Advanced Drainage Systems Inc (WMS) 2026 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Advantage Drainage Systems second quarter of fiscal year 2026 results conference call. My name is Kayla, and I will be your operator for today's call. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.

女士們、先生們，早安，歡迎參加 Advantage Drainage Systems 2026 財年第二季業績電話會議。我叫凱拉，我將擔任您今天通話的接線生。（操作員指示）現在，我謹將今天的演講交給本次電話會議的主持人，公司策略和投資者關係副總裁麥克·希金斯先生。先生，您可以開始了。

Good morning, everyone. Thanks for joining us today. Here with me, I have Scott Barbour, our President and CEO; and Scott Cottrill, our CFO. I would also like to remind you that we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. Lastly, the press release we issued earlier this morning is posted on the Investor Relations section of our website. A copy of the release has also been included in an 8-K submitted to the SEC. We will make a replay of this conference call available via webcast on the company website. I'll now turn the call over to Scott Barbour.

各位早安。感謝您今天收看我們的節目。陪在我身邊的是我們的總裁兼執行長史考特·巴伯；以及我們的財務長史考特·科特里爾。我還要提醒各位，我們將討論前瞻性陳述。由於各種因素，包括我們在新聞稿中討論的因素以及我們在向美國證券交易委員會提交的 10-K 表格中確定的風險因素，實際結果可能與這些前瞻性聲明有重大差異。雖然我們將來可能會更新前瞻性聲明，但我們不承擔任何更新義務。您不應過度依賴這些前瞻性陳述，所有這些陳述僅代表截至今日的情況。最後，我們今天早上發布的新聞稿已發佈在我們網站的投資者關係版塊。新聞稿的副本也包含在提交給美國證券交易委員會的 8-K 文件中。我們將透過公司網站的網路直播提供本次電話會議的錄音回放。現在我將把電話交給史考特·巴伯。

Thank you, Mike, and good morning, everyone. Thank you all for joining us on today's call. ADS executed well this quarter in spite of a challenging market environment, driving growth at strong margins. In the second quarter, we delivered 9% revenue growth and 17% growth in adjusted EBITDA. This performance reflects ADS' strategy to prioritize higher growth, higher-margin products, execute the material conversion strategy and implement self-help initiatives to improve safety and productivity, all of which we executed exceptionally well this quarter.

謝謝你，麥克，大家早安。感謝各位參加今天的電話會議。儘管市場環境充滿挑戰，但ADS本季表現出色，實現了強勁的成長和利潤率。第二季度，我們的營收成長了9%，調整後EBITDA成長了17%。這項業績反映了 ADS 的策略，即優先發展高成長、高利潤的產品，執行材料轉換策略，並實施自助舉措以提高安全性和生產力，而我們在本季度在所有這些方面都做得非常出色。

As we continue to deliver above-market growth and industry-leading margins, we remain committed to investing in both organic and inorganic growth to further strengthen our position as a leader in water management. Let me touch on a few highlights from this quarter. Allied Products sales increased 13% with double-digit growth in several key products, including the StormTech, retention/detention detention chambers, the catch basins and the water quality products, all of which benefited from new products introduced over the last year. Infiltrator revenue increased 25%, including Orenco or 7% on an organic basis, driven by double-digit growth in both tanks and advanced the products launched in the last several years. Pipe revenue increased 1%, with double-digit growth in the HP Pipe Products and construction applications being offset by weakness in the agriculture market.

隨著我們持續實現高於市場平均的成長和領先業界的利潤率，我們將繼續致力於投資有機成長和無機成長，以進一步鞏固我們在水資源管理領域的領導地位。讓我簡要介紹一下本季的一些亮點。聯合產品銷售額成長了 13%，其中幾款關鍵產品實現了兩位數的成長，包括 StormTech、滯留/蓄水池、集水池和水質產品，所有這些產品都受益於去年推出的新產品。Infiltrator 的營收成長了 25%，其中 Orenco 的營收成長了 7%（以自然成長計算），這主要得益於過去幾年推出的儲槽和先進產品的兩位數成長。管道收入成長 1%，其中高壓管道產品和建築應用領域的兩位數成長被農業市場的疲軟所抵消。

Importantly, pricing remains stable. From an end market perspective, 15% nonresidential sales growth was broad-based geographically across the US Organic growth of 12% was driven by double-digit growth of Allied Products as well as the strong growth in HP Pipe products. Inorganic results contributed 3% to the growth in the nonresidential market. The residential end market was more mixed as interest rates continue to weigh on single-family housing starts, existing home sales and land development activity. For the second quarter in a row, we experienced strong Allied Product growth in the multifamily development activity. From a geographic lens, land development activity was better in the Atlantic Coast and South Central US but the DIY channel we service through big box retailers remains challenged.

重要的是，價格保持穩定。從終端市場角度來看，非住宅銷售成長了 15%，這一成長在美國各地普遍實現。有機成長 12% 是由 Allied Products 的兩位數成長以及 HP Pipe 產品的強勁成長所推動的。非有機成長對非住宅市場成長貢獻了 3%。由於利率持續對獨棟住宅開工、二手房銷售和土地開發活動構成壓力，住宅終端市場的情況更加複雜。連續第二個季度，我們在多戶住宅開發活動中實現了強勁的聯合產品成長。從地理角度來看，大西洋沿岸和美國中南部地區的土地開發活動較為活躍，但我們透過大型零售商服務的 DIY 管道仍面臨挑戰。

Infiltrator's core residential business significantly outperformed the market and the continued outperformance by both companies gives us confidence that we have the right strategies product portfolio and go-to-market model to increase participation in the residential segment. Overall, we executed well in a challenging market environment and remain focused on driving profitable growth by executing these strategies, introducing new products and customer programs, pursuing acquisitions and investing capital for long-term growth.

Infiltrator 的核心住宅業務表現顯著優於市場，兩家公司持續的優異表現讓我們相信，我們擁有正確的策略、產品組合和市場進入模式，可以提高在住宅領域的參與度。總體而言，我們在充滿挑戰的市場環境中表現出色，並將繼續專注於透過執行這些策略、推出新產品和客戶計劃、進行收購以及投資資本來實現長期成長，從而推動獲利成長。

We continue to build on the strong foundation of the ADS story. We operate in highly attractive water segments supported by secular tailwinds from changing climate patterns, as well as the increasing awareness of the societal value of proper storm water and on-site wastewater management, ultimately driving long-term demand for the company's products. ADS is the only company with solutions that extend throughout the entire storm water or on-site wastewater system on a national scale. Through our best-in-class portfolio of water management products, we deliver solutions that are safer, faster to install and lower costs through savings on labor and equipment. We were excited to announce an agreement to acquire September, a US supplier of residential storm water and irrigation products that complement the existing ADS product portfolio.

我們將繼續鞏固ADS的強大基礎。我們在極具吸引力的水務領域開展業務，這些領域受益於氣候模式變化帶來的長期利好，以及人們對妥善處理雨水和現場廢水的社會價值的認識不斷提高，最終推動了對公司產品的長期需求。ADS 是唯一一家能夠提供覆蓋全國整個雨水或現場污水系統的解決方案的公司。我們憑藉一流的水管理產品組合，提供更安全、安裝更快捷、成本更低的解決方案，從而節省人力和設備成本。我們很高興地宣布達成協議，收購 September，這是一家美國住宅雨水和灌溉產品供應商，可以補充 ADS 現有的產品組合。

This acquisition presents another opportunity for us to grow our Allied Product portfolio with NDS' differentiated offerings alongside our core products ultimately providing a broader solution set to capture, convey, store and treat storm water. We will continue to execute ADS' strategy to diversify and increase the mix of profitable Allied and Infiltrator products that enhance resiliency, support profitable growth and enable ADS to pursue additional opportunities in water management products across a broader set of applications. The regulatory process remains ongoing, and we look forward to providing an update once available. The market outlook presented at the bottom left of Chart 4 remains unchanged. Overall, the residential and nonresidential end markets remain choppy.

此次收購為我們提供了另一個機會，讓我們能夠將 NDS 的差異化產品與我們的核心產品結合，從而擴展我們的聯合產品組合，最終提供更廣泛的解決方案，用於收集、輸送、儲存和處理雨水。我們將繼續執行 ADS 的策略，實現多元化，增加盈利的 Allied 和 Infiltrator 產品組合，以增強韌性，支持盈利增長，並使 ADS 能夠在更廣泛的應用領域中尋求水管理產品方面的更多機會。監管流程仍在進行中，我們將在有最新消息時及時向大家報告。圖表 4 左下角所示的市場前景維持不變。整體而言，住宅和非住宅終端市場仍波動不定。

The recent outperformance is driven by strong execution by our employees, and I'm very proud of the team for their performance delivered in the challenging quarter. Their disciplined execution and commitment to continuous improvement resulted in our safest first half of the year on record, achieving a total recordable incident rate, one-half of the industry average. This performance reflects our ongoing focus on safety and operational excellence, which are foundational elements of our sustainable growth strategy. When you stack our strengths, the scale, product portfolio go-to-market strategy and the ability to invest in our business, people and industry growth, you see ADS as a powerful value proposition. In summary, we continue to execute effectively in a challenging environment.

近期業績的優異表現得益於員工們的出色執行力，我為團隊在充滿挑戰的季度中取得的成績感到非常自豪。他們嚴謹的執行力和對持續改進的承諾，使我們取得了有史以來最安全的上半年，總可記錄事故率僅為行業平均水平的一半。這項業績體現了我們對安全和卓越營運的持續關注，而這正是我們永續成長策略的基礎要素。當我們把我們的優勢、規模、產品組合、市場推廣策略以及投資於業務、人才和行業發展的能力綜合起來，就會發現 ADS 是一個強大的價值主張。總之，我們在充滿挑戰的環境中繼續有效率地執行各項任務。

Our self-help operational initiatives continue to bear fruit, as demonstrated by the 33.8% adjusted EBITDA margin reported today. We will continue to increase the capacity of existing production facilities and add new capacity in strategic areas to meet customer demand. We are also highly focused on service and delivery experience for our customers leveraging the new digital tools across the platform. While we navigate the near-term environment, we do so with an eye towards the future. We remain firmly committed to our long-term vision and we'll continue investing in the capabilities that will position us for future success. Overall, the long-term outlook for our business remains strong, supported by compelling secular tailwinds driving demand for water management solutions across North America. Now I'll turn the call over to Scott Cottrill.

我們的自助營運措施持續取得成效，今天公佈的調整後 EBITDA 利潤率為 33.8%，就證明了這一點。我們將繼續提高現有生產設施的產能，並在戰略地區增加新的產能，以滿足客戶需求。我們也高度重視利用平台上的新型數位工具，為客戶提供服務和交付體驗。在應對近期環境的同時，我們也要著眼於未來。我們始終堅定不移地致力於我們的長期願景，並將繼續投資於能夠讓我們在未來取得成功的能力建設。整體而言，在強勁的長期利好因素推動下，我們業務的長期前景依然強勁，這些因素推動了北美地區對水資源管理解決方案的需求。現在我將把電話交給斯科特·科特里爾。

Thanks, Scott. On slide 5, we present our second quarter fiscal 2026 financial performance. Revenue increased 9% to $850 million, primarily due to the factors Scott mentioned. Importantly, we believe our results outpaced the end markets overall, demonstrating the resilience of the ADS business model. From a profitability perspective, we were very pleased with the 17% increase in adjusted EBITDA year-over-year and the resulting 33.8% adjusted EBITDA margin. A couple of things I feel are worth reiterating related to our strong performance during the quarter. First, we experienced strong growth in both our nonres and residential end markets. It is worth noting that the nonresidential end market also accounts for two-thirds of our Allied Product sales.

謝謝你，斯科特。在第 5 張投影片中，我們展示了 2026 財年第二季的財務表現。營收成長 9% 至 8.5 億美元，主要原因是 Scott 提到的那些因素。重要的是，我們相信我們的表現超過了終端市場的整體表現，證明了 ADS 商業模式的韌性。從獲利能力的角度來看，我們對調整後 EBITDA 年成長 17% 以及由此產生的 33.8% 的調整後 EBITDA 利潤率感到非常滿意。關於本季我們取得的優異業績，我覺得有兩點值得重申。首先，我們的非住宅和住宅終端市場均實現了強勁成長。值得注意的是，非住宅終端市場也占我們聯合產品銷售額的三分之二。

In addition, we continued to see favorable price cost performance in the quarter. Regarding manufacturing and transportation costs, we incurred incremental transportation costs related to the strong demand during the quarter as well as to reposition product around the network as a result of previously announced realignment actions. Regarding SG&A costs, the year-over-year increase was primarily driven by the acquisition of Orenco as well as higher sales-related costs. Again, it is important to highlight the company's performance and the resulting 33.8% margin in the quarter, demonstrating the resilience of the ADS business model. On slide 6, we present our free cash flow. We generated $399 million of free cash flow year-to-date compared to $238 million in the prior year, primarily driven by increased profitability, as well as better working capital performance and lower cash taxes.

此外，本季我們繼續看到良好的價格成本表現。關於製造和運輸成本，由於本季強勁的需求，以及由於先前宣布的調整措施，需要在網路中重新定位產品，我們產生了額外的運輸成本。關於銷售、一般及行政費用，較去年同期增加主要是因為收購 Orenco 以及銷售相關成本增加所致。再次強調，公司本季的業績和由此產生的 33.8% 的利潤率非常重要，這證明了 ADS 商業模式的韌性。在第 6 張投影片中，我們展示了我們的自由現金流。今年迄今為止，我們已產生 3.99 億美元的自由現金流，而去年同期為 2.38 億美元，這主要得益於盈利能力的提高、營運資本表現的改善以及現金稅收的減少。

Of note, we expect the OBBBA to result in an incremental $30 million to $40 million of free cash flow this fiscal year than we had originally anticipated. Thoughtful capital allocation continues to be a key focus for the management team and our Board, given the strong cash generation of the company. We expect $111 million to spend $111 million on capital expenditures year-to-date and expect to spend approximately $200 million to $225 million for the full year. These investments will focus on innovation and new product development at our world-class engineering and technology center, increasing our recycling capacity, particularly in the Southeast, continued investments in customer productivity and automation as well as executing growth initiatives in certain key geographies. We ended the quarter with less than 1 turn of net leverage or 0.7 turns to be exact and over $1.4 billion in available liquidity, including $813 million of cash on hand. Our target leverage looking forward approximately two turns.

值得注意的是，我們預計 OBBBA 將在本財年帶來比我們最初預期多 3,000 萬至 4,000 萬美元的自由現金流。鑑於公司強勁的現金流，審慎的資本配置仍是管理團隊和董事會關注的重點。我們預計今年迄今將在資本支出上花費 1.11 億美元，預計全年支出約為 2 億至 2.25 億美元。這些投資將重點放在我們世界一流的工程和技術中心的創新和新產品開發上，提高我們的回收能力，尤其是在東南部地區，繼續投資於客戶生產力和自動化，以及在某些關鍵地區實施成長計畫。本季末，我們的淨槓桿率不到 1 倍，準確來說是 0.7 倍，可用流動資金超過 14 億美元，其中包括 8.13 億美元的現金。我們預計未來大約兩輪的槓桿率。

We plan to use a significant portion of the cash on hand for the proposed acquisition of NDS. As a reminder, ADS signed an agreement to purchase NDS in an all-cash transaction valued at $1 billion or $875 million net of tax benefits. This represents a valuation multiple of times NDS' adjusted EBITDA for the trailing 12 months ended June 30, 2025, inclusive of expected run rate cost synergies. This is a compelling acquisition given the highly complementary strategic fit, alignment with the ADS water management strategy, growth profile and additional exposure to the residential segment and resilient applications such as residential repair remodel and the landscape irrigation markets.

我們計劃將手頭現金的很大一部分用於擬議的對 NDS 的收購。提醒一下，ADS 已簽署協議，將以全現金交易收購 NDS，交易價值 10 億美元，扣除稅收優惠後淨值為 8.75 億美元。這代表 NDS 截至 2025 年 6 月 30 日的過去 12 個月的調整後 EBITDA 的估值倍數，其中包括預期的運行率成本協同效應。鑑於此次收購與 ADS 的水資源管理策略高度互補、成長前景良好，以及對住宅領域和住宅維修改造、景觀灌溉市場等具有韌性的應用領域的額外拓展，這是一項極具吸引力的收購。

The company expects the acquisition to be accretive to adjusted earnings per share in the first year and given ADS' proven integration capabilities, we expect to generate $25 million in expected annual cost synergies by year three. We expect to achieve additional upside from revenue synergies through cross-selling products and expanding market opportunities in new segments and applications. We look forward to identifying areas where we can enhance our collective capabilities and create new opportunities for customers. Moving on to slide 7.

公司預計此次收購將在第一年增加調整後每股收益，鑑於 ADS 已證明的整合能力，我們預計到第三年將產生 2500 萬美元的預期年度成本協同效應。我們預期透過交叉銷售產品和拓展新領域及應用的市場機會，實現收入綜效，從而獲得額外的成長空間。我們期待找到可以提升集體能力並為客戶創造新機會的領域。接下來是第7張投影片。

We present our updated guidance ranges for fiscal 2026. Based on our performance in the first half of the year, as well as current trends and backlog, we increased the revenue guidance by 2% at the midpoint to $2.945 billion. In addition, we increased the adjusted EBITDA guidance by 5% at the midpoint to $920 million. The updated guidance drives an adjusted EBITDA margin of approximately 31.2% or 60 basis points higher than fiscal 2025. Despite our second quarter performance, we see demand and market strength to be the largest risk in the second half of the year, especially given the impact of seasonality. We remain cautious about market demand in the current environment and it reflected such in our guidance. We remain focused on executing our long-term strategic plan to drive consistent long-term growth margin expansion and free cash flow generation. With that, I will open the call for questions. Operator, please open the line.

我們在此公佈2026財年的最新業績指引範圍。根據我們上半年的業績，以及目前的趨勢和積壓訂單，我們將營收預期中位數上調 2%，至 29.45 億美元。此外，我們將調整後 EBITDA 預期中位數上調 5% 至 9.2 億美元。更新後的業績指引將使調整後的 EBITDA 利潤率將比 2025 財年提高約 31.2%，即 60 個基點。儘管我們第二季業績良好，但我們認為下半年需求和市場強度仍是最大的風險，尤其考慮到季節性因素的影響。我們對當前環境下的市場需求仍持謹慎態度，這也反映在我們的業績指引中。我們將繼續專注於執行我們的長期策略計劃，以推動持續的長期成長利潤率擴張和自由現金流的產生。接下來，我將開始接受提問。接線員，請接通線路。

(Operator Instructions) Mike Halloran, Baird.

（操作說明）Mike Halloran，Baird。

A couple of questions here. First question, maybe just how you see the end markets playing out in the back half of the year and what's embedded in your guidance. I certainly understand the unchanged end markets on a holistic basis. Does that assume normal sequentials from here? I know the original guidance assumed some deterioration in dynamics. Is that still part of the story? And then maybe just to comment on what inventory looks like in the channel?

這裡有幾個問題。第一個問題，您認為下半年終端市場的發展趨勢如何？您的業績指引中又包含了哪些內容？我當然從整體上理解終端市場沒有改變。這是否意味著接下來的序列是正常的？我知道最初的指導意見假設動力學方面存在一些惡化。那還是故事的一部分嗎？然後或許可以評論一下通路中的庫存狀況？

Go ahead.

前進。

Yes. So at the midpoint, Mike, when we look at 2H, we basically implied a little bit of degradation on a year-over-year basis. Again, when you look at our first half performance organically, it was good, up low single digits. And again, really good conversion from the company on all levels, new products, as Scott mentioned, as well as geographies. So again, as we ended my comments in the prepared script, it's demand that we see as kind of the riskiest part of the rest of the fiscal year, and we've reflected such in our guide. So a little conservative on that end based on where Q2 was. But again, we feel that that's prudent right now.

是的。所以，麥克，從中點來看，當我們審視下半年時，我們基本上認為同比略有下滑。再說，從我們上半年的整體表現來看，成績不錯，實現了個位數的成長。再次強調，公司在各個層面都取得了非常好的轉換率，包括新產品（如 Scott 所提到的）以及地理拓展。所以，正如我在準備好的講稿中結束發言時所說，我們認為需求是本財年剩餘時間裡風險最大的部分，我們也在指南中反映了這一點。所以，根據第二季的情況來看，這方面我們稍微保守了一些。但我們仍然認為，目前這樣做是謹慎的。

The inventory piece?

庫存部分？

Inventory piece. So we don't -- this is Scott Barbour, Mike. And I don't think we see anything unusual from an inventory standpoint, either in our customers' inventory in our inventory. So it's kind of sized correctly for what we call this tepid and uncertain demand picture. There's some friction out there, I call it, but this government shutdown is not helping. I think that creates a little uncertainty and friction out there. People are still kind of waiting see ultimately what happens with interest rates. But I feel like we're competing pretty well out there and in doing winning more than our fair share in that kind of market.

庫存件。所以我們沒有——我是史考特·巴伯，麥克。從庫存角度來看，我認為無論是客戶的庫存還是我們自己的庫存，都沒有任何異常情況。所以，就我們所說的這種疲軟且不確定的需求情勢而言，它的規模算是比較合適的。我認為，目前存在一些摩擦，但政府停擺對緩解這種情況毫無幫助。我認為這會造成一些不確定性和摩擦。人們仍在觀望利率最終的走向。但我感覺我們在市場上的競爭力相當不錯，而且在這種市場中贏得了遠超我們應得的份額。

And I think that's due to our go-to-market model, our scale, our national footprint, we can participate everywhere. And this really broad portfolio of products at Infiltrator, who is definitely in the right geographies with the right product lines and the ADS side. So we're just -- we're trying to be right, as Scott said, a little cautiously conservative around the demand side, which, as you all know, our second half of the year is the most uncertain demand environment we have because of weather and some of the focus on the northern climbs.

我認為這歸功於我們的市場進入模式、我們的規模、我們的全國佈局，我們可以參與任何地方。Infiltrator 擁有非常廣泛的產品組合，其產品線和廣告投放能力在地理位置和廣告投放方面都絕對佔優勢。所以，正如斯科特所說，我們只是想確保預測正確，在需求方面採取謹慎保守的態度。眾所周知，由於天氣和對北部登山活動的關注，下半年是我們需求環境最不確定的時期。

The other thing I'd highlight, Mike, is we've also highlighted our realignment activities as we look at the network and we optimize such. So again, really robust S&OP process, realignment activities to make sure that we're focusing on the right growth areas. So I would say the management team is focused in the right areas.

麥克，我還想強調一點，我們在審視網絡並進行優化時，也重點強調了我們的重組活動。所以，再次強調，我們需要非常健全的銷售與營運計畫流程，以及調整活動，以確保我們專注於正確的成長領域。所以我認為管理團隊的工作重點是正確的。

No, that makes sense. And you can certainly see the strong outperformance in the numbers. Maybe a similar question on the margin line. Just help me with the puts and takes in the back half of the year. I'm assuming there's an element of conservatism in how the margins moved to the back half. Maybe walk through mix, how you're thinking about price/cost and just bridge a little bit to the back half of the year from the front half? .

沒錯，這很有道理。從數據中確實可以看出其強勁的超額收益。或許在頁邊空白處也有類似的問題。請幫我處理下半年的買賣交易。我推測，邊緣位置向後移動有一定的保守因素。或許可以詳細解說產品組合，你是如何考慮價格/成本的，並且稍微過渡上半年和下半年的計畫？。

Yes. I would say price/cost, we'll start with that. That seems to be the topic everybody is the most interested in. But again, no degradation assumed in price/cost, so I think it's important to get that out of the way. The way we've kind of set our 2H guide or implied guide is very much driven by demand and the top line. And then we've kind of used our 30% to 40% incremental decremental margin approach, if you will, to look at what that might mean from an EBITDA perspective. Again, volume generated as we look through price/cost manufacturing transportation, SG&A, nothing unusual in there or something unexpected that we need to highlight or should highlight, just demand driven. .

是的。我認為應該從價格/成本入手，我們就從這個開始談起。這似乎是大家最感興趣的話題。但同樣，價格/成本方面沒有假設出現劣化，所以我認為有必要先明確這一點。我們制定下半年業績指引或隱含指引的方式，很大程度取決於市場需求和營收。然後，我們採用了 30% 到 40% 的增量遞減利潤率方法，從 EBITDA 的角度來分析這可能意味著什麼。再次強調，銷售量是由需求驅動的，從價格/成本、製造成本、運輸成本、銷售、一般及行政費用來看，沒有什麼不尋常的，也沒有什麼需要強調或應該強調的意外情況，這完全是需求驅動的。。

Matthew Bouley, Barclays.

馬修·布雷，巴克萊銀行。

Really a similar line of question here around that second half guide to start off. Just maybe clarify one piece of it. Basically, are you actually seeing signs of slowing as we kind of move into, let's say, October, November? Or is this really just taking that kind of conservative outlook and uncertainty, government shutdown, et cetera, and so forth, like you said, and building that into guide. Just curious if you've actually seen anything that would suggest that kind of bigger slowdown in that second half?

實際上，關於下半部分指南，這裡也存在類似的問題。或許可以澄清其中一點。基本上，隨著我們進入十月、十一月，你是否真的看到了經濟放緩的跡象？或者，正如你所說，這真的只是把那種保守的觀點和不確定性、政府停擺等等因素融入指南中嗎？我只是好奇，你是否真的看到任何跡象表明下半場會出現那種更大的放緩？

So this is Scott B., Matt. And I would say that we are more conservative as we look into the second half, we feel like we performed very well in the second. If it's there, we're going to get it. But we are worried about what I call the friction in the market. We're not -- it's not overwhelming and evident everywhere. But we do kind of sense that the slowdown, particularly around the infrastructure stuff, the government shutdown, particularly around the infrastructure stuff is not leading to less quote or orders, but it is putting some friction into release for shipment, if you will. And now that's not the hugest part of our business, but we're watching that super closely.

這位是 Scott B.，Matt。我認為，展望下半季，我們會更加保守，我們感覺下半季的表現非常出色。如果它在那裡，我們一定會得到它。但我們擔心的是我所說的市場摩擦。並非如此——它並不普遍，也並非隨處可見。但我們確實感覺到，經濟放緩，尤其是在基礎設施方面，政府停擺，尤其是在基礎設施方面，並沒有導致報價或訂單減少，但確實為發貨帶來了一些阻力。雖然這並非我們業務的最大部分，但我們正在密切關注它。

And the government has been shut down for, what, 40-plus days or something like that, and they do drive a piece of the economy. So we are a bit cautious around demand. The part I would add also on this is what we can control around our cost and what we choose to go and do around spending or initiatives, we feel very confident that we got this dialed in. And we'll work hard in the second half to do that. Our concern is that demand is going to be tepid and choppy. And again, this is our most volatile demand period is this period really November through March.

政府已經停擺了40多天了，而政府對經濟有著舉足輕重的影響。所以我們對需求持謹慎態度。我還要補充一點，關於成本控制以及我們在支出或措施方面的選擇，我們非常有信心已經把這方面控制好了。下半季我們會努力實現這個目標。我們擔心需求會疲軟且波動不定。再次強調，每年的11月到隔年3月是我們需求波動最大的時期。

Okay. Perfect. That's perfect. And I appreciate the thoughts there. So then secondly, on residential, so the 9% growth, I guess, presumably, that's mostly organic, but curious if that's true. So I guess across ADS and Infiltrator, you touched on at the top that multifamily is up and Allied and lot development is kind of choppy around the country. I'm really just looking if you could expand a bit. I mean, it stands out in a tough residential backdrop to have that type of growth. So maybe you can kind of go through the individual pieces of your residential business and expand a little bit on kind of what's driving that growth.

好的。完美的。那很完美。我很感謝你的想法。其次，關於住宅方面，9% 的成長，我猜想，大概主要是自然成長，但很好奇這是否屬實。所以我想，在 ADS 和 Infiltrator 中，你一開始就提到了多戶住宅市場正在上漲，而 Allied 和地塊開發在全國範圍內則有點起伏不定。我只是想問您能否再詳細解釋一下。我的意思是，在競爭激烈的住宅區環境中，這樣的成長動能非常突出。所以，或許您可以逐一分析一下您的住宅業務，並詳細說明推動業務成長的因素。

Yes, so I'm going to add something and Mike can add something. So Craig Taylor from Infiltrator here with us today are Infiltrator President. But new products, the tank products that we tooled and launched in the last 2, 2.5 years, Craig, the advanced treatment products the work that he and his team are doing with Orenco on profitability, all that stuff kind of redo nicely. The multifamily, where we have very good participation in particularly our Allied Products has done well. Mike, did you want to add something on residential? .

是的，所以我打算補充一些內容，麥克也可以補充一些內容。今天和我們在一起的是來自 Infiltrator 公司的 Craig Taylor，他是 Infiltrator 公司的總裁。但是新產品，例如我們在過去 2、2.5 年裡研發和推出的儲罐產品，克雷格，先進的處理產品，他和他的團隊正在與 Orenco 合作開展的盈利能力方面的工作，所有這些都很好地重現了之前的輝煌。多戶住宅領域，尤其是我們的聯合產品，表現非常出色。麥克，你想補充一些關於住宅方面的內容嗎？。

Yes. I was just going to say, Matt, your question around -- there was some contribution from Orenco in the quarter, but also if you take that out, we saw positive growth organically at ADS and Infiltrator in that residential end market. For the reasons Scott just said, right, the new products, the programs that we're working with builders to drive the conversion in the land development for single-family subdivisions. And then we've seen -- we mentioned in the first quarter, we've seen improvement in multifamily activity in a variety of geographies. And that's coming through. We can see that in the Allied Product sales that go into residential.

是的。我正想說，馬特，關於你提出的問題——Orenco 在本季度確實做出了一些貢獻，但如果排除 Orenco 的貢獻，我們在住宅終端市場看到了 ADS 和 Infiltrator 的有機增長。正如史考特剛才所說，正是由於新產品和我們正在與建築商合作的項目，才推動了土地開發向獨棟住宅小區的轉變。然後，正如我們在第一季提到的，我們看到各個地區的多戶住宅活動都有所改善。這一點正在顯現出來。我們可以從住宅領域的聯合產品銷售看出這一點。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc Capital Markets。

So just today on the outgrowth because I think you're worried about demand, but your outgrowth has been quite exceptional. Just kind of the sustainability of the outgrowth into the second half? And then my other second half question is just how we should think about first half, second half margin step down on the seasonality factor given that it seems like price/cost is moving much better in the right direction versus a year ago.

今天我想談談成長情況，因為我覺得您擔心需求，但您的成長情況相當出色。下半年的成長能否持續？那麼，我的第二個問題是，鑑於價格/成本似乎比去年同期朝著正確的方向發展得更好，我們應該如何看待上半年和下半年利潤率因季節性因素而下降的情況呢？

Go ahead, Scott.

請繼續，斯科特。

Jeff, Scott C. here. So again, as we said before, I'll just reiterate it. It's very much a demand-driven outlook based on the choppiness, again, very encouraged by what we saw in Q2. If you look at the first half, however, you had 5% of growth, 2% organic, 3% from Orenco. It's -- we're not seeing green shoots yet. So there's a lot of reason to be cautious and build such into our outlook. So it's demand driven. When you look at the margin expectations of that, as I said previously, it's more just looking at our 30% to 40% decremental margin historical kind of performance and putting it there. Price/cost stable, as I mentioned earlier, there's nothing falling off a cliff there for folks to be worried about. And if I look at manufacturing, transportation, SG&A, is there any kind of large onetime thing in there or some trend that we need to be concerned about? No. So that's the way I would present it demand-driven with a 30% to 40% decremental margin approach. .

我是 Jeff，Scott C.。所以，就像我們之前說的那樣，我再重申一次。鑑於目前的市場波動，這很大程度上是由需求驅動的前景，但我們在第二季看到的情況令人鼓舞。但如果你看一下上半年，你會發現成長了 5%，其中 2% 來自自然成長，3% 來自 Orenco。目前——我們還沒有看到任何好轉的跡象。所以，我們有很多理由保持謹慎，並將這種心態納入我們的看法中。所以這是需求驅動的。正如我之前所說，當你審視利潤率預期時，你會發現這更多的是參考我們過去 30% 到 40% 的利潤率下降幅度，並將其納入考慮。價格/成本穩定，正如我之前提到的，沒有地方會突然暴跌，大家不必擔心。如果我看一下製造業、運輸業、銷售、一般及行政費用，其中是否有任何需要我們關注的重大一次性事件或趨勢？不。所以，我會這樣呈現它：需求驅動，利潤率遞減 30% 到 40%。。

Okay. And then into the second half, can you just talk about how, I guess, last year, a pretty active storm dynamic and lack of this year if that -- if there's any good or bad comp dynamics around that?

好的。然後進入下半場，您能否談談去年風暴活動非常活躍，而今年卻相對較少——這方面是否存在任何有利或不利的比較因素？

Yes. I mean I think -- I mean, are you referring to kind of the back half, the last 6 months of the year that we're getting into? Yes. Yes. I mean, obviously, the biggest thing is winter and everybody's asking kind of questions around the guide, right? And so there's -- obviously, we have caution when we get into the back half of the year, we get through October, you get into November, through March, right? 50% of the country has winter and construction activity shuts down. And last year, you saw it was a very traditional winner in the northern half of the US and that impacted our business. It doesn't necessarily go away, but guys just can't work as long into the season. And I think we're trying to again be appropriately cautious around that dynamic potentially repeating itself. So yes, if the weather is better in the back half and it's warmer in the Northern climates longer. There's a chance construction activity continues and the fourth quarter is maybe a little better than expected. But we're sitting here on November 6, right? And so we're still like, call it, 60 days away from kind of what we'll know going into the fourth quarter.

是的。我的意思是，你指的是下半年，也就是我們即將進入的最後六個月嗎？是的。是的。我的意思是，很顯然，最重要的事情是冬季，每個人都在圍繞指南提出各種問題，對吧？所以很明顯，到了下半年，也就是十月、十一月、三月，我們都會更謹慎，對吧？全國50%的地區進入冬季，建築活動停工。去年，它在美國北部地區一直保持著非常傳統的領先地位，這對我們的業務產生了影響。這種情況不一定會消失，但球員在賽季期間的工作時間會縮短。我認為我們正在努力保持適當的謹慎，以避免這種情況再次發生。所以，是的，如果下半年的天氣更好，北方氣候溫暖的時間更長的話。建築活動有可能繼續進行，第四季的情況或許會比預期略好。但現在是11月6日，對吧？所以，我們距離第四季到來時的情況還有大約 60 天的時間。

Yes, I was actually referring to kind of all the hurricane activity that might have been maybe disruptive and then helpful down the road and this year kind of being a later year.

是的，我其實指的是所有那些可能造成破壞但從長遠來看也可能有所幫助的颶風活動，而今​​年颶風來得比較晚。

I mean I think when we have our second quarter, again, not having those probably played a little bit of benefit there. But again, it was pretty good weather in the second quarter. So guys could continue to. We benefited from that .

我的意思是，我認為到了第二季度，沒有那些因素可能確實起到了一定的作用。但話說回來，第二季的天氣相當不錯。所以男人們可以繼續下去。我們從中受益匪淺。。

John Lovallo, UBS.

瑞銀集團的約翰·洛瓦洛。

The first one, maybe just following up on Matt's question on the resi side. I mean, builders have clearly pulled back on starts to rightsize inventory in certain markets. But community count continues to grow pretty nicely. And personally, we're fairly optimistic heading into next year. But the question is, how are you thinking about the resi builder business heading into the spring? And what are you hearing from the folks on the ground?

第一個問題，或許只是對 Matt 在住宿方面提出的問題進行後續探討。我的意思是，很明顯，建築商已經減少了某些市場的開工量，以調整庫存規模。但社區數量仍在穩定成長。就我們個人而言，我們對明年相當樂觀。但問題是，您如何看待春季住宅建築商的業務前景？你從當地民眾那裡聽到了什麼消息？

I mean I don't think we're hearing a whole lot different than kind of what you described, right, a little bit of caution kind of favoring price over pace. But with that said, there's still large opportunity for share gain for us in those markets. We have a much smaller market share there than what we would have in nonresidential, for example. And when you look at the performance this year, again, the programs we have with the builders, promote our conversion strategy and the ADS value proposition. When you look geographically, places like Texas, North Carolina, seeing strong growth. Florida was very soft in the first quarter, but sales were essentially flat in the second quarter. So that's promising there. In terms of volumes, which the volume that we're selling in there. So I think our goal obviously is outperformed the market. And we feel like we have lots of opportunity there still with the conversion strategy, the Allied Products. And then when you think about the Infiltrator and Orenco opportunities that we're promoting in that segment as well. And we think we have a lot of tools to go and beat back any underperformance or weaker market performance in the macro.

我的意思是，我覺得我們聽到的和你描述的並沒有太大不同，對吧，就是有點謹慎，更傾向於價格而不是速度。但即便如此，我們在這些市場中仍有很大的份額成長機會。例如，我們在該領域的市場份額要小得多，遠低於我們在非住宅領域的市場份額。再看看今年的業績，我們與建築商合作的項目，再次證明了我們的轉化策略和 ADS 的價值主張。從地理位置來看，像德克薩斯州、北卡羅來納州這樣的地方都呈現出強勁的成長勢頭。佛羅裡達州第一季的銷售情況非常疲軟，但第二季的銷售額基本上持平。所以這方面很有希望。就銷量而言，指的是我們在那裡的銷售量。所以我認為我們的目標顯然是跑贏大盤。我們覺得，透過轉型策略和聯合產品，我們仍然有很多機會。然後，當你想到我們在這個領域也在推廣的 Infiltrator 和 Orenco 的機會。我們認為我們有許多工具可以應對宏觀經濟中任何表現不佳或疲軟的市場表現。

Got it. And then maybe on Texas specifically. I think the state just passed a $20 billion fund, about $1 billion a year. to replace aging pipe, and I think it starts to maybe 2027. I mean I think you guys have historically talked about Texas is like a $390 million, $400 million Pipe market. Just curious how you're thinking about this new bill, how significant of an opportunity could it be for you guys? And could it actually accelerate the adoption of in the state? .

知道了。然後或許可以專門談談德州。我認為該州剛剛通過了一項200億美元的基金，每年約10億美元，用於更換老化的管道，我認為這項計劃可能會持續到2027年。我的意思是，我認為你們過去一直認為德州的管道市場規模在 3.9 億美元到 4 億美元之間。我很好奇你們對這項新法案的看法，它對你們來說可能是個多大的機會？它真的能加速該州的採用嗎？。

So John, this is Scott Barbour. We supported that bill. We lobbied for that, Bill. We're -- as you know, we're quite active in Texas. We think this is a really strong step for that state to increase their kind of economic footprint and activity. It will bring great benefit to their populating their citizens. And we believe this will be a very good opportunity for us across the board. Whether it's nonresidential, residential, the rainwater harvesting piece, water conservation and rainwater harvesting was a nice kind of piece of that legislation. And we think this just adds -- I don't know how to dimension it right now, but what I do know is that more money will be spent on water infrastructure and water management in Texas with the result of this bill than before it was passed. So that is a good thing for ADS and Infiltrator for sure.

約翰，這位是史考特巴伯。我們支持這項法案。比爾，我們為此遊說。如您所知，我們在德克薩斯州非常活躍。我們認為這對該州來說是一個非常有力的舉措，有助於擴大其經濟影響力和活動。這將為他們的人口成長帶來巨大好處。我們相信這對我們所有人來說都將是一個非常好的機會。無論是非住宅區或住宅區，雨水收集、節水和雨水收集都是這項立法中很好的一部分。我們認為這只會增加——我現在還不知道該如何衡量，但我知道的是，這項法案通過後，德州在水利基礎設施和水資源管理方面的支出將比之前更多。所以這對ADS和Infiltrator來說肯定是件好事。

Garik Shmois, Loop Capital.

Garik Shmois，Loop Capital。

I wanted to ask on price/cost in the back half. So I was wondering if you could speak to what you're seeing on the material cost side of the ledger. And then just on pricing, it's been stable sequentially for a number of quarters here, but just given maybe the more conservative demand outlook, should we expect any change to pricing? .

我想問一下後半部的價格/成本。所以我想請您談談您在帳簿材料成本方面看到的情況。至於價格方面，雖然已經連續幾季保持穩定，但考慮到可能較保守的需求前景，我們是否應該預期價格會有任何變化？。

Yes, Garik, Scott C. here. Like I mentioned earlier that when you look at the implied 2H, it's a demand-driven forecast and outlook. So that's what I would say there. As I mentioned before, price/cost again, largely stable again. So -- and that's both on the material side and the pricing side. So I would say to factor such into your 2H as well. And again, manufacturing, transportation. And if I look through the other parts of gross profit, and I look at the other drivers that can move that margin around. There's nothing in there or SG&A that is -- we're highlighting that would be a significant downdraft trend that folks should be concerned about.

是的，我是 Garik，我是 Scott C.。正如我之前提到的，當你查看隱含的下半年業績時，它是一種由需求驅動的預測和展望。這就是我想說的話。正如我之前提到的，價格/成本再次基本上保持穩定。所以——這既包括材料方面，也包括價格方面。所以我建議你把這些因素也納入你的2H計畫中。還有製造業和運輸業。如果我仔細查看毛利的其他部分，並查看可能影響利潤率的其他因素。裡面沒有任何東西，銷售、一般及行政費用也沒有——我們強調的是，這將是一個值得人們關注的重大下降趨勢。

Okay. And then just on the SG&A piece, it picked up a little bit in the second quarter, it sounds like that level of inflation shouldn't continue or just any way to contextualize SG&A in the second half?

好的。然後，就銷售、一般及行政費用而言，第二季度略有上升，聽起來這種程度的通膨不應該持續下去，或者說，有什麼方法可以解釋下半年的銷售、一般及行政費用情況嗎？

Well, I think on the SG&A, there was the piece that we picked up from Orenco that is a year-over-year change. It's a bit higher SG&A company than the base company. We also executed a lot of costs around the transaction. They are -- it's not for free to get people in to help you work through a large -- the announcement of a large transaction like NDS. There's some accruals in there on that kind of stuff. So there again, those things we can control around SG&A spending, price/cost, our conversion, our transportation and logistics, I mean, we feel very solid where we are -- what we've done and where we are headed into the back half of this year. And I say to the team all the time.

嗯，我認為在銷售、一般及行政費用方面，有一部分是我們從 Orenco 那裡接手的，這是同比變化。這家公司的銷售、管理及行政費用比基準公司略高。我們也承擔了與交易相關的許多費用。要讓人們參與進來幫助你處理大型交易（例如 NDS 這樣的大型交易）的宣布，這不是免費的。這其中有一些這類應計費用。所以再說一遍，那些我們可以控制的因素，例如銷售、管理及行政費用、價格/成本、轉換率、運輸和物流，我的意思是，我們對我們目前的狀況——我們已經做的事情以及我們今年下半年的發展方向——都感到非常有信心。我一直都這樣跟隊員們說。

A lot of these things you see reading through are really things we started a year ago and began working around our network, costs, equipment focused on certain new products and things like that. And I think what you see is even though last year was not a great year. We continue to invest in those things and they've read through in a pretty good fashion. And that's what management is supposed to do is invest and work for the long-term performance of the company, and I feel like that's what we're doing pretty darn well right now.

你看到的很多東西，實際上都是我們一年前開始做的，我們圍繞著我們的網路、成本、設備，專注於某些新產品等等。我認為你所看到的是，儘管去年並不是一個好年份。我們繼續投資這些項目，而且它們也進展得相當順利。管理層應該要做的就是投資和努力，以實現公司的長期業績，我覺得我們目前在這方面做得相當不錯。

Collin Verron, DB.

科林·維隆，後衛。

I just wanted to follow up on price/cost. I think last quarter, you indicated that price cost is expected to be neutral for the year. Can you just talk about what's coming in better than expected in the second quarter that got you that $30 million EBITDA tailwind?

我只是想了解一下價格/成本狀況。我認為上個季度您曾表示，預計全年價格成本將保持中性。您能否談談第二季度哪些方面超出預期，為您帶來 3000 萬美元的 EBITDA 成長？

Yes. Again, you're referring to the EBITDA bridge on a year-over-year basis. So again, pricing stable. We've been talking about sequentially as well as year-over-year. Resin cost, for sure, this year has been one of those items that that's been good and something that we see sequentially flattening out on a precured basis. Again, we have really good line of sight to what's on our balance sheet and what's going to be coming off over the next two to three months. So something that we constantly put in front of us. But price/cost is, again, one of those items that favorable to expectations coming into the year.

是的。您再次提到的是同比 EBITDA 橋樑。所以，價格依然穩定。我們一直在討論環比和同比數據。樹脂成本今年肯定是表現不錯的項目之一，我們看到預固化樹脂的成本正在逐步趨於平穩。再次強調，我們對資產負債表上的內容以及未來兩到三個月內將減少的支出都有非常清晰的了解。所以，這是我們不斷擺在眼前的東西。但價格/成本再次成為符合年初預期的有利因素之一。

And I'd say the team is managing it really well on both sides as well as mix. I think the things that have exceeded expectations are around the material costs, our ability to convert the product across the board, not just Pipe, but at Infiltrator and our Allied Products and then the things that we targeted for transportation and logistics, all that have exceeded our expectations as well as the mix and the growth -- organic growth of Infiltrator and the Allied Products over the last 4, 5 months. And again, things we started a year ago kind...

我認為團隊在雙方以及混合方面都做得非常好。我認為超出預期的方麵包括材料成本、我們全面轉換產品的能力（不僅是管道，還包括 Infiltrator 和我們的附屬產品），以及我們針對運輸和物流所採取的措施，所有這些都超出了我們的預期，還有產品組合和增長——Infiltrator 和附屬產品在過去 4、5 個月中的自然增長。還有，我們一年前開始做的事情…

That's really helpful color. And I guess you mentioned on the transportation cost side of things that there were some of this inventory shift due to the realignment. I guess is this expected to be ongoing? It sounds like it is just because your second half guide is must be volume driven, but I just wanted to confirm that.

這個顏色真的很有幫助。我想你剛才也提到了運輸成本的問題，由於業務調整，庫存也出現了一些變化。我想這預計會持續下去吧？聽起來好像是因為你們下半年的銷售指南必須以銷售量為導向，但我只是想確認一下。

Let me take this one. Let me take this. So as demand might get stronger in one geography versus another or we announced the closure of a plant -- and we -- in the Northwest earlier in the calendar year, we had to move inventory to service our customers around that network. And we're going to do what it takes to do that. And I -- our logistics people are executing extremely well. We have a lot of great programs around safety and the new equipment we've added in there that are -- we've done, and we will continue to do that, and that's really what's from that. I've got smiling because he's always busting on that. But that's what we're going to do. And I would add, because of our scale in these logistics capabilities, we can do that. We can move this stuff around because of the size scale and management of that fleet. So that's what you saw through there is just kind of peak a little bit. Fundamentally, the unit are performing as we want. We just had to move some stuff around a little bit more than we anticipated.

讓我來做這個吧。讓我來拿。因此，由於某個地區的需求可能比另一個地區更強勁，或者我們在今年稍早宣布關閉西北地區的一家工廠，我們不得不將庫存轉移到該網路周圍的客戶。我們將竭盡全力去實現這個目標。而且，我們的物流人員表現非常出色。我們有很多很棒的安全項目，而且我們還增加了新的設備——我們已經這樣做了，而且我們將繼續這樣做，這才是真正的成果。我笑了，因為他總是拿這件事開玩笑。但我們就是要這麼做。我還要補充一點，由於我們在物流能力方面的規模優勢，我們能夠做到這一點。我們可以調動這些物資，是因為該船隊的規模和管理能力。所以你看到的只是稍微達到一個高峰而已。從根本上講，該部門的表現符合我們的預期。我們只是需要比預期多挪一下東西。

And your next question comes from the line of Jeff Reive with RBC Capital Markets.

你的下一個問題來自加拿大皇家銀行資本市場的傑夫·里夫。

Appreciate all the color thus far. At WesTech this year, you had an presence showcasing both Infiltrator and Orenco. It's pretty clear how complementary those businesses are. now that you've owned it for about a year, could you talk about how the integration is progressing, synergy capture and where you see opportunities to get growth or efficiencies?

欣賞目前為止的所有色彩。今年在西澳科技展上，你們展出了 Infiltrator 和 Orenco 兩款產品。很明顯，這些業務具有很強的互補性。現在您已經擁有這家公司大約一年了，能否談談整合進展如何，協同效應的實現情況，以及您認為在哪些方面有機會實現成長或提高效率？

I'm going to let Craig Taylor to take that.

我打算讓克雷格泰勒來做這件事。

Yes. So the acquisition is going extremely low right now. We're starting to bring products together that you saw at tech and extending that to the Orenco dealers, too. They see more of our Infiltrator product, and it's that understand what we can contribute to the market for them. And on the synergies, it's on track, exceeding our expectations too of what we've been doing. The commercial portion takes a little bit longer as that's winding up right now on the synergies, but it's hitting on all other elements that we together in the model and our expectations going forward.

是的。所以現在的收購價格非常低。我們正開始將您在技術展上看到的那些產品整合起來，並將其推廣到 Orenco 經銷商。他們更了解了我們的 Infiltrator 產品，也因此了解了我們能為市場帶來什麼。至於綜效方面，進展順利，甚至超越了我們對所做工作的預期。商業部分需要更長時間才能完成，因為目前正在進行協同效應方面的收尾工作，但它涵蓋了我們在模型中共同考慮的所有其他要素以及我們對未來的期望。

Yes, it's gone very well. .

是的，一切進展順利。。

Yes, I would add that what we've seen so far is earnings growing faster than sales, which is good, and the margins have improved also. I think we're tracking very well, like Craig said, on the operating efficiencies and the synergies and improving the margin performance of that business. .

是的，我還要補充一點，到目前為止我們看到的是獲利成長速度快於銷售額成長速度，這是好事，而且利潤率也有所提高。我認為正如克雷格所說，我們在提高營運效率、發揮協同效應以及改善該業務的利潤率方面進展非常順利。。

Yes, a lot of activity that's a good question. We appreciate. I also mentioned the safety performance has been very good out there in Oregon, and we lead in very hard and the team there has grabbed it. And that's been super good that we're glad to see. We read a lot of this with our Board yesterday, the synergy plan, which is really doing nicely in that safety performance. So we're really happy. One year in, we couldn't be more pleased about where Craig and the team are with that acquisition.

是的，活動很多，這是一個很好的問題。我們很感激。我還提到，俄勒岡州的安全表現非常出色，我們一直保持領先，那裡的團隊也牢牢把握住了機會。我們很高興看到這一點，這真是太好了。昨天我們和董事會一起仔細閱讀了這份協同計劃，該計劃在安全績效方面確實做得非常出色。所以我們真的很高興。一年過去了，我們對克雷格和他的團隊在這次收購中所取得的成就感到無比滿意。

That's really helpful. And just a follow-up on pricing. I believe you're prior guide call for price down low single digits, volume up low single digits. So just kind of given the upped guidance range, have your assumptions for the remainder of the year shifted at all either price or volume?

這真的很有幫助。關於價格方面，我還有一個後續問題。我認為你之前的指導意見是價格下跌個位數，成交量上漲個位數。鑑於業績指引範圍上調，您對今年剩餘時間的預期，無論是價格還是銷量，是否有所調整？

No. Not on pipe. No. No. I guess that's what you're referring to the pipe.

不。不在管道上。不。不。我猜你說的就是那根管子。

Yes.

是的。

Kind of, honestly, the pipe is like right on what we thought it was going to be. It kind of moves around a little bit by pipeline. We're really pleased with the superior growth of HP product line. But overall, from a volume, pricing mix, costs, the material costs a bit better than we anticipated as is the conversion loss. But from just a demand and price in the market, it's really almost exactly on the plan that we plan. So I think our team in the field is doing a very nice job. And with those product lines as well as seizing all opportunities on the Allied Products. Craig's team is doing a great job in the field.

說實話，這管道跟我們預想的差不多。它有點像是沿著管道稍微移動一下。我們對惠普產品線的卓越成長感到非常滿意。但總體而言，從銷售量、價格組合和成本來看，材料成本比我們預期的要好一些，轉換損失也是如此。但僅從市場需求和價格來看，這幾乎完全符合我們的計劃。所以我認為我們現場團隊的工作做得非常好。憑藉這些產品線，以及抓住聯合產品的所有機會。克雷格的團隊在現場工作做得非常出色。

We're clearly in the right geographies with the right distribution, the right product lines across the board. And again, this is -- we leaned into we leaned in over the years of beefing up in certain geographies. We leaned with capacity, we leaned it with trucking capacity. We leaned them with new products to get these advanced treatment products Craig has that are doing very well. But across both Infiltrator and ADS that's kind of working for us right now. So we'll continue to execute on that and invest in people and the necessary processes, systems and equipment we need to get the job done.

我們顯然在地理位置、分銷管道和產品線方面都佔據了正確的位置。再說一遍，這是——多年來，我們一直在某些地區加強自身實力。我們利用產能，我們利用卡車運輸能力。我們為他們提供了新產品，使他們能夠獲得 Craig 擁有的這些先進的治療產品，這些產品效果非常好。但就目前而言，無論是 Infiltrator 還是 ADS，這種方式對我們來說都比較有效。因此，我們將繼續執行這項計劃，並投資於人員以及完成工作所需的必要流程、系統和設備。

Trey Grooms, Stephens.

Trey Grooms，Stephens。

Maybe a little higher level or maybe longer-term focused questions here. Specifically with NDS, we haven't spent a whole lot of time here on that. I know you gave us some color back a few weeks ago with your conference call. And you mentioned the potential for additional upside from cross-sell and maybe some other opportunities. Do you think you could go maybe into a little more detail around where you see potential revenue synergies where they could exist, specifically with the in the US? And any way for us to think about what those potential revenue synergies could mean for enhanced top line growth opportunities?

或許可以提出一些更高層次或更著眼於長期發展的問題。具體到 NDS 方面，我們還沒有花太多時間研究它。我知道幾週前你的電話會議給我們帶來了一些色彩。您也提到了交叉銷售可能帶來的額外收益，以及其他一些機會。您能否更詳細地談談您認為可能存在的潛在收入綜效，尤其是在美國？我們有什麼方法可以思考這些潛在的收入綜效對於提升營收成長機會意味著什麼？

I'll try to tackle this without stepping over any lines. This is Scott Barbour, highly, highly complementary product line to our very bespoke catch basins that we call Nyloplast. NDS has, by far, the market-leading standard products, smaller diameter than we do. And when we get plans that show kind of the whole water installation on a nonresidential side, for instance. We see a lot of those products on there, and we think we'll be able to package very effectively those kind of products. We run across a lot of opportunities for that they have a great product line and channel gains that we have today. And we think our -- both our sales force will be able to kind of sell those products. We think in certain parts of the distribution, they're going to be able to sell more of our products to pipe products.

我會盡量在不越界的情況下處理這件事。這是 Scott Barbour，我們的產品系列與我們定制的集水池 Nyloplast 高度互補。NDS 擁有目前市場上領先的標準產品，其直徑比我們的產品小。例如，當我們拿到顯示非住宅區整個供水設施的圖紙時。我們看到很多這類產品，我們認為我們能夠非常有效地包裝這類產品。我們遇到了很多機會，因為他們擁有優秀的產品線和通路優勢，而我們目前也擁有這些優勢。我們認為我們的銷售團隊能夠銷售這些產品。我們認為在某些分銷環節，他們將能夠把我們的更多產品銷售給管道產品供應商。

We think that their focus, particularly in turf and irrigation, which is kind of world-class is going to be a strengthening of what we do, complementing and strengthening what we do ADS. And on the Waterworks side, we think will complement and strengthen NDS. So those are the kinds of things we're very excited about. And these products really exist in an installation side by side. So we're just going to get increased visibility on projects and jobs and opportunities that are going on in the market between our two sales groups and our relationships just deepened with the addition of NDS. We're super excited about working with that team out there. And that's probably about all I can say.

我們認為，他們尤其在草坪和灌溉方面的專注（這方面堪稱世界一流）將加強我們的工作，補充和加強我們ADS的工作。在水務方面，我們認為這將與國家發展策略相輔相成，並加強國家發展策略。所以，這些都是我們非常興奮的事情。而且這些產品確實會並排安裝在一起。因此，我們兩個銷售團隊將更清楚地了解市場上正在進行的專案、工作和機會，隨著 NDS 的加入，我們的關係也更加深入。我們非常期待與那個團隊合作。我大概只能說這麼多了。

Okay. Well, that's pretty exciting. And I guess, just another kind of higher-level thinking a little longer term, you guys are putting up some really nice margins the price/cost equation has kind of been beaten to here, but you're executing well. You've made some headway organically, clearly. And notwithstanding or just kind of setting in the NDS equation or acquisition aside here. Is there any way or maybe any update on how we can be thinking about longer term margin profile of the business, given kind of some of the improvements you've made here even organically?

好的。那真是太令人興奮了。我想，從更長遠的角度來看，你們的利潤率非常可觀，價格/成本等式在這裡似乎已經被超越了，但你們的執行力很強。顯然，你已經取得了一些自然而然的進展。儘管如此，或者說，在這裡把 NDS 方程式或收購放在一邊。鑑於您已經取得了一些進步，甚至是自然而然的進步，有沒有什麼方法或最新進展可以幫助我們思考公司更長期的利潤率狀況？

Go ahead, Scott C. This is a Scott C. question.

請講，斯科特·C。這是個斯科特·C的問題。

Yes. I'll give you a couple of different ways to think about it. A, we love the DNA of the company, right? The Allied and Infiltrator parts of the business grow at a much faster clip than the pipe side of the business, and they have much larger adjusted gross margins. So we really look at that -- so we kind of margin and accrete up as we go over time. I would say as well, the new product introduction, the engineering technology center, the way that we deploy capital, and capital allocation really powerful. And you look over the last 5 to 6 years and kind of what we've done there and how that's led to where we are. I think those are all kind of key avenues there. I think you'll see more of our capital deployed in that innovation as well as a bigger mix of what we spend on the CapEx side. In the Allied and the Infiltrator side of the house now that we've kind of caught up a little bit on the pipe side.

是的。我給你舉幾個不同的角度來思考這個問題。A，我們都喜歡這家公司的DNA，對吧？盟軍和滲透者業務部門的成長速度比管道業務部門快得多，而且它們的調整後毛利率也高得多。所以我們確實會考慮這一點——隨著時間的推移，我們會逐步累積利潤和利潤。我還要說，新產品的推出、工程技術中心、我們部署資本的方式、資本配置都非常強大。回顧過去 5 到 6 年，看看我們在那裡做了什麼，以及這些努力是如何讓我們走到今天這一步的。我認為這些都是關鍵途徑。我認為你會看到我們投入更多資金用於創新，以及我們在資本支出方面的支出比例更加多元化。現在我們已經稍微趕上了管道方面的進度，接下來是盟軍和滲透者陣營的情況。

There's some automation, productivity and other investments we need to do there. But a lot of margin accretion opportunity, both on the productivity, automation side of the house, new product introduction side of the house, the growth algorithm, if you will, as well as putting this balance sheet to work through accretive acquisitions as we move forward. I see all of those as kind of a trifecta, if you will, of how we not only grow the company but as well as accelerate that margin expansion as we go. So do we think that this ADS, a 20% to 25% EBITDA margin business we don't Yes. We see a lot of different reasons while we continue to creep as we move forward.

我們需要在那裡進行一些自動化、提高生產力和其他方面的投資。但有許多提高利潤率的機會，無論是在生產力、自動化方面，或是在新產品推出方面，也就是成長演算法方面，以及透過增值收購來利用資產負債表，這些都有助於我們不斷前進。我認為這三者可以看作是三重奏，它們不僅能促進公司發展，還能加速利潤率的擴張。所以我們認為這家 ADS 公司，一家 EBITDA 利潤率為 20% 至 25% 的公司，我們並不這麼認為。是的。在我們不斷向前推進的過程中，我們看到了許多不同的原因。

There are no further questions at this time. Scott Barbour, I turn the call back over to you.

目前沒有其他問題了。史考特巴伯，現在我把電話交還給你。

Okay. Thank you very much, and we appreciate everyone being on the call today, and the quality of the questions, we kind of anticipated a lot of questions around the second half like that. I'm sure we'll give more of them as we go forward. But good quarter. Like I said earlier, this is a quarter that we really started on a year ago with all the things that we work, understanding that the demand environment was going to be a little tepid those things we can control, we feel good about. We'll continue to work hard on those. And I think as the demand develops, we'll capture our fair share more, but we'll just have to see how it develops over time. So thank you very much, and you all have a good day.

好的。非常感謝，感謝今天所有參加電話會議的人，也感謝大家提出的問題品質很高，我們預料到下半場會有很多類似的問題。我相信隨著我們不斷前進，我們會提供更多這樣的機會。但本季表現不錯。正如我之前所說，這個季度我們實際上從一年前就開始著手處理所有事情了，我們當時也意識到需求環境會有些疲軟，但對於我們能夠控制的事情，我們感到很滿意。我們會繼續努力做好這些工作。我認為隨著需求的增長，我們將獲得更多應有的份額，但我們必須拭目以待，看看它如何隨時間發展。非常感謝，祝大家今天過得愉快。

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

今天的電話會議到此結束。您現在可以斷開連線了。