Encore Wire Corp (WIRE) 2023 Q2 法說會逐字稿

Hello. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Encore Wire Corporation Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Bret Eckert, Executive Vice President and Chief Financial Officer, you may begin.

你好。我叫克里斯，今天我將擔任你們的會議操作員。現在，我歡迎大家參加 Encore Wire Corporation 2023 年第二季度收益電話會議。 （操作員指示）布雷特·埃克特（Bret Eckert），執行副總裁兼首席財務官，您可以開始了。

Thank you, Chris. Good morning, and welcome to the Encore 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 second quarter ended June 30, 2023. After the financial review, we will take any questions you may have.

謝謝你，克里斯。早上好，歡迎參加 Encore Wire Corporation 季度電話會議。我是 Encore Wire 執行副總裁兼首席財務官 Bret Eckert。今天早上和我在一起的是總裁、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 6 月 30 日的第二季度財務業績。財務審查後，我們將回答您可能提出的任何問題。

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. 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 GAAP, 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?

在我們審查財務數據之前，請允許我指出，在整個電話會議中，我們可能會做出某些可能被視為前瞻性的聲明。為了遵守某些證券法規，並且不要試圖將每個特定聲明視為前瞻性聲明，我們建議您所有此類聲明都涉及某些風險和不確定性，可能導致實際結果與今天討論的結果存在重大差異。我建議你們每個人參閱該公司的 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 GAAP 提出的最直接可比的財務指標（包括 EBITDA）的調節表已發佈在我們的網站上，我們認為這對投資者來說是有用的補充信息。現在我將把電話轉給丹尼爾做一些開場白。丹尼爾？

Good morning, everyone, and thank you, Bret and Chris. Thanks for joining us on the call and for your interest in Encore Wire. We appreciate your continued investment, confidence and support. This quarter marked our ninth consecutive quarter of elevated margins despite our continued belief that we are in the midst of the period of gradual margin abatement. As we have discussed at length on prior earnings calls, copper margins began to gradually abate in mid-2021, and aluminum margins peaked in the fourth quarter of 2022. Since then, we've invested heavily and continue to invest in improving our service model and efficiency levels to reduce cost, increased capacity and deepen vertical integration, which we believe should contribute to achieving sustained higher gross margin levels when compared to pre-COVID baselines.

大家早上好，謝謝你們，布雷特和克里斯。感謝您參加我們的電話會議以及您對 Encore Wire 的興趣。我們感謝您持續的投資、信心和支持。儘管我們仍然相信我們正處於利潤率逐漸下降的時期，但本季度是我們利潤率連續第九個季度提高。正如我們在之前的財報電話會議上詳細討論的那樣，銅的利潤率在 2021 年中期開始逐漸下降，而鋁的利潤率在 2022 年第四季度達到頂峰。從那時起，我們投入了大量資金並繼續投資於改善我們的服務模式和效率水平，以降低成本、增加產能和深化垂直整合，我們認為與新冠疫情之前的基線相比，這應有助於實現持續較高的毛利率水平。

With respect to volume, we're pleased to have shipped a near record number of copper and aluminum pounds in the second quarter. These results demonstrate a dynamic shift in volume shipped when compared to a pre-COVID baseline. Copper and aluminum pounds shipped in the second quarter of 2023 increased by 13% and 78%, respectively, when compared to the second quarter of 2019. We captured this incremental market share by leveraging our single site vertically integrated campus, deep supplier relationships and strong employee base to quickly manufacture and ship finished goods to our customers despite the broader macro challenges faced in the sector.

就數量而言，我們很高興第二季度銅和鋁的出貨量接近創紀錄的磅數。這些結果表明，與新冠疫情之前的基線相比，發貨量發生了動態變化。與 2019 年第二季度相比，2023 年第二季度的銅和鋁磅出貨量分別增加了 13% 和 78%。我們通過利用我們的單一站點垂直整合園區、深厚的供應商關係和強大的實力，佔領了這一增量市場份額。儘管該行業面臨更廣泛的宏觀挑戰，但員工仍能夠快速製造並向客戶運送成品。

The strong performance is also a reflection of our steadfast commitment to outstanding customer service and our intense focus on shipping complete orders quickly combined with our expanded reinvestment initiatives such as the XLPE compounding facility set to come online late in the third quarter of this year. Since our inception, we've grown organically under the same value proposition that we were founded on: manufacturing innovative products while providing exceptional customer service focused on quickly shipping complete orders coast to coast. We believe our industry-leading fill rates continue to give us a strategic competitive advantage in the marketplace.

強勁的業績也反映了我們對卓越客戶服務的堅定承諾，以及我們對快速運送完整訂單的高度重視，再加上我們擴大的再投資計劃，例如將於今年第三季度末上線的 XLPE 複合設施。自成立以來，我們一直在與我們成立時相同的價值主張下有機發展：製造創新產品，同時提供卓越的客戶服務，專注於快速運送完整訂單。我們相信，行業領先的填充率將繼續為我們帶來市場戰略競爭優勢。

Our one location business model also affords us a higher level of agility in adapting to changing market conditions, structuring our operations to quickly service areas of new and growing demand, such as data centers and renewable energy. Demand for our products has remained strong, and our build-to-ship model, combined with the throughput of our modern service center positions us well to satisfy increases in future demand. We believe that we have made and/or making the appropriate sustainable investments to take advantage of future incremental demand for current and new product offerings that will help to facilitate the broad electrification of our economy. We expect that the current legislation in place to help fund the infrastructure needed for broad electrification will bolster long-term demand for many of our product categories. We also expect that this demand will raise the floor for the process of many raw material inputs for years to come.

我們的一站式業務模式還使我們能夠更加靈活地適應不斷變化的市場條件，構建我們的運營以快速服務新的和不斷增長的需求領域，例如數據中心和可再生能源。對我們產品的需求仍然強勁，我們的按船製造模式，加上現代服務中心的吞吐量，使我們能夠很好地滿足未來需求的增長。我們相信，我們已經進行和/或進行了適當的可持續投資，以利用未來對當前和新產品的增量需求，這將有助於促進我們經濟的廣泛電氣化。我們預計，當前為廣泛電氣化所需的基礎設施提供資金的立法將提振對我們許多產品類別的長期需求。我們還預計，這種需求將提高未來幾年許多原材料投入過程的底線。

We firmly believe that our historical, recent and future success is a direct reflection of our unique culture and strength of our experienced team. We also believe that our one campus location, increasing verticals, deep vendor and customer relationships and our ability to quickly ship complete orders will remain vital differentiators in our future success. We continue to believe that our stock is undervalued at current market prices in what we believe are historically low forward valuation multiples as evidenced by our continued share repurchases in Q2 of 2023 and increased repurchase authorization. Since Q1 of 2020, our share repurchase program has returned $565.4 million in capital to shareholders, and our continued purchasing demonstrates our confidence in long-term value creation potential of our company. With that, I'll now turn the call over to Bret to cover some financial performance indication in the second quarter. Bret?

我們堅信，我們歷史、近期和未來的成功直接反映了我們獨特的文化和經驗豐富的團隊的力量。我們還相信，我們的單一園區位置、不斷增長的垂直市場、深厚的供應商和客戶關係以及我們快速交付完整訂單的能力將仍然是我們未來成功的重要差異化因素。我們仍然認為，以當前市場價格計算，我們的股票被低估，遠期估值倍數處於歷史低位，我們在 2023 年第二季度持續進行股票回購併增加了回購授權就證明了這一點。自2020年第一季度以來，我們的股票回購計劃已向股東返還了5.654億美元的資本，我們的持續回購表明了我們對公司長期價值創造潛力的信心。現在，我將把電話轉給布雷特，介紹第二季度的一些財務業績指標。布雷特？

Thank you, Daniel. Second quarter and year-to-date 2023 highlights include second quarter earnings per diluted share of $6.01, year-to-date earnings per diluted share of $12.53. Second quarter net income of $104.7 million, year-to-date net income of $224.2 million. Gross profit of 26.1% in the second quarter of 2023, 28.6% year-to-date in 2023. Cash on hand, $667.8 million as of June 30, 2023. That compares to $730.6 million of cash on hand as of December 31, 2022. Capital expenditures amounted to just under $75 million in the first half of 2023. We repurchased 772,931 shares during the second quarter and 1,475,409 year-to-date in 2023. Total cash outlay for share repurchases of $126.7 million during the quarter, $253.8 million year-to-date in 2023.

謝謝你，丹尼爾。 2023 年第二季度和年初至今的亮點包括第二季度攤薄後每股收益 6.01 美元，年初至今攤薄後每股收益 12.53 美元。第二季度淨利潤為 1.047 億美元，年初至今淨利潤為 2.242 億美元。 2023 年第二季度毛利潤為 26.1%，2023 年迄今為 28.6%。截至 2023 年 6 月 30 日，手頭現金為 6.678 億美元。相比之下，截至 2022 年 12 月 31 日，手頭現金為 7.306 億美元. 2023 年上半年資本支出接近 7500 萬美元。我們在第二季度回購了 772,931 股股票，2023 年年初至今回購了 1,475,409 股。本季度股票回購的現金支出總額為 1.267 億美元，全年為 2.538 億美元- 2023 年至今。

In June of 2023, the Board of Directors increased the repurchase authorization back up to a full 2 million shares of our common stock through March 31, 2024. In a departure from previous calls, I am not going to read you the earnings release but instead highlight a few key points. Copper unit volume increased 1.3% in the second quarter of 2023 versus the second quarter of 2022 despite a very tough comp in the prior year quarter. Aluminum wire represented 14.4% of net sales in the second quarter of 2023 compared to 15% in the second quarter of 2022. Copper unit volume increased 10.4% in the second quarter of '23 versus the first quarter of 2023. The decrease in net sales in each of those periods was driven by an anticipated decrease in the average selling price in the current year period, which is consistent with the gradual margin abatement we have been discussing over the past several years. Gross profit percentage for the second quarter of 2023, as I said, was 26.1%, and that compares to 31.1% in the first quarter of 2023.

2023 年 6 月，董事會將回購授權增加到 2024 年 3 月 31 日之前的 200 萬股普通股。與之前的呼籲不同，我不會向您宣讀收益報告，而是強調幾個關鍵點。儘管去年同期的競爭非常激烈，但 2023 年第二季度的銅單位銷量較 2022 年第二季度增長了 1.3%。鋁線佔 2023 年第二季度淨銷售額的 14.4%，而 2022 年第二季度為 15%。與 2023 年第一季度相比，2023 年第二季度銅單位銷量增長了 10.4%。淨銷售額下降每個時期的增長都是由本年度平均售價的預期下降推動的，這與我們過去幾年一直在討論的逐步削減利潤率是一致的。正如我所說，2023 年第二季度的毛利潤率為 26.1%，而 2023 年第一季度的毛利潤率為 31.1%。

The average selling price of wire per copper pound sold decreased 12.4% in the second quarter of 2023 versus the first quarter of 2023, while the average cost of copper pound purchased decreased 5.3%. This resulted in a gradual abatement of copper spreads in the quarter, primarily driven by the decrease in average selling price noted above, which resulted in the decreased gross profit margin in the second quarter of 2023 when you compare it to the first quarter of 2023. We believe the earnings for the first half of 2023 were exceptional and remained significantly above historical levels. This is a testament to our organic growth strategy, one location business model. Historic, recent and other reinvestments in the business and our hard-working employees, all driven by a culture of relentless attention to detail.

與 2023 年第一季度相比，2023 年第二季度每磅銅的平均售價下降了 12.4%，而每磅銅的平均採購成本下降了 5.3%。這導致本季度銅價差逐步縮小，主要是由於上述平均售價下降，導致 2023 年第二季度與 2023 年第一季度相比毛利率下降。我們認為 2023 年上半年的盈利非常出色，並且仍顯著高於歷史水平。這證明了我們的有機增長戰略，即單一地點業務模式。對業務和辛勤工作的員工進行的歷史性、近期性和其他再投資，都是由不懈關注細節的文化推動的。

At a macro level, 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 second quarter of 2023. This marks the ninth consecutive quarter of elevated margins and spreads. Our balance sheet and cash flow generation remained very strong, allowing us to continue to reinvest in the business while consistently repurchasing shares of our common stock. Since the first quarter of 2020, we have repurchased 4,447,686 shares of our common stock at an average price of $127.11 for a total cash outlay of $565.4 million. As previously stated, in June of 2023, the Board of Directors increased the repurchase authorization back up to a full 2 million shares of our common stock through March 31, 2024. We also declared a $0.02 cash dividend during the quarter.

從宏觀層面來看，某些原材​​料供應持續緊張、持續的全球不確定性以及熟練勞動力供應持續受到抑制，導致 2023 年第二季度整體利差走高。這標誌著利潤率和利差連續第九個季度上升。我們的資產負債表和現金流量仍然非常強勁，使我們能夠繼續對業務進行再投資，同時不斷回購普通股。自 2020 年第一季度以來，我們以平均價格 127.11 美元回購了 4,447,686 股普通股，現金支出總額為 5.654 億美元。如前所述，2023 年 6 月，董事會將回購授權增加至 200 萬股普通股，截至 2024 年 3 月 31 日。我們還在本季度宣布派發 0.02 美元的現金股息。

Incremental investments to deepen vertical integration in our manufacturing processes as well as other projects focused on driving efficiencies and increasing capacity will continue to improve our service model. These types of organic investments have fueled our consistent growth since inception and position us favorably to continue to profitably capture market share for years to come. In 2022, we began construction on a new state-of-the-art cross-linked polyethylene, XLPE compounding facility to deepen vertical integration related to wire and cable insulation. XLPE insulation is used in many applications, including data centers, oil and gas, transit, wastewater treatment facilities, utilities, and wind and solar applications.

深化製造流程垂直整合的增量投資以及專注於提高效率和增加產能的其他項目將繼續改善我們的服務模式。自成立以來，這些類型的有機投資推動了我們的持續增長，並使我們有利於在未來幾年繼續盈利地佔領市場份額。 2022 年，我們開始建造一座新的最先進的交聯聚乙烯、XLPE 混煉設施，以深化與電線電纜絕緣材料相關的垂直一體化。 XLPE 絕緣材料用於許多應用，包括數據中心、石油和天然氣、交通、廢水處理設施、公用事業以及風能和太陽能應用。

As Daniel mentioned, we anticipate the new facility will be substantially completed by the end of the third quarter of 2023. Capital spending in 2023 through 2025 will further expand vertical integration and 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 $74.7 million in the first 6 months of 2023. We expect capital expenditures to continue 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.

正如 Daniel 提到的，我們預計新工廠將在 2023 年第三季度末基本完工。2023 年至 2025 年的資本支出將進一步擴大垂直整合和我們的製造流程，以降低成本並對選定的電線製造設施進行現代化改造，以實現提高產能和效率，並提高我們作為可持續發展和對環境負責的公司的地位。 2022 年資本支出總額為 1.484 億美元，2023 年前 6 個月為 7,470 萬美元。我們預計 2023 年資本支出將繼續在 1.6 億至 1.8 億美元之間，2024 年為 1.5 億至 1.7 億美元，2023 年為 8,000 萬至 1 億美元。 2025 年。我們預計將繼續利用現有現金儲備和運營現金流為這些投資提供資金。現在我將請丹尼爾發表最後幾句話。

Thank you, Bret. Our strong performance in the first half of 2023 positions us well for the future. Our outlook for demand remains strong and our single site, vertically integrated business model gives us a competitive advantage in the market today. The opening of a new service center in May of 2021, the opening of Plant 7 in the third quarter of 2022. The new XLPE facility, which will be third quarter of 2023 and the other capital projects under construction or planned should provide us the capacity and efficiency to competitively capture market share over the long term. Our unique business model continues to serve us well in current market conditions and remains a competitive advantage, giving us unmatched operational agility and speed to market and serving our customers' evolving needs.

謝謝你，布雷特。我們在 2023 年上半年的強勁表現為我們的未來奠定了良好的基礎。我們的需求前景仍然強勁，我們的單一站點、垂直整合的業務模式使我們在當今的市場上具有競爭優勢。新的服務中心將於 2021 年 5 月開業，7 號工廠將於 2022 年第三季度開業。新的 XLPE 設施將於 2023 年第三季度建成，其他在建或計劃的資本項目將為我們提供產能和效率，以在長期競爭中佔領市場份額。我們獨特的業務模式在當前的市場條件下繼續為我們提供良好的服務，並保持競爭優勢，為我們提供無與倫比的運營靈活性和上市速度，並滿足客戶不斷變化的需求。

Despite persistent tightness in availability of certain raw materials, our supplier partners continue to deliver on their commitments to Encore. We wouldn't have this level of success without the consistent exceptional performance of our long-term suppliers. Looking ahead, we remain solely committed to execute upon the core values of our company, unbeatable customer service, nimble operations and quick deliveries coast to coast. I remain confident in the strength of the Encore team in place as we stand ready to navigate any challenges that line our path.

儘管某些原材料的供應持續緊張，我們的供應商合作夥伴仍繼續履行對 Encore 的承諾。如果沒有我們的長期供應商始終如一的卓越表現，我們就不可能取得如此成功。展望未來，我們仍然致力於執行公司的核心價值觀、無與倫比的客戶服務、靈活的運營和快速的交貨。我對 Encore 團隊的實力仍然充滿信心，因為我們已做好準備應對前進道路上的任何挑戰。

I want to close by thanking our employees for their hard work and commitment to safety, quality and excellence. Our continued success would not have happened 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. Chris will now take questions from our listeners.

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。克里斯現在將回答聽眾的問題。

(Operator Instructions). Our first question is from Julio Romero with Sidoti & Company.

（操作員說明）。我們的第一個問題來自 Sidoti & Company 的 Julio Romero。

Wanted to start with maybe aluminum. The spreads in aluminum seem to be diverging a little bit from what copper is doing. If you could maybe just touch on that, talk about demand for aluminum? Are there changes in buying patterns from customers and our imports may be ramping up there?

想從鋁開始。鋁的價差似乎與銅的價差略有不同。您能否簡單談談這一點，談談對鋁的需求？客戶的購買模式是否發生變化，我們的進口量可能會增加？

Yes. So on the spread, Julio, as we said, aluminum margins I think really peaked in the fourth quarter, October or November of 2022. And so a period in which you had copper margins starting to abate in June of '21, right? Aluminum was still going up. Now you've got them abating as well. So you saw that continue in the first quarter into the second. There are a lot of imports if you look at inventories in the U.S. There's quite a lot of aluminum that is imported in, a lot of it coming from India. A lot of that inventory is dislocated a little bit. And so it's out of market probably by $0.25, $0.30, $0.40 from where the price is today.

是的。因此，胡里奧，就價差而言，正如我們所說，我認為鋁利潤率確實在 2022 年第四季度、10 月或 11 月達到頂峰。因此，在 21 年 6 月，銅利潤率開始下降的時期，對嗎？鋁價仍在上漲。現在它們也減弱了。所以你看到這種情況從第一季度一直持續到第二季​​度。如果你看看美國的庫存，就會發現有大量進口。有相當多的鋁是進口的，其中很多來自印度。很多庫存都有點混亂。因此，它可能比今天的價格低 0.25 美元、0.30 美元、0.40 美元。

So that has an effect on it as you manage through it. And so I think the normal or the gradual abatement is just something you're now seeing on the aluminum side that you didn't see before, which is a little new, but it's abating kind of consistent with what we saw from a copper perspective. So it's running consistent, and I expect those opportunities looking forward to be good on the aluminum side.

所以當你處理它時，這會對它產生影響。因此，我認為正常或逐漸的減弱只是您現在在鋁方面看到的以前沒有看到的東西，這有點新，但它的減弱與我們從銅的角度看到的情況一致。所以它的運行是一致的，我預計這些機會在鋁方面會很好。

Okay. That's really helpful there. And then just -- could you give us a quick refresher on why copper spreads peaked in '21 and aluminum were later in the fourth quarter of '22?

好的。這真的很有幫助。然後，您能否讓我們快速回顧一下為什麼銅價差在 21 年達到峰值，而鋁價差在 22 年第四季度晚些時候達到峰值？

Yes. It's just the timing a little bit. Aluminum was a catch up. You got to think about when you got into the pandemic and everything that was going on and all the strain it took, the impact it had on labor, right? And everyone is chasing 50, 60, 100 different raw materials, right? The chance to do any value reengineering potentially on a project, there was no time to do it. So if it was built with copper, it went with copper, right? There is a lot of tightness on the copper side, which we talked about. And so as things sort of started to settle, you had certain projects, particularly with the run-up in copper that started to get planned at the front end, right, to be done with aluminum, right? And so instead of value reengineering, they just leaned in. And so as they shifted towards that, and there is such tight availability, we all knew China was shut down. And so aluminum was very, very tight, and that kind of lagged a little bit from a copper perspective.

是的。只是時間有點緊而已。鋁是一個追趕者。你必須考慮一下當你陷入大流行時，以及正在發生的一切，以及它所帶來的所有壓力，它對勞動力的影響，對嗎？每個人都在追逐 50、60、100 種不同的原材料，對嗎？有機會對項目進行任何潛在的價值再造，但沒有時間這樣做。所以如果它是用銅建造的，它就用銅，對吧？銅方面有很多緊張，我們談到了這一點。因此，當事情開始穩定下來時，您就有了某些項目，特別是在前端開始計劃銅的上漲，對吧，用鋁來完成，對嗎？因此，他們沒有進行價值再造，而是向前傾斜。因此，當他們轉向這一點時，而且可用性如此緊張，我們都知道中國已被封鎖。因此，鋁非常非常緊，從銅的角度來看，這有點滯後。

And then it ebbs and flows as you go through it, copper prices came down, those projects started going back to being designed on the front end with copper in mind. And so it's somewhat traditional ebb and flow, but it did get accelerated a little bit or affected a little bit just by the timing of when the pandemic hit and how projects were planned going into it.

然後當你經歷它時，它會潮起潮落，銅價下跌，這些項目開始回到以銅為中心的前端設計。因此，這在某種程度上是傳統的潮起潮落，但它確實因大流行爆發的時間以及項目的計劃方式而有所加速或影響。

We also had some volatility, Julio, in aluminum that normally remains just in the copper side on the metal piece. If you look at Q3 -- Q2 specifically, you've got as much as $0.10 or $0.12 a pound on aluminum of volatility within each month and the overall bias, obviously, our trend was from maybe an $0.08 to $0.10 swing on the downside. That moves to aluminum piece also when the volatility is there, that's normally not. If you look at the copper piece, within Q2, you had as much as a $0.50 swing on Comex on the copper side. And overall, the low from 1 month to the next was as much as $0.26 a pound. So that type of volatility within a short 90-day window with deliveries the way that they've been and with the just-in-time service model, it really puts pressure from the actual confirmation of any kind of price increases. But also the positive piece of that is June firmed up as compared to April and May, and we were seeing a lot better stability toward the end of the quarter.

胡里奧，鋁也有一些波動，通常只存在於金屬片的銅側。如果你具體看看第三季度——第二季度，你會發現每個月鋁每磅的波動高達 0.10 美元或 0.12 美元，總體偏差明顯，我們的趨勢可能是從 0.08 美元到 0.10 美元的下行波動。當存在波動時，這種情況也會轉移到鋁片，但通常情況下不會。如果你看看銅，在第二季度，Comex 銅方面的波動高達 0.50 美元。總體而言，從 1 個月到下個月的最低價為每磅 0.26 美元。因此，在短短 90 天的時間內，交貨方式和準時服務模式下的這種波動，確實會因任何形式的價格上漲的實際確認而帶來壓力。但積極的一面是，與 4 月和 5 月相比，6 月更加穩定，並且我們在本季度末看到了更好的穩定性。

Got it. That's certainly good to hear. Can you maybe talk about fill rates. Where you guys are with fill rates today and maybe where competitors' fill rates would be at, just ballpark for them?

知道了。這當然很高興聽到。您能談談填充率嗎？你們今天的填充率在哪裡，也許競爭對手的填充率在哪裡，對他們來說只是大概的情況？

Yes. I mean we're in the high 90s. We prefer it to be 100. We've got 1 or 2 percentage points on the fill rate to make up. We are shipping fantastically quicker than what we were. Some of the added capacity and incremental capacity that we've added in the last several months is certainly paying off in that respect. As Bret mentioned earlier in his prepared statement, comments, when you look at where the product that we're shipping is going, there's more of a time to be received. It feeds into our product category real well and fits the quick ship and complete ship model real well.

是的。我的意思是我們正處於 90 年代。我們希望它是 100。我們需要彌補 1 或 2 個百分點的填充率。我們的發貨速度比以前快得多。我們在過去幾個月中增加的一些產能和增量產能在這方面肯定得到了回報。正如布雷特之前在他準備好的聲明中提到的那樣，評論中，當你查看我們要運送的產品的去向時，會發現有更多的時間可以接收。它非常適合我們的產品類別，並且非常適合快速運輸和完整的船舶模型。

Again, with the volatility in the metal, there's maybe anxiety from a purchasing perspective on releases or whatever it might be. But we did see that get quite a bit better in the end of Q2 once the metal is kind of firmed up, which allows us to execute, perform on that service model. As far as what the competitors are doing, we've got one, maybe 2 out there that do a fantastic job. They come in a little bit short of where we are, but they're doing a good job, and then there's a handful of those that are a little more opportunistic and not so great on the execution.

同樣，由於金屬的波動性，從購買的角度來看，可能會對發布或其他任何事情感到焦慮。但我們確實看到，一旦金屬變得堅挺，第二季度末情況就會好一些，這使我們能夠執行該服務模型。就競爭對手正在做的事情而言，我們有一個，也許兩個，做得非常出色。他們與我們的差距有點小，但他們做得很好，還有一些人更加機會主義，執行力不太好。

Really helpful color there. And then just last one is just on the buyback with the Board for you authorizing the repurchase. Should we expect any change with the pace of repurchases you've done in the first half of the year?

那裡的顏色確實很有幫助。最後一項就是與董事會進行回購，讓您授權回購。我們是否應該預期你們上半年的回購速度會發生任何變化？

Well, we've been -- if nothing else, we're consistent, the buyback was $126.7 million in the second quarter and $127.1 million in the first. That was not planned, but definitely pretty consistent between the 2, north of 700,000 shares. So I think you can take that you'd expect to take from the Board coming out and refilling that bucket back up to full $2 million.

好吧，我們一直 - 如果不出意外的話，我們是一致的，第二季度的回購額為 1.267 億美元，第一季度的回購額為 1.271 億美元。這不是計劃中的，但 700,000 股以上的 2 股之間絕對相當一致。所以我認為你可以把你期望從董事會那裡拿走的錢重新裝滿200萬美元。

It's consistent with what we did in August of last year. And so second year in a row where we bought back really just short of 1.5 -- we did about 1.1 million in the first 6 months of last year, almost 1.5 million in the first 6 months of this year. Looking at the price of the stock today, we remain undervalued, so...

這與我們去年八月的做法是一致的。因此，我們連續第二年回購了不到 1.5 個股票——去年前 6 個月我們回購了約 110 萬股，今年前 6 個月我們回購了近 150 萬股。看看今天的股票價格，我們仍然被低估，所以......

(Operator Instructions). The next question is from Brent Thielman with D.A. Davidson.

（操作員說明）。下一個問題來自 D.A. 的 Brent Thielman。戴維森。

I guess first just on the spreads. Any specifics on the spread change year-on-year or quarter-on-quarter? And I guess, Daniel, anything you can speak to in terms of the abatement of spread during the quarter? Was it even across the months with the exit rate, sort of better or worse? And I guess also to that point, is the abatement in spreads consistent across the product categories? Or is it kind of all over the map depending on where the demand environment is?

我想首先是點差。有關同比或環比利差變化的具體情況嗎？我想，丹尼爾，關於本季度利差的減少，您有什麼可以說的嗎？幾個月的退出率是好還是壞？我想在這一點上，各個產品類別的價差縮小是否一致？或者它是否遍布整個地圖，取決於需求環境的位置？

It's really kind of all the math, but it was better towards the end in our favor -- toward the end of the quarter. The volatility within April $0.28 or $0.29 in Comex on the copper side. And then right behind that, there was no real security with a $0.07 or $.08, maybe $0.10 swing within the month for aluminum. And then you came right back with May with similar type volatility on those metals. The timing of when those metals hit and the timing of when something ship and invoice contributes to that abatement in one direction, obviously, and then kind of halfway takes care of itself and cures itself on the other side. With that volatility and with the uncertainty within the month, it moves the timing of some of the larger projects.

這確實是所有數學問題，但在接近季度末時，情況對我們有利。 Comex 銅方面 4 月份波動幅度為 0.28 美元或 0.29 美元。緊隨其後的是，鋁在一個月內波動 0.07 美元或 0.08 美元，也許是 0.10 美元，沒有真正的安全保障。然後五月份這些金屬就出現了類似的波動。顯然，這些金屬撞擊的時間以及發貨和發票的時間會在一個方向上導致這種減弱，然後在另一側會自行解決並治愈。由於這種波動性和本月內的不確定性，它改變了一些較大項目的時間安排。

And then, like I said, once you get better clarity if that's not too strong of a term to use, but if you can get some clarity on the metal piece on the purchasing side, you got to fold that into all the noise that you hear in the news and geopolitically and all of the different programs that the government is putting in place by parts and infrastructure law and Inflation Reduction Act, CHIPS and Science Act. I mean there's a slew of them. There's 8 or 10 government projects. And so as you're navigating through this volatility and trying to get confirmation of what the actual rules are confirmed as these programs come out from the Feds, it really just contributes to that volatility and uncertainty. So folks are less anxious to pull the trigger, as you can imagine. It did firm up. It looked better toward the end of June, as I said, in our favor. And I look forward with the bullish outlook on copper specifically. I can't believe it would stay this low for very long with the demand numbers that are out there. And as you know, that typically forces demand in our market.

然後，就像我說的，一旦你得到更好的清晰度，如果這不是一個太強烈的術語，但如果你可以在購買方的金屬件上得到一些清晰度，你就必須將其折疊到你所聽到的所有噪音中。在新聞和地緣政治中聽到政府通過部分和基礎設施法以及減少通貨膨脹法、CHIPS 和科學法實施的所有不同計劃。我的意思是他們有很多。有8或10個政府項目。因此，當你在這種波動中航行並試圖確認美聯儲制定的這些計劃時實際規則是什麼，它實際上只會加劇這種波動和不確定性。因此，正如你可以想像的那樣，人們不太急於扣動扳機。它確實變硬了。正如我所說，到六月底，情況看起來對我們有利。我特別期待銅的看漲前景。我不敢相信，鑑於目前的需求量，它會長期保持在這麼低的水平。如您所知，這通常會推動我們市場的需求。

Brent, I'll just jump on that. But one thing as Daniel said, I mean, during the second quarter, and it's not usual you're coming out of the first quarter and you're rolling into the summer months. We did see demand kind of start a little bit slow, and then it just steadily increase throughout the quarter. And as we said culminating with near record volumes across most of our market segments in June. But June was super strong. And so you like to see that trailing month growing as you come through it. And it's all the same things that we talked about.

布倫特，我就直接說吧。但正如丹尼爾所說，我的意思是，在第二季度，第一季度結束後進入夏季的情況並不常見。我們確實看到需求開始有點緩慢，然後在整個季度穩步增長。正如我們所說，六月份我們大部分細分市場的交易量最終達到了接近創紀錄的水平。但六月非常強大。因此，您希望看到過去一個月隨著您的經歷而不斷增長。我們談論的都是同樣的事情。

We're still seeing some distributors that are kind of sitting in that cost-cutting mode. So they're making those inventory reductions like we talked about in the first quarter. That aligns very well. It makes us a preferred supplier due to our fill rates and quick shipments. So that positions us well from that standpoint. So the electrical contractor community still, from what we can hear, remains optimistic about the short- and long-term market opportunities. And so we continue to make the investments to be able to handle that incremental volume.

我們仍然看到一些分銷商處於削減成本的模式。因此，他們正在削減庫存，就像我們在第一季度談到的那樣。這非常吻合。由於我們的填充率和快速發貨，這使我們成為首選供應商。因此，從這個角度來看，我們處於有利的位置。因此，據我們所知，電氣承包商界仍然對短期和長期市場機會保持樂觀。因此，我們繼續進行投資，以便能夠處理增量。

Okay. And Bret, again, on the specifics on the spread change year-on-year or quarter-on-quarter, I didn't see that in the release. Are you providing that?

好的。布雷特，再次，關於同比或季度利差變化的具體細節，我在新聞稿中沒有看到這一點。你提供那個嗎？

We didn't. When you look at it, Brent, the challenges are and the abatement that's happening at the top line, right? It's what we expected and that's what I talked about in the first quarter. There's only 2 things I can change. There is either -- either you're not getting as high of a sale price or you're not able to pass your costs on, right? And so when you look at the comparison, whether or not it's quarter-over-quarter or sequential, right, look at the change in the average sales price and look at the change in our cost, that's not linear. But some drop in that sales price is associated with the decrease in copper and aluminum costs that we saw in the quarter and some is the abatement, right?

我們沒有。布倫特，當你看到這一點時，你會發現挑戰和收入的減少，對吧？這是我們的預期，也是我在第一季度談到的內容。我只能改變兩件事。要么是——要么你沒有得到那麼高的銷售價格，要么你無法轉嫁你的成本，對嗎？因此，當您查看比較時，無論是環比還是環比，對吧，看看平均銷售價格的變化，看看我們成本的變化，這不是線性的。但銷售價格的一些下降與我們在本季度看到的銅和鋁成本的下降有關，有些是減少，對嗎？

But that -- when you navigate through this demand starting to catch up, people start to catch up a little bit more, still dealing with supply issues and with labor issues. That's that gradual abatement you're seeing at the top line. And that hits you a little bit harder, right, as we talked about, making up complete numbers, but 50% of 100 is different than 40% of 90 or 45% of 90. And that's the math that you have as you go through this. But it's been -- it's all the same things we talked about. It's gradual. It really depends on the product or the mix, how many steps it takes to make a finished good and how quickly you need it. And all those are drivers ultimately and trying to get the best price we can for that product on that order. And you do that all day every day.

但是，當你應對這種需求開始迎頭趕上時，人們開始迎頭趕上，但仍在處理供應問題和勞動力問題。這就是您在頂線看到的逐漸減少的情況。這對你的打擊有點大，對吧，正如我們所討論的，組成完整的數字，但是 100 的 50% 與 90 的 40% 或 90 的 45% 不同。這就是你在經歷過程中所得到的數學這。但它一直是——我們談論的都是同樣的事情。這是漸進的。這實際上取決於產品或組合、製作成品需要多少步驟以及您需要多快。所有這些最終都是驅動因素，並試圖為該訂單的產品獲得最好的價格。你每天都這樣做。

Okay. I appreciate all that. And I think this dovetails on some of the comments about, I guess, spreads firming up in the end of June. But I guess with copper prices moving up here, is that better? Or is it worse for your spreads in this environment where it seems like demand is really good, but you're still seeing some level of normalization from kind of really high pricing levels from a couple of years ago?

好的。我很感激這一切。我認為這與一些關於 6 月底利差走強的評論相吻合。但我想隨著銅價上漲，情況會更好嗎？或者，在這種環境下，您的利差是否會變得更糟？在這種環境下，似乎需求確實很好，但您仍然看到幾年前的高定價水平在一定程度上正常化了？

Yes. We always do better in an increase in copper market. Of course, discipline cleans up a lot of the issues that exist on the downside. It's just much better, much cleaner operating in a bias or a trend on the upside for the metals, aluminum also.

是的。我們總是在銅市場的增長中做得更好。當然，紀律可以解決許多存在的問題。對於金屬（鋁）來說，它只是在偏向或上行趨勢下運行得更好、更清潔。

It's always been that way, Brent. And we do a really -- the team does a fantastic job of how we source raw materials. The increase in cost is the easiest to pass on to customers. And if you do nothing, if you keep your margin flat, again as I talked about, you get the same margin on the higher top line, which adds to the bottom line.

一直都是這樣，布倫特。我們的團隊在原材料採購方面做得非常出色。成本的增加最容易轉嫁給客戶。如果你什麼都不做，如果你保持利潤不變，正如我所說的，你會在較高的頂線上獲得相同的利潤，這會增加底線。

Okay. Okay. Helpful, guys. And then how should we think about the outlook for volumes? Because again, it seems like a really good demand environment? I know you have some initiatives coming, which I presume maybe unlock some capacity for you. But then again, you have some pretty tough comparables in the second half of the year. So I just wanted to get a sense of how you're thinking about kind of volume equation going forward?

好的。好的。有幫助，伙計們。那麼我們應該如何看待銷量前景呢？因為這似乎是一個非常好的需求環境？我知道您即將採取一些舉措，我認為這些舉措可能會為您釋放一些能力。但話又說回來，今年下半年你會遇到一些相當艱難的比較。所以我只是想了解一下您如何考慮未來的體積方程？

Yes, June was a good solid month in volume. Residential was stronger for us than expected in June. The commercial piece is holding strong. We still have the industrial piece that's moving. We've got -- as I mentioned earlier, there's quite a few dollars being thrown at the industry by the government on these programs that are coming out, that we're still sorting through what the requirements are for Build America, Buy America. What qualifies for Infrastructure Investment and Jobs Act. There's a lot of projects in front of us, the hardening of the grid on the utility piece, the renewable side, on the electric vehicle, the NAVI that's coming from the Fed. There's quite a few projects being promoted very heavily today from the government and that leads over into the distribution side of the product for us.

是的，六月的銷量表現不錯。六月份住宅市場的表現強於預期。商業片表現強勁。我們仍然有正在移動的工業部件。正如我之前提到的，政府在這些即將推出的計劃上向該行業投入了相當多的資金，我們仍在整理“建設美國、購買美國”的要求。什麼符合基礎設施投資和就業法案的資格。我們面前有很多項目，包括公用事業、可再生能源、電動汽車、美聯儲的 NAVI 方面的電網強化。今天，政府大力推廣了相當多的項目，這些項目為我們帶來了產品的分銷方面。

As these things continue to get sorted out and folks qualify and realize what the projects are and what they're not, we'll start to monetize some of those and execute as we do and turn those things into earnings. It's more I think there's close to $1 trillion in programs that there's some overlap to our product categories. And so as we continue to sort bills out and work with our distributor partners and end users and what that means for us, we'll know more as it goes. But the outlook for us is pretty bullish at this point.

隨著這些事情不斷得到解決，人們有資格並認識到這些項目是什麼，不是什麼，我們將開始將其中一些項目貨幣化，並按照我們的做法執行，並將這些項目轉化為收益。我認為還有近 1 萬億美元的項目與我們的產品類別有一些重疊。因此，當我們繼續整理賬單並與我們的分銷商合作夥伴和最終用戶合作以及這對我們意味著什麼時，我們將了解更多。但目前我們的前景相當樂觀。

Okay. And Daniel, are you -- I mean, are you capacity constrained in certain areas where some of these capital expenditures, initiatives you've got internally need to come on to allow some more robust growth in unit volumes? I'm just trying to think about that.

好的。丹尼爾，我的意思是，您在某些領域的能力是否受到限制，在這些領域中，您需要採取一些資本支出和內部舉措，以實現單位銷量的更強勁增長？我只是想考慮一下。

Yes, there's a few areas where we run pretty close, and we're running 7 days a week in some areas and other areas we're not. But we've been pretty open with the expansions that we're doing. And we obviously address bottlenecks as they come up and invest when we have the clarity on what's coming. We don't always try to just handle the moment that we're in. We're going to be ready going forward. The timing of some of the projects, CapEx projects couldn't be better for us. And so yes, we've addressed those bottlenecks and continue to address them. And you know how we're focused on the execution piece. We're going to continue that.

是的，有一些區域我們的運行非常接近，並且我們在某些​​區域每週運行 7 天，而在其他區域則不然。但我們對正在進行的擴展持相當開放的態度。當我們清楚地了解即將發生的事情時，我們顯然會解決出現的瓶頸並進行投資。我們並不總是試圖只處理我們所處的時刻。我們將做好前進的準備。一些項目、資本支出項目的時機對我們來說再好不過了。所以，是的，我們已經解決了這些瓶頸，並將繼續解決它們。你知道我們如何專注於執行部分。我們將繼續這樣做。

Okay. Just a couple of cleanups. Bret, do you have the LIFO impact this quarter? And then also any impact to SG&A and stock appreciation rights that you saw last quarter that went into this quarter?

好的。只需進行幾次清理即可。 Bret，本季度您有後進先出的影響嗎？然後，您上個季度看到的SG&A 和股票增值權對本季度有何影響？

It's a great question. So two things on the LIFO side, and again, you know how it works, right? It's just matching, right? And so when you -- ever you have a period in which copper is falling, right, you're going to have a LIFO pickup, but it's only matching. It's just the system thing. It's just matching current cost with current revenues. But LIFO with the falling copper, it was about $18.6 million in the second quarter '23 versus about $11.5 million in the second quarter of '22. But that's captured in the spread in the margins ultimately that you're talking about.

這是一個很好的問題。後進先出方面有兩件事，再說一次，你知道它是如何工作的，對吧？只是匹配而已，對吧？因此，當你遇到銅價下跌的時期時，對吧，你將會有一個後進先出的回升，但它只是匹配的。這只是系統的事情。它只是將當前成本與當前收入相匹配。但隨著銅價的下跌，後進先出法（LIFO）在 23 年第二季度約為 1860 萬美元，而在 22 年第二季度約為 1150 萬美元。但這最終體現在您所談論的利潤差中。

As far as SG&A, the main driver in the second quarter was just more on the top line. As it decreases, your commission number comes down. SG&A, the big hit for the (inaudible) is really in the first quarter. The stock price when you look at it, it changed $0.60. It was $185.33 at the end of March and $185.93 at the end of June. And so the big swing was from the $137 it was at the end of December. So the $18 million impact gross that you saw in the first quarter, obviously, is the same gross that you saw for the 6-month period. So that's what $0.85 on a year-to-date basis.

就銷售、管理費用而言，第二季度的主要推動力更多來自於營收。隨著它的減少，您的佣金數量也會減少。 SG&A，（聽不清）的重大打擊實際上是在第一季度。當你查看股價時，它變化了 0.60 美元。 3月底為185.33美元，6月底為185.93美元。因此，大幅波動是從 12 月底的 137 美元開始的。因此，您在第一季度看到的 1800 萬美元的影響總額顯然與您在 6 個月期間看到的總額相同。這就是年初至今的 0.85 美元。

The next question is from Alfred Funai with Barga, LLC.

下一個問題來自 Barga, LLC 的 Alfred Funai。

Just, for instance, interest of disclosure. No, I am not a securities analyst. I'm an investor in Encore, so I am a friend. My question there was a follow-up to what Bret was explaining in terms of some of the unusual, not necessarily unusual, but some of the mechanics behind the LIFO adjustments. If you had to characterize the second quarter in relation to the first quarter, you don't see anything unusual then in terms of contributing to the margin erosion for that period because of LIFO adjustments?

例如，披露利益。不，我不是證券分析師。我是 Encore 的投資者，所以我是朋友。我的問題是布雷特所解釋的後續問題，其中涉及一些不尋常的情況，不一定是不尋常的情況，而是後進先出調整背後的一些機制。如果您必須相對於第一季度來描述第二季度的特徵，那麼您不會發現由於後進先出調整而導致該時期利潤率侵蝕的任何異常情況？

No, because you're just -- the way -- because we ship our products so quickly, right, self-serving now, right? Because I know our margin when I take that order on what I think systems costs are. But I only know it for that very point in time. I know what's going to happen the next day, copper and aluminum is going to move and my cost structure is going to change. So the quicker I can ship that order, the quicker I lock in that margin. And so that's one of the things that we've always focused on with regard to our order fill and getting these orders out very, very quickly because it is self-serving from that standpoint, even though it's great from a service perspective for customers.

不，因為你只是——方式——因為我們如此快速地運送我們的產品，對吧，現在是自私的，對嗎？因為當我接受訂單時，我知道我們的利潤是我認為的系統成本。但我只知道那個時間點。我知道第二天會發生什麼，銅和鋁將會發生變化，我的成本結構將會發生變化。因此，我越快發貨，我就能越快鎖定利潤。因此，這是我們一直關注的關於訂單填寫和非常非常快地發出這些訂單的事情之一，因為從這個角度來看它是自私的，儘管從為客戶服務的角度來看它很棒。

And so that change you see because of it, right, you're costing everything based on averages from the previous month because you don't know what your average is going to be for that month, right. Even though you're selling at the higher spot or average on any given day, on any given order, you don't know what your ultimate cost is. So at the end of the month, once you know your cost for the month, that LIFO is just to catch that up. Catch up what you were selling at on every single order, every single day. So it's more of a balance sheet impact. It really does not have any impact from the income statement. It just matches current costs with current revenues. That is how we're selling every single day and it just gets it right. If you get collapsed, you never see it. If you could do it real time, it would have the same -- it would come up with the same result.

因此，您看到的變化是基於上個月的平均成本，因為您不知道該月的平均成本是多少，對吧。即使您在任何一天、任何訂單上以較高的價格或平均價格出售，您也不知道您的最終成本是多少。因此，到了月底，一旦您知道了當月的成本，後進先出法就可以彌補這一點。了解每天每一個訂單的銷售價格。所以這更多的是對資產負債表的影響。它確實對損益表沒有任何影響。它只是將當前成本與當前收入相匹配。這就是我們每天的銷售方式，而且它是正確的。如果你崩潰了，你就永遠看不到它了。如果你能實時做到這一點，它也會有同樣的結果——它會得出同樣的結果。

The reason for asking is there was a comment by Ernst & Young in the audit report or their opinion in terms of a matter of emphasis having to observe that it was challenging for them to follow some of the computations for LIFO adjustment. I just didn't know if perhaps the second quarter had unfortunately been impacted by perhaps some catch-up adjustments or something of the sort that might be out of the ordinary that would contribute to the lower margin you saw on the month. But I think you've explained, no, there's not. But that's the reason for asking the question. So I will follow up with another question. The McKinney area, obviously, was hit by some very unfortunate weather over the past couple of months. Did you have any unusual expenses that were recorded to cost of sales, for roof repairs or any type of damage replacement of that sort that might have impacted that margin?

詢問的原因是安永在審計報告中發表了評論，或者他們的意見強調了必須觀察到他們遵循後進先出調整的一些計算是具有挑戰性的。我只是不知道第二季度是否不幸受到了一些追趕性調整或其他可能導致本月利潤率較低的異常情況的影響。但我想你已經解釋過，不，沒有。但這就是提出這個問題的原因。所以我會跟進另一個問題。顯然，麥金尼地區在過去幾個月遭受了一些非常不幸的天氣襲擊。您是否有任何異常費用記錄在銷售成本中，例如屋頂維修或任何可能影響利潤的損壞更換？

No, sir. No. And really, the SG&A, the only thing that's going to change SG&A in any of the quarter is we talked about the stock comp, which has mainly been driven by the stock appreciation rights, which are variable accounting, not fixed, but we haven't issued any of those since January 2020. And then commissions stay at a consistent percentage, but that changes obviously with your top line change. And then freight, freight starting to level a little bit. It's really starting to come in with where it was in the middle of the pandemic. And so truck availability is better. Rates are starting to come in a lot better as you manage through it. So nothing unusual to report.

不，先生。不。實際上，SG&A，在任何一個季度中唯一會改變 SG&A 的是我們談論的股票比較，這主要是由股票增值權驅動的，這是可變會計，而不是固定的，但我們自 2020 年 1 月以來尚未發布任何此類產品。然後佣金保持在一致的百分比，但隨著您的收入變化，情況會明顯變化。然後是運費，運費開始一點點趨於平穩。它確實開始出現在大流行中期的情況下。因此卡車的可用性更好。當您克服困難時，費率開始好得多。所以沒有什麼異常需要報告。

Okay. And then finally, if I could ask, probably it's a boot type question, but does the company have any dialogue with these entities, individuals or whatever they may be, that follow the pattern of shortening this company's stock. I'm just curious why it was such a large percentage of the company's stock that is shorted because Encore is an outstanding company in terms of its performance. Obviously, there are some that see opportunities to go the other way and try to make money with that mechanism. But is there a dialogue that you try to have with them to try to help make sure they understand the company better, maybe it might cause them not to be short sellers?

好的。最後，如果我可以問的話，這可能是一個引導型問題，但該公司是否與這些實體、個人或其他任何人進行對話，這些實體、個人或任何人都遵循縮短該公司股票的模式。我只是好奇為什麼公司的股票被做空的比例這麼大，因為就業績而言，Encore 是一家出色的公司。顯然，有些人看到了反其道而行之的機會，並試圖利用這種機制賺錢。但是，您是否嘗試與他們進行對話，以幫助確保他們更好地了解公司，也許這可能會導致他們不做空？

Yes. Alfred, it's a fantastic question. The answer is yes. We -- I take calls from every and all investors and I've talked to a lot of them over the years, right? The challenge is a lot of those folks were just looking for volatility, right? They don't care if you go up or they go down -- you go down. They just want to be on the right side of it. And so when we grow our stock price from $40 to $185 or $200, you attract attention. Some of that attention is good, some of that attention isn't good, right? And there's always folks out there, they think they're smarter than anyone else. We've talked about the story for 2-plus years that margins are abating. I mean we've been crystal clear on that.

是的。阿爾弗雷德，這是一個很棒的問題。答案是肯定的。我們——我接到了所有投資者的電話，這些年來我已經和他們中的很多人進行了交談，對吧？挑戰在於很多人只是在尋找波動性，對吧？他們不在乎你是上升還是下降——你會下降。他們只是想站在正確的一邊。因此，當我們的股價從 40 美元上漲到 185 美元或 200 美元時，您就會引起注意。有些關注是好的，有些關注則不好，對吧？總有一些人認為自己比其他人更聰明。兩年多來，我們一直在談論利潤率下降的故事。我的意思是我們對此已經非常清楚了。

And a bull is going to look at that and go, I get it, and you're still doing fantastic, and a bear is going to look at it and play the story against you. And so earnings go down and they say, "See, I told you so." And we've been talking about that abatement, like I said, for several years on end. So there's always ones that look at it. Hopefully, you convert those shorts to long as you go through this process. It's frustrating. Having the consistent buyback is helpful in this process. But at the end of the day -- nothing beats execution at the end of the day.

牛市會看到這一點，然後走，我明白了，你仍然做得很棒，而熊市會看到它，然後用這個故事來反對你。因此，收入下降，他們說：“看，我告訴過你了。”正如我所說，我們多年來一直在談論這種削減。所以總有人關注它。希望您在完成此過程時將這些短褲轉換為長褲。真令人沮喪。在此過程中，持續回購是有幫助的。但歸根結底——沒有什麼比最終的執行更好的了。

But I share your frustration with the shorts. I think it's just part of the market today. You see it and given our success, you attract a bit more of that, so...

但我和你一樣對短褲感到沮喪。我認為這只是當今市場的一部分。你看到了，鑑於我們的成功，你會吸引更多這樣的人，所以......

Next question is from George Tokarz, an investor.

下一個問題來自投資者喬治·託卡茲。

Can you hear me?

你能聽到我嗎？

Yes, sir.

是的先生。

I bought the company, the stock a couple of months ago, and I have to tell you from an investor's point of view, I was just so impressed with the performance the company and your staff and yourselves. I think you guys are just being a little hard on yourselves, margin abatement. I mean, from what I understand, these were unusual margins that you experienced because of a supply and demand because of COVID. Would I be correct to suggest that you're simply going back to normal margins?

幾個月前我買了這家公司的股票，我必須從投資者的角度告訴你們，我對公司、你們的員工和你們自己的表現印象深刻。我認為你們只是對自己有點苛刻，減少了利潤。我的意思是，據我了解，由於新冠疫情的供需關係，您所經歷的利潤是不尋常的。我建議您簡單地恢復正常利潤率是否正確？

Well, I think that's -- you're definitely gravitating down George, as you go through it, right? The real question is we're making a lot of investments in business, right? What everyone is trying to figure out is where do you land on this, right? If you started this journey and gross margin was 15.2% in 2020, where do we go back to? And that's what a lot of the investments that are out there. And then you got to look at the overall demand constructs and supply constructs, right? Because we do think, as Daniel stated in his comments, that we do think we can land and have historical -- I mean current margins land in an area above what we saw historically, right? And we try to figure out exactly where that is. But there's so many things at play here, right?

嗯，我認為——當你經歷這一切時，你肯定會被喬治吸引，對嗎？真正的問題是我們在商業上進行了大量投資，對嗎？每個人都想弄清楚的是你在哪裡著陸，對吧？如果你開始這一旅程，2020 年毛利率為 15.2%，我們該回到哪裡？這就是很多投資的目的。然後你必須看看整體需求結構和供給結構，對嗎？因為我們確實認為，正如丹尼爾在評論中所說，我們確實認為我們可以實現並實現歷史性的目標——我的意思是當前的利潤率高於我們歷史上看到的水平，對嗎？我們試圖弄清楚它到底在哪裡。但這裡有很多事情在起作用，對吧？

Copper supply, you've got 2.5 days above ground. Because it was 3.5 to 4 when we talked in the first quarter. There was a recent meeting in New York that was represented by some of the largest mines globally and they landed -- those leaders landed on about 6 million deficit -- 6 million metric ton deficit per year in the near term, in the next 12 to 18 months. I mean, to put in perspective, that's like adding another Chile, who's one of your largest suppliers in the world. And so the deficit clearly sits there.

銅供應，距離地面還有 2.5 天。因為我們第一節聊的時候比分是3.5比4。最近在紐約舉行了一次會議，由全球一些最大的礦山代表參加，他們達成了共識——這些領導人達成了約 600 萬公噸的赤字——短期內每年赤字 600 萬公噸，在未來 12 年至18個月。我的意思是，從長遠來看，這就像添加另一個智利，它是你們在世界上最大的供應商之一。因此赤字顯然就在那裡。

Demand that you're seeing coming in from data centers or AI or electric vehicles, the U.S. and global infrastructure upgrades are being pushed, semiconductors and chips onshoring, battery plants, renewables, utilities. All that is really setting itself up to drive demand above and beyond some of those historical residential, commercial, industrial sources. And so all that put it in a [blender heat pulse], right? And you come up with the impact on the margin. And so I think we're trying to give a lot of transparency. Am I proud at $6 this quarter? Absolutely, right? Going from $3.68 to $26.22 in 2021, to $36.91 in 2022. At $12.53, we're still having a fantastic year, and that's a little bit of the point as new folks come in, recognize that these are elevated margins. They're coming back. And we're making a lot of investment in the business to try to keep it as long as we can.

你看到的需求來自數據中心、人工智能或電動汽車、美國和全球基礎設施升級、半導體和芯片本土化、電池廠、可再生能源、公用事業。所有這些實際上都在推動需求超越一些歷史悠久的住宅、商業、工業來源。所以所有這些都將其放入[攪拌機熱脈衝]中，對吧？然後你就可以得出對利潤的影響。所以我認為我們正在努力提供很大的透明度。我對本季度 6 美元感到自豪嗎？絕對正確？從 3.68 美元到 2021 年的 26.22 美元，再到 2022 年的 36.91 美元。以 12.53 美元的價格，我們仍然度過了美好的一年，這就是新人進來的一點點，認識到這些都是高利潤。他們回來了。我們正在對這項業務進行大量投資，以盡可能長時間地保留它。

Well, you guys are buying back the stock. You issued a dividend. You have potentially an absolutely wonderful horizon as far as copper, and I love your theme, the electrification of America. Now do you guys hedge at all on your copper by any chance?

好吧，你們正在回購股票。您發放了股息。就銅而言，你有一個絕對美妙的前景，我喜歡你的主題，即美國的電氣化。現在你們有機會對沖銅嗎？

No, sir. I do the best hedges out there, George, and that is you buy it and sell it in the same month, right? Should we buy it and change the shape and ship it within a month. And so I'm turning finished good inventories right now 12x to 14x. And so we do not bet the company on our heads with regard to copper. We've just changed the shape very quickly and ship orders as quickly as we can, and you cannot beat that. There's no guessing on the market, you're just locking in the margin you thought you had.

不，先生。喬治，我做了最好的對沖，那就是你在同一個月內買入並賣出，對吧？我們應該購買它並改變形狀並在一個月內發貨嗎？因此，我現在將成品庫存翻了 12 倍到 14 倍。因此，我們不會在銅方面把公司押在我們的頭上。我們剛剛非常快地改變了形狀並儘快發貨，這是您無法比擬的。市場上沒有猜測，您只是鎖定了您認為擁有的利潤。

Excellent. Well, you Texas boys are doing really good and God bless you. Are you going to make guidance for the rest of the year, do you think?

出色的。好吧，你們德克薩斯州的男孩們做得非常好，上帝保佑你們。您認為您會為今年剩餘時間提供指導嗎？

Well, we don't give guidance, George, just because of all the things we've talked about and the uncertainty in copper prices. But I think if you go back and look at my comments and Daniel's comments, when you look out on demand that's out there, you look at commercial side data centers continue to be a big driver. They're constantly going through reconfiguration. You kind of started with -- they were water cooled, now they're going air cooled. They started with an H design. They proposed an X design that never got traction. They're now doing an F design, which is -- has the latest technology that uses the same number of servers in half the footprint, air cooled with a lot less energy consumption. You're going to have more power in 1 building, I think, that's ever been done before. And so that process continues to drive it that keeps things optimistic.

好吧，喬治，我們不提供指導，只是因為我們討論過的所有事情以及銅價的不確定性。但我認為，如果你回頭看看我和丹尼爾的評論，當你關注現有的需求時，你會發現商業側數據中心仍然是一個重要的推動力。他們不斷地進行重新配置。一開始它們是水冷的，現在它們是風冷的。他們從 H 設計開始。他們提出了一種 X 設計，但從未得到關注。他們現在正在進行 F 設計，即採用最新技術，在一半的佔地面積內使用相同數量的服務器，採用風冷，能耗顯著降低。我認為，在一棟建築中你將擁有更多的權力，這以前從未做過。因此，這個過程繼續推動它，使事情保持樂觀。

And then in all this federal spending and we got an election year coming up next year, it's still kind of mired up and all the politics you'd expect to be as you go through this. And so as that starts to kind of triple down as they figure out this Build America Buy America initiatives, we're super well positioned to be able to serve that, and that's why we're making the investments we're making.

然後，在所有這些聯邦支出中，以及明年即將到來的選舉年，它仍然陷入困境，以及您在經歷這一過程時所期望的所有政治。因此，當他們提出“建設美國、購買美國”計劃時，這種情況開始增加三倍，我們處於非常有利的位置，能夠為此提供服務，這就是我們進行投資的原因。

We have no further questions. At this time, I'll turn it back to the presenters for any closing remarks.

我們沒有其他問題了。此時，我會將其轉回給演示者以供結束語。

Chris, thank you, and I appreciate everyone's time today and your investment in Encore Wire (inaudible) day.

克里斯，謝謝你，我感謝大家今天抽出時間以及你們對 Encore Wire（聽不清）日的投入。

This concludes today's conference call. You may now disconnect. Thank you.

今天的電話會議到此結束。您現在可以斷開連接。謝謝。