Cactus Inc (WHD) 2025 Q1 法說會逐字稿

Good day, everyone, and thank you for standing by. My name is RG, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cactus Q1 2025 earnings call.

大家好，感謝大家的支持。我叫 RG，今天我將擔任您的會議接線生。現在，我歡迎大家參加 Cactus 2025 年第一季財報電話會議。

(Operator Instructions) Thank you. I would now like to turn the call over to Alan Boyd, Director of Corporate Development and Investor Relations. Please go ahead.

（操作員指示）謝謝。現在我想將電話轉給企業發展和投資者關係總監艾倫·博伊德 (Alan Boyd)。請繼續。

Thank you, and good morning. We appreciate you joining us on today's call. Our speakers will be Scott Bender, our Chairman and Chief Executive Officer; and Jay Nutt, our Chief Financial Officer. Also joining us today are Joel Bender, President; Steven Bender, Chief Operating Officer; Steve Tadlock, CEO of FlexSteel; and Will Marsh, our General Counsel.

謝謝，早安。感謝您參加今天的電話會議。我們的演講者將是我們的董事長兼執行長 Scott Bender；以及我們的財務長傑伊·納特（Jay Nutt）。今天與我們一起參加的還有總裁 Joel Bender；史蒂文·本德 (Steven Bender)，首席營運官； FlexSteel 首席執行官史蒂夫·塔德洛克 (Steve Tadlock)；以及我們的總法律顧問威爾·馬什 (Will Marsh)。

Please note that any comments we make on today's call regarding projections or expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC.

請注意，我們在今天的電話會議上就未來事件的預測或預期所做的任何評論都是《私人證券訴訟改革法案》所涵蓋的前瞻性陳述。前瞻性陳述受到許多風險和不確定性的影響，其中許多是我們無法控制的。這些風險和不確定性可能導致實際結果與我們目前的預期有重大差異。我們建議聽眾查看我們的收益報告以及我們向美國證券交易委員會提交的文件中討論的風險因素。

Any forward-looking statements we make today are only as of today's date, and we undertake no obligation to publicly update or review any forward-looking statements. In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release.

我們今天所做的任何前瞻性陳述僅截至今天為止，我們不承擔公開更新或審查任何前瞻性陳述的義務。此外，在今天的電話會議中，我們將參考某些非公認會計準則財務指標。我們的收益報告中包含了這些非 GAAP 指標與最直接可比較的 GAAP 指標的對帳。

With that, I will turn the call over to Scott.

說完這些，我會把電話轉給史考特。

Thanks, Alan, and good morning to everyone. I'm pleased with our strong start to 2025, which saw record levels of Pressure Control product revenues per rig combined with record first-quarter bookings in our Spoolable Technologies business. The market outlook has changed considerably since we last spoke, but these first quarter records and our business fundamentals continue to demonstrate why we outperform market activity trends and support our expectations about our ability to continue to do so.

謝謝，艾倫，大家早安。我很高興看到我們在 2025 年取得了強勁的開局，每台鑽機的壓力控制產品收入創下了歷史新高，同時我們的可捲繞技術業務第一季的預訂量也創下了歷史新高。自從我們上次談話以來，市場前景發生了很大變化，但第一季的記錄和我們的業務基本面繼續證明了我們為何能超越市場活動趨勢，並支持我們對繼續這樣做的能力的預期。

We cannot control the change in the general outlook for our industry but we can control our rapid response. I continue to be very proud of our associates' commitment to delivering for our customers despite market and supply chain uncertainty. Some first-quarter total company highlights include revenue of $280 million, adjusted EBITDA of $94 million, adjusted EBITDA margin of 33.5%. We paid a quarterly dividend of $0.13 per share, and we increased our cash balance to $348 million.

我們無法控制行業整體前景的變化，但我們可以控制我們的快速反應。儘管市場和供應鏈存在不確定性，我仍然對我們的員工致力於為客戶提供服務感到非常自豪。第一季公司整體亮點包括營收 2.8 億美元、調整後 EBITDA 9,400 萬美元、調整後 EBITDA 利潤率 33.5%。我們支付了每股 0.13 美元的季度股息，並將現金餘額增加到 3.48 億美元。

I'll now turn the call over to Jay Nutt, our CFO, who will review our financial results. Following his remarks, I'll provide some thoughts on our outlook for the near term before opening the lines for Q&A. So Jay?

現在我將把電話轉給我們的財務長傑伊·納特 (Jay Nutt)，他將審查我們的財務結果。在他發表演說之後，我將就我們近期的前景發表一些看法，然後再開始問答環節。那麼傑伊？

Thank you, Scott, and good morning, everyone. As Scott mentioned, total Q1 revenues were $280 million, which were up 3% sequentially, and total adjusted EBITDA was $94 million, up 1.2% sequentially. For our Pressure Control segment, revenues of $190 million were up 7.7% sequentially, driven primarily by customer drilling efficiencies, leading to record levels of products sold for rigs followed.

謝謝你，斯科特，大家早安。正如史考特所提到的，第一季總營收為 2.8 億美元，季增 3%，調整後 EBITDA 總值為 9,400 萬美元，季增 1.2%。對於我們的壓力控制部門，營收為 1.9 億美元，季增 7.7%，主要受客戶鑽井效率的推動，導致隨後的鑽機產品銷售達到創紀錄的水平。

Operating income increased $3.5 million or 6.9% sequentially, with operating margins decreasing 20 basis points and adjusted segment EBITDA increased $3.3 million or 5.3% sequentially with margins decreasing by 80 basis points. The margin decline was primarily due to reserves taken in connection with litigation claims.

營業收入較上季增加 350 萬美元，即 6.9%，營業利潤率下降 20 個基點；調整後分部 EBITDA 環比增加 330 萬美元，即 5.3%，利潤率下降 80 個基點。利潤率下降主要是由於與訴訟索賠相關的準備金所致。

For our Spoolable Technologies segment, revenues of $93 million were down 3.6% sequentially on the expected lower domestic customer activity in the seasonally slow quarter, partially offset by increased international shipments. Operating income decreased $1.6 million or 6.5% sequentially with operating margins decreasing 80 basis points due to lower operating leverage.

對於我們的可捲繞技術部門而言，由於季節性淡季預計國內客戶活動減少，收入為 9,300 萬美元，環比下降 3.6%，但國際出貨量增加部分抵消了這一影響。營業收入較上季減少 160 萬美元，即 6.5%，由於營業槓桿率降低，營業利潤率下降 80 個基點。

Adjusted segment EBITDA decreased $1.8 million or 5% sequentially while margins decreased by 50 basis points. Corporate and other expenses were $9.6 million in Q1, up $3.7 million sequentially, resulting from professional fees associated with the evaluation of growth initiatives with a focus on international expansion. Adjusted corporate EBITDA was $4.4 million of expense.

調整後部門 EBITDA 較上季減少 180 萬美元，即 5%，利潤率則下降 50 個基點。第一季公司及其他支出為 960 萬美元，比上一季增加 370 萬美元，主要由於對以國際擴張為重點的成長計畫進行評估所產生的專業費用。調整後的企業 EBITDA 支出為 440 萬美元。

On a total company basis, first-quarter adjusted EBITDA was $94 million, up 1.2% from $93 million during the fourth quarter. Adjusted EBITDA margin for the first quarter was 33.5% compared to 34.1% for the fourth quarter. Adjustments to total company EBIT during the first quarter of 2025 include noncash charges of $6.1 million in stock-based compensation and $3.5 million for professional fees associated with growth initiatives.

就整個公司而言，第一季調整後的 EBITDA 為 9,400 萬美元，較第四季的 9,300 萬美元成長 1.2%。第一季調整後的 EBITDA 利潤率為 33.5%，而第四季為 34.1%。2025 年第一季公司息稅前利潤總額的調整包括 610 萬美元的股票薪酬非現金費用和 350 萬美元的與成長計畫相關的專業費用。

Depreciation and amortization expense for the first quarter was $16 million, which includes an ongoing $4 million of amortization expense related to the intangible assets resulting from the FlexSteel acquisition. During the first quarter, the public or Class A ownership of the company averaged and ended the period at 86%.

第一季的折舊和攤銷費用為 1,600 萬美元，其中包括與 FlexSteel 收購產生的無形資產相關的 400 萬美元持續攤銷費用。第一季度，該公司的公眾或 A 類股權平均持股比例為 86%。

GAAP net income was $54 million for the first quarter versus $57 million during the fourth quarter. The decrease was largely driven by professional fees incurred at corporate. Booked tax expense during the first quarter was $17 million, resulting in an effective tax rate of just under 24%. Adjusted net income and earnings per share were $59 million and $0.73 per share, respectively, compared to $57 million and $0.71 per share in the fourth quarter. Adjusted net income for the first quarter was net of a 25% tax rate applied to our adjusted pretax income.

第一季 GAAP 淨收入為 5,400 萬美元，第四季為 5,700 萬美元。下降的主要原因是公司產生的專業費用。第一季的帳面稅費為 1,700 萬美元，實際稅率略低於 24%。調整後淨收入和每股盈餘分別為 5,900 萬美元和每股 0.73 美元，而第四季分別為 5,700 萬美元和每股 0.71 美元。第一季的調整後淨收入是扣除調整後稅前收入的 25% 稅率後的淨收入。

During the quarter, we paid a quarterly dividend of $0.13 per share, resulting in a cash outflow of approximately $11 million, including related distributions to members. Additionally, we made a cash tax payment and associated distributions of approximately $25 million in January related to deferred estimated 2024 taxes as discussed during the fourth-quarter call.

在本季度，我們支付了每股 0.13 美元的季度股息，導致現金流出約 1,100 萬美元，包括向會員的相關分配。此外，正如第四季度電話會議上所討論的，我們在 1 月份支付了約 2500 萬美元的現金稅款和相關分配，與遞延預計的 2024 年稅款有關。

We ended the quarter with a cash balance of $348 million, a sequential increase of approximately $5 million. This increase was lower than our usual cadence due to the 2024 tax payment, the build of inventory in our Spoolable business in anticipation of seasonally stronger second and third quarters, and some continued elevated inventory balances in our Pressure Control business to mitigate tariff impacts. Additionally, strong March revenues led to increased accounts receivable balances at quarter end.

本季末，我們的現金餘額為 3.48 億美元，比上一季增加約 500 萬美元。由於 2024 年的納稅、為迎接第二季和第三季季節性強勁而增加的 Spoolable 業務庫存，以及為減輕關稅影響而持續增加的壓力控制業務庫存餘額，這一增幅低於我們的正常節奏。此外，三月強勁的收入導致季度末應收帳款餘額增加。

Net CapEx, excluding the equity investment in Vietnam, was approximately $9 million during the first quarter of 2025. In a moment, Scott will give you our second quarter operational outlook. Some additional financial considerations when looking ahead to the second quarter include an effective tax rate of 21% and an estimated tax rate for adjusted EPS of approximately 25%.

2025 年第一季度，淨資本支出（不包括對越南的股權投資）約為 900 萬美元。斯科特稍後會向您介紹我們第二季的營運展望。展望第二季度，一些額外的財務考慮因素包括 21% 的有效稅率和約 25% 的調整後每股盈餘預估稅率。

Total depreciation and amortization expense during the second quarter is expected to be approximately $16 million with $7 million associated with our Pressure Control segment and $9 million in Spoolable Technologies. We are reducing our full-year 2025 net CapEx outlook, including the $6 million equity investment, to a range of $40 million to $50 million, given the latest market uncertainty while maintaining critical investments to support our manufacturing diversification strategy and enhanced efficiencies in our Baytown manufacturing plant. We will continue to evaluate further reductions to this planned spend as the year progresses.

預計第二季的總折舊和攤銷費用約為 1,600 萬美元，其中 700 萬美元與壓力控制部門有關，900 萬美元與 Spoolable Technologies 有關。考慮到最近的市場不確定性，我們將 2025 年全年淨資本支出預期（包括 600 萬美元的股權投資）下調至 4,000 萬至 5,000 萬美元之間，同時保持關鍵投資以支持我們的製造多元化策略和提高貝敦製造工廠的效率。隨著時間的推移，我們將繼續評估進一步削減這項計劃支出。

Finally, the Board has approved a quarterly dividend of $0.13 per share, which will be paid in June. This covers the financial review, and I'll now turn the call back over to Scott.

最後，董事會批准每股 0.13 美元的季度股息，將於 6 月支付。這涉及財務審查，現在我將把電話轉回給斯科特。

Thanks, Jay. I'd like to begin by clarifying our current understanding of the tariff rates that will impact our Pressure Control business and better quantify the import exposures that we are mitigating. By mid-next year, we expect the tariff impact to our business to be neutralized, and we are taking several near and medium-term actions to achieve this. We are increasing alternative sourcing of product where possible, rolling out our new wellhead design, but most importantly, we are ramping up production from our Vietnam facility and working with our customers to support these cost increases while ensuring on-time product delivery.

謝謝，傑伊。首先，我想澄清一下我們目前對影響壓力控制業務的關稅稅率的理解，並更好地量化我們正在減輕的進口風險。到明年年中，我們預計關稅對我們業務的影響將被抵消，我們正在採取多項近期和中期行動來實現這一目標。我們正在盡可能增加產品的替代來源，推出新的井口設計，但最重要的是，我們正在提高越南工廠的產量，並與客戶合作以支持這些成本增長，同時確保按時交付產品。

For the past several years, we paid a Section 301 tariff of 25% on goods imported from our Chinese manufacturing plant. Currently, we are paying an additional 45% or more on tariffs -- I'm sorry, additional 45% or more tariff on our imports from China. Our products imported from Vietnam currently incur the new Section 232 25% tariff applied to nearly all countries, the same rate that was applied to imports from our Chinese facility before the recent tariff increases.

過去幾年，我們為從中國製造廠進口的商品支付了 25% 的 301 條款關稅。目前，我們對從中國進口的商品額外繳納了 45% 或更多的關稅——抱歉，我們對從中國進口的商品額外繳納了 45% 或更多的關稅。我們從越南進口的產品目前幾乎在所有國家都適用新的第 232 條 25% 關稅，與最近關稅上調之前從我們的中國工廠進口的產品適用的稅率相同。

While we had expected no additional tariffs from Vietnam, the 25% tariff will replace the Section 301 tariff we had already been paying since 2018. So to be clear, we expect that sourcing from Vietnam will put us back into the same tariff position we've been operating under for the past several years. Moreover, we believe Vietnam will provide us with an advantage over the vast majority of our competitors who were locked primarily on Chinese imports and do not have material US manufacturing.

雖然我們預計越南不會徵收額外關稅，但 25% 的關稅將取代我們自 2018 年以來一直在支付的 301 條款關稅。因此，需要明確的是，我們預計從越南採購將使我們回到過去幾年一直處於的相同關稅地位。此外，我們相信，越南將為我們帶來優勢，讓我們超越絕大多數主要依賴中國進口且缺乏美國製造業的競爭對手。

The dollar value of goods that we currently import from China exposed to tariffs is highly variable and changing rapidly, given these revised rates. But I can share a framework for how to approximate our total imports.

鑑於這些修訂後的稅率，我們目前從中國進口的受關稅影響的商品的美元價值變化很大且迅速。但我可以分享一個框架來估算我們的總進口量。

In 2022, the last year we reported specific product cost of sales before the acquisition of FlexSteel, our Pressure Control product revenue represented approximately two-thirds of our total revenues. Our product gross margin can be found in historical filings from the same period. Both this product proportion of sales and the gross profit margin are close enough to recent results to utilize to approximate our total Pressure Control product cost of goods sold.

2022 年是收購 FlexSteel 之前我們報告特定產品銷售成本的最後一年，我們的壓力控制產品收入約占我們總收入的三分之二。我們的產品毛利率可以在同一時期的歷史文件中找到。該產品的銷售比例和毛利率都足夠接近最近的結果，可以用來近似我們的總壓力控制產品銷售成本。

As we've shared previously, about half of our product cost of goods sold relates to imports from China, and approximately 80% of our product costs are direct, which relates primarily to material costs and freight. These factors can be taken together to calculate the dollar value of our imports that the tariff expense lies to, which I think you'll agree is relatively small compared with the total size of our business today, particularly including the contribution of Spoolable Technologies.

正如我們之前所分享的，我們產品銷售成本的約一半與從中國進口有關，約 80% 的產品成本是直接成本，主要與材料成本和運費有關。可以把這些因素綜合起來計算出關稅費用所對應的進口產品的美元價值，我想你會同意，與我們今天的業務總規模相比，這個數字相對較小，特別是包括了 Spoolable Technologies 的貢獻。

So to reiterate, we expect to neutralize the increased tariff expenses by mid next year. And although our margins may face modest compression between now and then, our inventory on hand and mitigating efforts will allow us to largely preserve our profitability on an absolute basis.

因此，我們重申一下，我們預計到明年年中將抵消增加的關稅支出。儘管從現在到那時我們的利潤率可能會面臨適度壓縮，但我們現有的庫存和緩解措施將使我們在很大程度上保持絕對獲利能力。

I'll now move into our expectations for the second quarter of 2025 by reporting segment. Notwithstanding strong momentum in April in both segments, for the second quarter, we expect Pressure Control revenue to be down low to mid-single digits versus the $190 million reported in the first quarter. The anticipated decline is largely due to moderating levels of products sold per rig followed after a record first quarter and a decline in average activity levels.

現在，我將按報告部分介紹我們對 2025 年第二季的預期。儘管兩個部門在 4 月都表現強勁，但我們預計第二季壓力控制收入將較第一季的 1.9 億美元下降低至中等個位數。預期的下降主要是由於第一季創紀錄的銷售水準和平均活動水準下降導致每台鑽機銷售的產品數量減少。

From speaking with our customers, we believe that second-quarter average US land drilling activity will be down slightly from first-quarter average levels, and the industry will exit the second quarter with approximately 30 fewer land rigs operating than today. The activity decline is likely to continue as the year progresses and our customers reset their budgets, given weaker commodity prices and tariff impacts.

透過與客戶的溝通，我們認為第二季度美國陸地鑽井活動平均水平將比第一季略有下降，第二季末該行業運營的陸地鑽井平台數量將比現在減少約 30 台。鑑於大宗商品價格走弱和關稅影響，隨著時間的推移以及客戶重新調整預算，活動下滑可能會持續下去。

Adjusted EBITDA margins in our Pressure Control segment are expected to remain stable at 33% to 35% for the second quarter. This adjusted EBITDA guidance excludes approximately $3 million of stock-based comp expense within the segment. Regarding our Spoolable Technologies segment, we expect second-quarter revenue to be up mid- to high single digits from the first quarter.

我們壓力控制部門的調整後 EBITDA 利潤率預計第二季將保持穩定在 33% 至 35% 之間。調整後的 EBITDA 指引不包括該部門內約 300 萬美元的股票補償費用。關於我們的 Spoolable Technologies 部門，我們預計第二季的營收將比第一季成長中高個位數。

We believe normal second quarter seasonal expansion will more than offset the expectation of lower average US land activity levels. We booked record Q1 orders, providing us increased confidence in this outlook. Sales to international locations were up 30% quarter over quarter, driven by robust demand in Canada where we had our strongest quarter since acquiring this business.

我們認為，第二季正常的季節性擴張將足以抵消美國平均土地活動量下降的預期。我們獲得了創紀錄的第一季訂單，這讓我們對這一前景更有信心。受加拿大強勁需求的推動，國際地區的銷售額環比增長了 30%，加拿大是我們收購該業務以來表現最強勁的一個季度。

In April, we also produced and shipped our first commercial order of sour service pipe for high H2S applications. We're excited about the opportunities of this product, particularly in the Mid East market. We remain optimistic in our business performance despite uncertainty in the general macro environment.

今年 4 月，我們還生產並運送了首批用於高 H2S 應用的酸性服務管道商業訂單。我們對該產品的機會感到非常興奮，特別是在中東市場。儘管宏觀環境存在不確定性，但我們對業務表現仍保持樂觀。

As a reminder, we have a high-quality customer base in our Spoolable Technologies segment with approximately 70% of our revenue coming from majors, large E&Ps, and NOCs. These customers seem to be more resilient in their purchasing practices than the private and small E&Ps in a lower commodity price environment.

提醒一下，我們的 Spoolable Technologies 部門擁有高品質的客戶群，其中約 70% 的收入來自主要公司、大型 E&P 和 NOC。在商品價格較低的環境下，這些客戶的採購行為似乎比私人和小型勘探與生產企業更具彈性。

We expect adjusted EBITDA margins to be approximately 35% to 37% for Q2, which excludes $1 million of stock-based comp in the segment. Given our US manufacturing footprint, our Spoolable Technologies business is much less directly impacted by tariffs than our Pressure Control business. However, we have experienced an increase in steel input costs year to date. Although most of our steel inputs are sourced domestically, markets have adjusted pricing to reflect tariffs regardless of where the steel is sourced.

我們預計第二季調整後的 EBITDA 利潤率約為 35% 至 37%，其中不包括該部門 100 萬美元的股票補償。鑑於我們的美國製造足跡，我們的可捲繞技術業務受關稅的直接影響比壓力控制業務小得多。然而，今年迄今為止，鋼鐵投入成本增加。儘管我們大部分的鋼鐵投入都來自國內，但無論鋼鐵來源地如何，市場都會根據關稅調整價格。

Adjusted corporate EBITDA is expected to be a charge of approximately $4.5 million in Q2, which excludes $2 million of stock-based comp. Regarding our international expansion plans, we remain committed to establishing an international business but have no further updates that we can share at this time. I can assure you our leadership is very focused on this initiative.

預計第二季調整後企業 EBITDA 費用約為 450 萬美元，其中不包括 200 萬美元的股票補償。關於我們的國際擴張計劃，我們仍然致力於建立國際業務，但目前沒有可以分享的進一步更新資訊。我可以向你們保證，我們的領導階層非常重視這項措施。

In conclusion, we had a strong start to the year in both segments. Although the industry outlook is clouded considerably in the last 90 days, I remain confident that we will deliver strong returns and cash flows through this cycle, given our supportive customer base and our industry-leading diverse supply chain and manufacturing cost profile.

總而言之，我們在兩個領域都取得了強勁的開局。儘管過去 90 天行業前景相當不明朗，但鑑於我們支持的客戶群以及我們行業領先的多樣化供應鏈和製造成本狀況，我仍然相信我們將在此週期中實現強勁的回報和現金流。

My management and I are unfortunately not strangers to making the difficult decisions necessary to preserve returns during market cycles such as this. And we have shown -- and as we've shown in prior downturns, one positive implication is that operators tend to high-grade suppliers such as Cactus in times of supply uncertainty. We've received several recent inquiries about expanding business with customers in the areas we have not historically serviced, which supports this thesis.

不幸的是，我和我的管理層對於在這樣的市場週期中做出必要的艱難決定以保持回報並不陌生。我們已經證明——正如我們在之前的經濟低迷時期所證明的那樣，一個積極的影響是，在供應不確定的時候，運營商傾向於選擇 Cactus 等高級供應商。我們最近收到了一些關於擴大與我們以前未曾服務過的地區的客戶業務的詢問，這支持了這一論點。

And with that, I'll turn it back over to the operator and we can begin Q&A. Operator?

說完這些，我將把麥克風交還給接線員，然後我們就可以開始問答了。操作員？

(Operator Instructions) David Anderson, Barclays.

（操作員指示）巴克萊銀行的大衛安德森。

Hey, David. How are you?

嘿，大衛。你好嗎？

Vietnam, it sounds like you're going to be 100% shifting over from China in about a year. I'm curious on the Bossier City side, though, which appears to be an even greater structural advantage. However, you have talked about some higher costs from importing the steel. I'm curious if you could talk about how you've mitigated that so far.

越南，聽起來你們將在大約一年內 100% 從中國轉移過來。不過，我對博西爾城方面感到好奇，他們似乎有更大的結構優勢。然而，您談到了進口鋼材導致的成本增加。我很好奇您是否可以談談您目前是如何緩解這種情況的。

Have you been able to source in other areas? And even with that, I'm just kind of curious, net-net, how much of an advantage is it today in terms of cost for a customer in Bossier City versus China? I'm just curious what that looks like and what he's looking at.

您能在其他地區找到貨源嗎？即便如此，我只是有點好奇，整體而言，對於博西爾城的客戶來說，與中國相比，目前的成本優勢有多大？我只是好奇那是什麼樣子以及他在看什麼。

David, we've never described Bossier City as a low-cost operation. It's a fast turnaround sort of a robust manufacturing environment, which is, frankly, anything but high cost -- I mean, low cost. What it frankly does is protect our market share by ensuring that we make deliveries.

大衛，我們從來沒有把博西爾城描述成一個低成本的營運項目。這是一個快速週轉的強大製造環境，坦白說，它的成本絕不高——我的意思是低成本。坦白說，它的作用是透過確保我們交付產品來保護我們的市場份額。

So I can just tell you that the steps that we're taking -- and you're right, migrating to Vietnam for sourcing for the US in addition to several other initiatives will mean that our supply chain will still be heavily skewed towards non-Bossier City manufacturing despite the fact they account for 50%.

因此，我可以告訴你，我們正在採取的措施——你是對的，將美國採購轉移到越南，以及其他一些舉措，將意味著我們的供應鏈仍然嚴重偏向非博西爾城製造業，儘管它們佔了 50%。

I really don't think that we'll be able to get Bossier much over 50%. And the reason for that is there's not that much US manufactured steel. So although Bossier buys the steel in the US, that doesn't mean the steel has been sourced in the US.

我真的不認為我們能夠讓博西爾的支持率超過 50%。原因在於美國生產的鋼鐵產量不多。因此，儘管 Bossier 在美國購買鋼材，但這並不意味著鋼材的來源是在美國。

Understood. Understood on that. We often talk about passing through higher input cost to customers. And I don't mean to diminish your performance in the first quarter, but I'm wondering, have you seen any pull forward in the first quarter of customers trying to get ahead of some of these tariffs? I heard, Jay mentioned some -- pulling some more supply chain to get ahead of them. Curious how your customers are looking at that today.

明白了。明白了。我們經常談論將更高的投入成本轉嫁給客戶。我並不是想貶低你們第一季的業績，但我想知道，在第一季度，你們是否看到客戶為了避開某些關稅而採取了任何行動？我聽說，傑伊提到了一些——拉動更多的供應鏈以領先他們。好奇您的客戶今天是如何看待這一點的。

And in the past, we often talk about confidence in passing all this through to the customer. Are you still convinced that the customer can absorb all this? I realize you're a small part of this AFE, but I'm just curious how you think your customers are going to behave in this environment. Thank you.

過去，我們經常談論將這一切傳遞給客戶的信心。您是否仍相信客戶能夠接受這一切？我知道您只是這個 AFE 的一小部分，但我只是好奇您認為您的客戶在這種環境下會如何表現。謝謝。

Yes. So we -- maybe we didn't make this clear. Once Vietnam replaces China, we're going to be largely neutral in terms of tariffs, okay? So you understand that. I think that during this interim period, in addition to the various sourcing initiatives that we're taking, I am very confident that our customers will bridge the gap. So while our profit margin percentages will decline, our absolute profitability will be maintained. And so yes, I am confident of that.

是的。所以我們——也許我們沒有把這一點說清楚。一旦越南取代中國，我們在關稅方面將基本保持中立，好嗎？所以你明白這一點。我認為，在此過渡期間，除了我們正在採取的各種採購措施之外，我非常有信心我們的客戶將彌補這一差距。因此，雖然我們的利潤率百分比會下降，但我們的絕對獲利能力將保持不變。是的，我對此很有信心。

Great. Thank you, Scott.

偉大的。謝謝你，斯科特。

David, you had another -- what was your first question?

大衛，你還有另一個問題──你的第一個問題是什麼？

Stephen Gengaro, Stifel.

史蒂芬·根加羅（Stephen Gengaro），Stifel。

Thanks. Good morning, everybody. Well, thanks for all the details. I think my first question, and I just second on to what Dave asked. But when you look back at kind of prior downturns and cycles and your conversations with customers, you -- to my knowledge, you've never kind of lost a customer permanently, right? They tended to stick with you because of the quality of the product, et cetera.

謝謝。大家早安。好的，感謝您提供所有詳細資訊。我想我的第一個問題是，我只是回答了戴夫提出的問題。但是，當您回顧以前的經濟衰退和週期以及您與客戶的對話時，據我所知，您從來沒有永久地失去過客戶，對嗎？由於產品的品質等等，他們往往會繼續選擇你。

What do you expect to see in this downturn? Like is there any difference in sort of the way customers are acting or you expect them to act as they sort of navigate this uncertain period?

您預計此次經濟衰退將會帶來什麼結果？例如，在度過這個不確定的時期時，客戶的行為方式或您期望他們的行為方式有什麼不同嗎？

Well, forgive me, Steve, I'm going to answer David's question, the first question he asked. Are we seeing customers trying to pull forward purchases? Yes, we have had many, many requests from customers to pull forward purchases, 100% of which we have denied. So yes, they're doing the same thing that we're trying to do, but we've not allowed them to do that because that is not fair to the other -- our other customers to deplete our pre-tariff inventory. So apologize, David, for not responding.

好吧，原諒我，史蒂夫，我要回答大衛的問題，他問的第一個問題。我們是否看到顧客試圖提前購買？是的，我們收到很多客戶要求提前購買的請求，但我們都拒絕了。所以是的，他們正在做和我們嘗試做的同樣的事情，但我們不允許他們這樣做，因為這對其他客戶不公平——他們會耗盡我們關稅前的庫存。所以，大衛，很抱歉我沒有回覆。

And then Stephen, you want to know --

那麼史蒂芬，你想知道--

Well, it seems like you've obviously -- you won't -- we don't talk market share anymore, but it's high and you're a key cog in the wheel for your customers. So I would imagine that they are sticking by you and not kind of shopping lower price because of the sloppy environment, similar what they've done in prior cycles but I just want to make sure that's an accurate conclusion.

嗯，看起來你顯然——你不會——我們不再談論市場份額了，但它很高，而且你是客戶的關鍵人物。因此我可以想像，他們會堅持你的立場，而不會因為環境惡劣而選擇低價購物，這與他們在之前的周期中所做的類似，但我只是想確保這是一個準確的結論。

Yeah, I would say that it is an accurate conclusion. Our major customers are sticking by us. I'm not going to tell you that there are not competitors out there who are not going to try to take advantage of our request for support, but I don't see it as any different than it has been in the past. So our best defense has been transparency with our customers and we've always been transparent with them. We don't take advantage of them.

是的，我想說這是一個準確的結論。我們的主要客戶一直支持著我們。我不會告訴你，沒有競爭對手不會試圖利用我們的支援請求，但我認為這與過去沒有什麼不同。因此，我們最好的防禦措施就是對客戶保持透明，而且我們也始終對他們保持透明。我們不會利用他們。

And the fact that we're -- to my knowledge, we're really the only supplier who can guarantee delivery and sustainability. So while there might be a few competitors out there who might be able to say, I'm not going to pass the tariff impact, you know that as soon as they deplete their inventory, they're going to have to replace it with higher cost or not replace it at all. The customers with whom we do business, the most important thing to them is sustainability of supply chain, and we truly are the only ones that offer that.

事實上，據我所知，我們確實是唯一能夠保證交付和永續性的供應商。因此，儘管可能會有一些競爭對手說，我不會轉嫁關稅影響，但你知道，一旦他們耗盡庫存，他們將不得不以更高的成本進行替換，或者根本不進行替換。對於與我們有業務往來的客戶來說，最重要的是供應鏈的可持續性，而我們確實是唯一提供這種服務的公司。

Great. Thank you. And the second question I had was around sort of M&A opportunities in this environment. I mean, obviously, the cash balance is very good. You guys are always, I think always -- but you're seeking transactions that are proprietary, accretive, cash-generating, et cetera. What do you think you'll see in this macro environment? Like do you think this creates opportunities for you, given how strong the balance sheet is? And anything you can shed light on that topic would be helpful.

偉大的。謝謝。我的第二個問題是關於這種環境下的併購機會。我的意思是，顯然現金餘額非常好。你們總是，我想總是——但你們尋求的是專有的、增值的、產生現金的交易等等。您認為在這樣的宏觀環境下您會看到什麼？考慮到資產負債表的強勁，您認為這會為您創造機會嗎？如果您能闡明該主題的任何內容，那將會很有幫助。

Yeah, Steve, it's not a surprise to you that private equity can't give anything away right now. So I don't think there's a single investment in oilfield service that's owned by private equity that's not available at an attractive price.

是的，史蒂夫，私募股權現在無法放棄任何東西，這對你來說並不奇怪。因此，我認為私募股權投資的油田服務項目沒有一項不能以有吸引力的價格獲得。

FlexSteel was a rather unique opportunity. I can't -- I think maybe we have seen one or two that are similar to that. But right now, my focus is on the business that we're in, the industry that we're in. So I wouldn't dismiss another FlexSteel and I think there are going to be more and more FlexSteel looking opportunities, as I say, primarily from private equity, but our focus right now is on our industry.

FlexSteel 是一個相當獨特的機會。我不能——我想也許我們已經看過一兩個類似的例子。但現在，我的重點是我們所從事的業務、我們所處的行業。因此，我不會拒絕另一個 FlexSteel，我認為將會有越來越多的 FlexSteel 尋找機會，正如我所說，主要來自自私募股權，但我們目前的重點是我們的行業。

Great. Thanks for the color.

偉大的。謝謝你的顏色。

Scott Gruber, Citigroup.

花旗集團的史考特‧格魯伯。

I missed the revenue guide for Pressure Control in 2Q. Can you repeat that? And then on the EBITDA dollar preservation, which is super impressive, Dave asked about pushing pricing. I was also curious about start-up costs in Vietnam. Are those material? Will there be a weight on near-term profits or are those really de minimis?

我錯過了壓力控制第二季的收入指南。你能重複一遍嗎？然後，關於 EBITDA 美元保值，這非常令人印象深刻，戴夫詢問了推動定價的問題。我還對越南的啟動成本感到好奇。那些是材料嗎？這是否會對短期利潤造成壓力，還是這些只是微不足道的？

They're de minimis. I hate to use the word de minimis since it was in The Wall Street Journal today. Did you read that article?

它們是微不足道的。我不願意使用「最低限度」這個詞，因為它今天出現在《華爾街日報》上。你讀過那篇文章嗎？

No.

不。

They're de minimis tariffs. Anyway, I don't want to use the word de minimis. So our second-quarter guide revenue-wise, Alan?

它們是最低限度關稅。無論如何，我不想使用“最低限度”這個詞。那麼，艾倫，我們的第二季收入指南是怎麼樣的呢？

It was down low to mid-single digits, Scott.

斯科特，它已經下降到個位數的低位了。

Okay. I appreciate that. And then also on Vietnam, we saw the investments.

好的。我很感激。我們在越南也看到了投資。

Let me answer it, Vietnam, for you. I don't know if we've explained this clearly enough. We have two operations in Vietnam. And we have already funded the primary operation, the one that replaces Suzhou. So it's done and dusted and -- except for maybe, I don't know, a couple of hundred thousand dollars, there's really not much additional money to be spent. I think most of it, Joel, is IT-related?

讓我來為你解答吧，越南。我不知道我們是否已經解釋得夠清楚了。我們在越南有兩個業務。我們已經為主要營運項目（即替代蘇州營運項目）提供了資金。所以一切都塵埃落定了——除了大概幾十萬美元之外，真的沒有什麼額外的錢可以花。喬爾，我認為大部分都與 IT 有關？

All that is left is the final IT.

剩下的就是最後的IT了。

The final IT, which is always the last thing to go in. But it's already producing goods. So no, you'll have no surprises.

最後的 IT，總是最後才進入的。但它已開始生產商品。所以，你不會有任何意外。

Got it. And I was curious about the supply chain in Vietnam or the region really, your ability to kind of move away from the Chinese supply chain. Are you going to be able to source forgings and castings from either Vietnam or other countries in order to completely kind of move away from China?

知道了。我真的很好奇越南或該地區的供應鏈，你們是否有能力擺脫中國供應鏈。您是否能夠從越南或其他國家採購鍛造件和鑄件，以完全擺脫對中國的依賴？

You are a very clever questioner. So as much as I hate to respond to this question, I have to tell you that we will be more fully integrated -- can I leave it at that -- in Vietnam than we are in China.

你是一個非常聰明的提問者。因此，儘管我不願意回答這個問題，我必須告訴你，與中國相比，我們在越南的融合程度會更加全面——我可以就此打住嗎？

Sure. Since you gave me a compliment, we can leave it there. Okay, I appreciate it.

當然。既然你誇了我，那我們就到此為止。好的，我很感激。

Arun Jayaram, JPMorgan.

摩根大通的阿倫‧賈亞拉姆 (Arun Jayaram)。

Good morning. How do you see the mix of Vietnam's manufacturing as a total -- as a percentage of the total in Pressure Control kind of evolving as we move through year-end and, call it, midyear of next year?

早安.隨著我們進入年底以及明年年中，您如何看待越南製造業的整體結構——佔壓力控制總量的百分比——將如何變化？

Yes. So the ultimate goal is that Vietnam will provide 100% or close to 100% of what China provided for the US market. And the Chinese operation will devote its resources to the international markets.

是的。因此，最終目標是越南將為美國市場提供中國100%或接近100%的供應。中國公司將把資源投入國際市場。

Got it, got it. And you feel like you can get there by middle of 2026?

明白了，明白了。您覺得到 2026 年中期可以達成這個目標嗎？

The only thing really standing between us and that is the fact that we have to wait for API. API has this -- I think I mentioned this before, API has a requirement that you have to be up and running the four or five -- four months, Joel?

真正阻礙我們實現這一目標的唯一因素是我們必須等待 API。API 有這個 - 我想我之前提到過，API 有一個要求，你必須啟動並運行四到五個 - 四個月，喬爾？

Four months. You need to have done an internal audit --

四個月。你需要進行內部稽核--

Okay, so we already started. So once we get API in there and get our monogram, then we can get monogram product. But that's not to say we're not shipping already because we are. It just means that we can't ship fully assembled and tested. It means we have to finish it in Bossier and then we can monogram it.

好的，我們已經開始了。因此，一旦我們獲得 API 並獲得我們的字母組合，我們就可以獲得字母組合產品。但這並不是說我們還沒有發貨，因為我們已經發貨了。這只是意味著我們無法運送完全組裝和測試過的產品。這意味著我們必須在 Bossier 完成它，然後我們才能為其加上字母組合。

But we have to add value in Bossier. Once we see API monogram, it can stand alone and ship without any additional expense in Bossier City. But yes, Vietnam was designed to fully replace our US requirements.

但我們必須在博西爾增加價值。一旦我們看到 API 字母組合，它就可以獨立運作並運送至博西爾城，無需任何額外費用。但是，越南確實是為了完全取代我們對美國的要求而設計的。

Great, great. And then my follow-up is you guys use the average cost method of inventory for accounting purposes. So is it fair to say that 2Q will not fully reflect the impact of tariffs on Chinese goods? And so we're trying to maybe understand -- got quite a few questions on the buy side. Just maybe to help understand what type of margin or EBITDA impact could we see in the second half when your inventory perhaps reflects the leading-edge costs, unfortunately, because of these tariffs.

太好了，太好了。然後我的後續問題是，你們使用庫存平均成本法來進行會計。那麼，是否可以說第二季不會完全反映關稅對中國商品的影響？因此，我們試圖了解買方提出了不少問題。也許只是為了幫助了解當您的庫存可能反映前沿成本時，我們可能會在下半年看到什麼樣的利潤率或 EBITDA 影響，不幸的是，這是由於這些關稅造成的。

Yeah. Arun, this is Jay. So I would say we're on a standard cost basis, but we are rolling our standards, given these unusual tariff increases, and we have quite a bit of pre-tariff inventory on hand. So as we roll our standards and take up the cost, we also have the benefit of the amortization of the standard cost roll that provide us some relief over the back half of the year.

是的。阿倫，這是傑伊。所以我想說，我們是基於標準成本的，但考慮到這些不尋常的關稅上調，我們正在推行我們的標準，而且我們手頭上有相當多的關稅前庫存。因此，當我們推行標準並承擔成本時，我們還可以享受標準成本攤銷的好處，這為我們在下半年帶來了一些緩解。

And we turn our inventory about two times a year so we think that we will see some margin -- a little bit of margin compression in the back half of the year. But as we diversify the supply chain and sourcing initiatives, that will help mitigate some of the impact on the margins.

我們的庫存每年週轉兩次左右，因此我們認為下半年利潤率會有一點壓縮。但隨著我們供應鏈和採購計畫的多樣化，這將有助於減輕對利潤率的一些影響。

Great. Thanks a lot.

偉大的。多謝。

(Operator Instructions) Jeff LeBlanc, TPH.

（操作員指示） Jeff LeBlanc，TPH。

Good morning, Scott and team. Thank you for taking my question. I just wanted to see if you could share your thoughts on the potential ongoing Section 232 investigation that the administration has ordered by the Secretary of Commerce to conduct?

早上好，斯科特和團隊。感謝您回答我的問題。我只是想看看您是否可以分享一下對政府已下令商務部長進行的第 232 條調查的看法？

The additional -- 232 is steel, aluminum, and derivatives, right?

額外的－232 是鋼、鋁和衍生物，對嗎？

Right. I thought that the -- yes, I thought that the Secretary of Commerce was directed to conducting an ongoing investigation, the impact to the US -- or the US economy, excuse me.

正確的。我認為——是的，我認為商務部長被指示進行持續調查，調查對美國——或美國經濟的影響，對不起。

Oh, I'm sorry, to see how -- yes, I did read that. I don't -- I'm not sure I can really opine on that and I don't want to get political, but it's -- there's only one conclusion. The US does not have adequate steelmaking capacity to avoid imports. And so if we're going to ramp up manufacturing, we're going to rely upon countries who are willing to sell steel. So the answer is it's got to be inflationary. I don't see any way to avoid that.

哦，很抱歉，我看到了——是的，我確實讀過那個。我不知道——我不確定我是否真的能對此發表意見，我也不想涉及政治，但——只有一個結論。美國沒有足夠的鋼鐵產能來避免進口。因此，如果我們要擴大製造業，我們必須依賴那些願意出售鋼鐵的國家。所以答案是必然會導致通貨膨脹。我看不出有任何方法可以避免這種情況。

I'll just -- as an anecdote, we've always been a large, large consumer of forgings for our industry, way back from our Wood Group days and our Ingram Cactus days. Those forge companies who are capable of producing this unique sort of steel because we don't just buy steel, we buy shaped, forged steel, are either out of business completely and gone or they've converted their manufacturing to munitions.

我只是——作為一個軼事，從我們的 Wood Group 時代和 Ingram Cactus 時代開始，我們一直是我們行業鍛造的大型消費者。那些能夠生產這種獨特鋼材的鍛造公司（因為我們不只是購買鋼材，我們還購買成型的鍛造鋼材）要么已經完全停業，要么已經將生產轉向軍火生產。

In fact, a good friend of mine owns the largest forge company in our area, took us on a tour. And he is so full of government work that he just told me, I'm never going back. The cost is attractive -- I'm sorry, the selling price is attractive and the sustainability is pretty much assured. And he's just not terribly interested in the volatility of oilfield service requirements. So that's a -- they can send us money as they want. That's the conclusion. There ain't no steel.

事實上，我的一個好朋友擁有我們地區最大的鍛造公司，他帶我們參觀了。他忙於政府工作，所以他告訴我，我永遠不會回去。成本很有吸引力——對不起，售價很有吸引力，而且可持續性幾乎可以保證。他對油田服務需求的波動性並不太感興趣。所以，他們可以隨意匯款給我們。這就是結論。沒有鋼鐵。

Okay. So the idea, though, is that there wouldn't be incremental sanctions or incremental tariffs related to that investigation?

好的。那麼，您的想法是，不會出現與該調查相關的增量製裁或增量關稅嗎？

I mean, it's -- the existing -- sorry for interrupting you, the existing 232 have -- I don't -- it's got to be inflationary. So additional 232 tariffs could be nothing but more inflationary. There is no substitute for imported steel. And I don't see anybody building a steel mill right now suitable for our industry.

我的意思是，現有的——抱歉打斷你，現有的 232 有——我不——它必然會導致通貨膨脹。因此，額外的232項關稅只會加劇通貨膨脹。進口鋼材無可取代。我現在還沒有看到任何人建造適合我們行業的鋼鐵廠。

Okay. Thank you very much for the color. I'll hand the call back to the operator.

好的。非常感謝你提供的顏色。我會把電話轉回給接線生。

Don Crist, Johnson Rice.

唐克里斯特、約翰遜賴斯。

Good morning, guys. I wanted to ask one question on the sour flexible pipe that you -- FlexSteel pipe that you ship. Obviously, that's opening up a new market. And just kind of your thoughts around how big you think or how material that order is and kind of how big that market you think can grow in the next couple of years. Because I know there's a lot of sour oil out there.

大家早安。我想問一個關於你們運送的酸性柔性管道——FlexSteel 管道的問題。顯然，這正在開拓一個新的市場。您認為這個訂單有多大，或者有多重要，以及您認為這個市場在未來幾年能成長到多大。因為我知道那裡有很多酸性油。

Yeah. This is Steve. So in terms of the North American market, I think wells will just continue to get more sour over time, so we think it's a growing opportunity in North America. But given kind of the robustness of our pipe and the makeup, it's not -- we're certainly not the cheapest alternative.

是的。這是史蒂夫。因此就北美市場而言，我認為隨著時間的推移，油井的酸性會越來越強，所以我們認為這是北美的成長機會。但考慮到我們的管道和結構的堅固性，我們肯定不是最便宜的替代品。

In general, when people choose FlexSteel, they choose it for the reliability, robustness and they're willing to pay the premium and that's going to be the case in sour service. So it's going to be, I think, a small percentage of our sales but a growing percentage over time.

一般來說，當人們選擇 FlexSteel 時，他們選擇它是因為它的可靠性、堅固性，並且他們願意支付溢價，在酸性服務中也是如此。因此，我認為，這將只占我們銷售額的一小部分，但隨著時間的推移，這一比例將不斷增長。

It's more material, more immediately, I think, once we have some qualification testing, which I think will be sort of something within a 12-month time frame for the Middle East because in the Middle East, significant -- I mean, most production has a pretty high H2S content.

我認為，一旦我們進行了一些資格測試，它就會變得更加重要，更加直接，我認為這將在中東地區 12 個月的時間範圍內完成，因為在中東，重要的是 — — 我的意思是，大多數產品的 H2S 含量都相當高。

So we see a lot of opportunity there. Traditionally, in the Middle East, we've been more used in water injection applications, but we're really pushing the use of our piping unconventionals as well as in the sour area. So we're pretty excited about the potential.

因此我們看到那裡有很多機會。傳統上，在中東，我們更多地用於注水應用，但我們確實在推動管道非常規技術以及在酸性地區的使用。因此，我們對其潛力感到非常興奮。

Right, yeah. And that's kind of what I was pointing towards was the Middle East using a whole lot more pipe because of its sour classification. I'll turn it back to the operator. Thank you.

是的，是的。這就是我所指的，中東地區由於其酸性分類而使用了更多的管道。我會將其轉回給接線生。謝謝。

That ends our Q&A session and we appreciate your participation. I would now like to turn the call back over to Scott Bender, Chairman and CEO, for closing remarks. Please go ahead.

我們的問答環節到此結束，感謝您的參與。現在，我想將電話轉回給董事長兼執行長 Scott Bender 來做最後發言。請繼續。

Okay. Thanks, everybody, for listening. I know this tariff issue is on everybody's mind. If you're all in here, I'd pat you on the head and tell you that I'm very comfortable that we have this under control.

好的。謝謝大家的聆聽。我知道每個人都關心關稅問題。如果你們都在這裡，我會拍拍你們的頭並告訴你們，我很放心我們已經控制住了局面。

I also would add that historically, downturns have been good for our business. They've always created opportunities with new customers, and we're already seeing those opportunities right now, in fact, a little earlier than I had anticipated. So just as we've always come out of these periods stronger, I'm really comfortable that we'll do the same. Anyway, everybody, have a good day, and thanks for calling in.

我還要補充一點，從歷史上看，經濟低迷對我們的業務有利。他們總是為新客戶創造機會，事實上，我們現在已經看到了這些機會，比我預期的要早一點。因此，正如我們總是能走出這些時期並變得更加強大一樣，我非常確信我們也會這樣做。無論如何，祝大家有愉快的一天，感謝您的來電。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。