上是約翰的斯賓塞考夫曼。我想先開始。下半年指南中似乎有相當多的保守主義，特別是如果第二季度要和第一季度一樣好，如果不比第一季度好的話，就會回到 EBITDA 利潤率範圍內。那麼，您能否幫我們描繪一下利潤率下降幾百個基點以進入該範圍需要發生什麼情況？

Yes. So we're continuing to produce in the second quarter, roughly at the same level we produced in the first quarter. But given the seasonal nature of this business, historically, we do start to pull that production back in the back half of the year. So it does assume that there is a pullback in that production, which, of course, will decrease our utilization and does result in a margin impact to that.

是的。因此，我們將繼續在第二季度生產，與第一季度的生產水平大致相同。但鑑於這項業務的季節性，從歷史上看，我們確實會在今年下半年開始縮減產量。因此，它確實假設該生產出現回落，這當然會降低我們的利用率，並確實對其產生利潤率影響。

But I do think it's fair to say right now, given what we're seeing in the market for Q1 and Q2, we are being conservative at this point. We know the economy can shift very quickly on us. We know the consumer, while there's still a significant amount of excess savings post pandemic, that is working its way down. And we read all the same reports that you do that the back half of the year, that consumer may be in a very different situation than they are today.

但我確實認為現在可以公平地說，鑑於我們在第一季度和第二季度的市場上看到的情況，我們在這一點上是保守的。我們知道經濟會很快改變我們。我們了解消費者，雖然在大流行後仍有大量過剩儲蓄，但這種儲蓄正在逐漸減少。我們閱讀了所有相同的報告，說你在今年下半年這樣做，消費者的處境可能與今天截然不同。

Right. Okay. That makes sense. And the buyback announcement is certainly encouraging. How should we think about the timing of executing on this? And is there any change to your strategy overall for buybacks?

正確的。好的。這就說得通了。回購公告當然令人鼓舞。我們應該如何考慮執行時間？您的整體回購策略是否有任何變化？

We have a disciplined plan with our buyback. And if you look at what we've done historically with the last buyback, we purchased the largest amount of shares at the best value time in the marketplace. It doesn't mean that our program will always be set that way. But we work very closely with our Board of Directors to set the parameters. We filed a 10b5-1 plan, so it operates off of that. The management team is not out making stock buy decisions on a daily basis here.

我們有一個嚴格的回購計劃。如果你看看我們在上次回購中所做的歷史，我們會在市場上最具價值的時間購買最大數量的股票。這並不意味著我們的程序將始終以這種方式設置。但我們與董事會密切合作來設定參數。我們提交了 10b5-1 計劃，因此它以此為基礎運作。管理團隊並不是每天都在這裡做出股票購買決定。

The next question is from Joe Ahlersmeyer of Deutsche Bank.

下一個問題來自德意志銀行的 Joe Ahlersmeyer。

Nice quarter.

不錯的季度。

Thanks, Joe.

謝謝，喬。

Thanks, Joe.

謝謝，喬。

Dennis, I just want to clarify, I think I heard you say inventory was up sequentially. Was that on a days or otherwise basis? Because I think on a dollars basis, it was down. Maybe you're talking finished good inventories up in the quarter?

丹尼斯，我只是想澄清一下，我想我聽到你說庫存是按順序增加的。是按天計算還是以其他方式計算？因為我認為以美元為基礎，它是下跌的。也許你說的是本季度完成的良好庫存？

Yes, finished goods inventory is up in the quarter.

是的，本季度成品庫存有所增加。

Got it. Okay. It makes more sense.

知道了。好的。這更有意義。

Essentially, right, so yes.

本質上，對，所以是的。

Right. And just maybe zooming in on that point about inventory and sort of in line with an earlier question, is that the number you're looking at more around the decision to increase your production rate, your own inventory? Because obviously, you benefited from the longer-run SKUs and being able to build inventory that's helped your margin in 1Q. Because otherwise, if you're looking at the sell-through trends as a way to decide if you need to take up production rates, that would seem like it would have told you that in the first quarter.

正確的。也許只是放大關於庫存的那一點並且有點符合之前的問題，你正在尋找更多關於提高生產率的決定的數字，你自己的庫存？因為很明顯，您從長期 SKU 中受益，並且能夠建立有助於提高第一季度利潤率的庫存。因為否則，如果您將銷售趨勢視為決定是否需要提高生產率的一種方式，那麼它似乎會在第一季度告訴您這一點。

It's a combination of the inventory that we have on the ground as well as what we see out in the channel. We are comfortable with the level in the channel, albeit it is lower than what it historically would be coming out of Q1. We knew that, and we built our inventory to be able to support that.

這是我們在實地擁有的庫存以及我們在渠道中看到的庫存的組合。我們對渠道中的水平感到滿意，儘管它低於第一季度的歷史水平。我們知道這一點，並且我們建立了庫存以支持這一點。

Got it. That makes sense. One other thing. You had mentioned branding might be heavier in the front half of the year. Did you see that in the first quarter? Or is your expectation now it's a little bit more of a smooth curve over the year?

知道了。這就說得通了。另一件事。你曾提到品牌在今年上半年可能會更重。你在第一季度看到了嗎？還是您現在的期望是一年中的曲線更加平滑？

Branding was in line with where we thought it would be in Q1. We expect it to increase in Q2. So it will be the heaviest quarter for branding spend.

品牌與我們認為的第一季度一致。我們預計它會在第二季度增加。因此，這將是品牌支出最重的一個季度。

We start our heaviest advertising in March, and that it will continue to drive as we work through the second quarter -- into the third quarter, but it will decrease somewhat at that point.

我們在 3 月份開始投放最重的廣告，並且在我們工作到第二季度 - 進入第三季度時它將繼續推動，但到那時它會有所減少。

The next question is from Keith Hughes of Truist.

下一個問題來自 Truist 的 Keith Hughes。

Could you talk about just volume in the quarter was the -- was volume all of the decline or was there any change in price?

你能談談本季度的銷量嗎 - 銷量是否全部下降或者價格是否有任何變化？

There -- this was all volume. And we received probably about $4 million in price, Keith. So I mean, predominantly all volumes.

那裡 - 這就是全部。基思，我們收到了大約 400 萬美元的價格。所以我的意思是，主要是所有捲。

Okay. And a question on the balance sheet. Receivables moved a lot from year-end to the quarter. I know they moved up seasonally, but it was particularly large. Could you talk about what's happening there?

好的。還有一個關於資產負債表的問題。從年末到本季度，應收賬款變動很大。我知道它們季節性上漲，但特別大。你能談談那裡發生了什麼嗎？

Yes. We returned to more normal or seasonal terms. In the prior years, we were just producing as much as we possibly could to catch demand. Now here we felt like it was a good business practice to return to more normal practices and offer some longer terms given the market conditions that we're seeing today.

是的。我們回到了更正常或季節性的條款。在前幾年，我們只是盡可能多地生產以滿足需求。現在，鑑於我們今天看到的市場狀況，我們覺得回到更正常的做法並提供更長的期限是一種很好的商業做法。

Okay. And then final question. Bryan, you had said you were running the same level of production or expected to run the same level of production in the second quarter. Are you talking the same number of days, the same number of units? I mean, usually, you seasonally move up a little bit from the first...

好的。然後是最後一個問題。布萊恩，你曾說過你正在運行相同水平的生產或預計在第二季度運行相同水平的生產。你說的是相同的天數，相同的單位數量嗎？我的意思是，通常情況下，你會從第一個開始季節性地向上移動一點點......

Roughly, it's going to be the same number of units.

粗略地說，它將是相同數量的單位。

Same number of units. So that would be lower than what you would normally sequentially do, correct?

相同數量的單位。所以這將低於您通常按順序執行的操作，對嗎？

Yes. We also have a little bit higher inventory. Knowing that the channel inventory was a little bit lower, the channel usually is going to stock heavier in Q1. Instead, that's on our ground, and we can keep running at the same rate.

是的。我們的庫存也略高一些。知道渠道庫存略低，渠道通常會在第一季度增加庫存。相反，那是在我們的地面上，我們可以繼續以相同的速度運行。

The next question is from Phil Ng of Jefferies.

下一個問題來自 Jefferies 的 Phil Ng。

Congrats on the really strong quarter. The margins were certainly really impressive. I guess this is a question for Dennis. I know the $1 billion production number is in sales guidance, but if you're producing to annual revenue run rate of $1 billion in revenues, but also working down your inventories, it sounds like, is it fair to assume that your sales pace is currently actually outpacing your production with at least your dollar's inventory is down sequentially. So whether or not you come in at or above that, it's really, I guess, contingent on how you're thinking about the back half?

恭喜這個非常強勁的季度。利潤率確實令人印象深刻。我想這是丹尼斯的問題。我知道 10 億美元的生產數字在銷售指導中，但如果你的年收入運行率達到 10 億美元的收入，而且還減少你的庫存，這聽起來像是，假設你的銷售速度是公平的目前實際上超過了你的產量，至少你的美元庫存是連續下降的。因此，無論你是否達到或超過這個水平，我想這真的取決於你對後半部分的看法？

Yes, to your point, it is all about what we're thinking about the back half. At the end of the day, though, we gave guidance on a production plan, a plan to produce, to support $1 billion in net sales. We've never really given guidance on the top line.

是的，就你的觀點而言，這完全是關於我們對後半部分的看法。不過，在一天結束時，我們就生產計劃、生產計劃提供了指導，以支持 10 億美元的淨銷售額。我們從未真正在頂線給出指導。

Okay. Fair enough. But it sounds like it's progressing, tracking ahead of that. So that's pretty encouraging.

好的。很公平。但它聽起來像是在進步，在這之前進行跟踪。所以這非常令人鼓舞。

And I guess, for Bryan, you mentioned flattish sell- through the year, so certainly better than the mid-single digit you are working towards from a production standpoint. So the decking season does come through better than that mid-single-digit decline number. Based on your lead times, would you potentially see upside as early as 2Q? Or is this more of a 3Q event just based on the lead times?

我想，對於布萊恩來說，你提到了全年銷量持平，所以從生產的角度來看，肯定比你正在努力實現的中個位數要好。因此，裝飾季的表現確實好於中等個位數的下降數字。根據您的交貨時間，您是否有可能最早在第二季度看到上漲空間？或者這更像是一個僅基於交貨時間的 3Q 事件？

And then ultimately, what are your channel partners kind of messaging in terms of how they're thinking about sell-through demand this year? I know it's flattish year-to-date, but any color on how they're thinking about the year shaping up?

最後，就他們如何看待今年的銷售需求而言，您的渠道合作夥伴傳達了什麼樣的信息？我知道今年迄今為止表現平平，但他們對今年的走勢有何看法？

I think we would primarily see that in the third quarter, and some of it may tail into the fourth quarter as we get back to the right level of inventory for year-end.

我認為我們主要會在第三季度看到這種情況，隨著年底我們恢復到正確的庫存水平，其中一些可能會拖到第四季度。

Okay. Any comments on what your channel partners are saying for the full year in terms of sell-through, your expectations so far?

好的。對您的渠道合作夥伴對全年銷量的評價有何評論，您到目前為止的期望是什麼？

Our channel partner, they're conservative. They took a conservative inventory in the first quarter, and I expect they will continue to be conservative as they go through the year.

我們的渠道合作夥伴，他們很保守。他們在第一季度進行了保守的盤點，我預計他們將在今年繼續保持保守。

The next question is from Alex Rygiel of B. Riley.

下一個問題來自 B. Riley 的 Alex Rygiel。

Thanks for a nice quarter, gentlemen. As it relates to Arkansas, what production rate might you reaccelerate the business, the build plan?

先生們，謝謝你們帶來了一個愉快的季度。就阿肯色州而言，您可能會以何種生產率重新加速業務和建設計劃？

I think where we stand at this point, we have the capacity in our existing facilities to get us out to -- we talked about a late '25 for plastic processing and then into early 2026 for actual decking production. I think we're pretty committed to that at this point. If we do see a significant shift, we could probably pull that ahead a little bit. But to given the amount of work it takes to do a greenfield site, that's the right timing. And we have the capacity available in Winchester. And firmly, we would have to run at a much higher utilization to be able to support that, but we have the ability to do that.

我認為我們目前所處的位置，我們現有設施有能力讓我們走出去——我們談到了 25 年底的塑料加工，然後是 2026 年初的實際鋪面生產。我認為我們現在非常致力於這一點。如果我們確實看到了重大轉變，我們可能會稍微提前一點。但考慮到新建網站所需的工作量，這是正確的時機。我們在溫徹斯特擁有可用的容量。堅定地說，我們必須以更高的利用率運行才能支持這一點，但我們有能力做到這一點。

And how do you think about seasonality in the second half of the year? I know we were talking that maybe pull-through demand would be sort of normal typical seasonal trends here. Do you still see that playing out in the second half of the year?

您如何看待下半年的季節性？我知道我們在談論，也許拉動需求將是這裡正常的典型季節性趨勢。你仍然認為下半年會出現這種情況嗎？

I think the -- you'll see that the 2 halves look similar to what it is historically, but I did say it was a steeper curve going into the second and third, and then I think the curve drops off to a little bit larger extent in the fourth quarter, again, where I fully expect the channel to continue withholding conservative inventories.

我認為 - 你會看到這兩個部分看起來與歷史上的相似，但我確實說過進入第二個和第三個是更陡峭的曲線，然後我認為曲線下降到更大一點第四季度的程度，我完全預計該渠道將繼續保留保守的庫存。

The next question is from Adam Baumgarten of Zelman.

下一個問題來自 Zelman 的 Adam Baumgarten。

I guess just on the topic of deflation or even inflation, what are you guys seeing from that perspective?

我想就通貨緊縮甚至通貨膨脹這個話題，你們從那個角度看到了什麼？

We talked about there being moderation in inflation over the last couple of calls. We continue to see that. There's a few selective things. This is more of a specialty materials that they've been able to continue to push some price increases through.

在過去的幾次通話中，我們談到了通貨膨脹的緩和。我們繼續看到這一點。有一些選擇性的東西。這更像是一種特殊材料，他們能夠繼續推動價格上漲。

Probably the one thing that we have seen some deflation on and we don't use that much of it is going to be a virgin polyethylene. That probably is the largest deflation that we've seen out there. So we have some benefit from that, but it's not driving. The majority of that benefit you saw in the first quarter was outperformance and our continuous improvement initiatives.

可能我們已經看到一些通貨緊縮並且我們沒有使用那麼多的東西將是原始聚乙烯。這可能是我們所見過的最大的通貨緊縮。所以我們從中得到了一些好處，但它不是驅動力。您在第一季度看到的大部分收益是出色的表現和我們的持續改進計劃。

Okay. So similar outlook, it sounds like it last quarter for the year?

好的。如此相似的前景，聽起來像是今年的最後一個季度？

Yes.

是的。

Okay. And then I guess just touching on the different channels, any material difference in demand patterns in retail versus double sale channel?

好的。然後我想就不同渠道而言，零售渠道與雙重銷售渠道的需求模式有何實質性差異？

Timing tends to be different. We see the peak of the retail channel has a much higher peak as it moves into the second and third quarter as more DIY business is completed during that time. Whereas the pro side of the market is a little bit more level. It still peaks in those summer months out there. But overall, we're still seeing good performance from all the channels.

時間往往不同。隨著更多 DIY 業務在此期間完成，我們看到零售渠道的峰值在進入第二和第三季度時出現了更高的峰值。而市場的專業方面則更高一些。它仍然在那些夏季的幾個月里達到頂峰。但總的來說，我們仍然看到所有渠道的良好表現。

The next question is from Reuben Garner of The Benchmark Company.

下一個問題來自 The Benchmark Company 的 Reuben Garner。

And congrats on the strong results. So in the past, you've referenced kind of traffic to your website. Is there anything that you guys have seen internally that's given you pause about the consumer in the second half? Or is it really just kind of high-level conservativeness just given the macro and news in general?

並祝賀取得了豐碩的成果。所以在過去，您已經將某種流量引用到您的網站。你們在內部看到的有什麼讓你們在下半年對消費者猶豫不決的嗎？還是僅僅考慮到宏觀和一般新聞，這真的只是一種高層保守？

I think the biggest change that we've seen, we didn't go as heavily with marketing in the past couple of years. And this year, we're back into normalized marketing again. So we supported that web traffic with marketing, and that will continue in the second quarter of this year. But overall, we've seen good web results coming through, and that's a positive time for the consumer.

我認為我們所看到的最大變化是，在過去的幾年裡，我們沒有那麼重視營銷。今年，我們又回到了常態化營銷。因此，我們通過營銷支持網絡流量，並將在今年第二季度繼續。但總的來說，我們已經看到了良好的網絡結果，這對消費者來說是一個積極的時刻。

Great. And then, Dennis, you referenced your commitment to the 26% to 27% EBITDA margin for the year. I'm curious is -- if you were to come in maybe better than expected on top line or gross margin or both as we get into the second half, would that imply there's room for more spending on the SG&A side to ramp marketing and branding even further? Or would there be -- would there be upside from a margin perspective if the top line progresses better than you're expecting?

偉大的。然後，丹尼斯，你提到了你對今年 26% 到 27% 的 EBITDA 利潤率的承諾。我很好奇——如果進入下半年，你的收入或毛利率或兩者都好於預期，這是否意味著在 SG&A 方面有更多支出的空間來提升營銷和品牌更深入？或者，如果頂線的進展好於您的預期，從利潤率的角度來看是否會有上升空間？

Yes. Honestly, I mean, if things progress better, right? I mean we've talked about gross margin improvement for every $100 million in net sales that we produced to. That's another 100 to 150 basis points of gross margin improvement. So that in and of itself is a significant deal. So things really do accelerate in the back half, then that would lead to higher gross margins and would give us that ability as well to spend more on the SG&A side.

是的。老實說，我的意思是，如果事情進展得更好，對嗎？我的意思是，我們已經討論過我們每產生 1 億美元的淨銷售額就可以提高毛利率。這又是毛利率提高 100 到 150 個基點。因此，這本身就是一筆重要的交易。因此，下半年事情確實會加速，然後這將導致更高的毛利率，並使我們有能力在 SG&A 方面花費更多。

Our marketing team is very focused on making sure that the funds that they're spending, they're bringing consumers through the door for our channel partners. So we see the opportunity as we move later into the third quarter that by putting some more dollars and the marketing team continue to drive that demand and we end up finishing at the higher end of that SG&A guidance. That's an -- absolutely a possibility.

我們的營銷團隊非常專注於確保他們花費的資金能夠為我們的渠道合作夥伴帶來消費者。因此，當我們進入第三季度後期時，我們看到了機會，通過投入更多資金和營銷團隊繼續推動需求，我們最終完成了 SG&A 指導的較高端。那是——絕對有可能。

Congrats again, and good luck.

再次恭喜，祝你好運。

The next question is from Matthew Bouley of Barclays.

下一個問題來自巴克萊銀行的 Matthew Bouley。

I think you mentioned at the top that the wood conversion was continuing at an accelerated pace. I think you said the penetration right now is still around 25%. I recall there was some uncertainty in how that would play out this year. So just kind of given what you're seeing on the ground today, what's your sort of latest thoughts and where penetration get to over the next 24 months?

我想你在頂部提到木材轉換正在加速進行。我想你說現在的滲透率仍然在 25% 左右。我記得今年的結果如何存在一些不確定性。因此，考慮到您今天在實地看到的情況，您的最新想法是什麼，以及未來 24 個月的滲透率如何？

Yes. So talking with our contractors, we've heard consistently that Trex composites are not going backwards against wood in spite of the fact that wood has dropped down. Over the long term, I expect with the product portfolio that Trex has today, supported by the enhanced product line, Basics and Naturals primarily intended to go after that wood buyer, we can convert at 200 basis points a year. So we've seen whether we can achieve that this year with the economic conditions around us. But really, it's a long-term opportunity for Trex to be able to drive up towards that 45%, 50% of the marketplace.

是的。因此，與我們的承包商交談時，我們一直聽說 Trex 複合材料不會對木材倒退，儘管木材已經下降。從長遠來看，我希望藉助 Trex 今天擁有的產品組合，在增強的產品線 Basics 和 Naturals 的支持下，主要是為了滿足木材買家的需求，我們可以每年轉換 200 個基點。所以我們已經看到我們今年能否在我們周圍的經濟條件下實現這一目標。但實際上，對於 Trex 來說，這是一個能夠向 45%、50% 的市場份額邁進的長期機會。

Got you. Okay. That's great color. And then secondly, just kind of given how the housing market is evolving here and you're clearly seeing some strength on the new construction side. I recall a couple of years ago, you guys had spoken to perhaps allocating some of your capacity, if possible, towards the homebuilder channel. Any thoughts on how that might play out this year given that strength on the homebuilder side?

明白了好的。那是很棒的顏色。其次，考慮到這裡的房地產市場是如何演變的，你清楚地看到了新建築方面的一些力量。我記得幾年前，你們曾說過，如果可能的話，也許將你們的一些能力分配給房屋建築商渠道。考慮到房屋建築商方面的實力，今年有什麼想法可以發揮作用嗎？

We do have some specific individuals within our sales team, where they're -- 100% of their focus is on the new builders. During the pandemic, they were building everything they could. It was really kind of difficult to get time with them. But now that the business is changing a little bit and people are looking for more value in these expensive homes, we're absolutely having some really good discussions and showing some of these larger builders how they can add value to their home by including a Trex that can making it more marketable. More to come on that but we are making inroads with it.

我們的銷售團隊中確實有一些特定的個人，他們在那裡——他們 100% 的注意力都集中在新的建設者身上。在大流行期間，他們竭盡所能。真的很難抽出時間和他們在一起。但現在業務發生了一點變化，人們正在尋找這些昂貴房屋的更多價值，我們絕對進行了一些非常好的討論，並向其中一些較大的建築商展示了他們如何通過安裝 Trex 來增加房屋的價值這可以使它更有市場。更多內容即將推出，但我們正在取得進展。

Next question is from Ketan Mamtora of BMO Capital Markets.

下一個問題來自 BMO Capital Markets 的 Ketan Mamtora。

Congrats on a strong quarter. I'm curious, either Bryan or Dennis, with this uncertain economic backdrop, does this create any M&A opportunity perhaps to expand into adjacent product categories?

祝賀一個強勁的季度。我很好奇，布萊恩或丹尼斯，在這種不確定的經濟背景下，這是否會創造任何併購機會，或許可以擴展到相鄰的產品類別？

Well, I think there's the opportunity for it. I was impressed with the Fortune Brands announcement earlier today, which was an 8 or 9 -- a 9 multiple out there. We see the right opportunities where we can leverage Trex's expertise to get it at the right multiple and then drive the kind of growth and returns our shareholders expect from us. There's significant multiple opportunity out there.

好吧，我認為這是一個機會。今天早些時候 Fortune Brands 的公告給我留下了深刻的印象，它是 8 或 9 —— 9 的倍數。我們看到了合適的機會，我們可以利用 Trex 的專業知識使其達到合適的倍數，然後推動股東對我們期望的增長和回報。那裡有很多機會。

And Bryan, are there any product categories within residential, which would be kind of interesting to Trex, just at a high level?

布萊恩，在住宅中是否有任何產品類別，Trex 會感興趣，只是在高層次上？

I think (inaudible) I'd be willing to discuss on the call.

我想（聽不清）我願意在電話中討論。

The next question is from Rafe Jadrosich of Bank of America.

下一個問題來自美國銀行的 Rafe Jadrosich。

What type of sellout would you need to see to ramp up production above that $1 billion current run rate?

您需要看到哪種類型的售罄才能使產量超過 10 億美元的當前運行率？

We would need to see growth in the second quarter and then continue to see that into at least the first couple of months of the third quarter. I think at that point, we would look at continuing running at a higher capacity utilization as we move into the back half of the year.

我們需要在第二季度看到增長，然後至少在第三季度的前幾個月繼續看到這種增長。我認為到那時，我們會考慮在進入下半年時繼續以更高的產能利用率運行。

When you say growth, do you mean on a year-over-year basis sell-out growth?

當你說增長時，你是指同比銷售增長嗎？

Yes, year-over-year -- on a year-over-year sell-out basis, when I talk about consumer or channel selling out.

是的，同比——當我談論消費者或渠道售罄時，同比售罄。

Got it. Okay. That's helpful. And then in the buckets of gross margin improvement that you called out between raw material optimization, the processes and the streamlining, can you talk about which of those were the largest drivers? And then going forward, is there any additional opportunity within those or anything temporary that happened in the first quarter that won't continue?

知道了。好的。這很有幫助。然後在您提到的原材料優化、流程和精簡之間的毛利率提高方面，您能談談其中哪些是最大的驅動因素嗎？然後展望未來，在第一季度發生的那些或任何不會繼續的臨時事件中是否還有其他機會？

These are cost savings initiatives and continuous improvement initiatives that we've captured now that they're locked in. And so we fully expect to reap the benefits of those going forward. Relative to what drove more or less of that good guide, I'd say it was pretty evenly split across the process efficiencies, the raw material optimization and improvements to raw material processing.

這些是我們現在已經鎖定的成本節約舉措和持續改進舉措。因此，我們完全希望從這些舉措中獲益。相對於或多或少推動該良好指南的因素，我想說它在流程效率、原材料優化和原材料加工改進方面相當平均。

The next question is from Dan Oppenheim of Credit Suisse.

下一個問題來自瑞士信貸的 Dan Oppenheim。

Just a quick question here. You talked about the receivables and sort of going back in terms of the terms. But also, when you talked about sort of keeping inventory levels very conservative, it sounds though that you wouldn't say that there was really any sort of real improvement or increase in sales driven by the change in terms, but you're offering that. And so just trying to think about that program relative to the...

這裡只是一個簡單的問題。您談到了應收賬款，並在條款方面進行了回顧。而且，當你談到保持庫存水平非常保守時，聽起來你不會說真的有任何真正的改善或銷售增長是由條款的變化驅動的，但你提供了.所以只是想想想那個程序相對於...

You've cut out on us here so I'm not sure I've got the full question. But the reality is these were more historical or seasonal terms that we've given out over the years. And so we felt like it was a good practice to revert back to those historical norms relative to the terms since we had plenty of capacity, we had the inventory in play, and we knew that our channel was looking at things more conservatively.

你在這裡打斷了我們，所以我不確定我是否有完整的問題。但現實情況是，這些都是我們多年來給出的更具歷史意義或季節性的術語。因此，我們覺得恢復到與條款相關的那些歷史規範是一個很好的做法，因為我們有足夠的容量，我們有庫存，而且我們知道我們的渠道正在更保守地看待事情。

Those terms provide the incentive to the channel to hold on to that inventory. Would I like to have seen inventory to be a little bit heavier going into Q2? Absolutely. But having those terms there helps us get to where we need to be moving into the busiest seasonal part of the year.

這些條款為渠道提供了保留該庫存的動力。我希望看到進入第二季度的庫存增加一點嗎？絕對地。但是有了這些條款，我們就可以到達一年中最繁忙的季節。

The next question comes from Michael Rehaut of JPMorgan.

下一個問題來自摩根大通的 Michael Rehaut。

First, I just wanted to kind of look at seasonality and how it typically plays out through the year. If you go back and you look at 2016 to 2019 or so, 2020 even if you can consider that normal, but there's definitely a pattern where back half sales are anywhere from 5% to 20% less than first half sales, and 2Q is actually, more often than not, a high watermark. And I think following that pattern, gross margins in the back half can be anywhere from 200 to 400 basis points lower than the front half.

首先，我只是想看看季節性以及它通常如何在一年中發揮作用。如果你回頭看看 2016 年到 2019 年左右，2020 年即使你可以認為這是正常的，但肯定有一種模式，即後半年銷售額比上半年銷售額少 5% 到 20%，而第二季度實際上是，通常是高水印。而且我認為按照這種模式，後半部分的毛利率可能比前半部分低 200 到 400 個基點。

So as we think about this year and to the extent that demand patterns, at least on an end market basis, are reverting to normal, is there any reason to not expect that typical seasonality to display itself this year?

因此，當我們考慮今年以及需求模式（至少在終端市場的基礎上）正在恢復正常的程度時，是否有任何理由不期望今年會出現典型的季節性？

I think the question is really with the consumer in the back half. So if we were talking about a fully normalized environment, I'm right there with you. But the question is, how is that consumer going to hold up as we get to the back half of the year.

我認為問題實際上出在後半部分的消費者身上。因此，如果我們談論的是一個完全標準化的環境，我就在你身邊。但問題是，當我們進入今年下半年時，消費者將如何支撐。

Okay. I appreciate that. I guess also on the end market demand. I think you indicated that sell-through, you were looking at was -- has been roughly flattish or you expect it to be kind of flattish in the first half of the year and down maybe mid-single digits, if I heard right, in the back half. Your other public competitor talked about sell-through in the past quarter or 2 being down maybe high single digits. I was wondering if -- to the extent that you're aware of those prior comments, if there might be any differences between the two of you or differences between your businesses or such that might explain that difference?

好的。我很感激。我想也取決於終端市場需求。我認為你表示銷售率，你正在看的是 - 大致持平，或者你預計今年上半年它會持平並且可能下降中個位數，如果我沒聽錯的話，在後半部分。您的其他公開競爭對手談到過去一個或兩個季度的銷售率下降可能是高個位數。我想知道，就您對之前的評論的了解程度而言，你們兩人之間或您的業務之間是否存在任何差異，或者是否可以解釋這種差異？

I can't really speak to their comments. But from Trex's perspective, we have the best channel partners. We have products that meet all segments of the market. We've got a couple of new products at the high end of the marketplace to ensure that we're holding on to people at the premium level, and that's what helped to drive the performance that we've seen in the first quarter and where we're expecting to be at least in the second quarter.

我真的不能說他們的評論。但從 Trex 的角度來看，我們擁有最好的渠道合作夥伴。我們擁有滿足所有細分市場的產品。我們在高端市場推出了一些新產品，以確保我們能夠留住高端人群，這有助於推動我們在第一季度看到的業績，以及我們預計至少在第二季度。

This concludes our question-and-answer session. I would like to turn the conference back over to Bryan Fairbanks for closing remarks.

我們的問答環節到此結束。我想將會議轉回給 Bryan Fairbanks 作閉幕詞。

Thank you for your questions and your attendance on today's call. We look forward to speaking with many of you during the quarter at conferences and other events. Have a great evening. Thanks.

感謝您提出問題並出席今天的電話會議。我們期待在本季度的會議和其他活動中與你們中的許多人交談。祝你有個愉快的夜晚。謝謝。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。