Encore Wire Corp (WIRE) 2023 Q1 法說會逐字稿

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Encore Wire Corporation First Quarter 2023 Earnings Conference Call. (Operator Instructions). Thank you. Bret Eckert, you may begin your conference.

早上好。我叫艾瑪，今天我將擔任你們的會議接線員。此時，我想歡迎大家參加 Encore Wire Corporation 2023 年第一季度收益電話會議。 （操作員說明）。謝謝。 Bret Eckert，你可以開始你的會議了。

Thanks, Emma. Good morning, and welcome to the Encore Water (sic) [Wire] Corporation Quarterly Conference Call. I'm Bret Eckert, Executive Vice President and Chief Financial Officer of Encore Wire. With me this morning is Daniel Jones, President, CEO and Chairman of the Board. In a minute, we will review Encore's financial results for the first quarter ended March 31, 2023.

謝謝，艾瑪。早上好，歡迎來到 Encore Water (sic) [Wire] 公司季度電話會議。我是 Encore Wire 的執行副總裁兼首席財務官 Bret Eckert。今天早上和我一起的是總裁、首席執行官兼董事會主席丹尼爾瓊斯。稍後，我們將回顧 Encore 截至 2023 年 3 月 31 日的第一季度財務業績。

After the financial review, we will take any questions you may have. Before we review the financials, let me indicate that throughout this conference call, we may be making certain statements that might be considered to be forward-looking. In order to comply with certain securities legislation and instead of attempting to identify each particular statement as forward-looking, we advise you that all such statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed today.

財務審查後，我們將回答您可能提出的任何問題。在我們審查財務數據之前，讓我指出，在整個電話會議中，我們可能會做出某些可能被認為具有前瞻性的陳述。為了遵守某些證券法規，而不是試圖將每個特定的聲明都確定為前瞻性的，我們建議您所有此類聲明都涉及某些風險和不確定性，這些風險和不確定性可能導致實際結果與今天討論的結果大不相同。

I refer each of you to the company's SEC reports and news releases for a more detailed discussion of these risks and uncertainties. Also, reconciliations of non-GAAP financial measures discussed during this conference call to the most directly comparable financial measures presented in accordance with generally accepted accounting principles, including EBITDA, which we believe to be useful supplemental information for investors, are posted on our website. I'll now turn the call over to Daniel for some opening remarks. Daniel?

我建議你們每個人參閱公司的 SEC 報告和新聞稿，以更詳細地討論這些風險和不確定性。此外，本次電話會議期間討論的非 GAAP 財務指標與根據公認會計原則（包括我們認為對投資者有用的補充信息的 EBITDA）提出的最直接可比財務指標的對賬已發佈在我們的網站上。我現在將電話轉給 Daniel 做一些開場白。丹尼爾？

Good morning, everyone. Thank you for joining us on the call and for your interest in Encore Wire. We appreciate your continued investment, confidence and support. The strong results for the first quarter ended March 31, 2023, marked our eighth consecutive quarter of elevated margins. Stable demand in the quarter, coupled with continued domestic and global uncertainties. And persistent tightness in the availability of copper drove metal prices higher in the first quarter, while other raw materials costs remained fairly flat.

大家，早安。感謝您加入我們的電話會議並感謝您對 Encore Wire 的關注。感謝您持續的投資、信任和支持。截至 2023 年 3 月 31 日的第一季度業績強勁，標誌著我們連續第八個季度實現高利潤率。本季度需求穩定，加上國內和全球持續的不確定性。銅供應持續緊張推動金屬價格在第一季度走高，而其他原材料成本保持平穩。

Our key suppliers continue to perform at a high level, which positioned us favorably to meet customer demand in a timely manner. By continuing to execute on our core values of providing unbeatable customer service and higher fill rates, ongoing margin abatement remained gradual in the first quarter of 2023. I continue to believe that our operational agility, speed to market and deep supplier relationships remain competitive advantages in our serving -- serving our customers' evolving needs.

我們的主要供應商繼續保持高水平表現，這使我們能夠及時滿足客戶需求。通過繼續執行我們提供無與倫比的客戶服務和更高填充率的核心價值觀，持續的利潤率下降在 2023 年第一季度仍然是漸進的。我仍然相信我們的運營敏捷性、上市速度和深厚的供應商關係仍然是競爭優勢我們的服務——滿足客戶不斷變化的需求。

We remain committed to reinvesting in our business with current and planned projects focused on increasing capacity, efficiency and vertical integration across our campus. We also remain committed to shareholder capital return as evidenced by our significant share repurchases in the quarter. Copper unit volumes were flat in the first quarter of 2023 versus the first quarter of 2022. Copper spreads decreased 4.2% on a sequential quarter basis as compared to the fourth quarter ended December 31, 2022.

我們仍然致力於通過當前和計劃中的項目對我們的業務進行再投資，重點是提高整個校園的容量、效率和垂直整合。我們還繼續致力於股東資本回報，我們在本季度大量回購股票就證明了這一點。 2023 年第一季度銅單位交易量與 2022 年第一季度持平。與截至 2022 年 12 月 31 日的第四季度相比，銅價差環比下降 4.2%。

We continue to believe Encore Wire remains well positioned to capture market share in the current economic environment. As we address the near-term challenges, we remain focused on the long-term opportunities for our business, including improving our position as a sustainable environmentally responsible company in our industry. We believe that our superior order fill rates and deep vertical integration continue to enhance our competitive position.

我們仍然相信 Encore Wire 仍然處於有利地位，可以在當前的經濟環境中佔據市場份額。在應對近期挑戰的同時，我們仍然專注於我們業務的長期機遇，包括提高我們在行業中作為可持續的環境責任公司的地位。我們相信，我們卓越的訂單完成率和深度垂直整合將繼續提升我們的競爭地位。

As orders come in from electrical contractors, our distributors can continue to depend on us for quick deliveries coast to coast. I'll now turn the call over to Bret to cover the financial results. Bret?

由於訂單來自電氣承包商，我們的分銷商可以繼續依賴我們快速交付東海岸到西海岸。我現在將電話轉給布雷特來報導財務結果。布雷特？

Thank you, Daniel. Net sales for the first quarter ended March 31, 2023, were $660.5 million compared to $723.1 million for the first quarter of 2022. Copper unit volume was flat in the first quarter of 2023 versus the first quarter of 2022. The decrease in net sales was driven by a decrease in the average selling price in the first quarter of 2023 compared to the first quarter of 2022. Aluminum wire represented 14.6% of net sales in the first quarter of 2023.

謝謝你，丹尼爾。截至 2023 年 3 月 31 日的第一季度淨銷售額為 6.605 億美元，而 2022 年第一季度為 7.231 億美元。2023 年第一季度銅單位銷量與 2022 年第一季度持平。淨銷售額下降幅度為受 2023 年第一季度平均售價與 2022 年第一季度相比下降的推動。鋁線佔 2023 年第一季度淨銷售額的 14.6%。

Gross profit percentage for the first quarter of '23 was 31.1% compared to 33.7% in the first quarter of 2022. The average selling price of wire per copper pound sold decreased 11.8% in the first quarter of 2023 compared to the first quarter of 2022, while the average cost of copper pound purchased decreased 8.2%. This resulted in the gradual abatement of copper spreads in the quarter, primarily driven by a decrease in the average selling price noted above, offset somewhat by increased aluminum spreads, which resulted in the decreased gross profit margin in the first quarter of 2023 compared to the first quarter of 2022.

23 年第一季度毛利率為 31.1%，而 2022 年第一季度為 33.7%。與 2022 年第一季度相比，2023 年第一季度每磅銅線的平均售價下降 11.8% ，而採購銅磅的平均成本下降了 8.2%。這導致本季度銅價差逐漸縮小，這主要是受上述平均售價下降的推動，但在一定程度上被鋁價差的增加所抵消，這導致 2023 年第一季度的毛利率與2022 年第一季度。

The increase in SG&A in the quarter was primarily due to an increase in stock appreciation rights, or SARs, expense driven by the increase in our stock price at March 31, 2023, compared to December 31, 2022. We recorded $13.2 million in SARs expense in the first quarter 2023 compared to booking of $4.8 million SARs benefit in the first quarter of 2022, resulting in approximately an $18 million increase in expenses period-over-period.

本季度 SG&A 的增加主要是由於 2023 年 3 月 31 日的股價與 2022 年 12 月 31 日相比上漲導致股票增值權或 SAR 費用增加。我們記錄了 1320 萬美元的 SAR 費用與 2022 年第一季度 480 萬美元的 SAR 收益相比，2023 年第一季度的支出同比增加了約 1800 萬美元。

No SARs were granted subsequent to January of 2020 as this plan was replaced with a deferred cash plan. Net income for the first quarter of 2023 was $119.5 million versus $161.5 million in the first quarter of 2022. Fully diluted earnings per common share were $6.50 in the first quarter of 2023 versus $7.96 in the first quarter of 2022. We started off 2023 strong while navigating stable demand, fluctuating more material costs and continued gradual margin abatement.

2020 年 1 月之後沒有授予任何 SAR，因為該計劃已被遞延現金計劃取代。 2023 年第一季度的淨收入為 1.195 億美元，而 2022 年第一季度為 1.615 億美元。2023 年第一季度的完全攤薄後每股普通股收益為 6.50 美元，而 2022 年第一季度為 7.96 美元。我們在 2023 年開局強勁，同時導航穩定的需求，波動更多的材料成本和持續逐漸減少的利潤率。

We also faced headwinds in February and March, with the banking prices domestically and globally. Our team rose above the challenges to deliver another strong quarter. Persistent tightness in the availability of certain raw materials, ongoing global uncertainties and the continued suppressed availability of skilled labor kept overall spreads elevated in the first quarter of 2023. As Daniel stated, this marks the eighth consecutive quarter of elevated margins and spreads.

我們在 2 月和 3 月也面臨不利因素，包括國內和全球的銀行業價格。我們的團隊克服了挑戰，創造了另一個強勁的季度。 2023 年第一季度，某些原材料的供應持續緊張、持續的全球不確定性以及熟練勞動力的持續受壓導致整體利差上升。正如 Daniel 所說，這標誌著利潤率和利差連續第八個季度上升。

Our balance sheet remains very strong. We have no long-term debt. Our revolving line of credit remains untapped. We had $697.4 million in cash at the end of the quarter. During the first quarter, we repurchased 702,478 shares of our common stock for a total cash outlay of $127.1 million. Since the first quarter of 2020, we have repurchased 3,674,755 shares of our common stock at an average price of $119.38 for a total cash outlay of $438.7 million.

我們的資產負債表仍然非常強勁。我們沒有長期債務。我們的循環信貸額度仍未動用。截至本季度末，我們擁有 6.974 億美元現金。第一季度，我們回購了 702,478 股普通股，現金支出總額為 1.271 億美元。自 2020 年第一季度以來，我們以平均 119.38 美元的價格回購了 3,674,755 股普通股，現金支出總額為 4.387 億美元。

We also declared a $0.02 cash dividend during the quarter. In addition, in February of 2023, the Board of Directors extended the repurchase authorization for up to 2 million shares of our common stock through March 31, 2024, with 1,297,522 shares remaining forward repurchase under that authorization. The incremental investments announced in July of 2021 continue in earnest, focused on broadening our position as a low-cost manufacturer in the sector and increasing manufacturing capacity to drive growth.

我們還在本季度宣布了 0.02 美元的現金股息。此外，2023 年 2 月，董事會將我們最多 200 萬股普通股的回購授權延長至 2024 年 3 月 31 日，根據該授權，還有 1,297,522 股股票可提前回購。 2021 年 7 月宣布的增量投資將繼續認真進行，重點是擴大我們作為該行業低成本製造商的地位，並提高製造能力以推動增長。

In 2022, we began construction on a new state-of-the-art cross-linked polyethylene or XLPE compounding facility to deepen vertical integration related to wire and cable installation. XLPE insulation is used in many applications, including data centers, oil and gas, transit, wastewater treatment facilities, utilities and wind and solar applications. We anticipate the new facility will be substantially completed by the end of the third quarter of 2023.

2022 年，我們開始建設新的最先進的交聯聚乙烯或 XLPE 複合設施，以深化與電線電纜安裝相關的垂直整合。 XLPE 絕緣材料用於許多應用，包括數據中心、石油和天然氣、運輸、廢水處理設施、公用事業以及風能和太陽能應用。我們預計新設施將在 2023 年第三季度末基本完工。

Capital spending in 2023 through 2025 will further expand vertical integration in our manufacturing processes to reduce costs as well as modernize select wire manufacturing facilities to increase capacity and efficiency and improve our position as a sustainable and environmentally responsible company. Total capital expenditures were $148.4 million in 2022 and $31.8 million in the first quarter of 2023.

2023 年至 2025 年的資本支出將進一步擴大我們製造流程的垂直整合，以降低成本，並對精選線材製造設施進行現代化改造，以提高產能和效率，並提升我們作為可持續發展和對環境負責的公司的地位。 2022 年總資本支出為 1.484 億美元，2023 年第一季度為 3180 萬美元。

We expect total capital expenditures to range from $160 million to $180 million in 2023, $150 million to $170 million in 2024 and $80 million to $100 million in 2025. We expect to continue to fund these investments with existing cash reserves and operating cash flows. I will now turn the floor over to Daniel for a few final remarks.

我們預計 2023 年總資本支出將在 1.6 億美元至 1.8 億美元之間，2024 年將在 1.5 億美元至 1.7 億美元之間，2025 年將在 8000 萬至 1 億美元之間。我們預計將繼續以現有現金儲備和經營現金流為這些投資提供資金。我現在將發言權交給 Daniel 作最後的發言。

Thank you, Bret. Our strong start in the first quarter positions us well for 2023. The consistent success further attests to the strength of our One campus, vertically integrated low-cost business model, which continues to thrive under current market conditions. I believe our single-site business model provides us with efficiency and scale advantages compared to the multi-location operational models standard in our sector.

謝謝你，布雷特。我們在第一季度的強勁開局為我們 2023 年做好了準備。持續的成功進一步證明了我們的 One Campus、垂直整合的低成本商業模式的實力，該模式在當前市場條件下繼續蓬勃發展。我相信，與我們行業的多地點運營模式標準相比，我們的單點業務模式為我們提供了效率和規模優勢。

This remains a competitive advantage, giving us unmatched operational agility and speed to market and serving our customers' evolving needs. Despite persistent tightness and availability of certain raw materials, our supplier partners continue to deliver on the commitments to Encore. We wouldn't have this level of success without the consistent exceptional performance of our long-term suppliers.

這仍然是一項競爭優勢，為我們提供了無與倫比的運營靈活性和上市速度，並滿足了客戶不斷變化的需求。儘管某些原材料持續緊張且供應充足，但我們的供應商合作夥伴繼續履行對 Encore 的承諾。如果沒有我們的長期供應商始終如一的出色表現，我們就不會取得如此成功。

The labor market also remains tight and a limiting constraint for many companies. Operationally, we continue to grow through investments that enhanced our service model, increased capacity, reduced cost and focused on the health and wellness of our employees. Looking ahead, we remain solely committed to execute upon the core values of the company, unbeatable customer service, minimal operations and quick deliveries coast to coast.

勞動力市場仍然緊張，是許多公司的限制因素。在運營方面，我們繼續通過投資增強我們的服務模式、增加容量、降低成本並關注員工的健康和福利來實現增長。展望未來，我們仍然完全致力於執行公司的核心價值觀、無與倫比的客戶服務、最小化運營和快速交付。

I remain confident in the strength of the Encore team in place as we stand ready to navigate any challenges in our path. I want to close by thanking our employees for their hard work and commitment to safety, quality and excellence. Our continued success would not happen without their outstanding contributions. Our strong financial results have allowed us the opportunity to incrementally invest in our team as we position Encore as an employer of choice in the sector. I also want to thank our shareholders for their continued support. And Emma, we'll now take questions from our listeners.

我對 Encore 團隊的實力充滿信心，因為我們隨時準備應對我們前進道路上的任何挑戰。最後，我要感謝我們的員工的辛勤工作以及對安全、質量和卓越的承諾。沒有他們的傑出貢獻，我們就不會取得持續的成功。我們強勁的財務業績使我們有機會逐步投資於我們的團隊，因為我們將 Encore 定位為該行業的首選雇主。我還要感謝我們的股東一直以來的支持。艾瑪，我們現在將接受聽眾的提問。

(Operator Instructions). Your first question comes from the line of Julio Romero with Sidoti & Company.

（操作員說明）。你的第一個問題來自 Julio Romero 與 Sidoti & Company 的合作。

To start off on the copper volumes realized in the quarter, flat year-over-year, if you could maybe speak to what tempered volumes there? Bret, I think you called out in the prepared remarks some headwinds with the banking crisis in February and March. If you can elaborate on that impact at all? And has that impact continued into the second quarter?

從本季度實現的銅交易量開始，同比持平，如果你能談談那裡有哪些回火交易量？布雷特，我想你在準備好的發言中指出了 2 月和 3 月銀行業危機帶來的一些不利因素。您能否詳細說明這種影響？這種影響是否會持續到第二季度？

Well, as you know, Julio, we're not going to really touch on anything post March 31. We definitely saw, like everyone in the country saw and even globally, there was a lot of uncertainty as you got into February and into March, with what was going on with the banks, what was going to happen with interest rates. That always leans in on the commodity, right? Is the dollar stronger, is the dollar weaker? You've got to play with regard to that.

好吧，正如你所知，胡里奧，我們不會真正觸及 3 月 31 日之後的任何事情。我們確實看到，就像全國乃至全球的每個人都看到的那樣，進入 2 月和 3 月時存在很多不確定性，隨著銀行發生的事情，利率會發生什麼。這總是依賴於商品，對吧？美元走強，美元走弱？你必須考慮到這一點。

So you saw some fluctuation in those copper prices. Even though availability is still very, very, very tight and the shape of copper is never been more critical. And so that had a little bit of headwind that we experienced. We also saw which -- what happens during those times is distributors tend to take a look at their inventory and take their inventory levels down a little bit because they see a lot of fluctuation in the copper balance. They want to get a little bit leaner.

所以你看到這些銅價出現了一些波動。儘管可用性仍然非常、非常、非常緊張，而且銅的形狀從未像現在這樣重要。因此，我們遇到了一些不利因素。我們還看到了——在那段時間發生的事情是分銷商傾向於查看他們的庫存並將他們的庫存水平降低一點，因為他們看到銅平衡有很大的波動。他們想瘦一點。

So we did see distributor inventories come down 15 to 20 days. That's actually a good thing, in my mind. You're coming into the second quarter. They have a lot leaner inventories, which plays very well into our immediate order immediate ship business model. And so I like that position as you head into the second quarter.

所以我們確實看到分銷商庫存下降了 15 到 20 天。在我看來，這實際上是一件好事。你即將進入第二季度。他們有很多更精簡的庫存，這在我們的即時訂單即時發貨業務模型中發揮了很好的作用。所以當你進入第二季度時，我喜歡這個位置。

Got it. I appreciate the detail there. So I guess, fair to say you've got available capacity to generate volumes above the first quarter run rate?

知道了。我很欣賞那裡的細節。所以我想，公平地說你有可用的能力來產生高於第一季度運行率的數量？

Absolutely. I mean we've been adding capacity, but you're always going to take a look at really balancing volume and margin. You're looking to optimize your capacity and utilization. You've got to continue to focus on customer service and profitability, and margin is important in that process. And so those decisions are made on an order-by-order basis.

絕對地。我的意思是我們一直在增加容量，但你總是要看看真正平衡的數量和利潤。您希望優化您的容量和利用率。你必須繼續關注客戶服務和盈利能力，而利潤率在這個過程中很重要。因此，這些決定是在逐個訂單的基礎上做出的。

Got it. And then maybe to turn to SG&A. I know you called out in the press release the impact of the $13 million of stock appreciation rights. Maybe talk about how you expect SG&A to trend for the remainder of the year?

知道了。然後也許轉向 SG&A。我知道你在新聞稿中提到了 1300 萬美元股票增值權的影響。也許談談您期望 SG&A 在今年剩餘時間裡的趨勢？

I think it's been tracking. I think last year is probably a good indication. There's -- everyone had some wage inflation, and we'll see a little bit of that coming into it from last year to this year, but some of that you saw even in last year's numbers. The SARs expense is just something we can't control. It's why we went away from them.

我認為它一直在跟踪。我認為去年可能是一個很好的跡象。每個人都有一些工資上漲，從去年到今年我們會看到其中的一點點，但其中一些甚至在去年的數字中也看到了。特區的開支是我們無法控制的。這就是我們離開他們的原因。

The stock price went from $137 at the end of December to $185 and change at the end of March. And so that delta is what you pick up and revalue every single quarter. And so you'll potentially get some of that back going into next quarter, depending on how things settle out. So that's gonna ebb and flow. But the standard cost, the commission's freight's been looking better, the availability of freight is better. So I think all in, you're gonna to see -- I think last year was a pretty good representative number.

股價從 12 月底的 137 美元漲至 185 美元，並在 3 月底發生變化。因此，這個增量就是你在每個季度都獲得併重新估價的東西。因此，您可能會在下個季度收回部分資金，具體取決於事情的解決方式。所以這會潮起潮落。但是標準成本，佣金的運費一直在看，運費的可用性更好。所以我認為總而言之，你會看到——我認為去年是一個非常有代表性的數字。

Your next question comes from the line of Brent Thielman with D.A. Davidson.

你的下一個問題來自 Brent Thielman 和 D.A.戴維森。

Maybe just picking up on Julio's question about just the volume, Daniel. I'd love to hear to what you're hearing from the customers. And overall, do you still feel like you're in a demand environment that supports the capacity investments that you've been making and still making?

也許只是回答 Julio 關於音量的問題，Daniel。我很想听聽您從客戶那裡聽到的消息。總的來說，您是否仍然覺得自己處於一個支持您一直在進行並且仍在進行的容量投資的需求環境中？

Well, there's still areas that are -- the frequency of quotes is still pretty good, specifically to the industrial side. The commercial market is still going along good. The residential piece that we talked about a couple of quarters back saw the biggest hit, if you will. But again, the volatility in the quarter that had to do with Comex prices fluctuating as much as $0.55 or $0.60 during the quarter, some of the projects that are being discussed about may get pushed out a week, out a month, out a quarter, whatever it might be.

嗯，還有一些領域——報價的頻率仍然相當不錯，特別是在工業方面。商業市場仍然進展順利。如果你願意的話，我們在幾個季度前談到的住宅項目受到了最大的打擊。但同樣，本季度與 Comex 價格波動有關的波動高達 0.55 美元或 0.60 美元，正在討論的一些項目可能會被推遲一周、一個月、一個季度，不管它是什麼。

Those things happen. We certainly are not gearing our capacity up for one specific quarter. The capacity that we have geared toward that service model where we feel -- where we know our strength is, is what we're after. We do have an opportunity to catch up on some items, which is fantastic for the service, which is what we're after when we started adding the capacity piece. But again, that volatility in the quarter of Comex, coupled with the geopolitical forces, you've got the bank issue that was not really giving folks a lot of confidence that lasted about a week or 10 days.

那些事情發生了。我們當然不會為一個特定的季度增加產能。我們針對我們所感受到的服務模式的能力 - 我們知道我們的力量所在，這就是我們所追求的。我們確實有機會趕上一些項目，這對服務來說非常棒，這就是我們開始添加容量部分時所追求的。但同樣，Comex 季度的波動，加上地緣政治力量，銀行問題並沒有真正給人們很大的信心，持續了大約一周或 10 天。

There was a pause there that you could see and feel. But as far as where the volume ended versus the comp last year's first quarter, pretty happy with the numbers. And I'm pretty bullish going forward on what's happening in that industrial and commercial. Each one of those segments are doing real well. There are pockets that are still pretty hot versus other geographical spots. But for the most part, the industrial and the commercial both are moving along at about the pace that we thought would happen.

那裡有一個你可以看到和感覺到的停頓。但就去年第一季度的銷量與競爭對手相比而言，我們對這些數字非常滿意。而且我非常看好該工業和商業領域正在發生的事情。這些細分市場中的每一個都做得很好。與其他地理區域相比，有些地方仍然很熱。但在大多數情況下，工業和商業都在以我們認為會發生的速度前進。

And would you call your customer, or I guess, distributor inventory levels into the second quarter sort of unusually low, especially considering this is when the construction season ramps up?

你會告訴你的客戶，或者我猜，經銷商庫存水平進入第二季度時異常低，特別是考慮到這是施工季節增加的時候？

When you see the movement in copper like you have and the uncertainty with interest rates, they may be on the leaner side going into the second quarter, Julio (sic) [Brent]. They're definitely towards that side of it. You typically start to see a build as you get into the summer months, so they can be responsive to that demand. But they -- it's not unusual to come in a little bit lean like this, particularly when you got the volatility in copper and you've got a partner that you know that can deliver, right? So it takes it off their balance sheet.

當你看到銅的走勢和利率的不確定性時，它們可能會在進入第二季度時處於較弱的一面，胡里奧（原文如此）[布倫特]。他們肯定是朝著它的那一邊。您通常會在進入夏季時開始看到構建，因此他們可以響應該需求。但是他們 - 像這樣精簡一點點並不罕見，特別是當你的銅價波動並且你有一個你知道可以提供的合作夥伴時，對吧？所以它把它從他們的資產負債表上拿掉了。

And the inventory balance, Bret, was quite a bit higher than last quarter and especially last year, and your mark raw material costs presumably are down. Can we infer that you're sitting on any larger sort of balance the finished goods that just didn't go in Q1 that ultimately should in the second quarter?

Bret 的庫存餘額比上個季度，尤其是去年要高很多，而且您的標記原材料成本可能下降了。我們能否推斷出您正處於任何更大的平衡狀態，即最終在第二季度最終應該在第一季度沒有進入的成品？

Well, no. I mean, if you look at this, we've been -- since we opened a service center in May of '21, we've talked about needing to build inventory levels, right? The key to this business is the shape of the inventory as well, right, having a little bit more raw in this market when copper is as tight as it is and the shape is, as challenged as it is, gives us more flexibility, and we've got the balance sheet to sustain it.

好吧，不。我的意思是，如果你看看這個，我們一直 - 自從我們在 21 年 5 月開設服務中心以來，我們一直在討論需要建立庫存水平，對嗎？這項業務的關鍵也是庫存的形狀，對吧，當銅如此緊張且形狀如此挑戰時，在這個市場上擁有更多的原材料，這給了我們更大的靈活性，而且我們有資產負債表來維持它。

Having more width is super important to get closer to the end shape, right? I can make it any color, I can cable it, I can -- you just tell me what you want, right? And so we do lean in to get a little bit more speed in customer service with regard to that. And then there was a continued commitment to build finished goods. And all in for the quarter, copper was up, even though the other raw materials were fairly flat. And so all that's what you see in the balance sheet of inventory.

擁有更大的寬度對於接近最終形狀非常重要，對吧？我可以把它變成任何顏色，我可以用電纜連接它，我可以——你只要告訴我你想要什麼，對吧？因此，我們確實傾向於在這方面提高客戶服務的速度。然後繼續致力於製造成品。總而言之，本季度銅價上漲，儘管其他原材料價格持平。這就是您在庫存資產負債表中看到的所有內容。

Okay. And then it looks like aluminum spreads were, I mean, still favorable, but overall aluminum revenue was down from the fourth quarter I guess, on an absolute basis, same as a percentage of total revenue. Sort of a 2-parts question. Did that have a big impact on the gross margin comparison to Q4? Because I think aluminum has benefited your margins from the past few quarters. And then just the second part of that would be, was aluminum also caught up in some of that distributor sort of destocking that you talked about?

好的。然後看起來鋁價差，我的意思是，仍然有利，但我猜整體鋁收入從第四季度開始下降，在絕對基礎上，與總收入的百分比相同。有點像兩部分的問題。與第四季度相比，這對毛利率有很大影響嗎？因為我認為鋁在過去幾個季度中使您的利潤率受益。然後就是第二部分，鋁是否也捲入了你所說的分銷商的一些去庫存？

I think it goes both ways. Aluminum is a little bit more subject to imports. And so with some of the international markets, particularly China opening up last year, right, you did see an increase of some imports to catch up, and that tends to impact aluminum more than it does copper. Aluminum spreads were up compared to the first quarter of last year.

我認為這是雙向的。鋁更受進口影響。因此，隨著一些國際市場，特別是中國去年的開放，你確實看到一些進口增加了，這對鋁的影響往往大於對銅的影響。與去年第一季度相比，鋁價差有所上升。

I've always talked about copper spreads likely peaking in like the June of '21, right, although being very gradual. I'd probably tell you, I would have saw aluminum spreads may be peak in the fourth quarter last year. But they're still very strong, and they're still accretive to overall results.

我一直在談論銅價差可能會在 21 年 6 月達到頂峰，對，儘管非常緩慢。我可能會告訴你，我會看到鋁價差可能在去年第四季度達到峰值。但它們仍然非常強大，並且它們仍然會增加整體結果。

Okay. Maybe one more, and I'll get back in queue. Daniel and Bret, I understand you don't give guidance. Maybe could you just help us understand what would prevent you from seeing expanding margins into the second quarter from the first quarter? Because you had some pretty big factors this quarter, including lower spreads, kind of flat volume where you weren't getting the operating leverage margin wasn't that much lower year-on-year. So I'm just trying to think about those factors as we move into the second quarter and what's going to be the governor on margin expansion.

好的。也許還有一個，我會回到隊列中。 Daniel 和 Bret，我知道你們不提供指導。也許你能幫助我們了解什麼會阻止你看到利潤率從第一季度擴大到第二季度？因為本季度你有一些相當大的因素，包括較低的利差，你沒有獲得經營槓桿利潤率的持平交易量同比並沒有那麼低。因此，當我們進入第二季度時，我只是想考慮這些因素，以及利潤率擴張的州長。

Well, I mean, as you know, we've talked about [margin] abatement, right, for 2-plus years now, right? And so the key is managing that at a gradual level. And if you look at the last couple of years' margins, you could probably throw a bell curve on it, right? It always starts a little bit lower in the first, comes up a little bit in the second and third and comes back down.

好吧，我的意思是，如你所知，我們已經討論了 [保證金] 減少，對吧，現在已經 2 年多了，對吧？因此，關鍵是要循序漸進地進行管理。如果你看看過去幾年的利潤率，你可能會在上面畫一個鐘形曲線，對吧？它總是在第一個開始時稍微低一點，在第二個和第三個中上升一點然後再下降。

The market conditions are gonna dictate it, the ability of our peers to be able to deliver finished goods in a timely manner is going to impact it, how tight the metal continues to be and how significant that tightness in the shape is. You know what I mean by that is rod. There's only one other competitor that has their own rod mill. And so if you can't get the rod you need domestically and you have to look internationally, you're going to countries all over the world to buy. You name it, right?

市場狀況將決定它，我們的同行能夠及時交付成品的能力將對其產生影響，金屬繼續保持多緊以及形狀的緊度有多重要。你知道我說的那根桿是什麼意思。只有另一個競爭對手擁有自己的棒磨機。所以，如果你在國內買不到你需要的魚竿，你就得到國際上看看，你就會去世界各國購買。你的名字，對不對？

That's a long way to go to get rod, and so that can be a limiting factor. All that's going to come into play. Copper today -- now estimates will tell you China could be up to 60% of the world's copper consumption. As they start to get more bullish and get moving this year, that's going to draw on the metal that you've got less than 3.5 days above ground. So all those factors come into play as you look to convert. Skilled labor has not gotten any better.

要獲得釣竿還有很長的路要走，因此這可能是一個限制因素。所有這些都會發揮作用。今天的銅——現在的估計會告訴你中國可能佔世界銅消費量的 60%。隨著他們今年開始變得更加看漲並開始行動，這將利用離地不到 3.5 天的金屬。因此，當您希望轉換時，所有這些因素都會發揮作用。熟練勞動力並沒有得到任何改善。

I think it's the new norm. And so the ability to manage that impact on every operation is something that we'll continue to lean in on. And all that's going to go and -- come into what margins do on a go-forward basis. But we work on every single order to make sure it fits within the parameters that we're looking for and putting customer service first. And obviously, profitability and margin plays into that.

我認為這是新常態。因此，我們將繼續依靠管理對每個操作的影響的能力。所有這一切都會發生——進入利潤率在前進的基礎上所做的事情。但我們會處理每一個訂單，以確保它符合我們正在尋找的參數，並將客戶服務放在首位。顯然，盈利能力和利潤率會影響到這一點。

Your next question comes from the line of Ryan Connors with North Coast Research.

您的下一個問題來自 North Coast Research 的 Ryan Connors。

I just had one, which was a bigger picture in nature, but actually a segue from your previous response there to that question about just the tightness of copper markets. And so my question was around sort of recycled and -- recycled scrap availability as a raw material component both for yourself (inaudible) you compete with in other related markets for raw material.

我只有一個，這在本質上是一個更大的圖景，但實際上是從你之前對那個關於銅市場緊張的問題的回答開始的。因此，我的問題是關於回收廢料和回收廢料的可用性，作為原材料的組成部分，你自己（聽不清）在其他相關市場上與原材料競爭。

I know you do have your own scrap purchase program in-house. But is that something you're investing in? Have you seen external -- other players investing in scrap processing capacity to try to build up that side of the raw material base? Curious, any color you might have there.

我知道你們內部有自己的廢料採購計劃。但這是你投資的東西嗎？你有沒有看到外部 - 其他參與者投資於廢料處理能力以試圖建立原材料基地的那一面？好奇，你可能有任何顏色。

Yes. No, it's a great question. As you navigate this, one of the things that we really saw as you got deeper into the pandemic and coming out of it is the scrap supply. And it makes sense, right? People were not buying automobiles, you weren't seeing as many projects going that were causing a lot of scrap to be generated. The scrap supply got very tight. It goes hand in hand when there's only 3, 3.5 days above ground, right?

是的。不，這是一個很好的問題。當您瀏覽此內容時，當您深入了解大流行並從中走出來時，我們真正看到的一件事是廢料供應。這是有道理的，對吧？人們沒有購買汽車，你也沒有看到有那麼多項目在進行，導致產生大量廢料。廢鋼供應變得非常緊張。當地面上只有 3、3.5 天時，它會齊頭並進，對吧？

There's a lot of scrap that is going overseas a lot. It's going to China because they're paying. At one point, they were paying Comex for scrap, which you typically get a discount for scrap. We have the ability in our furnace to process it, but we only buy the highest quality. And so the availability of scrap is extremely tight. It goes hand-in-hand with tightness in the metal itself.

有很多廢料流向海外。它去中國是因為他們付錢。有一次，他們向 Comex 支付廢料費用，通常你會得到廢料折扣。我們有能力在我們的熔爐中加工它，但我們只購買最高質量的。因此，廢鋼的供應極其緊張。它與金屬本身的緊密度密切相關。

And so we did talk about last year, we were buying less scrap. The flip side of that is pure cathode. I can run faster. And so there's a bit of a give and take as you look at that. And so as the spread between Comex and scrap tightens, I'd rather buy cathode than scrap. And we'll continue to evaluate that, but the scrap market is very, very tight.

所以我們去年確實談到過，我們購買的廢料減少了。它的另一面是純陰極。我可以跑得更快。因此，當你看到這一點時，會有一些讓步。因此，隨著 Comex 和廢鋼之間的價差收緊，我寧願購買陰極也不願購買廢鋼。我們將繼續對此進行評估，但廢料市場非常非常緊張。

I think as you look at the outlook for copper, get past '25, there's a looming supply gap. That's not going to help the availability of scrap, right? It's going to get folks continuing to maybe go after scrap closer to Comex. And at that point in time, it's just not economical to pursue.

我認為，當您審視銅的前景時，過了 25 年，供應缺口迫在眉睫。這不會有助於廢料的可用性，對嗎？這將使人們繼續可能更接近紐約商品交易所。在那個時候，追求它是不經濟的。

Your next question comes from the line of [Eli Voss] with (inaudible).

你的下一個問題來自 [Eli Voss] 和（聽不清）。

I have a question regarding the new facility you're building, which should be completed in Q3. What implications do you see? Do you see more revenue or higher margins from that? And the second question is, are you planning a new share buyback program since there is only a little spare capacity, which might run out in the next 2 quarters. Can you evaluate on that one?

我有一個關於您正在建設的新設施的問題，該設施應在第三季度完工。你看到什麼含義？您是否從中看到了更多的收入或更高的利潤？第二個問題是，你是否正在計劃一個新的股票回購計劃，因為只有很少的閒置產能，可能會在接下來的兩個季度耗盡。你能評價那個嗎？

Perfect question. Thank you for that. So I'll start with the second question. You can -- you look at last year. So, yes the Board authorized us to repurchase up to 2 million through March of '24. And we purchased, as you know, a little over 700,000 leaving the balance for the remainder of the year. Similar to the authorization we got from the Board a year ago, they also, at that time, had authorized 2 million shares through March '23. We bought back a little more than 1.1 million shares last year in the first 2 quarters.

完美的問題。謝謝你。那麼我將從第二個問題開始。你可以——你看看去年。所以，是的，董事會授權我們在 2024 年 3 月之前回購最多 200 萬美元。如您所知，我們購買了 700,000 多一點，剩下的餘額用於今年剩餘時間。與我們一年前從董事會獲得的授權類似，他們當時也授權了 200 年 3 月之前的 200 萬股。去年前兩個季度，我們回購了略多於 110 萬股股票。

And then at that point in time, the Board actually refreshed the authorization back to a full 2 million. And so it's something that when we talk to the Board and meet with them every single meeting, we'll evaluate where we sit with regard to repurchases in the market and the remaining authorization, and then the Board makes a decision as to how they want to act.

然後那個時間點，董事會居然把授權刷新回了整整200萬。因此，當我們與董事會交談並在每次會議上與他們會面時，我們將評估我們在市場回購和剩餘授權方面的位置，然後董事會就他們想要的方式做出決定行動。

With regard to the XLPE facility, and that's part of what we talked about in deepening vertical integration, right, you've got to look to see where you think the demand potentially is going. And when you -- we've talked a lot about strength in data centers, right, in oil and gas. The infrastructure investments that are being made in transit and wastewater treatment, hardening into the grid with regard to utilities and you've got wind and solar from a renewable, right?

關於 XLPE 設施，這是我們在深化垂直整合中談到的一部分，對，你必須看看你認為需求可能會走向何方。當你——我們已經談了很多關於數據中心的實力，對，在石油和天然氣方面。在交通和廢水處理方面進行的基礎設施投資，在公用事業方面強化到電網，你已經從可再生能源中獲得了風能和太陽能，對吧？

All that takes this cross-linked polymer or XLPE insulation. And so as a company or a manufacturing you have to always balance the buy versus make. And if we can put a facility in that we can find ways to make it cheaper than we can buy it. And then it also gives me a much broader access to supply. So no longer limited by someone else's capacity, I can leverage my own to be able to lean into what the market offers.

所有這些都採用這種交聯聚合物或 XLPE 絕緣材料。因此，作為公司或製造商，您必須始終平衡購買與製造。如果我們能把設施放進去，我們就能找到方法讓它比我們買的便宜。然後它也給了我更廣泛的供應渠道。因此，不再受限於其他人的能力，我可以利用自己的能力來了解市場提供的東西。

So it is part of our vertical integration strategy. We've got our own plastic mill that makes our own PVC insulation and PVC pellets, and now we'll have our own XLPE facility. So it picks up the other side of the insulation.

所以這是我們垂直整合戰略的一部分。我們擁有自己的塑料廠，可以生產我們自己的 PVC 絕緣材料和 PVC 顆粒，現在我們將擁有自己的 XLPE 設施。所以它拾起絕緣的另一面。

So maybe a follow-up question on that one. First, the CapEx since you have quite flush with cash, which is great. Could you envision another use for CapEx in terms of not only investing in the one facility or doing share buybacks, but making a takeover or going into copper mines or whatever? Or is it excluded as an idea? And the second one is, did you evaluate how your company is going to profit from the Inflation Reduction Act?

所以也許是關於那個的後續問題。首先是資本支出，因為你的現金非常充裕，這很好。您能否設想 CapEx 的另一種用途，不僅是投資於一個設施或進行股票回購，還包括進行收購或進入銅礦等？還是作為一個想法被排除在外？第二個是，您是否評估過您的公司將如何從《降低通貨膨脹法案》中獲利？

Yes. So with regard to vertical -- or deepening our capital spending, we typically -- and you see it in, both our press release and the comments we made today, we stay pretty general until we get closer to a facility opening, but we are focused over the next 3 to 5 years. And continuing into a deepened vertical integration as well as to reduce cost and modernize select wire manufacturing facilities to increase capacity and efficiency.

是的。因此，關於垂直 - 或加深我們的資本支出，我們通常 - 你會在我們的新聞稿和我們今天發表的評論中看到它，我們保持相當籠統，直到我們接近設施開放，但我們未來 3 到 5 年的重點。並繼續深化垂直整合，降低成本並使精選線材製造設施現代化，以提高產能和效率。

And so all that continues. And as we get closer, we'll announce more specifics about other projects in the mix. You're in this $150 million, $170 million, $180 million-type million spending. And as we roll on another year, we'll update for any additional spending opportunities. What was your second question?

所以一切都在繼續。隨著我們的臨近，我們將宣布有關其他項目的更多細節。你在這 1.5 億美元、1.7 億美元、1.8 億美元的百萬支出中。隨著我們又一年的到來，我們將更新任何額外的消費機會。你的第二個問題是什麼？

If you looked how much you can profit from the Inflation Reduction Act? Because I think you're in a prime spot for cables and stuff, which is going to be needed in the oil and gas or even in windmills and et cetera.

如果你看看你能從《降低通貨膨脹法案》中獲利多少？因為我認為你正處於電纜和其他東西的黃金地段，石油和天然氣甚至風車等都需要這些東西。

Absolutely. I mean, I think everything you see when you look out and say, okay, what's the market look like? It goes back to Brent's question. It really gets back to what you all think about the continued expansion of data centers and what AI might do to that and what you think about renewables in this country, look at EVs, right? 1% of the vehicles in the U.S. are electric, right? But to get to that, you've first got to build battery plants.

絕對地。我的意思是，我認為當你向外看時看到的一切都會說，好吧，市場是什麼樣子的？這又回到了布倫特的問題。這真的回到了你們對數據中心持續擴張的看法，以及人工智能可能對此做些什麼，以及你們對這個國家的可再生能源的看法，看看電動汽車，對吧？美國有 1% 的車輛是電動的，對吧？但要做到這一點，您首先必須建造電池廠。

You've got to build the facilities to build the cars. You need more semiconductors. And so you've got to build semiconductor plants, all that takes wire and cable. And then once you get the electric vehicle, the electric vehicle charging capacity in the U.S. is not great. right? We're not stopping at a major gas station with the restroom and a chance to buy a drink, right?

你必須建造設施來製造汽車。你需要更多的半導體。所以你必須建造半導體工廠，所有這些都需要電線和電纜。然後一旦你拿到電動汽車，美國的電動汽車充電能力就不是很好。正確的？我們不會在帶洗手間的大型加油站停下來買飲料，對吧？

You're stopping at odd locations to charge the vehicle. So that has to get more mainstream. The majority of a charging station is copper. You power it with aluminum. And so a lot of the things with regard to the infrastructure, the hardening of the grid and the electrification is all going to take wire and cable with a looming supply gap in copper -- headed out there in the next 3 to 4 years. And so those are the constructs that we look to when we look for capacity additions and where we want to build in the market.

你在奇怪的地方停下來給車輛充電。所以這必須變得更加主流。充電站的大部分是銅。你用鋁給它供電。因此，與基礎設施、電網加固和電氣化有關的很多事情都將在未來 3 到 4 年內解決電線和電纜問題，而銅的供應缺口迫在眉睫。因此，當我們尋找增加容量以及我們想要在市場上建立的地方時，這些就是我們所關注的結構。

Yes. You should broaden your shareholder base in Europe. I guess there's a lot of great topic to go on the road show here because this topic is in everybody's mind here.

是的。你應該擴大你在歐洲的股東基礎。我想這裡的路演有很多很棒的話題，因為這裡的每個人都在想這個話題。

Fantastic. Thank you for that.

極好的。謝謝你。

Your next question comes from the line of Mike Schenck.

你的下一個問題來自 Mike Schenck。

My question is really on the process that you go through and your thinking, which I applaud that caused you to be so aggressive, both on the amount of shares as well as the price paid in Q1, which I believe averages actual a little bit under $181 a share. As we go forward, does that demonstrate a confidence in the future outlook and your cash flows? If you could comment at the process you go through and why you got so aggressive this quarter?

我的問題實際上是關於你經歷的過程和你的想法，我很讚賞這導致你在股票數量和第一季度支付的價格上如此激進，我認為平均實際略低於每股 181 美元。在我們前進的過程中，這是否表明您對未來前景和現金流充滿信心？如果你能評論一下你經歷的過程以及為什麼你在這個季度變得如此激進？

Yes. No, listen, I think we've been pretty consistent. We bought back 785,000 shares, I want to think, in the third quarter last year. We continue to execute on the Board's authorization. We do see it as a return of capital to shareholders, probably gives you some level of confidence in what we think and the value as you go through this process.

是的。不，聽著，我認為我們一直非常一致。我想，我們在去年第三季度回購了 785,000 股股票。我們繼續執行董事會的授權。我們確實將其視為對股東的資本回報，可能會讓您對我們的想法和您在整個過程中的價值有一定程度的信心。

We only have really 3 levers. We've never done an acquisition in our history. And so when you look at our use of cash balance, you've got CapEx. We've got a very robust capital expenditure plan over the next 3 to 5 years. You look at the dividend, which is only $0.02 a quarter, and you look at stock buybacks. And there's a lot of benefit from the stock buyback side and shows the confidence that we think is out there.

我們實際上只有 3 個槓桿。在我們的歷史上，我們從未進行過收購。因此，當您查看我們對現金餘額的使用時，就會發現資本支出。我們在未來 3 到 5 年內製定了非常穩健的資本支出計劃。你看看每季度只有 0.02 美元的股息，再看看股票回購。股票回購方面有很多好處，顯示出我們認為存在的信心。

So I think with that, that authorization by the Board for up to 2 million more shares and the activity we did in the first quarter, you can interpret.

所以我認為，董事會對最多 200 萬股的授權以及我們在第一季度所做的活動，你可以解釋。

That makes sense. I appreciate it. And I have visited you. I've been there in McKinney. It was probably 15 years ago, but I understand the philosophy on no acquisitions. I think the organic growth story is been exceptionally well executed. And thanks for what you're doing, keep doing it.

這就說得通了。我很感激。我拜訪過你。我去過麥金尼。大概是 15 年前的事了，但我理解不收購的理念。我認為有機增長的故事執行得非常好。感謝你所做的一切，繼續做下去。

You should come back...

你應該回來...

Your next question comes from the line of Brent Thielman with D.A. Davidson.

你的下一個問題來自 Brent Thielman 和 D.A.戴維森。

Daniel, I mean, you and your customers had to deal with a lot of erratic sort of movement in copper prices this last quarter. Could you talk about the traction you saw with attempted price increases, especially just given how tight the supply situation is in the market?

丹尼爾，我的意思是，你和你的客戶在上個季度不得不應對銅價的大量不穩定波動。您能否談談您看到的提價嘗試帶來的吸引力，尤其是考慮到市場供應形勢如此緊張？

Yes. Good point, Brent. You saw copper start off the year and start off the quarter around $3.70 something run up to $4.25-ish or whatever and then backed off a little bit and then actually ended up the quarter at the tail end of March with some strength. And so when's that happening, as you can imagine, the industry does not change the price sheet on the way down.

是的。好點，布倫特。你看到銅從年初開始，在本季度開始時約為 3.70 美元，最高漲至 4.25 美元左右，然後略有回落，然後實際上在 3 月底以一定的強度結束了本季度。因此，正如您可以想像的那樣，什麼時候會發生這種情況，行業不會在下降的過程中改變價格表。

But when there is a price increase, there's a new price sheet that is an increase over the last one. And we had really good traction within the quarter with a couple of different price increases going to a new price sheet. There's times when the industry will change the discount levels and print a sheet and what have you, but it was very clear and very consistent message in the quarter to get those prices up a little bit in reference to some of the raw material volatility.

但是當價格上漲時，就會有一個新的價格表，它比上一個價格表有所增加。我們在本季度內獲得了很好的牽引力，新的價格表中有幾次不同的價格上漲。有時行業會改變折扣水平並打印一張紙和你有什麼，但本季度非常明確且非常一致的信息是參考一些原材料波動讓這些價格略有上漲。

And then again, the demand in different buckets of our product offering has been pretty fantastic. Specifically toward that industrial and some of the more niche products in the commercial line. So to hit the requirements on some of the repeat business, the demands of the customer, we charge for it. When it doesn't go out to the market for -- on a bid process and get chopped up, it's good business. It's good margins and everybody is happy.

再一次，我們產品的不同類別的需求非常好。特別是針對工業產品和商業產品線中的一些更小眾的產品。所以針對一些回頭客的要求，客戶的訴求，我們是收費的。當它不進入市場時——在投標過程中被砍掉，這是一筆好生意。這是一個很好的利潤，每個人都很高興。

The price increase in the sheets that were in the quarter, you announce them with a day or two, clean up and then go right to that sheet. And we had good success, which is another vote of confidence for the bullishness that I have in the marketplace.

本季度床單的價格上漲，您會在一兩天內宣布它們，清理乾淨然後直接轉到該床單。我們取得了很好的成功，這是對我在市場上的樂觀情緒的又一次信任投票。

That's really helpful, Daniel. I appreciate that. I just wanted to come back -- I mean you and others in your sort of sector have talked about industrial projects, all the different things that are out there. I'm wondering if you can just talk about how meaningful that is now for Encore? I know you don't like to give percentage parameters. I get that, but just something to help us understand from the outside looking in how much of a bigger deal that is as it relates to your business.

這真的很有幫助，丹尼爾。我很感激。我只是想回來——我的意思是你和你所在行業的其他人已經討論過工業項目，所有不同的東西都在那裡。我想知道你是否可以談談現在對 Encore 有多大意義？我知道你不喜歡給出百分比參數。我明白了，但這只是幫助我們從外部了解與您的業務相關的更大交易的內容。

And if I could just follow up to maybe just helping folks understand what the biggest drivers of the aluminum business are right now because that still looks very healthy.

如果我能跟進，也許只是幫助人們了解目前鋁行業的最大驅動力是什麼，因為它看起來仍然非常健康。

Yes, the industrial piece, the way the market works for us on the industrial side, there's limited capacity and there's limited availability of product. And majority of the volume that comes through is on a custom build-to-order basis to begin with. And so the volume is pretty substantial from a copper pounds perspective, the footage, the multi-conductor combinations, the color combinations, a lot of those things are specific to the job itself.

是的，工業部分，市場在工業方面為我們運作的方式，產能有限，產品可用性有限。並且大部分通過的數量是在自定義構建到訂單的基礎上開始的。因此，從銅磅的角度來看，體積相當大，鏡頭、多導體組合、顏色組合，其中很多都是工作本身特有的。

And so it's a pretty fast-paced, but once you get in and start to work through some of the requirements of the end users and the installers, that's where our service model kicks in and we can go from not having the product on the floor to delivering the product for installation pretty quickly. That allows us to charge for that value and charge for that service level.

所以這是一個相當快的節奏，但是一旦你進入並開始處理最終用戶和安裝人員的一些要求，這就是我們的服務模型開始的地方，我們可以從沒有產品到場以快速交付產品進行安裝。這使我們能夠按該價值收費並按該服務水平收費。

When you're seeing the amount of quotes that are coming in and the work that you have to put in ahead of time before you actually arrive at quoting that price, it's shielded or it's insulated really from the usual price cutters that we deal with in the marketplace, specifically because the amount of time and work that was put in leading up to those custom specifications. So it's good volume. It's good margins.

當您看到收到的報價數量以及在實際報出該價格之前必須提前完成的工作時，它就會受到保護或與我們在市場，特別是因為在製定這些定制規範方面投入的時間和工作量。所以它的音量很好。這是很好的利潤率。

And the other part is a lot of it is backed by some of the opportunities that are there with the interest rate infrastructure and some of the reduction act there in the marketplace that the Feds are financing. So huge opportunity, hundreds of billions of dollars into the electrical market. We're just trying to make sure that we participate in the areas of opportunity that we've identified.

而另一部分是很多它得到了利率基礎設施的一些機會和美聯儲正在資助的市場上的一些減少行為的支持。如此巨大的商機，千億美元流入電器市場。我們只是想確保我們參與到我們已經確定的機會領域。

And then as far as the aluminum piece goes, aluminum is less volatile really from a processing perspective in the marketplace on a bias or a trend basis, but we have aluminum start off the year and start off the quarter in the low $1.40s per pound and ran up to I think it was about $1.70, some-odd $1.71 or something a pound. And then fell off a little bit and then stabilized toward the end of March. So as it relates to the metal price itself, that's quite a bit of volatility for aluminum, which attracts -- as you know, from our story in the past, it attracts some of the opportunistic threats that we've dealt with historically from imports.

然後就鋁片而言，從加工角度來看，鋁在偏差或趨勢基礎上的波動性確實較小，但我們讓鋁在今年年初和本季度開始時處於每磅 1.40 美元的低位然後漲到我認為大約是 1.70 美元，奇怪的是 1.71 美元或一磅左右。然後下降一點點，然後在 3 月底穩定下來。因此，由於它與金屬價格本身有關，鋁的波動很大，正如你所知，從我們過去的故事來看，它吸引了一些我們在歷史上處理過的來自進口的機會主義威脅.

The good thing there is when it creeps back up or stabilizes it forces discipline in the marketplace. And at some point, the product has to be actually delivered. So we were able to perform very well and hang on to margins and deflect some of the most threats from just the overall outside noise that we run into -- in the market. But the volumes are still good.

好事是當它回升或穩定時，它會迫使市場紀律。在某些時候，必須實際交付產品。因此，我們能夠表現得非常好，並保持利潤率，並從我們遇到的整體外部噪音中轉移一些最大的威脅——在市場上。但是銷量還是不錯的。

The demand is still good. I've been very clear in the past, as you know, and I'm still clear today. I prefer to sell and ship copper. But in this market, the aluminum is very important for us to go forward, and we're actually pretty good at what we do in the aluminum side.

需求還是不錯的。如你所知，我過去一直很清楚，今天我仍然很清楚。我更喜歡銷售和運輸銅。但在這個市場上，鋁對我們前進非常重要，我們實際上非常擅長我們在鋁方面所做的事情。

Yes. Just on the XLPE plant start-up, any reason to think the ramp-up of that facility could be dilutive at all the margins in a meaningful way just as you're trying to get that sort of a steady pace?

是的。就 XLPE 工廠的啟動而言，有什麼理由認為該設施的擴產可能會以有意義的方式稀釋所有利潤率，就像您試圖獲得那種穩定的步伐一樣？

Going forward, that plant is to, as you know, bring some of our cost in-house, the control of those costs in-house. It's a very important piece of the industrial cable market, and that's a very important piece of that commercial market cable that we make, being a higher temperature insulation ratings and a little more durable cable overall. So we will benefit, and we will treat it the same.

展望未來，正如你所知，該工廠將把我們的一些成本帶到內部，在內部控制這些成本。這是工業電纜市場中非常重要的一塊，也是我們製造的商業市場電纜中非常重要的一塊，它具有更高的溫度絕緣額定值和整體更耐用的電纜。所以我們會受益，我們也會一視同仁。

And as our history has shown, when we're able to lower our costs and increase our service model in a particular segment, we could really do some things and having to control really of the input side of that raw material is going to be a big win for us.

正如我們的歷史所表明的那樣，當我們能夠降低成本並增加特定細分市場的服務模型時，我們確實可以做一些事情並且必須真正控制原材料的輸入端將成為對我們來說是個大勝利。

Okay. Last one, guys. I've got to ask, I mean, you haven't been shy about buybacks. Obviously, substantial activity here over the last couple of years. I mean as you look at your stock sub-1.5x book value. And anything you can tell us today about how you're thinking about repurchases here?

好的。最後一個，伙計們。我得問，我的意思是，你對回購併不害羞。顯然，在過去的幾年裡這裡有大量的活動。我的意思是當你看你的股票低於賬面價值的 1.5 倍時。你今天能告訴我們你是如何考慮回購的嗎？

Well, I guess -- Brent, it's Bret again. I mean I think as you look at this, I mean, the Board came out after a pretty significant purchase level last year of almost 2.1 million with a reauthorization of up to another 2 million shares. And so you can look back since February of '20, and we've been active in the market for repurchases. And so again, I think you've got to interpret that from your perspective. But we do -- as we said before, through the first quarter, we've seen that as a good use of cash.

好吧，我想——布倫特，又是布雷特。我的意思是，我認為當你看到這個時，我的意思是，董事會在去年購買了近 210 萬股的相當可觀的水平之後出來，並重新授權了多達 200 萬股。所以你可以回顧一下自 20 年 2 月以來，我們一直活躍在回購市場上。再次重申，我認為你必須從你的角度來解釋它。但我們這樣做了——正如我們之前所說，在整個第一季度，我們認為這是對現金的一種很好的利用。

Your next question comes from the line of Andrew Shirley with ES Capital.

你的下一個問題來自 ES Capital 的 Andrew Shirley。

You touched on this earlier, but I didn't quite get the net response. I was just curious, the -- was the copper price spike in early January a headwind at all to realize spreads during the quarter?

你之前提到過這個，但我沒有完全得到淨回應。我只是好奇，一月初的銅價飆升是否對本季度實現價差構成不利影響？

We're -- it's a great question, Andrew. I mean, listen, we've -- it's kind of a normal course in managing the purchases we do within a quarter, right? Copper moves up, copper moves down, and it's the same thing with other raw materials. We are really good at capturing those costs and passing those on, right? But when we've talked about abatement, right, an abatement has been more on the top end and not on the bottom end, right?

我們 - 這是一個很好的問題，安德魯。我的意思是，聽著，我們已經 - 這是管理我們在一個季度內進行的採購的正常過程，對吧？銅漲，銅跌，其他原材料也是一樣。我們真的很擅長捕獲這些成本並將其轉嫁，對嗎？但是當我們談到減排時，對吧，減排更多地發生在頂端而不是底端，對吧？

And so that's where you're seeing. So we tried to just maybe decipher or put it out there even clearer when you talk about abatement. You may see some erosion at the top end is as the broader sector starts to catch up a little bit. But that's really where it's hitting. Fluctuations in copper and the like, we're looking at that price at every single order, whether or not it's average or spot whatever is higher.

這就是你所看到的。因此，當您談論減排時，我們試圖破譯或更清楚地把它放在那裡。隨著更廣泛的行業開始迎頭趕上，您可能會看到頂端出現一些侵蝕。但這確實是它擊中的地方。銅等的波動，我們正在查看每個訂單的價格，無論是平均價格還是現貨價格更高的價格。

And so that's where our service model really is such a competitive advantage. We talk about shipping orders quick, 24 hours, 48 hours a 100% complete. It's a fantastic customer service, but it's extremely defensive, right? Because if I take an order, and I know my margin and I ship it that day or the next day, it doesn't matter what copper does. I just locked in my margin.

這就是我們的服務模式真正具有競爭優勢的地方。我們談論快速、24 小時、48 小時 100% 完成的發貨訂單。這是一個很棒的客戶服務，但它非常具有防禦性，對吧？因為如果我接到一個訂單，並且知道我的保證金並在當天或第二天發貨，那麼銅的走勢並不重要。我只是鎖定了保證金。

And that's why that service model is the best hedge out there. And when you turn inventory 12x to 14x a year of finished goods, you're capturing everything within that month. And so there's a great match of revenues and costs.

這就是為什麼這種服務模式是目前最好的對沖方法。當您將庫存變成一年成品的 12 倍到 14 倍時，您就可以在那個月內獲得所有東西。因此，收入和成本非常匹配。

Yes. Good catch though, Andrew. It was about $0.50, I think, if I'm correct. From the beginning of January through the end, I think it was close to a $0.50 run.

是的。不過不錯，安德魯。如果我沒記錯的話，我想大概是 0.50 美元。從 1 月初到月底，我認為它接近 0.50 美元。

But it sounds like you're suggesting it didn't specifically present a headwind during the quarter.

但這聽起來像是在暗示它在本季度並沒有特別出現逆風。

Not specifically. I mean there's more things that go into it. The timing of it, the timing of the price increases, the timing of posting the price sheet increase, where you stand with quotes, where you stand with production runs by the end of the month, what have you. But we typically ship out and bring in the same amount of -- we try to match up the pounds to the month. So spreading that $0.50 over 22 trading days and pulling prices from one day to the next, it definitely maybe speeds a few things up.

不具體。我的意思是有更多的東西進入它。它的時間，價格上漲的時間，發布價格表上漲的時間，你對報價的立場，你對月底生產運行的立場，你有什麼。但我們通常會運出並運入相同數量的——我們會嘗試將磅數與月份相匹配。因此，將 0.50 美元分攤到 22 個交易日，並將價格從一天拉到下一天，這肯定會加快一些速度。

Folks that are going to wait to see if copper is going to go up or down, you get a bias or a trend on the upside, it will shake some things lose during the week or during the month, for sure.

人們會等著看銅是會上漲還是下跌，你會得到一個偏見或趨勢向上，它肯定會在一周或一個月內動搖一些損失。

Okay. Great. And then just one more, not asking about this current quarter specifically, but historically, what is the typical sequential volume pickup from 1Q to 2Q due to seasonal factors?

好的。偉大的。然後再問一個問題，不是具體詢問當前季度，而是從歷史上看，由於季節性因素，從第一季度到第二季度的典型連續銷量回升是多少？

Yes, that's a tough one. We don't give any future guidance, and it's tough. You go back to 2019 and then you rolled into '20, you had the pandemic and with everything that was out there. As you know, we stayed fully operational and things really started to pick up from that standpoint. You had periods in there where there was a pent-up demand. And so you saw a big catch-up on that. You looked at residential when it got meteoric a year ago, it was really driven by folks moving out of more populated areas and into more rural areas.

是的，這是一個艱難的過程。我們不提供任何未來的指導，這很艱難。你回到 2019 年，然後進入 20 年，你經歷了大流行病以及那裡的一切。如您所知，我們保持全面運營，從這個角度來看，事情真的開始好轉了。你在那裡有被壓抑的需求的時期。所以你看到了一個很大的追趕。你看看一年前住宅發展迅猛的時候，它確實是由人們搬出人口稠密的地區並搬到更多的農村地區所推動的。

Whenever that happens, and you see a residential boom, light commercial always follows 12, 18, 24 months later because you have to build the infrastructure around this much larger influx of population in a more rural area, you still need gas stations and Starbucks and supermarkets and care now and churches and schools. And so that is going to -- you should see that tail as you go into this next year.

每當這種情況發生時，你會看到住宅熱潮，輕型商業總是在 12、18、24 個月後出現，因為你必須圍繞更多農村地區大量湧入的人口建設基礎設施，你仍然需要加油站、星巴克和現在超市和護理以及教堂和學校。所以這將 - 你應該在明年進入時看到那條尾巴。

And you see some of that already that we saw in the fourth quarter and the first quarter. And so it's hard to peg it. I will tell you, typically, the first quarter and fourth quarter are kind of the shoulder quarters. And the second and third quarter are typically a little bit stronger as far as -- and that kind of aligns well with the build timing.

你已經看到了我們在第四季度和第一季度看到的一些情況。所以很難確定。我會告訴你，通常情況下，第一季度和第四季度有點像肩部。第二和第三季度通常會稍微強一點——這與構建時間很吻合。

Your next question comes from the line of Alfred [Finoy] with (inaudible).

你的下一個問題來自 Alfred [Finoy] 和（聽不清）。

I'm curious about the wholesale electrical distributor customers that you have. Are they very forthcoming with information about their inventory levels of wire products?

我很好奇您擁有的批發電氣分銷商客戶。他們是否非常樂意提供有關其電線產品庫存水平的信息？

Yes, I think so. We're pretty close with those distributor customers. There's long-term relationships with those people. We have field reps. They get to know on a relational level families and whatever it might be. And we also are very active visiting with and bringing in and visiting our place back and forth with those distributor customers. And so we can put eyes on their inventory, and we have folks in the field constantly doing that, providing the feedback.

是的，我想是這樣。我們與那些分銷商客戶非常接近。與這些人有長期的關係。我們有現場代表。他們在關係層面上了解家庭以及任何可能的家庭。我們也非常積極地拜訪和引進這些經銷商客戶並來回參觀我們的地方。因此，我們可以關注他們的庫存，我們讓該領域的人員不斷這樣做，提供反饋。

With that type of information available, do you think the distribution customers have more embraced your concept of how to have almost just-in-time delivery? Or are some of them still tending to go back to the, let's say, the historical practices that they may have had in the past where they stock larger quantities just so they can have the inventory on their side?

有了這些可用的信息，您認為分銷客戶是否更接受您關於如何幾乎準時交貨的概念？或者他們中的一些人是否仍然傾向於回到，比方說，他們過去可能擁有的歷史實踐，即他們庫存更多的數量只是為了讓他們有庫存？

Yes. That's a great question, Alfred. The current state is nearer to the front end of your question, more just-in-time levels. As the speed of the volatility of the raw materials moves from a value perspective, you do see those inventory holdings fluctuate. If you can get some type of specific bias or trend, you might see it build a little bit ahead of time, but it's usually related to a specific job or anticipated job that they have in their market area. But if I had to choose today versus historical levels, I would tell you today, distributors run extremely -- on the extreme end of the lean side.

是的。這是一個很好的問題，阿爾弗雷德。當前狀態更接近問題的前端，更及時的水平。從價值的角度來看，隨著原材料波動速度的變化，您確實會看到這些庫存量在波動。如果你能得到某種特定的偏見或趨勢，你可能會看到它提前一點建立，但它通常與他們在其市場區域中的特定工作或預期工作有關。但如果我必須選擇今天與歷史水平，我今天會告訴你，分銷商運行非常 - 在精益端的極端。

If I could ask just one final follow-up question. For your distributor customers that might be closer to Canada or to Mexico, do you think you get any business that they would have from selling to their customers in either of those countries?

如果我能問一個最後的後續問題。對於可能離加拿大或墨西哥更近的分銷商客戶，您認為您會從向這兩個國家/地區的客戶銷售產品中獲得任何業務嗎？

Over the years, there may be some residual business, if you will. But as far as direct product crossing the border, the electrical specifications in those 2 countries don't match up with our country, specifically on our building wire product. So I would say no.

多年來，如果你願意的話，可能會有一些剩餘的業務。但就直接過境的產品而言，這兩個國家的電氣規格與我國不匹配，特別是我們的建築電線產品。所以我會說不。

Your next question comes from the line of Taylor Merritt with Forge First Asset Management.

你的下一個問題來自 Taylor Merritt 與 Forge First Asset Management 的合作。

Wanted to ask on the XLPE facility. You've already spoken to it a few times. Is that solely a cost initiative? Or will the XLPE insulation let you access markets or sales channels that you're not currently able to or in a capacity you'd like to?

想問一下 XLPE 設施。你已經和它談過幾次了。這僅僅是一項成本舉措嗎？或者，XLPE 絕緣材料能否讓您進入您目前無法進入或無法進入的市場或銷售渠道？

It's a great question, Taylor. I mean if you were listening a couple of years back, I talked about during the pandemic, right? When raw materials across the board got tight. And as you know, we never ran out, but we spent -- we went from -- or at least I went from spending an hour a day to 12 hours a day chasing them. And as you go through that, I said that there were certain aspects of our supply chain that maybe raise their heads from a risk or availability or cost standpoint that I didn't like as much as some of our others.

這是一個很好的問題，泰勒。我的意思是，如果你幾年前在聽，我在大流行期間談到過，對嗎？當原材料全線吃緊時。正如你所知，我們從未用完，但我們花了——我們從——或者至少我從每天花一個小時到每天花 12 個小時追逐他們。當你經歷這些時，我說過我們供應鏈的某些方面可能會從風險或可用性或成本的角度抬起頭來，我不像其他人那樣喜歡這些方面。

And that was really one of the relationships. In the heat pandemic when there was a lot of build going on, the XLPE cross polymer capacity domestically was very strained. There was a lot of companies on quotas. You can only get so much, and it was a limiting factor at that time as to how much product we can put out. When we looked at that, it was just a natural extension.

這確實是其中一種關係。在大量建設的熱浪中，國內XLPE交聯聚合物產能非常緊張。有很多公司都在配額上。你只能得到這麼多，這在當時是我們能生產多少產品的一個限制因素。當我們看到它時，它只是一個自然的延伸。

We've vertically integrated since our inception. You looked at where when you get to a certain point from a volume standpoint, you could say, listen, we benefit if we made our own versus relying on someone else to buy it. I also then control the labor aspect, the access to the other raw materials. And that really came to bear when we saw the opportunity in XLPE, particularly with the ability to derisk some of that supply.

我們從一開始就垂直整合。從數量的角度來看，當你到達某個點時，你可以說，聽著，如果我們自己製造而不是依靠別人購買，我們會受益。然後我還控制勞動力方面，即對其他原材料的訪問。當我們看到 XLPE 的機會時，尤其是有能力降低部分供應的風險時，這才真正發揮作用。

But our ability to build a facility, right, you don't build it for what we need today, you build it as to where you think the market will be. And so we always build an incremental capacity that can serve all the markets we talked about and the type of insulation that demand that as that group expands.

但是我們建造設施的能力，對，你不是為了我們今天需要的而建造它，而是根據你認為市場的位置來建造它。因此，我們總是建立一個增量能力，可以服務於我們談到的所有市場，以及隨著該群體的擴張而需要的絕緣類型。

Got it. So fair to say then as that facility comes online later this year -- and we're still presumably at the front end of the -- some of these larger infrastructure government-backed CapEx programs, residential will become structurally smaller part of the business?

知道了。那麼公平地說，隨著該設施在今年晚些時候上線——我們可能仍處於前端——一些更大的基礎設施政府支持的資本支出計劃，住宅將在結構上成為業務的較小部分？

I don't think say just on that, I would tell you that our ability to serve the availability of that type of installation will not be a limiting factor for us once that facility is online.

我不認為僅就此而言，我會告訴您，一旦該設施上線，我們提供此類安裝可用性的能力將不會成為我們的限制因素。

Right. Okay. But residential as a percentage of sales is, like you say, probably hit the high water margin through the second quarter of '21 and..

正確的。好的。但是住宅佔銷售額的百分比，就像你說的，可能會在 2021 年第二季度達到高水位，並且......

What I was saying, Taylor, in the second quarter '21 is that we felt that the price -- the copper margin peaked in June of '21, right? Residential, if you look at the residential percentage today, it was about 27.9% of our business for the first quarter. If you compare that to the fourth quarter, right, and see a trend there, it was 29.3%. So it was 1.4% different, right? Not a big move. So residential is still running a little higher than it was pre-pandemic levels, but that's not related to my comment from June of '21.

泰勒，我在 21 年第二季度說的是，我們認為價格——銅利潤率在 21 年 6 月達到頂峰，對吧？住宅，如果你看看今天的住宅百分比，第一季度它大約占我們業務的 27.9%。如果你將其與第四季度進行比較，你會發現那裡的趨勢是 29.3%。所以它有 1.4% 的不同，對吧？不是什麼大動作。所以住宅的運行仍然比大流行前的水平高一點，但這與我在 21 年 6 月的評論無關。

And it's not directly related or comparable to XLPE coming online, to the extent that the uses of that insulation grow, we start to ship more product associated with it that could impact the percent of residential. But again, that doesn't mean it impacts the pounds per se.

而且它與上線的 XLPE 沒有直接關係或可比性，隨著這種絕緣材料的使用增長，我們開始運送更多與之相關的產品，這可能會影響住宅的百分比。但同樣，這並不意味著它會影響磅數本身。

There are no further questions at this time. And this concludes today's conference call. Thank you for attending. You may now disconnect.

目前沒有其他問題。今天的電話會議到此結束。感謝您的出席。您現在可以斷開連接。