UFP Industries Inc (UFPI) 2023 Q1 法說會逐字稿

Good day, and welcome to the Q1 2023 UFP Industries, Inc. Earnings Conference Call and Webcast. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Dick Gauthier, Vice President of Investor Relations. Your line is open, sir.

美好的一天，歡迎來到 2023 年第一季度 UFP Industries, Inc. 收益電話會議和網絡廣播。 （操作員說明）請注意，今天的會議正在錄製中。我現在想將會議交給您的發言人，投資者關係副總裁 Dick Gauthier 先生。先生，您的線路開通了。

Welcome to the first quarter 2023 conference call for UFP Industries. Hosting the call today are CEO, Matt Missad; and CFO, Mike Cole. Matt and Mike will offer prepared remarks, and then the call will be opened for questions. This conference call is available simultaneously in its entirety to all interested investors and news media through our website -- webcast at ufpi.com. A replay will also be available at that website.

歡迎來到 UFP Industries 2023 年第一季度電話會議。今天主持電話會議的是 CEO Matt Missad；和首席財務官 Mike Cole。 Matt 和 Mike 將提供準備好的評論，然後電話將開始提問。所有感興趣的投資者和新聞媒體都可以通過我們的網站——網絡直播 ufpi.com 同時收看本次電話會議的全部內容。重播也將在該網站上提供。

Before I turn the call over to Matt Missad, let me remind you that today's press release and presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the press release and in the filings with the Securities and Exchange Commission. I will now turn the call over to Matt Missad.

在我將電話轉給 Matt Missad 之前，讓我提醒您，今天的新聞稿和演示文稿包含 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。這些陳述受可能導致實際結果的風險和不確定性的影響與公司的預期和預測存在重大差異。這些風險和不確定性包括但不限於新聞稿和向美國證券交易委員會提交的文件中確定的那些因素。我現在將把電話轉給 Matt Missad。

Thank you, Dick, and good afternoon everyone. Thank you for joining first quarter 2023 conference call. (technical difficulty) unpredictable would happen, but (technical difficulty) chaperoning through a tricky quarter, and we were able to report earnings per share of $1.98, which exceeded our analyst consensus estimate. The first quarter results were generally in line with our expectations, although some unanticipated things happened. As an example, January was in line with expectations, February was below and March was above. We will review the results by segment, but the overarching theme is that challenges will continue as the economy is affected by interest rate changes, reactions to unsustainable federal debt levels and the resiliency of consumers. We plan to anticipate and meet the challenges head on.

謝謝你，迪克，大家下午好。感謝您加入 2023 年第一季度電話會議。 （技術困難）不可預測會發生，但（技術困難）陪伴度過了一個棘手的季度，我們能夠報告每股收益 1.98 美元，這超出了我們分析師的普遍預期。第一季度的業績總體上符合我們的預期，儘管發生了一些意想不到的事情。例如，1 月符合預期，2 月低於預期，3 月高於預期。我們將按部分審查結果，但總體主題是，隨著經濟受到利率變化、對不可持續的聯邦債務水平的反應以及消費者彈性的影響，挑戰將繼續存在。我們計劃預測並迎接挑戰。

As we discussed in February, the year 2023 will not likely be smooth, but we expect it to be more in line with pre-COVID economies plus normal growth. Our team is focused on executing our plans and taking advantage of opportunities if others stumble. We have accumulated a significant amount of capital and will stay operationally aggressive and fiscally conservative using our balance sheet to support our growth and value creation.

正如我們在 2 月份討論的那樣，2023 年可能不會一帆風順，但我們預計它會更符合 COVID 之前的經濟和正常增長。我們的團隊專注於執行我們的計劃，並在其他人跌跌撞撞時利用機會。我們已經積累了大量資本，並將利用我們的資產負債表來保持積極的運營和財政保守，以支持我們的增長和價值創造。

Our unique business model allows decisions on cost containment, staffing and inventory levels to be handled by those closest to the action, and we don't wait for events to make decisions. Our growth hasn't affected our agility, and we intend to keep it that way.

我們獨特的商業模式允許有關成本控制、人員配置和庫存水平的決策由最接近行動的人來處理，我們不會等待事件發生才能做出決策。我們的成長並未影響我們的敏捷性，我們打算保持這種狀態。

Now let's review segment performance and outlook. In Retail Solutions as a value-added manufacturer seller and self distributor, our products provide solutions for the DIY consumer as well as the professional contractor. Our strategy in this segment is simple, provide innovative new products and solutions, find, harness and expand opportunities, select and build the right brands and utilize our national reach, purchasing expertise and distribution network to provide the best customer value.

現在讓我們回顧一下細分市場的表現和前景。在零售解決方案中，作為增值製造商銷售商和自營分銷商，我們的產品為 DIY 消費者和專業承包商提供解決方案。我們在這一領域的戰略很簡單，即提供創新的新產品和解決方案，尋找、利用和擴大機會，選擇和打造合適的品牌，並利用我們的全國影響力、採購專業知識和分銷網絡來提供最佳客戶價值。

Overall, retail unit sales were only down 2% versus 2022, a better-than-expected result. The leading indicators of remodeling activity published by the Joint Center for Housing predict a modest 2.8% decline in remodeling activity over the period ending in Q1 of 2024. Our big box customers are executing their strategies to capture business from the professional contractor, and they appear to be taking share. We, too, will work hard to make sure we can capture additional market share while enhancing our return on investment.

總體而言，零售單位銷售額與 2022 年相比僅下降了 2%，結果好於預期。聯合住房中心發布的改建活動領先指標預測，截至 2024 年第一季度，改建活動將溫和下降 2.8%。我們的大客戶正在執行他們的戰略，從專業承包商那裡獲取業務，他們似乎分享。我們也將努力工作，以確保我們能夠在提高投資回報率的同時獲得更多的市場份額。

In the first quarter, ProWood and Sunbelt unit sales were up double digits from 2022. The growth can be attributed to favorable market where prices are comparable to pre-pandemic levels. Outdoor projects using lumber are much more affordable now than in the previous few years.

第一季度，ProWood 和 Sunbelt 的單位銷售額比 2022 年增長了兩位數。增長可歸因於有利的市場，其價格與大流行前水平相當。現在使用木材的戶外項目比前幾年便宜得多。

Most of the total revenue shortfall was due to a lower level of lumber market. And as we predicted, margins were lower in Q1 of 2022 as the buying opportunities did not materialize in 2023 like they did a year ago. On a positive note, you may recall in Q2, the declining market hurt margins in ProWood and Sunbelt. Thankfully, we don't expect a similar lumber market decline in 2023, and I am encouraged by the words of Paul who said, you cannot fall off the floor.

總收入不足的主要原因是木材市場水平較低。正如我們預測的那樣，2022 年第一季度的利潤率較低，因為購買機會並沒有像一年前那樣在 2023 年實現。從積極的方面來看，您可能還記得在第二季度，市場下滑損害了 ProWood 和 Sunbelt 的利潤率。值得慶幸的是，我們預計 2023 年木材市場不會出現類似的下滑，保羅的話讓我感到鼓舞，他說，你不能從地板上掉下來。

Decorators had a solid first quarter. They have invested in more innovation capacity and will be driving new products to market using our patented and mineral-based technology, which has considerable opportunities for growth. Its durability, ease of use and enhanced strength to weight ratio make it a contractor favorite. The launch of our Rapid Rail has exceeded our expectations, helping us achieve our goal of increasing share while achieving better sales attachments of railing to decking sales.

裝修公司第一季度表現穩定。他們投資於更多的創新能力，並將使用我們的專利和基於礦物的技術將新產品推向市場，這具有相當大的增長機會。它的耐用性、易用性和增強的強度重量比使其成為承包商的最愛。我們 Rapid Rail 的推出超出了我們的預期，幫助我們實現了增加份額的目標，同時實現了欄杆到甲板銷售的更好銷售附件。

In our UFP-Edge business unit, we named the new leader. Chris Hayn will bring a renewed focus on driving efficiency and implementing the growth strategy set forth by Will Schwartz and the retail team. While Edge was slow in the first quarter, market demand has started to pick up. Edge sales were particularly affected by weather, including key markets on the West Coast. Inventories in the channel are also better balanced, which will allow Edge to better manage demand with the ability to react quickly. Share gains are a critical piece of the Edge strategy.

在我們的 UFP-Edge 業務部門，我們任命了新的領導者。 Chris Hayn 將重新關注提高效率和實施 Will Schwartz 和零售團隊制定的增長戰略。雖然 Edge 在第一季度表現緩慢，但市場需求已經開始回暖。邊緣銷售尤其受天氣影響，包括西海岸的主要市場。渠道中的庫存也得到了更好的平衡，這將使 Edge 能夠更好地管理需求，並具有快速反應的能力。分享收益是邊緣戰略的關鍵部分。

As we analyze the next manufacturing location in the U.S. for this great product lineup, we will utilize our partnership with Pinelli Universal in Mexico to produce products in one of the best facilities in North America.

當我們分析這個偉大產品系列在美國的下一個製造地點時，我們將利用我們與墨西哥 Pinelli Universal 的合作夥伴關係，在北美最好的工廠之一生產產品。

Moving to the Construction segment. Factory Built is trending according to plan and is well below year ago levels. The RV industry is down by as much as 80% in some areas while the MH industry is down 29% based on February shipments.

轉到建築部門。 Factory Built 正在按計劃發展，遠低於一年前的水平。根據 2 月份的出貨量，RV 行業在某些地區下降了 80%，而 MH 行業下降了 29%。

The current forecast were shipments of manufactured housing units in 2023 is 71,000. We have adjusted our business accordingly and are investing in more technology to provide options for affordable homes. Our sales into RV are a small percentage of total sales, but there continue to be opportunities to innovate and create more value in that space.

目前的預測是 2023 年製造房屋的出貨量為 71,000。我們相應地調整了我們的業務，並正在投資更多技術，為經濟適用房提供選擇。我們的房車銷售額只佔總銷售額的一小部分，但在該領域仍有創新和創造更多價值的機會。

Site Built has been a pleasant surprise thus far, even with February actual new home sales being down from 2022. March showed a rebound and current order files have improved as well. We are adding a second shift in many locations as we ramp up to shift customer orders. The outlook for our Site Built business is more positive than it was 2 months ago as the annual starts forecast ranges between $1.2 million and $1.4 million for 2023. At that level of activity, we have a good sustainable business unit for Site Built.

到目前為止，Site Built 一直是一個驚喜，儘管 2 月份的實際新屋銷售量低於 2022 年。3 月份出現反彈，當前訂單文件也有所改善。隨著我們加快轉移客戶訂單的速度，我們在許多地點增加了第二個班次。我們的 Site Built 業務前景比 2 個月前更加樂觀，因為 2023 年的年度開工預測範圍在 120 萬美元到 140 萬美元之間。在這種活動水平上，我們有一個良好的 Site Built 可持續業務部門。

Commercial had a positive Q1. As we have seen in this business, when economic times are uncertain, there's a tendency to push back projects. They eventually come through, but it creates a much greater cost for us to service. While the order files are strong, our ability to hit plan for the year hinges on our customers moving forward on their remodeling and construction plans. Our team has done a very good job of refocusing for profitability and return, and we will need to continue to drive that improvement in order to compete for capital with our other business units.

商業有積極的第一季度。正如我們在這個行業中看到的那樣，當經濟時期不確定時，就會有推遲項目的趨勢。他們最終通過了，但它為我們的服務創造了更大的成本。雖然訂單文件很大，但我們能否實現年度計劃取決於我們的客戶能否推進他們的改造和建設計劃。我們的團隊在重新關注盈利能力和回報方面做得非常好，我們需要繼續推動這一改進，以便與我們的其他業務部門競爭資本。

Concrete Forming Solutions is making investments in growth by opening new facilities and adding sales talent in selected markets. Our new locations in Long Island, New York and Colorado are up and running. These will increase SG&A costs in the near term but will serve as a catalyst for their target of $500 million in revenue and beyond. UFP Construction will rely on our experienced management team to guide the business through any uncertainty and to produce strong results for the balance of 2023.

Concrete Forming Solutions 正在通過在選定市場開設新設施和增加銷售人才來投資增長。我們在長島、紐約和科羅拉多州的新地點已啟動並投入運營。這些將在短期內增加 SG&A 成本，但將成為他們實現 5 億美元及以上收入目標的催化劑。 UFP Construction 將依靠我們經驗豐富的管理團隊來指導業務應對任何不確定性，並在 2023 年的剩餘時間裡取得強勁的業績。

UFP Packaging continues to strengthen its structure to bring greater efficiency on the design and manufacturing side of the business while better serving the customers. Our use of our investments in mixed materials allows us to make better solutions and better values. We expect these improvements to yield greater market share in each of our runways. Packaging industry is fragmented and our modest market share there's tremendous opportunity for growth in packaging.

UFP Packaging 繼續加強其結構，以提高業務設計和製造方面的效率，同時更好地為客戶服務。我們對混合材料的投資使我們能夠制定更好的解決方案和更好的價值。我們預計這些改進將在我們的每條跑道上產生更大的市場份額。包裝行業是分散的，我們適度的市場份額是包裝增長的巨大機會。

PalletOne performed well in Q1 and has been using the combination with other UFP facilities to serve national customers and grow their presence and importance with national, regional and local customers. PalletOne continues to look for opportunities to expand its network to get closer to the customers nationwide.

PalletOne 在第一季度表現良好，並一直在使用與其他 UFP 設施的組合來服務全國客戶，並提高他們在全國、地區和本地客戶中的影響力和重要性。 PalletOne 繼續尋找機會擴大其網絡，以更貼近全國的客戶。

In Structural Packaging, demand for this business unit was unexpectedly soft in Q1. The Purchasing Managers Index indicates the lack of strength with March's indicator of 46.3%, a 19% drop from a year ago. However, as lumber and other input costs have normalized, the value of our product remains relatively better due to our focus on capacity and solution-based designs. We are growing capacity without adding additional facilities by consolidating production of certain items in key regional locations. We need to convert customers to more value-added products and services as well as increase our market share to reach our targets. Increasing our design, engineering, testing and analytical capabilities will help this effort as well adding increased capacity in our steel and mixed material solutions.

在結構包裝方面，第一季度對該業務部門的需求出乎意料地疲軟。採購經理人指數表明缺乏實力，3 月份的指標為 46.3%，比一年前下降了 19%。然而，隨著木材和其他投入成本的正常化，由於我們專注於容量和基於解決方案的設計，我們的產品價值仍然相對較高。我們在不增加額外設施的情況下通過整合關鍵區域位置的某些項目的生產來提高產能。我們需要將客戶轉化為更多增值產品和服務，並增加我們的市場份額以實現我們的目標。提高我們的設計、工程、測試和分析能力將有助於這一努力，並增加我們的鋼鐵和混合材料解決方案的能力。

Productive Packaging is growing revenues and looking to scale its recent acquisitions in corrugate and labels. The unit is executing at scale and synergy plans were designed to add 50% more capacity to the label production and to add a second corrugate conversion facility.

Productive Packaging 正在增加收入，並希望擴大其最近在瓦楞紙和標籤方面的收購。該部門正在大規模執行，協同計劃旨在為標籤生產增加 50% 以上的產能，並增加第二個瓦楞紙轉換設施。

Our international team is focused heavily on extending our packaging solutions to multinational customers. The recently acquired online timber trading platform, timber base, is expected to drive sales growth and create efficiency in the supply chain for our foreign-to-foreign sales.

我們的國際團隊專注於將我們的包裝解決方案擴展到跨國客戶。最近收購的在線木材交易平台 timber base 預計將推動銷售增長，並為我們的對外銷售在供應鏈中創造效率。

Some other areas of interest are new product sales. New product sales for the first quarter were $166.6 million. Our annual target for 2023 is $795 million, so we have work to do to achieve that target. We are building out the framework to support achieving the target. Our Innovate Fund has a robust pipeline of new targets, which we will select from to ensure the best results 3 to 5 years from the date of our investment in these companies.

其他一些感興趣的領域是新產品銷售。第一季度的新產品銷售額為 1.666 億美元。我們 2023 年的年度目標是 7.95 億美元，因此我們需要努力實現該目標。我們正在構建支持實現目標的框架。我們的創新基金擁有強大的新目標渠道，我們將從中進行選擇，以確保自我們投資這些公司之日起 3 至 5 年內取得最佳結果。

Acquisition growth is another area of focus. We continue to drive our growth strategy, including acquisitions. Currently, our acquisition team is reviewing several potential transactions. One of the challenges is determining the new normal for financial results after a few years of outsized performance. Again, we look for companies with a good cultural fit, who bring clear new product capabilities or expansion of existing product lines, which we can scale through our network.

收購增長是另一個重點領域。我們繼續推動我們的增長戰略，包括收購。目前，我們的收購團隊正在審查幾項潛在交易。挑戰之一是在經歷了幾年的超常業績後確定財務業績的新常態。同樣，我們尋找具有良好文化契合度的公司，這些公司可以帶來清晰的新產品功能或擴展現有產品線，我們可以通過我們的網絡進行擴展。

Purchasing. The lumber market has been trading in a relatively narrow band thus far in 2023. For example, with southern yellow pine in week 1 of 2023, random lengths was $459 per thousand board feet. And at quarter end, in week 13, the market was $533 per thousand board feet. Contrast that with week 1 of 2022 at $922 per thousand board feet and week 13 of 2022 at $1,235 per thousand board feet.

購買。 2023 年迄今為止，木材市場的交易區間一直相對狹窄。例如，2023 年第 1 週的南方黃松，隨機長度為每千板英尺 459 美元。在季度末，即第 13 週，市場價格為每千板英尺 533 美元。相比之下，2022 年第 1 週為每千板英尺 922 美元，2022 年第 13 週為每千板英尺 1,235 美元。

We expect that as new production comes online, mills will curtail other production to manage against excess supply. And unless there is unexpectedly high demand, we don't anticipate the same price levels in the lumber market we saw in 2022 or 2021, which may result in lower revenues per unit.

我們預計，隨著新產品上線，鋼廠將削減其他產品以應對供應過剩。除非出現意外的高需求，否則我們預計木材市場的價格水平不會達到 2022 年或 2021 年的水平，這可能會導致單位收入下降。

Transportation. The availability of drivers is improving while the cost of labor, equipment, fuel and insurance are elevated. We are implementing our new transportation management system in the second quarter, which will serve as a springboard to improve transportation management overall.

運輸。司機的可用性正在提高，而勞動力、設備、燃料和保險的成本卻在上升。我們將在第二季度實施新的運輸管理系統，這將作為改善整體運輸管理的跳板。

Human capital. While the typical unemployment numbers remain low, the [US VIX] index was 6.7% in March. The workforce participation rate was 62.6%, still well below historical averages.

人力資本。雖然典型的失業人數仍然很低，但 3 月份 [美國 VIX] 指數為 6.7%。勞動力參與率為 62.6%，仍遠低於歷史平均水平。

We are receiving more applicants, yet finding those motivated to grow a career is still a challenge. We have enhanced our training programs to allow more of our internal candidates to obtain the skills and training they need to move up in the organization. And we have implemented our new human capital management software in most of our facilities, and we'll be integrating the most recent acquisitions over the next year. In an uncertain economy, our goal is to retain our key employees and to help them grow with our company. We will also try to bring outside skills and talent to our organization when other companies falter.

我們收到了更多的申請者，但找到那些有動力發展職業的人仍然是一個挑戰。我們加強了培訓計劃，讓更多的內部候選人獲得他們在組織中晉升所需的技能和培訓。我們已經在我們的大部分設施中實施了我們新的人力資本管理軟件，我們將在明年整合最近的收購。在不確定的經濟中，我們的目標是留住我們的關鍵員工並幫助他們與我們的公司一起成長。當其他公司步履蹣跚時，我們還將嘗試將外部技能和人才引入我們的組織。

Since our growth will be fueled by the talent of our team, we will keep training, recruiting and making ourselves better for the future. All who want to work hard to create a better life for themselves and their families are welcomed and encouraged at UFP, and the best performers will win.

由於我們的成長將由我們團隊的人才推動，我們將繼續培訓、招聘並為未來變得更好。所有想努力工作為自己和家人創造更美好生活的人都受到 UFP 的歡迎和鼓勵，表現最好的人將獲勝。

Capital allocation. As you know, we are focused on prudently and profitably investing capital in our business. Growth capital is a priority via greenfield and technology investments as well as targeted acquisitions that expand our product offerings or our reach or both. We also will provide capital for replacement and maintenance needs.

資本配置。如您所知，我們專注於對我們的業務進行審慎且有利可圖的投資。通過綠地和技術投資以及擴大我們的產品供應或我們的影響力或兩者的有針對性的收購，增長資本是一個優先事項。我們還將為更換和維護需求提供資金。

In Q1, we returned capital to shareholders through share repurchases, buying back 151,000 shares and our Board declared a $0.25 per share dividend for payment in June.

在第一季度，我們通過股票回購向股東返還資本，回購了 151,000 股股票，我們的董事會在 6 月份宣布派發每股 0.25 美元的股息。

And for the forward outlook, as I try to predict what will happen over the next 3 quarters, I am reminded of MGK's lyrics, "all I know is I don't know nothing. People talk and they don't say nothing." Although the lyrics may disappoint an English teacher, they create a simple reminder, that there are hundreds of forecasts published and equally as many predictions as to what the Fed might do or whether Congress will rein in spending or increase the debt. From what we can glean today, we are still on track to our annual targets and the current market indicators support us achieving those targets. Only time will tell is, "I don't know nothing at all."

對於前瞻性展望，當我試圖預測未來 3 個季度會發生什麼時，我想起了 MGK 的歌詞，“我所知道的是我什麼都不知道。人們說話，他們什麼也沒說。”儘管歌詞可能會讓英語老師失望，但它們只是簡單地提醒人們，有數百種預測已發布，而且關於美聯儲可能採取的行動或國會是否會控制支出或增加債務的預測也同樣多。從我們今天收集到的信息來看，我們仍在朝著我們的年度目標邁進，目前的市場指標支持我們實現這些目標。只有時間會證明，“我什麼都不知道。”

Now I'd like to turn it over to Mike Cole to review the financial information.

現在我想把它交給 Mike Cole 來審查財務信息。

Thank you, Matt, and hello, everyone. Our results this quarter were in line with our overall expectations and included a 27% drop in sales to $1.8 billion, consisting of a 20% reduction in selling prices primarily due to the decline in lumber prices we passed on for our customers and a 7% decrease in units; a 37.5% drop in operating profits to $162 million, resulting in a decremental operating margin of 14.6%, slightly better than the 15% to 20% range we estimated for the year; a $208 million improvement in operating cash flow compared to last year as soft unit sales and low lumber prices reduced our seasonal increase in net working capital and a balance sheet that continues to gain strength with a net cash surplus of $145 million this year compared to net debt of $410 million last year.

謝謝你，馬特，大家好。我們本季度的業績符合我們的總體預期，包括銷售額下降 27% 至 18 億美元，其中銷售價格下降 20%，這主要是由於我們為客戶轉嫁的木材價格下降，以及 7%單位減少；營業利潤下降 37.5% 至 1.62 億美元，導致營業利潤率下降 14.6%，略好於我們今年估計的 15% 至 20% 的範圍；與去年相比，經營現金流增加了 2.08 億美元，原因是單位銷售疲軟和木材價格低廉減少了我們淨營運資本的季節性增長，資產負債表繼續增強，今年的淨現金盈餘為 1.45 億美元，與淨現金相比去年的債務為 4.1 億美元。

By segment, sales in our Retail segment dropped 25% to $750 million, consisting of a 23% decline in selling prices and a 2% decrease in units. Given market conditions, our unit sales held up well this quarter, primarily driven by our ProWood and Decorators business units. Our unit sales to big box customers also held up well with a 6% increase for the quarter while our business with independent retailers, which is more closely correlated with new housing starts, dropped by 17%. Also, our big box customers continue to pursue a greater share of professional contractor business.

按部門劃分，我們零售部門的銷售額下降 25% 至 7.5 億美元，其中銷售價格下降 23%，銷量下降 2%。鑑於市場狀況，本季度我們的單位銷售額保持良好，主要受我們的 ProWood 和裝飾器業務部門的推動。我們對大型客戶的單位銷售額也保持良好，本季度增長了 6%，而我們與獨立零售商的業務（與新房開工更密切相關）下降了 17%。此外，我們的大型客戶繼續尋求更大份額的專業承包商業務。

Our retail operating profits dropped to $41 million this year, a 42% decrease from last year, resulting in a 12.5% decremental operating margin. As we mentioned last quarter, we expected a difficult comparison in Q1 this year for retail.

我們今年的零售營業利潤下降至 4100 萬美元，比去年下降 42%，導致營業利潤率下降 12.5%。正如我們上個季度提到的，我們預計今年第一季度的零售業比較困難。

Last year, retail, which has a sales mix heavily weighted toward variable priced treated lumber, greatly benefited from a rising lumber market that reached over $1,300 per thousand compared to only $400 per thousand this year. This greatly enhanced profitability in Q1 last year to cause unfavorable results in Q2 through Q4 when prices then dropped steadily until they reach the bottom of just under $400 per thousand at the end of 2022. As we mentioned last quarter, we continue to believe retail is well positioned to report an increase in operating profits for the year as Q1 results were in line with our expectations.

去年，零售業的銷售組合嚴重偏重於可變價格處理木材，從木材市場的上漲中受益匪淺，木材市場達到每千人 1,300 美元以上，而今年僅為每千人 400 美元。這極大地提高了去年第一季度的盈利能力，導致第二季度至第四季度出現不利結果，當時價格穩步下降，直到 2022 年底達到略低於每千人 400 美元的底部。正如我們上個季度提到的那樣，我們仍然認為零售業由於第一季度業績符合我們的預期，因此有望報告本年度營業利潤的增長。

Moving on to Packaging. Sales in this segment dropped 20% to $487 million, consisting of an 18% decline in selling prices and a 2% decrease in units, which was in line with expectations. We were pleased to see that our team added approximately $28 million of sales to new accounts and $7 million of sales to new locations of existing accounts. These increases were more than offset by a decline in prices and unit sales to existing accounts as market demand declined.

繼續包裝。該部門的銷售額下降 20% 至 4.87 億美元，其中銷售價格下降 18%，銷量下降 2%，符合預期。我們很高興看到我們的團隊為新客戶增加了大約 2800 萬美元的銷售額，為現有客戶的新地點增加了 700 萬美元的銷售額。由於市場需求下降，這些增長被現有客戶的價格和單位銷售額下降所抵消。

Our Packaging operating profits dropped to $55 million, a 34% decrease from last year, resulting in a decremental operating margin of 22%, which is within the 20% to 25% range we estimated for the year. Customer quoting activity accelerated during the quarter, resulting in a more competitive environment, but we believe this should also give us opportunities to gain market share of desirable business as the year progresses.

我們的包裝營業利潤下降至 5500 萬美元，比去年下降 34%，導致營業利潤率下降 22%，這在我們今年估計的 20% 至 25% 的範圍內。本季度客戶報價活動加速，導致競爭環境更加激烈，但我們相信，隨著時間的推移，這也應該讓我們有機會獲得理想業務的市場份額。

Turning into Construction. Sales in this segment dropped 34% to $516 million, consisting of an 18% decline in selling prices and a 16% decrease in units. As expected, the unit decline was due to our Site Built and Factory Built businesses, whose units declined 22% and 19%, respectively. These declines were offset by unit increases in our Commercial and Concrete Forming units as these end markets remain resilient.

轉向建築。該部門的銷售額下降了 34% 至 5.16 億美元，其中銷售價格下降了 18%，銷量下降了 16%。正如預期的那樣，單位下降是由於我們的 Site Built 和 Factory Built 業務，其單位分別下降了 22% 和 19%。這些下降被我們的商業和混凝土成型裝置的單位增加所抵消，因為這些終端市場仍然具有彈性。

Operating profits in our Construction segment dropped to $54 million, a 31% decrease from last year, resulting in a decremental operating margin of 9%, which was better than the 20% to 25% range we estimated for the full year. Last year, in Q2 through Q4, the Construction segment benefited from the drop in lumber prices I mentioned earlier because if sales are more heavily weighted to products with selling prices that are fixed for a period of time. Peak demand and capacity constraints also allowed the team to be more selective in the business we pursued last year.

我們建築部門的營業利潤下降至 5400 萬美元，比去年下降 31%，導致營業利潤率下降 9%，好於我們估計的全年 20% 至 25% 的範圍。去年，從第二季度到第四季度，建築部門受益於我之前提到的木材價格下跌，因為如果銷售更多地集中在銷售價格在一段時間內固定的產品上。高峰需求和產能限制也讓團隊在我們去年從事的業務中更具選擇性。

As we manage through this down cycle, each segment continues to focus on executing our strategies to grow our portfolio of value-added products, and we're pleased to report an increase in our ratio of value-added sales to total sales to 68% this year from 58% last year. Similarly, our ratio of new product sales to total sales increased to over 9% this year from 7.4% last year. We're confident these efforts will continue to help us achieve our 10% minimum EBITDA margin target and help us continue to enhance our profitability over the longer term. We're pleased to report an EBITDA margin for the quarter that exceeded 11%.

在我們度過這個下行週期的過程中，每個部門都繼續專注於執行我們的戰略以增加我們的增值產品組合，我們很高興地報告我們的增值銷售額佔總銷售額的比例增加到 68%今年是去年的 58%。同樣，我們今年新產品銷售額佔總銷售額的比例從去年的 7.4% 增加到 9% 以上。我們相信這些努力將繼續幫助我們實現 10% 的最低 EBITDA 利潤率目標，並幫助我們在長期內繼續提高盈利能力。我們很高興地報告本季度的 EBITDA 利潤率超過 11%。

We're also mindful of our cost structure in this environment as we ensure the company is appropriately sized relative to demand while still providing the resources needed to execute long-term strategies and enhance our ability to offer value-added solutions and drive innovation.

我們還注意到我們在這種環境下的成本結構，因為我們確保公司規模相對於需求適當，同時仍然提供執行長期戰略所需的資源，並增強我們提供增值解決方案和推動創新的能力。

Our SG&A expenses came in slightly under plan, declining nearly $26 million this quarter or 12%, primarily due to lower bonus and sales incentive expenses.

我們的 SG&A 費用略低於計劃，本季度下降近 2600 萬美元或 12%，主要是由於獎金和銷售激勵費用較低。

Moving on to our cash flow statement. Our cash flow used in operations was $37 million, a $208 million improvement over last year due to lower seasonal working capital requirements, resulting from soft unit sales and lumber prices. However, our cash cycle for the quarter increased to 71 days this year from 61 days last year due to a 4-day increase in our receivable cycle and a 7-day increase in our inventory cycle, offset by a 1-day increase in our payables cycle.

轉到我們的現金流量表。我們用於運營的現金流量為 3700 萬美元，比去年增加了 2.08 億美元，原因是單位銷售疲軟和木材價格下降導致季節性營運資金需求減少。然而，由於我們的應收賬款週期增加了 4 天，我們的庫存週期增加了 7 天，我們的現金周期從去年的 61 天增加到今年的 71 天，但我們的現金周期增加了 1 天。應付款週期。

While we've experienced a slight delay in payments with certain customers, our overall receivables are in good shape with over 93% current. Our inventory cycle was above historical trends and is an area of focus as we reset our safety stock levels for the improvement in supply chain constraints and lower demand environment.

雖然我們與某些客戶的付款略有延遲，但我們的整體應收賬款狀況良好，流動率超過 93%。我們的庫存週期高於歷史趨勢，並且是我們重新設置安全庫存水平以改善供應鏈約束和降低需求環境的重點領域。

Our investing activities in Q1 included $38 million in capital expenditures. We continue to target CapEx of $200 million to $225 million for the year. The long and variable lead times may continue to impact timing.

我們在第一季度的投資活動包括 3800 萬美元的資本支出。我們繼續將今年的資本支出目標定為 2 億至 2.25 億美元。漫長而多變的提前期可能會繼續影響時間安排。

Our capital investments are primarily focused on expanding our capacity to manufacture new and value-added products, primarily in our Packaging segment and Deckorators and ProWood business units, achieve efficiencies through automation and enhanced working conditions in our plants in all segments and increase our transportation capacity as we transform this [function] from a cost to a profit center.

我們的資本投資主要集中在擴大我們製造新產品和增值產品的能力，主要是在我們的包裝部門以及裝飾和 ProWood 業務部門，通過自動化和改善我們所有部門工廠的工作條件來提高效率，並提高我們的運輸能力當我們將此[功能]從成本中心轉變為利潤中心時。

Finally, our financing activities for the year included $16 million of dividends and $33 million of cash paid for share buybacks.

最後，我們當年的融資活動包括 1600 萬美元的股息和 3300 萬美元的現金回購。

Turning to our capital structure and resources. We continue to have a strong balance sheet with $145 million in surplus cash in excess of debt [plan] compared to [410] debt last year. Our total liquidity was $1.7 billion, consisting of surplus cash of $423 million in availability to $41 million under our credit facility and $535 million under a shelf agreement with certain long-term (technical difficulty).

轉向我們的資本結構和資源。與去年 [410] 債務相比，我們的資產負債表繼續保持強勁，現金盈餘超過債務 [計劃] 1.45 億美元。我們的總流動資金為 17 億美元，包括可用的剩餘現金 4.23 億美元到我們的信貸額度下的 4100 萬美元，以及與某些長期（技術困難）的臨時協議下的 5.35 億美元。

The strength of our cash flow generation conservative (technical difficulty) managing our capital structure and prudent returns-driven approach to capital allocation continues to (technical difficulty) with an abundance of capital to grow our business and also to return to shareholders through up and down cycles. We'll continue to pursue a balanced and return-driven (technical difficulty), share buybacks, capital investments and M&A.

我們的現金流產生的力量保守（技術困難）管理我們的資本結構和審慎的回報驅動的資本分配方法繼續（技術困難）用充足的資本來發展我們的業務，並通過上下回報股東週期。我們將繼續追求平衡和回報驅動（技術難度）、股票回購、資本投資和併購。

Specifically, our Board approved a quarterly dividend of $0.25 a share to be paid in June. We had a share repurchase program approved by our Board of Directors, providing us with authorization to purchase up to 2 million shares until February of 2024. Through April, we bought back 550,000 shares at an average price of $78.45.

具體而言，我們的董事會批准了將於 6 月份支付的每股 0.25 美元的季度股息。董事會批准了一項股票回購計劃，授權我們在 2024 年 2 月之前購買最多 200 萬股股票。到 4 月，我們以平均 78.45 美元的價格回購了 550,000 股股票。

As I mentioned earlier, we're planning for total capital expenditures of $225 million this year, and we continue to pursue a healthy pipeline of M&A opportunities of companies that have a strong strategic fit and enhance our capabilities and competitive position while providing higher margin return and growth potential. It's all I have on the financials, Matt.

正如我之前提到的，我們計劃今年的總資本支出為 2.25 億美元，我們將繼續尋求具有強大戰略契合度的公司的健康併購機會，增強我們的能力和競爭地位，同時提供更高的利潤率回報和增長潛力。這就是我在財務上的全部信息，馬特。

Thank you, Mike. Now I'd like to open it up for questions.

謝謝你，邁克。現在我想打開它來提問。

(Operator Instructions) And today's first question will come from the line of Stanley Elliott with Stifel.

（操作員說明）今天的第一個問題將來自 Stanley Elliott 與 Stifel 的對話。

Impressive in the environment. I guess I'd like to start off on the Packaging business. I mean we've seen PMIs. You mentioned them being down kind of 46-ish, but we had 5 quarters or so sub-50 as kind of rebounded here. Should your Packaging business track that maybe on a lag? Or do we think that some of the outgrowth initiatives you will have in terms of gaining share and gaining customer wallet can actually help that part of the business perform better?

在環境中令人印象深刻。我想我想從包裝業務開始。我的意思是我們已經看到了 PMI。你提到他們下降了 46 左右，但我們有 5 個季度左右低於 50 作為這裡的反彈。您的包裝業務是否應該滯後跟踪？或者我們是否認為您在獲得份額和獲得客戶錢包方面的一些增長舉措實際上可以幫助這部分業務表現得更好？

Yes, I would say it's the latter, Stanley. I think to me, it's just a data point to consider. I think our team -- the market was soft in the first quarter, no doubt about it. I expect it probably will be a little soft, but we see signs of improvement, and I think that's the important thing. But most important is what you outlined at the end there, which is our ability to gain market share and provide new innovative solutions, we expect will help us kind of regardless of market size.

是的，我會說是後者，斯坦利。我認為對我來說，這只是一個需要考慮的數據點。我認為我們的團隊——第一季度市場疲軟，這一點毫無疑問。我預計它可能會有點軟，但我們看到了改善的跡象，我認為這很重要。但最重要的是你在最後概述的內容，即我們獲得市場份額和提供新的創新解決方案的能力，我們希望無論市場規模如何，都會對我們有所幫助。

And then kind of switching gears. You mentioned, I thought I heard (inaudible) commentary around the Deckorators product if that's -- so I would love to hear a little bit more about that. And then more broadly, how are you all thinking about the retail business, the news constantly talking about the consumer getting stretched, and I do think the big box channel is positioned to outgrow your other distribution networks. But if you could kind of elaborate on a little bit, those two would be great.

然後是一種切換齒輪。你提到過，我想我聽到了關於 Deckorators 產品的（聽不清）評論，如果那是——所以我很想听到更多關於它的信息。然後更廣泛地說，你們如何看待零售業務，新聞不斷談論消費者越來越緊張，我確實認為大盒子渠道的定位是超越你們的其他分銷網絡。但如果你能稍微詳細一點，那兩個就太好了。

Sure. So on the Deckorators side, obviously, we're excited about the future. Certainly, the mineral-based composite, which I talk about a lot is something that we're excited about. A lot of potential new products for that technology. And I think the rapid rail system, among other things that are being added to the extent that we can tie those together with our decking sales and get more of the share of the combined total. That's a big plus for the Deckorators and the Deckorators brand.

當然。因此，在 Deckorators 方面，顯然，我們對未來感到興奮。當然，我經常談論的礦物基複合材料讓我們感到興奮。該技術有很多潛在的新產品。我認為快速鐵路系統，以及其他正在增加的東西，我們可以將它們與我們的甲板銷售聯繫在一起，並在合併總額中獲得更多份額。這對 Deckorators 和 Deckorators 品牌來說是一大優勢。

I think if I look at retail in general for your second part of your question, there is a slight reduction, 2.8%, I think, over the next basically year is what's being predicted in the repair/remodel index. But I like the customers that we have, and I like the approach we ask. And I really think with the combination of both ProWood and Sunbelt and the strategies that our retail group has that we should be able to take share. And so I would expect getting growth from share. And as long as the market holds reasonably well, we should be very, very good. I think the challenge to everything is what happens if the consumer loses confidence.

我認為，如果我在問題的第二部分總體上看一下零售業，我認為維修/改造指數中預測的基本上是在接下來的一年中略有減少，2.8%。但我喜歡我們擁有的客戶，我喜歡我們要求的方法。我真的認為，結合 ProWood 和 Sunbelt 以及我們零售集團的戰略，我們應該能夠分享。因此，我希望從份額中獲得增長。只要市場保持良好，我們就應該非常非常好。我認為對一切的挑戰是如果消費者失去信心會發生什麼。

Right. And I guess one last quick one, if I could. You mentioned your commentary around January than February and March. Could you share or care to share anything around how April is looking thus far?

正確的。如果可以的話，我想最後一個快速。你在 1 月左右提到了你的評論，而不是 2 月和 3 月。您能否分享或願意分享到目前為止 4 月的情況？

Yes. I think it's kind of going to look at it, the trend is a positive trend for March, and I sense that, that is continuing at least at this point.

是的。我認為這有點像，趨勢是 3 月份的積極趨勢，我感覺到，至少在這一點上，這種趨勢仍在繼續。

And that will come from the line of Reuben Garner with The Benchmark Company.

這將來自 The Benchmark Company 的 Reuben Garner 系列。

Maybe if we could start off with the -- a follow-up on the retail side. So Matt, you mentioned inventory in the channel, I think, was better balanced. Can you go into more detail on that? We've heard a few building product categories that maybe -- or inventory retail have gotten too low and things are maybe starting to normalize in the other direction. Just curious if you're seeing that and if it's different by kind of product category.

也許我們可以從——零售方面的後續行動開始。所以馬特，你提到渠道中的庫存，我認為，平衡得更好。你能詳細介紹一下嗎？我們聽說過一些建築產品類別可能 - 或者庫存零售已經變得太低，並且事情可能開始朝著另一個方向正常化。只是好奇您是否看到它，以及它是否因產品類別而異。

Yes. The reference that I made was to the Edge product line, Reuben, but I think there's probably a fair amount of accuracy to the comment about just generally carrying a little less inventory, not quite as heavy as they were, so that makes it a lot easier for us to manage. And as Mike alluded to, for us to be able to help manage our safety stock levels back to a more normalized kind of situation. So cautiously optimistic there.

是的。我提到的是 Edge 產品線，Reuben，但我認為關於通常攜帶較少庫存的評論可能相當準確，不像它們那麼重，所以這使得它很多便於我們管理。正如邁克提到的那樣，我們能夠幫助管理我們的安全庫存水平，使其恢復到更正常的狀態。所以謹慎樂觀。

Okay. And then kind of a broader question about pricing. You guys have sort of distanced yourself, I think, increasingly so in recent quarters from commodity price action. And I was wondering if you could talk about some of the value-added areas, maybe some areas where pricing is holding in better than it historically has or areas where there's more pressure than others? Anything that jumps out to you for some of the things that areas where you've moved into more value add versus the commodity piece that would be [great].

好的。然後是關於定價的更廣泛的問題。我認為，你們在最近幾個季度越來越遠離大宗商品價格走勢。我想知道你是否可以談談一些增值領域，也許是一些定價比歷史上更好的領域，或者比其他領域壓力更大的領域？任何讓你跳出來的東西，你已經進入更多增值領域的東西，而不是[偉大]的商品。

Yes. I think we talk a lot about converting customers from sticks and panels to more designed, engineered and manufactured products, so we see that both on the industrial side and on the concrete forming side as examples. So those are areas where we can help drive that process.

是的。我認為我們談論了很多關於將客戶從棒材和麵板轉變為更多設計、工程和製造產品的問題，因此我們在工業方面和混凝土成型方面都看到了這一點。因此，這些是我們可以幫助推動這一進程的領域。

I would say the other key portion of this is to try to make sure that we are at least paid reasonably for a lot of the products that we do, put a lot of effort and energy into treated lumber being one where we probably haven't been fairly rewarded for the value of that product. So we continue to try to make improvements there in that model, and that will be important to future value-add sales.

我想說的另一個關鍵部分是努力確保我們至少為我們所做的許多產品獲得合理的報酬，將大量的精力和精力投入到處理過的木材中，這是我們可能沒有的因該產品的價值而得到公平的回報。因此，我們繼續嘗試在該模型中進行改進，這對未來的增值銷售很重要。

With respect to some of the other commodity type business, we're trying to deemphasize that where we can, but we also recognize that some of it is the bread and milk that we need in order to get the rest of the value-added products to the customers. So I know each of the business units and each of the segments is very, very focused on trying to maximize the value add, developing new products is an area for us to help enforce that and to help that to grow as well. So we're coming at it from a lot of different angles, and we expect that to continue to improve.

關於其他一些商品類型的業務，我們試圖盡可能地淡化這一點，但我們也認識到其中一些是我們需要的麵包和牛奶，以便獲得其餘的增值產品給客戶。所以我知道每個業務部門和每個部門都非常非常專注於嘗試最大化增值，開發新產品是我們幫助實施並幫助其增長的一個領域。所以我們從很多不同的角度來看它，我們希望它能繼續改進。

Understood. Congrats on the results in a choppy period and good luck going forward.

明白了。祝賀在波濤洶湧的時期取得的成績，祝你好運。

Thank you.

謝謝。

One moment for our next question. And that will come from the line of Ketan Mamtora with BMO Capital Markets.

稍等一下我們的下一個問題。這將來自 Ketan Mamtora 與 BMO Capital Markets 的合作。

Can you talk a little bit about your comments in the prepared remarks where you said Site Built was a bit above, pleasant surprise. Curious if you can provide some additional color in the context of the sharp drops that we saw in building permits and starts late last year? So as we cycle through that, so far as consumption of materials is concerned, so if you can elaborate on that, that would be helpful.

您能否在準備好的評論中談談您的評論，您說 Site Built 有點高，令人驚喜。想知道您是否可以在我們看到的建築許可急劇下降並於去年年底開始的情況下提供一些額外的顏色？因此，當我們循環進行時，就材料消耗而言，如果你能詳細說明，那將會很有幫助。

Yes. Let me try to make sure I understand the question well. So basically, if I looked at it and you can kind of tell what our expectations were with -- when I said January was in line, February was below and March was back in line again. And I think I would take a look at Site Built in a similar vein and say that we've provided decremental margin information last year, we talked about what that might look like, and I would say to the credit of the Site Built management team and all the people on that team. They've been able to outperform even though sales have been less than certainly they want it, but they're in line with what our expectations were.

是的。讓我試著確保我很好地理解了這個問題。所以基本上，如果我看一下它，你可以說出我們的期望是什麼——當我說 1 月符合時，2 月低於預期，3 月再次符合預期。而且我想我會以類似的方式看一下 Site Built 並說我們去年提供了遞減保證金信息，我們討論了它可能是什麼樣子，我想說這歸功於 Site Built 管理團隊以及該團隊中的所有人。儘管銷售額肯定低於他們想要的水平，但他們仍然能夠跑贏大盤，但他們符合我們的預期。

And I think what we're talking about at this juncture is the way March rebounded from what the low was in February, it appears that there's more strength in that market. So we feel much better about that today and feel very confident in our annual numbers, where they all look like February, we would have been less confident.

而且我認為我們此時談論的是 3 月份從 2 月份的低點反彈的方式，似乎該市場有更多的力量。所以我們今天對此感覺好多了，並且對我們的年度數據非常有信心，它們看起來都像二月份，我們本來就不那麼自信了。

I know I'm taking out a long walk around the block, Ketan, but I think that's, hopefully, that answers what you're trying to get at.

Ketan，我知道我正在繞著街區走很長一段路，但我認為這很有希望地回答了你想要達到的目標。

No, that's certainly helpful. And now has that part of the market become just generally more competitive so far as you can tell, given lumber has come down, demand has eased? Curious if the competitive dynamics have changed at all.

不，那肯定有幫助。據您所知，現在這部分市場是否普遍變得更具競爭力，因為木材已經下降，需求已經緩解？好奇競爭動態是否發生了變化。

Yes, I think there's -- I'll say a couple of components to the competitive dynamics. One is the situation which we were fortunate to have a little bit of over the last few years, which was the demand far outstripped supply. So there was actually a positive pricing element to our sales. That premium, I'll call it, is gone. So that by itself creates competitive dynamic. And then with pricing being lower, that's going to create a competitive squeeze as well.

是的，我認為有——我會說競爭動態的幾個組成部分。一個是我們幸運地在過去幾年中遇到的情況，即需求遠遠超過供應。所以我們的銷售實際上有一個積極的定價因素。那個溢價，我稱之為，已經消失了。因此，這本身就創造了競爭動力。然後隨著定價的降低，這也會造成競爭壓力。

I think if I look at some of the services we offer in our value-based engineering, some of the other component services and the customer relationships that our team has been able to forge, I think we still become a preferred supplier, and there is a value in making sure that the -- our customers know we can deliver when we say we are, and I think that's a big benefit for us.

我認為，如果我看看我們在基於價值的工程中提供的一些服務、其他一些組件服務以及我們團隊能夠建立的客戶關係，我認為我們仍然成為首選供應商，並且有確保我們的客戶知道我們可以在我們說的時候交付的價值，我認為這對我們來說是一個很大的好處。

No, that's helpful. And then final question. From M&A standpoint, obviously, the balance sheet is in very strong shape. Curious where you see kind of most opportunities. You talked about reviewing a number of opportunities. Where would you say you think there is the most potential?

不，那很有幫助。然後是最後一個問題。從併購的角度來看，資產負債表顯然處於非常強勁的狀態。好奇你在哪裡看到最多的機會。你談到了審查一些機會。你覺得哪裡最有潛力？

That's a great question. And I think each one of the business units has identified targets that they feel are very important to their future growth. And that's creating what I think is a terrific competition for capital trying to find transactions that make the most sense that can bring the biggest impact over time. So we've talked a lot about the industrial and packaging space, which for us is really total packaging now. I think we also would look at areas such as concrete forming where there's some opportunities to convert more value-added sales.

這是一個很好的問題。我認為每個業務部門都確定了他們認為對其未來增長非常重要的目標。這正在創造我認為是一場激烈的資本競爭，試圖找到最有意義的交易，隨著時間的推移可以帶來最大的影響。所以我們已經談了很多關於工業和包裝空間，對我們來說現在真的是整體包裝。我認為我們還會關注混凝土成型等領域，這些領域有機會轉化更多的增值銷售。

And I think on the retail side, there are some very good opportunities there for mixed materials and other things. So I don't think there's a shortage of opportunities, Ketan. Our challenge is making sure that we maintain our fiscal conservatism as we evaluate these opportunities. And as I mentioned in my remarks, I think that probably the bigger challenge is people thinking that the hockey stick that they are planning going forward is real when it may or may not be.

我認為在零售方面，混合材料和其他東西有一些非常好的機會。所以我不認為機會短缺，Ketan。我們面臨的挑戰是確保我們在評估這些機會時保持財政保守主義。正如我在發言中提到的那樣，我認為更大的挑戰可能是人們認為他們計劃前進的曲棍球棒是真實的，無論它是否真實。

One moment for our next question. That will come from the line of Kurt Yinger with D.A. Davidson.

稍等一下我們的下一個問題。這將來自 Kurt Yinger 與 D.A.戴維森。

Just looking at the retail gross margin, I mean absent any big changes in lumber pricing going forward is, is the Q1 kind of 12.6% number, kind of a reasonable run rate? And then any kind of mix impacts to be aware of in Q2, maybe like a little bit heavier on the pressure treatment side that could weigh that down? Or how do you think about that?

只看零售毛利率，我的意思是如果未來木材價格沒有任何大的變化，第一季度的 12.6% 的數字是否合理？然後在第二季度要注意任何類型的混合影響，也許在壓力處理方面有點重，這可能會壓低它？或者你怎麼看？

Yes. The biggest drivers within gross margin, Kurt. So if we get a market that stays pretty well deflated like it is now, and we don't get a lot of sequential volatility.

是的。毛利率中最大的驅動因素，庫爾特。因此，如果我們的市場像現在這樣保持通縮狀態，那麼我們就不會出現太多的連續波動。

The big drivers are kicking the lumber market swings out of it, give me an amount of variable price treated lumber. And then it's really more mix changes. And I think you're going to see more treated number, like you said, in Q2, a little less to that than in Q3. And so while volumes pick up tremendously in Q2, the mix is more weighted towards treated lumber and could move margin down, but you have a lot more sales dollars. So profitability would it be expected to be way higher.

大司機正在擺脫木材市場的波動，給我一些經過可變價格處理的木材。然後它真的是更多的混合變化。而且我認為你會看到更多的治療數字，就像你說的那樣，在第二季度，比第三季度少一點。因此，雖然第二季度銷量大幅增加，但組合更傾向於處理木材，可能會降低利潤率，但你有更多的銷售收入。因此，預計盈利能力會更高。

Okay. Perfect. That makes sense. And then in the packaging business, I mean, we kind of finally saw pricing slip to a headwind. Is that all flow through from lower lumber prices, maybe on just a bit of a lag or any other areas of pressure from a pricing perspective with customers?

好的。完美的。這就說得通了。然後在包裝業務中，我的意思是，我們終於看到定價下滑到逆風。是否所有這些都來自較低的木材價格，也許只是有點滯後，或者從與客戶的定價角度來看，任何其他方面的壓力？

Yes. What I would tell you is I think most of the lumber market flow-through has been built in at this point. I think the question about how slow are the customers going to be is that some different runways, maybe more of a longer-term slowdown. Others will bounce back, and that's the beauty of the balanced model of the customers that we have. So what I would tell you is I think there's probably an increase in quoting activity right now as people who are not as busy as they were before, starting to take a look and trying to squeeze where they can.

是的。我要告訴你的是，我認為大部分木材市場的流通都已在此時建立。我認為關於客戶將有多慢的問題是一些不同的跑道，也許更長期的放緩。其他人會反彈，這就是我們擁有的客戶平衡模型的美妙之處。所以我要告訴你的是，我認為現在的報價活動可能有所增加，因為人們不像以前那樣忙碌，開始看一看並試圖擠在他們可以的地方。

So again, I think the benefits that we bring allow us to provide more value for the customer, but there certainly will be that kind of normal pressure in the marketplace that hadn't existed in '21 or '22.

因此，我再次認為，我們帶來的好處使我們能夠為客戶提供更多價值，但市場肯定會出現 21 年或 22 年不存在的那種正常壓力。

Got it. Yes. That makes sense. Okay. And then just on decremental margins, Mike, forgive me because I missed this. What was kind of the outlook for that within the retail segment for the year?

知道了。是的。這就說得通了。好的。然後只是遞減的利潤率，邁克，請原諒我，因為我錯過了這個。今年零售業的前景如何？

We didn't provide one. So we guided you, I guess, last time we spoke. For Q1 results, that would be well below last year. So we knew that was going to happen given the dynamics with the lumber market, and -- but we had said that we felt like once we get past Q1, I mean, when we look at the full year, in Q2, Q3 and Q4, we would more than make up for whatever shortfall we had in Q1 because whatever we made in Q1 last year, we gave back and then some in Q2 and Q3. So with the lumber market where it's at today, we still feel like we definitely feel like that's the case. So the shortfall that we have so far for the year, we're going to more make up for the next 9 months.

我們沒有提供。所以我想，我們上次談話時指導了你。對於第一季度的結果，這將遠低於去年。所以我們知道，鑑於木材市場的動態，這種情況將會發生，而且——但我們曾說過，我們覺得一旦我們度過了第一季度，我的意思是，當我們回顧全年，即第二季度、第三季度和第四季度時，我們將彌補我們在第一季度的任何不足，因為無論我們在去年第一季度取得什麼成就，我們都會在第二季度和第三季度回饋社會。因此，對於今天的木材市場，我們仍然覺得確實如此。因此，我們今年到目前為止的缺口，我們將在接下來的 9 個月內更多地彌補。

Got it. Okay. And then last quarter you talked about, I think, decremental operating margin 15% to 20% for the year. You guys, I guess, said that Q1 was pretty much in line with expectations. But anything from a market or a performance perspective here early in the year that makes you feel like you could do a little bit better or come in at the low end of that range? Or any thoughts around that?

知道了。好的。然後上個季度你談到，我認為，今年的營業利潤率下降了 15% 到 20%。我猜你們說 Q1 非常符合預期。但是，從年初的市場或業績角度來看，有什麼讓你覺得你可以做得更好一點或進入該範圍的低端？或者有什麼想法嗎？

I think we feel good about where we sit today. But the guidance that we gave is for the full year, and I think the guidance has to reflect some uncertainty about -- still about severity and duration of any recession. And we're already in one today. So I think we still want to be conservative in how we look at that. And so those ranges, I think, are ones that we're still going to still look to.

我認為我們對今天的坐姿感覺很好。但我們給出的指導是針對全年的，我認為該指導必須反映一些不確定性——仍然是關於任何衰退的嚴重性和持續時間。我們今天已經合二為一了。所以我認為我們仍然希望在我們如何看待這個問題上保持保守。因此，我認為這些範圍是我們仍將繼續關注的範圍。

Yes. And I'd probably add, Kurt, that there are some opportunities for improvement. I know each one of the business units and segments see some different things that we can do to improve, but Mike's right, there's other external factors that we can't control. So we're going to continue to work on the things that we can improve and hope the external factors take care of themselves.

是的。庫爾特，我可能會補充說，還有一些改進的機會。我知道每個業務部門和部門都看到了我們可以做的一些不同的事情來改進，但邁克是對的，還有其他我們無法控制的外部因素。因此，我們將繼續致力於我們可以改進的事情，並希望外部因素能夠自行解決。

Right. Yes. Still early in the year. Makes sense. And then just last one for me. Mike, what was bonus expense here in Q1?

正確的。是的。還是年初。說得通。然後給我最後一個。邁克，第一季度的獎金支出是多少？

The bonus rate was about, we accrued to about 20% of pre-bonus operating profit. So with that number, you can -- and you have the operating profit number, you can calculate what bonus expense was pretty close.

紅利率約為，我們應計約佔紅利前營業利潤的 20%。因此，有了這個數字，你就可以——而且你有了營業利潤數字，你就可以計算出非常接近的獎金支出。

Got it. Good luck here in Q2.

知道了。祝你在第二季度好運。

Thanks, Kurt.

謝謝，庫爾特。

One moment for our next question. And that will come from the line of Julio Romero with Sidoti & Co.

稍等一下我們的下一個問題。這將來自 Julio Romero 與 Sidoti & Co. 的系列。

Can you hear me?

你能聽到我嗎？

Yes.

是的。

This is [Stefan Geom] on for Julio Romero. I guess my first question is, can you talk about your execution in retail and the progress the new segment President is making on creating our synergies and scaling your products.

這是 Julio Romero 的 [Stefan Geom]。我想我的第一個問題是，你能談談你在零售業的執行情況，以及新任部門總裁在創造我們的協同效應和擴展你的產品方面取得的進展嗎？

Sure. I guess. So Will Schwartz, who just got into the role on January 1, is doing an excellent job. He's working with his team and helping to drive the business. And I think we're very optimistic about where that business is headed.

當然。我猜。因此，1 月 1 日剛剛上任的威爾·施瓦茨 (Will Schwartz) 表現出色。他與他的團隊一起工作，幫助推動業務發展。而且我認為我們對該業務的發展方向非常樂觀。

And can you also talk to pricing changes in the Construction segment? By how much more do you see for the prices in that segment coming down before we see some stabilization there?

你還能談談建築部門的定價變化嗎？在我們看到那裡出現一些穩定之前，您認為該部分的價格還會下降多少？

Yes. That's a really tough question. I try not to get into specific pricing, particularly by segment or by business unit. As we outlined before, I think the lumber market pricing and probably any premium from the demand far outstripping supply, those are already out of what I would say was pricing in Q1. So for us, it really becomes what's the demand look like going forward. And as long as the demand is in the range that we estimated is then the pricing, we think will be somewhere in the range that it is.

是的。這是一個非常棘手的問題。我盡量不談具體定價，尤其是按細分市場或業務部門。正如我們之前概述的那樣，我認為木材市場定價以及可能遠遠超過供應的需求溢價，這些已經超出了我所說的第一季度定價。所以對我們來說，它真的變成了未來的需求。只要需求在我們估計的範圍內，那麼定價，我們認為就會在它所在的範圍內。

I guess the last one for me. Can you speak to the potential impact on the regional banking crisis with the FBI or to your customers, suppliers, et cetera?

我想最後一個適合我。您能否與 FBI 或您的客戶、供應商等談談對地區銀行業危機的潛在影響？

Yes, I wish I could probably speak for hours on it, but I don't think it would be particularly useful for anyone because I don't have any specialized knowledge in the area. I think what it indicates is that interest rate environment has caused some issues and so it has ripple effects. And so from our standpoint, we're just looking to see what the next moves that the fed makes are, but at this point, very difficult to predict if it's a broader-based issue or just specific to a small number of banks.

是的，我希望我能就它講上幾個小時，但我不認為它對任何人都特別有用，因為我在該領域沒有任何專業知識。我認為這表明利率環境導致了一些問題，因此會產生連鎖反應。因此，從我們的角度來看，我們只是想看看美聯儲的下一步行動是什麼，但在這一點上，很難預測這是一個更廣泛的問題還是僅針對少數銀行。

And I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Matt Missad for any closing remarks.

我現在不會在隊列中顯示更多問題。我現在想將電話轉回給 Matt Missad 先生，聽取任何結束語。

Well, thank you again for joining us today. 2023 will be a challenging year. And as we all know, with what might be the world's largest birthday party in D.C., we'll still keep our eyes open.

好吧，再次感謝您今天加入我們。 2023年將是充滿挑戰的一年。眾所周知，在華盛頓舉行的可能是世界上最大的生日派對上，我們仍將睜大眼睛。

I know our team prides on a good challenge. So while it's not in Michigan this week, let's hold for sunshine in Q2 and throughout 2023. And I know that no matter what the obstacles we face, our team plans to roll with the changes and come out ahead. Have a great day.

我知道我們的團隊以挑戰為榮。因此，雖然本週不在密歇根州，但讓我們在第二季度和整個 2023 年等待陽光。而且我知道，無論我們面臨什麼障礙，我們的團隊都計劃順應變化並取得領先。祝你有美好的一天。

Thank you all for participating. This concludes today's program. You may now disconnect.

謝謝大家的參與。今天的節目到此結束。您現在可以斷開連接。