Worthington Enterprises Inc (WOR) 2024 Q3 法說會逐字稿

Hello, and welcome to the Worthington Enterprises third quarter fiscal 2024 earnings conference call. All participants will be in a listen-only mode until the question and answer session of the call. This conference is being recorded at the request of Worthington Enterprises. If anyone objects, you may disconnect at this time. I'd now like to introduce Marcus Rogier, Treasurer and Investor Relations Officer. Mr. Rogier, you may begin.

您好，歡迎參加沃辛頓企業 2024 財年第三季財報電話會議。所有參與者將處於只聽模式，直到通話問答環節。本次會議是應沃辛頓企業的要求進行錄製的。如果有人反對，您可以此時斷開連線。現在我想介紹財務主管兼投資者關係長馬庫斯·羅吉爾(Marcus Rogier)。羅吉爾先生，您可以開始了。

Thank you, Sarah, and good morning, everyone, and welcome to Worthington Enterprises Third Quarter Fiscal 2024 earnings call. On our call today, we have Andy Rose, Worthington's President and Chief Executive Officer; and Joe Hayek, Worthington's Chief Financial and Operations Officer. And before we get started, I'd like to note that certain statements made today are forward-looking within the meaning of the 1995 Private Securities Litigation Reform Act. These statements are subject to risks and uncertainties that could cause actual results to differ from those suggested we issued our earnings release yesterday after the market close. Please refer to it for more detail on those factors that could cause actual results to differ materially. In addition, our discussion today will include non-GAAP financial measures. A reconciliation of these measures with the most appropriate comparable GAAP measure is included in the earnings press release, which is available on our Investor Relations website.

謝謝莎拉，大家早安，歡迎參加沃辛頓企業 2024 年第三季財報電話會議。今天參加我們電話會議的有沃辛頓總裁兼執行長安迪羅斯 (Andy Rose)；和沃辛頓首席財務和營運長喬·海耶克(Joe Hayek)。在我們開始之前，我想指出，今天發表的某些陳述具有 1995 年《私人證券訴訟改革法案》含義內的前瞻性。這些聲明存在風險和不確定性，可能導致實際結果與我們昨天收盤後發布的收益報告中建議的結果不同。請參閱它以了解有關可能導致實際結果存在重大差異的因素的更多詳細資訊。此外，我們今天的討論將包括非公認會計準則財務指標。這些指標與最合適的可比較 GAAP 指標的對帳已包含在收益新聞稿中，該新聞稿可在我們的投資者關係網站上取得。

At this point, I'll turn the call over to Andy for opening remarks.

此時，我將把電話轉給安迪致開幕詞。

Thank you, Marcus, and good morning. I want to welcome everyone to our first full quarter as Worthington enterprises. We have hit the ground running and are already delivering solid results as evidenced by our adjusted EBITDA of $67 million and adjusted earnings per share of $0.80. While there are a number of one-time items mostly related to the separation, which Joe will run through, we are proud of our people and their ability to stay focused over the past year. I remain as excited as ever about Worthington enterprises and our opportunity for long-term value creation. Our consumer products, building products and sustainable energy businesses represent a strong franchise have market-leading products and brands that will enable people to live, safer, healthier and more expressive lives. We have a unique and proven growth platform that has been purposefully created using deep industry expertise, a performance driven people-first culture and the best employees in the world and a thoughtful long-term investment strategy. We find the best product opportunities invest to drive value at scale and build sustainable advantage through safety, quality service and a reputation for doing the right thing for our customers.

謝謝你，馬庫斯，早安。我想歡迎大家來到我們作為沃辛頓企業的第一個完整季度。我們已經開始運作，並且已經取得了紮實的成果，調整後的 EBITDA 為 6700 萬美元，調整後的每股收益為 0.80 美元。雖然有許多一次性專案主要與喬將經歷的分離有關，但我們為我們的員工以及他們在過去一年中保持專注的能力感到自豪。我對沃辛頓企業和我們創造長期價值的機會一如既往地感到興奮。我們的消費品、建築產品和永續能源業務代表了強大的特許經營權，擁有市場領先的產品和品牌，將使人們過著更安全、更健康和更​​具表現力的生活。我們擁有一個獨特且經過驗證的成長平台，該平台是利用深厚的行業專業知識、績效驅動的以人為本的文化、世界上最優秀的員工以及深思熟慮的長期投資策略而有目的地創建的。我們發現最好的產品機會進行投資，透過安全、優質服務和為客戶做正確事情的聲譽來大規模推動價值並建立永續優勢。

The Worthington business system of transformation, innovation and M&A is well entrenched and enables us to grow faster and deliver on our number one goal of generating attractive returns for our shareholders.

沃辛頓的轉型、創新和併購業務體系根深蒂固，使我們能夠更快地發展並實現為股東創造有吸引力的回報的首要目標。

Our transformation playbook now and its third evolution continues to provide a systematic approach for improving our commercial operations and supply chain functions, enhancing the top and bottom line for our businesses. Innovation is now deeply embedded competency that we put to work across our business from process innovation to new product development, which we intend to make best in class with a pipeline that will distinguish us from competitors and provide enhanced value to our customers and finally, our expertise in strategic M&A will help us drive growth and higher returns as we add new products, new brands and consolidate markets. To that end, we recently welcomed Halo products into our portfolio of brands, offering an innovative collection of pizza ovens, pellet grills and grills that is disrupting the outdoor living space. This acquisition immediately accelerates years of product development for us with its lean and capable team. And while it's early days, the company is already benefiting from our relationships with major retailers and gaining greater access to our capital and expertise to drive accelerated direct to consumer marketing and sales. This is a nice example of the Worthington business system at work and how we build market-leading businesses. We are disciplined stewards of capital and not only making new investments to deliver long-term value creation, but also redeploying capital in situations where we can earn a better return.

我們的轉型手冊及其第三次演變繼續提供系統化的方法來改善我們的商業營運和供應鏈功能，提高我們業務的收入和利潤。現在，創新已成為一種根深蒂固的能力，我們將其運用到從流程創新到新產品開發的整個業務中，我們打算透過一條管道將其打造為同類最佳產品，使我們與競爭對手區分開來，並為我們的客戶提供更高的價值，最後，我們的隨著我們增加新產品、新品牌和鞏固市場，策略併購方面的專業知識將幫助我們推動成長和更高的回報。為此，我們最近將 Halo 產品納入我們的品牌組合，提供一系列創新的披薩烤箱、顆粒烤架和烤架，顛覆了戶外生活空間。此次收購立即加速了我們精幹而有能力的團隊多年來的產品開發。雖然還處於早期階段，但該公司已經從我們與主要零售商的關係中受益，並獲得了更多的資本和專業知識，以加速直接面向消費者的行銷和銷售。這是沃辛頓業務系統運作以及我們如何建立市場領先業務的一個很好的例子。我們是紀律嚴明的資本管理者，不僅進行新投資以創造長期價值，而且在能夠獲得更好回報的情況下重新部署資本。

We're off to a good start in our first quarter as Worthington enterprises, and Joe will now walk you through the numbers.

作為沃辛頓企業，我們在第一季取得了良好的開端，喬現在將向您介紹這些數字。

Thank you, Andy, and good morning, everyone. two three was our first stand-alone quarter as Wilmington enterprises. And given the recent business separation, we have recast our historical income statement and balance sheets for periods prior to December first, 2023, to reflect Worthington Steel as discontinued operations. As a result, there is and will be some noise in our reported financials, but we will attempt to call out unique items and adjustments to facilitate year-over-year comparability of the business performance. In Q3, we reported GAAP earnings from continuing operations of $0.44 a share versus $0.6 in the prior year. There were several unique items that impacted our quarterly results, including the following. The current quarter was negatively impacted by one-time discrete tax charges of $9 million or $0.18 a share, all related to the business separation. In addition we incurred pretax expense of $3 million or $0.05 per share related to the separation in the current quarter. We do not anticipate having additional separation costs in future quarters. We also took advantage of the current interest rate environment to annuitize.

謝謝你，安迪，大家早安。二三是我們作為威爾明頓企業的第一個獨立季度。鑑於最近的業務分離，我們重新制定了 2023 年 12 月 1 日之前期間的歷史損益表和資產負債表，以將沃辛頓鋼鐵公司反映為已終止經營業務。因此，我們報告的財務數據中存在並將存在一些噪音，但我們將嘗試列出獨特的項目和調整，以促進業務業績的同比可比性。第三季度，我們報告的持續營運業務的 GAAP 收益為每股 0.44 美元，去年同期為 0.6 美元。有幾個獨特的項目影響了我們的季度業績，包括以下內容。本季受到一次性離散稅費 900 萬美元或每股 0.18 美元的負面影響，所有這些都與業務分離有關。此外，我們也因本季的分拆而產生了 300 萬美元或每股 0.05 美元的稅前費用。我們預計未來幾季不會產生額外的離職成本。我們也利用目前的利率環境進行年金化。

Our only remaining legacy defined-benefit pension plan, which resulted in a non-cash pretax charge of $8 million or $0.12 a share. We incurred modest restructuring charges, which negatively impacted earnings by a penny per share in the current quarter. And lastly, results in the prior year quarter were negatively impacted by $0.21 a share due to several unique items, the largest being corporate costs that were eliminated at the time of separation, along with smaller restructuring and other nonrecurring items. Excluding these items. We generated adjusted earnings from continuing operations of $0.8 per share in the current year quarter compared to $0.81 a share in Q3 of last year. Additionally, our building products business recorded a one-time pretax charge of $2 million or $0.03 a share in the current quarter related to a lower of cost or net realizable value adjustment on propane tanks that were imported from a third party supplier in Europe. The LCM was primarily driven by higher expected transportation costs for those tanks.

我們僅存的遺留固定福利退休金計劃，導致非現金稅前費用為 800 萬美元或每股 0.12 美元。我們產生了適度的重組費用，這對本季每股收益產生了 1 美分的負面影響。最後，由於幾個獨特的項目，去年同期的業績受到每股 0.21 美元的負面影響，其中最大的是在分拆時消除的公司成本，以及較小的重組和其他非經常性項目。排除這些項目。本季持續經營業務調整後每股收益為 0.8 美元，去年第三季為每股 0.81 美元。此外，我們的建築產品業務在本季度記錄了一次性稅前費用 200 萬美元或每股 0.03 美元，原因是從歐洲第三方供應商進口的丙烷罐的成本或可變現淨值調整較低。LCM 主要是由這些坦克的預期運輸成本較高所推動的。

Consolidated net sales in the quarter of $317 million decreased 8.5% from $346 million in the prior year. The decrease was driven by lower sales in Building Products, which experienced an unfavorable product mix and slightly lower volumes during the quarter, partially offset by slight increases in sales within Consumer Products and sustainable energy solutions, which both benefited from increased volumes gross profit for the quarter decreased to $73 million from $79 million in Q3 a year ago, while our gross margin increased to 23.1% from 22.8%, including the $2 million charge in building products. Our adjusted EBITDA in Q3 was $67 million, down from $70 million in Q3 of last year. And our trailing 12 months adjusted EBITDA is now $279 million, and our trailing 12 months adjusted EBITDA margin is 21.5%.

本季綜合淨銷售額為 3.17 億美元，比去年同期的 3.46 億美元下降 8.5%。這一下降是由於建築產品銷售額下降所致，該產品在本季度經歷了不利的產品組合和銷量略有下降，但部分被消費品和可持續能源解決方案銷售額的小幅增長所抵消，這兩者都受惠於銷量毛利的增加第三季的毛利率從一年前第三季的7,900 萬美元下降到7,300 萬美元，而毛利率從22.8% 增加到23.1%，其中包括200 萬美元的建築產品費用。第三季調整後的 EBITDA 為 6,700 萬美元，低於去年第三季的 7,000 萬美元。我們過去 12 個月調整後 EBITDA 現已達到 2.79 億美元，過去 12 個月調整後 EBITDA 利潤率為 21.5%。

With respect to cash flows and our balance sheet. Cash flow from operations was $50 million in the quarter and free cash flow was $40 million. It would have been higher if not for $13 million in cash outflows related to the business separation. During the quarter, we invested $10 million on capital projects, which included $5 million related to our previously mentioned facility modernization projects. We also spent $9 million to acquire an 80% interest in an affiliate of Halo products group and paid $16 million in dividends, which represented the larger pre-separation Worthington Industries dividend that was paid in December. We also received $40 million in dividends from our unconsolidated JVs during the quarter and 93% cash conversion rate on that equity income.

關於現金流量和我們的資產負債表。本季營運現金流為 5,000 萬美元，自由現金流為 4,000 萬美元。如果沒有與業務分離相關的 1,300 萬美元現金流出，這個數字還會更高。本季度，我們在資本項目上投資了 1000 萬美元，其中包括與我們之前提到的設施現代化項目相關的 500 萬美元。我們還斥資 900 萬美元收購了 Halo products group 一家附屬公司 80% 的股權，並支付了 1,600 萬美元的股息，這是沃辛頓工業公司 12 月支付的較大的分拆前股息。本季我們也從未合併的合資企業獲得了 4,000 萬美元的股息，該股權收入的現金轉換率為 93%。

Looking at our balance sheet and liquidity position, we ended the quarter with an exceptionally strong balance sheet, $298 million of long term funded debt carrying an average interest rate of 3.6% combined with $227 million in cash that is yielding around 5%. We continue to operate with extremely low leverage ending the quarter with a net debt to trailing EBITDA leverage ratio of about a quarter turn. And we are well positioned for the future with ample liquidity having a $500 million undrawn bank credit facility. Yesterday, the Worthington enterprises Board declared a dividend of $0.16 per share for the quarter, which is approximately $8 million and will be payable in June 2024.

從我們的資產負債表和流動性狀況來看，本季末我們的資產負債表異常強勁，長期融資債務為2.98 億美元，平均利率為3.6%，現金為2.27 億美元，收益率約為5% 。本季結束時，我們繼續以極低的槓桿率運營，淨債務與往績 EBITDA 槓桿率約為四分之一圈。我們擁有充足的流動性，擁有 5 億美元未提取的銀行信貸額度，為未來做好了充分準備。昨天，沃辛頓企業董事會宣布本季​​股息每股 0.16 美元，約 800 萬美元，將於 2024 年 6 月支付。

We'll now spend a few minutes on each of the businesses and consumer products. Net sales in Q3 were $133 million, up slightly from $131 million a year ago. Increase was a result of higher volumes, which were partially offset by lower average selling prices. Adjusted EBITDA for the consumer business was $26 million and adjusted EBITDA margin was 19.3% in Q3 compared to $21 million and 16.1% last year. We experienced a strong sequential improvement with volumes increasing 19% compared to Q2 as a result of some storm and weather related demand as well as recent market share gains at level five so some demand may have been pulled from Q4 into Q3. We are cautiously optimistic heading into the spring as people begin to enjoy the outdoors more frequently and begin to take on more repair remodel projects during the quarter.

我們現在將花幾分鐘時間討論每個企業和消費品。第三季淨銷售額為 1.33 億美元，略高於去年同期的 1.31 億美元。銷量增加是銷量增加的結果，但平均售價下降部分抵消了銷量的增加。第三季消費者業務調整後 EBITDA 為 2,600 萬美元，調整後 EBITDA 利潤率為 19.3%，而去年同期為 2,100 萬美元和 16.1%。由於一些風暴和天氣相關的需求以及最近市場份額達到第五級，我們經歷了強勁的連續改善，與第二季度相比，銷量增加了19%，因此一些需求可能已從第四季度轉移到第三季。進入春季，我們持謹慎樂觀的態度，因為人們開始更頻繁地享受戶外活動，並開始在本季度進行更多的維修改造項目。

As Andy mentioned, the consumer business acquired an 80% controlling interest in an affiliate of Halo Products Group for approximately $9 million Halo is an innovative asset-light provider of tech-enabled products, including pizza ovens, pellet grills, grills and accessories complement our other leading outdoor living brands like Coleman, portable propane tanks and BernzOmatic torches fuel and accessories. Halo is a natural match with these products and creates a powerful combination of Halo is small today with 2023 revenues of $7 million, which was primarily direct to consumer. We intend to leverage our strong relationships with channel partners to help further grow and scale the brand. We're excited to have Halo as part of our consumer business and we welcome that talented team to Worthington coating products generated net sales of $148 million in Q3, down 19% from $184 million a year ago. The decrease was driven by a less favorable product mix, lower average selling prices and lower volumes, especially in the large format heating end market, which continued to see destocking coating products generated adjusted EBITDA of $53 million for the quarter, and adjusted EBITDA margin was 35.8% compared to $58 million and 31.6% in Q3 of last year. Results in the current quarter were negatively impacted by the $2 million due to the LCM on imported tanks that I mentioned earlier, the destocking we continue to see in our heating end markets should run its course by the summer. And we are optimistic that that demand will return to more seasonally normal levels thereafter.

正如Andy 所提到的，消費者業務以約900 萬美元收購了Halo Products Group 一家附屬公司80% 的控股權Halo 是一家創新輕資產提供商，提供科技產品，包括披薩烤箱、顆粒烤架、烤架和配件，以補充我們的產品。其他領先的戶外生活品牌，如 Coleman、便攜式丙烷罐和 BernzOmatic 火炬燃料和配件。Halo 與這些產品是天然的搭配，並創造了一個強大的組合。Halo 目前規模較小，2023 年收入為 700 萬美元，主要直接面向消費者。我們打算利用與通路合作夥伴的牢固關係來幫助進一步發展和擴大品牌規模。我們很高興 Halo 成為我們消費者業務的一部分，我們歡迎這個才華橫溢的團隊加入沃辛頓塗料產品，第三季度的淨銷售額為 1.48 億美元，比一年前的 1.84 億美元下降了 19%。下降的原因是產品組合較差、平均售價較低和銷售下降，特別是在大型暖氣終端市場，塗料產品的庫存持續減少，本季調整後 EBITDA 為 5,300 萬美元，調整後 EBITDA 利潤率與去年第三季的5,800 萬美元和31.6% 相比，成長了35.8%。本季的業績受到我之前提到的進口罐 LCM 造成的 200 萬美元的負面影響，我們在供熱終端市場上繼續看到的去庫存應該會在夏季結束。我們樂觀地認為，此後需求將恢復到季節性正常水準。

Additionally, our water business continued to show growth in revenues and margins in Q3 as the initiatives we put in place in early 2024 are having a positive impact during Q3. The Water team also continued the launch of our Amtrol Titan well tanks with two new sizes. The Titan is a patented composite tank that combines the strength of steels and the advantages of high-tech composites providing superior impact resistance and UV protection wave delivered very strong results, contributing equity earnings of $26 million in the quarter, up from 19 million a year ago. The team at WAVE continues to focus on refining and enhancing their value proposition to customers, and they saw both volume and margin improvements in the quarter for Dietrich also continued to perform very well and contributed $18 million in equity income for the quarter. So their results were down $1 million compared to the prior year quarter and were up $4 million sequentially from Q2. The Tiger ClarkDietrich team is leveraging its national presence and benefited from higher volumes in Q3, which was offset by some margin compression in sustainable energy solutions. Net sales in Q3 of 35 million were up 11% or $4 million from the prior year, primarily due to higher volumes, which were partially offset by lower average selling prices and an unfavorable product mix.

此外，我們的水務業務在第三季的營收和利潤持續呈現成長，因為我們在 2024 年初採取的舉措在第三季產生了正面影響。Water 團隊也持續推出兩種新尺寸的 Amtrol Titan 井罐。Titan 是一款專利的複合材料罐，結合了鋼材的強度和高科技複合材料的優點，提供卓越的抗衝擊性和紫外線防護波，取得了非常強勁的業績，為本季度貢獻了2600 萬美元的股本收益，高於去年的1,900 萬美元前。WAVE 團隊繼續專注於完善和增強對客戶的價值主張，他們看到本季度的銷售和利潤都有所改善，而 Dietrich 也繼續表現出色，為本季度貢獻了 1800 萬美元的股本收入。因此，他們的業績比去年同期下降了 100 萬美元，比第二季度連續成長了 400 萬美元。Tiger ClarkDietrich 團隊正在利用其在全國的影響力，並受益於第三季度銷量的增加，但可持續能源解決方案的利潤率壓縮抵消了這一影響。第三季的淨銷售額為 3,500 萬輛，比上一年增長 11%，即 400 萬美元，這主要是由於銷量增加，但部分被平均售價下降和不利的產品組合所抵消。

Scs reported an adjusted EBITDA loss of $3 million in the current quarter compared to breakeven results in the prior year due to lower gross margins and several one-time expenses in the current environment. The SCS team continues to focus on near term cost controls and long-term investments as they attempt to balance current market conditions with the exceptional growth opportunities that we believe will materialize as the hydrogen and CNG ecosystems grow during the quarter, the team had success getting additional new product certified and customer ready and quoting activity continues to improve, which should ultimately result in a better demand environment.

Scs 報告稱，由於當前環境下毛利率較低和多項一次性費用，與上一年的盈虧平衡結果相比，本季度調整後 EBITDA 虧損 300 萬美元。SCS 團隊繼續專注於近期成本控制和長期投資，因為他們試圖平衡當前的市場狀況與特殊的成長機會，我們相信隨著氫和CNG 生態系統在本季度的發展，這些機會將成為現實，該團隊成功地獲得了其他新產品經過認證、客戶準備就緒以及報價活動不斷改善，最終將帶來更好的需求環境。

At this point, we're happy to take any questions that people might have in queue.

目前，我們很樂意回答人們可能提出的任何問題。

(Operator Instructions) Daniel Moore, CJS Securities.

（操作員指示）Daniel Moore，CJS 證券。

Thank you. Good morning Andy, good morning, Joe. Thanks for taking the call.

謝謝。早安，安迪，早安，喬。感謝您接聽電話。

Good morning, Dan.

早上好，丹。

I wanted to maybe start with where we finished off there at the tail end of the comments on the JVs, what can you tell us about demand and activity levels, both at WAVE in Clark feature and a forward looking basis, I know you don't quote backlog. So how would you describe the level of new business coming into the pipeline relative to say maybe six months ago or this time last year?

我想也許從我們在合資企業評論的最後結束的地方開始，您能告訴我們關於克拉克 WAVE 功能和前瞻性基礎上的需求和活動水平的信息嗎？我知道您不知道。 t 報價積壓。那麼，相對於六個月前或去年這個時候，您如何描述即將進入的新業務水平？

Yes, it's a fair question. I think the markets have evolved in that construction space leaving, for instance, WAVE whose mix of repair and remodel versus new is typically 65% to 70% repair remodel. It's higher now in part because the new spend is down there, their mix of end markets, our estimates of those at least it's still kind of tough sledding in commercial buildings that are office centric, but also in commercial, you have lots of other things, including data centers, which is showing good growth, but 70% of their and markets we believe are noncommercial right there, a mix of health care, education, retail and transportation projects. And so volumes seem steady there in ClarkDietrich, there's a little bit of a different mix there, slightly more new there.

是的，這是一個公平的問題。我認為建築領域的市場已經發展，例如，WAVE 的維修和改造與新建的組合通常為 65% 至 70% 的維修改造。現在它更高，部分原因是新的支出在那裡，他們的終端市場組合，我們對這些的估計至少在以辦公為中心的商業建築中仍然有點艱難，但在商業建築中，你還有很多其他東西，包括資料中心，顯示出良好的成長，但我們認為 70% 的資料中心和市場都是非商業性的，包括醫療保健、教育、零售和運輸項目。因此，ClarkDietrich 的銷量似乎很穩定，那裡有一點不同的組合，那裡稍微新一點。

They're broadening the types of projects we're working on, not because they're super focused on X or Y or Z, but just because it's where construction is happening. And so we think that as construction activity kind of came down, it seems to be more sort of flat now it's not continuing to go down at least right this minute, nor is it going straight up. I think the Architectural Billings Index that came out yesterday or the day before was 49 five, which is just below 50. It was was 45 the last few months. It was I think the last time it was at 50 was was April of last year. That's a good sign. I think we mentioned in December that the activity level, not the billings, but activity with architects had started to pick back up, which is typically a precursor to billings, but that also takes what we do see a good ABI that takes 12 to 24 months to show up in somebody like ours is revenue or ClarkDietrich or waves. And so we generally are still feel very good about the spaces that they're in kind of mid to longer term. And I could call it a bit murky out there in the short term.

他們正在擴大我們正在進行的專案類型，並不是因為他們超級專注於 X、Y 或 Z，而只是因為這是施工發生的地方。因此，我們認為，隨著建築活動的下降，現在似乎更加平穩，至少在這一分鐘不會繼續下降，也不會直線上升。我認為昨天或前天公佈的建築比林斯指數是 49 5，略低於 50。過去幾個月是45。我想上一次50歲是在去年四月。這是一個好兆頭。我想我們在12 月提到過，活動水平，而不是賬單，而是與建築師的活動已經開始回升，這通常是賬單的前兆，但這也需要我們確實看到一個好的ABI，需要12到24幾個月出現在像我們這樣的人身上的是收入或ClarkDietrich或波浪。因此，從中長期來看，我們總體上仍然對它們所處的空間感覺非常好。我可以說短期內情況有點不明朗。

Very helpful. Pete, maybe switching gears, I still early days, obviously, but maybe just update us on progress in the direct assumed direct to consumer channel. Obviously, a key capability of Level five. Now you're bolting on tacked on halo. Some may know any tangible examples of product you're now offering or plan to offer DTC. that perhaps you didn't historically and just, you know, progress in general and that's a match.

很有幫助。皮特，也許要換個方向，顯然我還處於早期階段，但也許只是向我們通報直接假設的直接面向消費者管道的進展情況。顯然，這是五級的關鍵能力。現在你已經戴上光環了。有些人可能知道您現在提供或計劃提供 DTC 產品的具體範例。也許你並沒有從歷史上看，只是，你知道，總體上取得了進步，這是匹配的。

Yes, I think, Dan, the short answer is that when we acquired Level five, we acquired not only a new set of products, but we acquired a capability and it really helped us really helped open up our eyes in terms of the direct-to-consumer channel. And so the team in consumer really is looking across the product line to figure out which products we think we can sell into that channel. And hey, look, excuse me, Halo is another example of a product that is sold direct to consumer only right now. And so that's part of the overarching strategy. Now when we either develop new products or acquire new products is looking across all the channels direct to consumer and using and leveraging our big box retail relationships to sort of maximize the opportunity for those products. So I wouldn't say there's one opportunity there's probably a bunch of opportunities where, you know, we're looking to sort of leverage those capabilities.

是的，我認為，丹，簡短的回答是，當我們獲得第五級時，我們不僅獲得了一套新產品，而且獲得了一種能力，它確實幫助我們在直接方面打開了視野。面向消費者的渠道。因此，消費者團隊確實正在審視整個產品線，以確定我們認為可以向該通路銷售哪些產品。嘿，請注意，Halo 是目前僅直接銷售給消費者的產品的另一個例子。這是總體戰略的一部分。現在，當我們開發新產品或採購新產品時，我們會尋找直接面向消費者的所有管道，並利用我們的大型零售關係來最大限度地提高這些產品的機會。所以我不會說只有一個機會，可能有很多機會，你知道，我們正在尋求利用這些能力。

Helpful. Last one for me. I'll jump out on. I think you mentioned that puts a little bit of potential pull-forward in demand in the consumer side in from Q4 to Q3. Any details there? Or can you quantify that at all? Thanks again for the help and congrats on a really solid quarter.

有幫助。最後一張給我。我就跳出去。我認為您提到，從第四季度到第三季度，消費者方面的需求可能會有一點潛在的拉動。有詳細的嗎？或者你能量化這一點嗎？再次感謝您的幫助，並祝賀這個季度的表現非常出色。

Thank you. Yes, sure. The the consumer business, particularly our camping gas cylinders, to a lesser extent, the torches that go with those there is a little bit of weather related spike demand from from time to time. And so if you remember in January, the polar vortex and then the storms that were kind of back-to-back across the country. It really created kind of a need because those products are sometimes used as emergency heat sources and they're certainly used to repair pipes that break again, if you not to be become a weatherman. But if you get past those two events, the weather in the winter has been relatively benign. And so we feel really good about the spring and the season and how we're positioned and how we've helped our retail customers get to where they want to be and to where they'll be able to best serve their own customers. But sometimes that spike demand can really move move things from a month to a month. That's the reason for kind of some of our, I'll call it cautious optimism in Q4?

謝謝。是的，當然。消費業務，特別是我們的露營氣瓶，在較小程度上，與之配套的手電筒有時會出現一些與天氣相關的需求高峰。所以，如果你還記得一月份，極地渦旋和隨後的風暴在全國各地接連發生。它確實創造了一種需求，因為這些產品有時被用作緊急熱源，如果你不想成為天氣預報員，它們肯定會被用來修復再次破裂的管道。但如果你經歷了這兩件事，冬天的天氣就相對溫和了。因此，我們對春季和季節以及我們的定位以及我們如何幫助我們的零售客戶到達他們想要的地方以及他們能夠最好地為自己的客戶服務的地方感到非常滿意。但有時，需求的激增確實可以將事情從一個月推遲到一個月。這就是我們對第四季持謹慎樂觀態度的原因？

Yes, there's still the storms are incremental demand. The question and it's hard to predict is was there pull forward or not? And you know, the answer is if our retailers are fully prepared and fully stocked. There may be a little bit of pull-forward, but it's again, it's not an exact science in terms of estimating it.

是的，風暴仍然存在，增量需求仍然存在。很難預測的問題是是否有向前拉？您知道，答案是我們的零售商是否做好充分準備並備有充足庫存。可能會有一點提前，但同樣，就估計而言，這並不是一門精確的科學。

Understood. Thank you.

明白了。謝謝。

Susan Maklari, Goldman Sachs.

蘇珊·馬克拉里，高盛。

Thank you. Good morning, everyone.

謝謝。大家，早安。

Good morning.

早安.

Good morning, Ito. I'd like to start with the price for a bit on. Can you just give us more color on what's driving that lower? Is it mix? Is it absolute declines in there? Just what's going on in there and how you're thinking about that going forward?

早上好，伊藤。我想先從價格談起。您能為我們提供更多關於導致價格下降的原因嗎？是混合的嗎？那裡是絕對下降嗎？那裡正在發生什麼？您對未來有何看法？

Yes. I think your question was around pricing.

是的。我認為你的問題是關於定價的。

Yes.

是的。

So no, it's it's mostly it's mostly mix, honestly, of the some dynamics within consumer and in Building Products was right, I guess building products, for example, the destocking in those very large propane heating tanks, those are our most expensive tanks and they and they come at pretty healthy growth gross margin. So there's there's an outsized impact when those are running up or in this case destocking.

所以不，老實說，這主要是消費者和建築產品內部的一些動態的混合，我想建築產品，例如，那些非常大的丙烷加熱罐的庫存減少，這些是我們最昂貴的罐，他們的毛利率成長相當健康。因此，當這些庫存增加或在這種情況下減少庫存時，就會產生巨大的影響。

Okay, right. And perhaps turning a bit to the outlook. And you mentioned on the potential for this pickup as we get into the spring and summer, maybe some lift in the R&R activity. I guess when you think about the macro backdrop and some of the more recent news and data points, just any thoughts on how that could come through to the business and how you're thinking about the setup more broadly there.

好吧，對。或許還需要關心前景。你提到了隨著我們進入春季和夏季，這種回升的潛力，也許 R&R 活動會有所提升。我想，當您考慮宏觀背景以及一些最新的新聞和數據點時，您會想到如何將其影響到業務以及您如何更廣泛地考慮那裡的設置。

Yes, I think I think if I would maybe call it some sort of pretty close to seasonally normal with some continued, I think, above what we say cautious optimism. But since hub and you're right, the data points out, there are still a little bit mixed. And so I don't think it's certainly not worse than it was six months ago. But again, the consumer is still relatively cautious. We still have some destocking in these large and good-sized margin of propane tanks. And so yes, I would say that we continue to be thoughtful about our markets. Our teams have done a phenomenal job being there for their customers. We haven't at least we don't think we've lost any share in a lot of these categories, but ultimately higher interest rates matter. If you look at if you look at the large propane tanks, for instance, and you look at kind of housing starts and then our demand there. There's about us six to 12 months lag and how those have have worked for us the last several years. Housing starts, I think bottom like last summer, the end of July and have kind of crept back up since. But because of that lag in residential construction, at least come, we anticipate needing another kind of quarter to quarter point for that to run its course.

是的，我想我想我是否可以將其稱為某種非常接近季節性正常的情況，我認為，我認為，這種情況持續高於我們所說的謹慎樂觀。但由於中心和你是對的，數據指出，仍然存在一些混合。因此，我認為情況肯定不會比六個月前更糟。但同樣，消費者仍然相對謹慎。我們仍然對這些大型丙烷罐進行了一些去庫存。所以，是的，我想說我們將繼續深思熟慮我們的市場。我們的團隊在為客戶服務方面做得非常出色。我們還沒有，至少我們不認為我們在許多此類類別中失去了任何份額，但最終更高的利率很重要。例如，如果你看看大型丙烷罐，看看房屋開工情況，然後看看我們在那裡的需求。我們大約有 6 到 12 個月的滯後，以及這些滯後在過去幾年對我們的作用。我認為房屋開工率就像去年夏天七月底那樣觸底，此後有所回升。但由於住宅建設的滯後（至少是這樣），我們預計需要另一個四分之一到四分之一的點才能使其順利進行。

Okay. That's helpful. And then just one one last one for me. It was exciting to see the Halo acquisition come through. Can you give us just an update on the overall M&A pipeline, how that's coming through and anything that, you know is of interest, perhaps there?

好的。這很有幫助。然後我就只剩下最後一張了。看到 Halo 收購的成功令人興奮。您能否向我們介紹整個併購管道的最新情況、進展以及您認為可能感興趣的內容？

Sure. As far as M&A activity in 2022 and 2023, really sort of slowed down? That was okay for us, right? Because we were in the midst of the spin from activity in 2024. It has certainly been predicted to pick back up from where hopeful that that is the case is still early in 2024. I think you'll see us acquire a lot of companies smaller than halo from that was a really good opportunity for us, as Andy said, to really fast forward a bunch of product development and be able to really grow and leverage what we do to make that business better. But we have kind of a pretty robust program of kind of making outbound calls and trying to be as smart as we can, knowing who the right fits for us are in building products and in consumer products right now, less in the SCS business. Some are pretty large, some are not as big and more bolt-ons, but there's nothing that we're kind of getting ready to announce or anything. It's burning a hole in our pocket, but we continue to be out there. And as we said, have it have a really good balance sheet and some liquidity so that when we find the right fit, we'll be able to think about that. But going back to our criteria for those, they're going to be are going to be margin-rich. They're going to be asset-light and they're going to have a sustainable competitive advantage that we think we can either leverage or have it even make us better.

當然。就 2022 年和 2023 年的併購活動而言，真的有放緩嗎？這對我們來說沒問題，對吧？因為 2024 年我們正處於活動的旋轉之中。當然，預計到 2024 年初，這一情況將會有所回升。我想你會看到我們收購了很多比halo 小的公司，正如安迪所說，這對我們來說是一個非常好的機會，可以真正快速推進一系列產品開發，並能夠真正發展並利用我們所做的事情使該業務變得更好。但我們有一個相當強大的計劃，可以撥打外線電話，並儘可能地變得聰明，知道誰最適合我們現在的建築產品和消費產品領域，而不是 SCS 業務。有些相當大，有些則沒有那麼大，而且有更多的附加功能，但我們還沒有準備好宣布什麼。它在我們的口袋裡燒了一個洞，但我們仍然在那裡。正如我們所說，讓它擁有一個非常好的資產負債表和一定的流動性，這樣當我們找到合適的人選時，我們就能考慮這一點。但回到我們對這些公司的標準，他們將獲得豐厚的利潤。他們將是輕資產的，並將擁有可持續的競爭優勢，我們認為我們可以利用這種優勢，甚至讓我們變得更好。

Okay. All right. Well, that sounds great. Thanks for all the color and good luck with everything. Thank you.

好的。好的。嗯，聽起來不錯。感謝所有的顏色，祝一切順利。謝謝。

Kathryn Thompson, Thompson Research Group.

凱瑟琳·湯普森，湯普森研究小組。

Good morning. This is actually Brian Barrows on for Kathryn. Thank you for taking my questions. Good morning, Brian, and a further on the GBS. I think the past few quarters has kind of seen the to fill in kind of opposite directions almost and probably not always the case, maybe more of a short-term blip. Just given what markets have been recently guess do you think that dynamic is kind of over going forward? Seems like maybe it is a little bit given your comments about our teacher kind of stabilizing from here, but just interested to hear your thoughts on how two may or may not be linked in momentum going forward?

早安.這實際上是布萊恩巴羅斯 (Brian Barrows) 為凱瑟琳 (Kathryn) 配音的。感謝您回答我的問題。早安，Brian，接下來是 GBS。我認為過去幾季幾乎出現了相反的方向，而且可能並非總是如此，也許更多的是短期現象。考慮到最近的市場情況，您認為這種動態是否有點過度了？考慮到您對我們老師的評論從這裡開始趨於穩定，似乎可能有點這樣，但只是想聽聽您對兩者在未來的動力中可能或可能不相關的想法？

Yes. I mean, if you think about the products, BRIAN ClarkDietrich tends to be more on the front end of construction wave a little more on the back end of construction. So as the cycles move up and down, they're going to not move in lockstep if that makes sense. And you know, Joe kind of talked about it earlier that the market for our overall commercial construction products is pretty steady. There's pockets of weakness, which is office. Everybody knows and talks about that. But there is a bit of a belief, I think that there could be a renovation, the renovation, renaissance of sorts that that comes from companies trying to attract workers back to the office and changing up things to make it more appealing to be there as well as some of the other kind of macro trends around reshoring, near-shoring, health care education. Those markets continue to be pretty pretty strong. So it's a little hard to predict if those businesses are going to it kind of move together. But I'm there demand, I would say is reasonably steady right now once again, ladies and gentlemen, if you have a question, it is star one.

是的。我的意思是，如果你考慮一下產品，BRIAN ClarkDietrich 傾向於更專注於建築浪潮的前端，更專注於建築的後端。因此，當週期上下移動時，如果有意義的話，它們將不會同步移動。你知道，喬早些時候談過，我們整體商業建築產品的市場相當穩定。有一些弱點，那就是辦公室。每個人都知道並談論這一點。但有一種信念，我認為，公司可能會進行某種改造、改造、復興，試圖吸引員工回到辦公室，並做出一些改變，讓辦公室變得更具吸引力。以及圍繞回流、近岸、醫療保健教育的其他一些宏觀趨勢。這些市場仍然相當強勁。因此，很難預測這些企業是否​​會一起行動。但我的需求，我想說，現在再次相當穩定，女士們先生們，如果你們有問題，這是第一個問題。

(Operator Instructions) Brian McNamara, Cannacord Genuity.

（操作員說明）Brian McNamara，Cannacord Genuity。

Good morning. Guys. Congrats on the results, Mona, and thank you buying more of I hate to put you on the spot, Joe, what I'm going to say I get a lot of questions about the earnings power of the business for maybe some folks new to the story kind of can you can you put up some guardrails in terms of how we should look at the business in terms of both the gross margin side and then how that flows into EBITDA margin if you wouldn't mind?

早安.夥計們。恭喜你的結果，莫娜，謝謝你買了更多的東西，我不想讓你陷入困境，喬，我要說的是，對於一些剛接觸該行業的人來說，我收到了很多關於該業務獲利能力的問題這個故事是這樣的，你能不能就我們應該如何從毛利率方面看待業務以及如何流入 EBITDA 利潤率（如果你不介意的話）提出一些防護措施？

I mean of the way, our gross margin for the quarter was 23.1% and it's going to be a little different by business. You know, the historically the consumer products business is going to have higher gross margins just based on what they do and maybe a little bit higher SG&A as a percent of sales as well. But we think when we see consumer at kind of 19.3% EBITDA margin in the quarter. That's kind of what we think. And they think good looks like for them. They get they get good volumes and ultimately, you can you can kind of hang in there or that number around there or better than we feel really good about it as revenues grow and the gross margin from building products on the on the heating cooling and water side of the business was really strong. This past quarter. I think it was 6.2%. They had 130 basis points of that was the LCM that we talked about, which we certainly believe is nonrecurring. So that would be adjusted 7.5% was 11% a year ago. And this is the EBITDA margin. I'm talking about the B. 11% last year.

我的意思是，我們本季的毛利率為 23.1%，根據業務的不同，毛利率會略有不同。你知道，從歷史上看，消費品業務的毛利率會更高，這取決於他們所做的事情，SG&A 佔銷售額的百分比可能也會更高一些。但我們認為，當我們看到本季消費者的 EBITDA 利潤率為 19.3% 時。我們就是這麼想的。他們認為自己看起來不錯。他們得到了很好的銷量，最終，你可以堅持下去，或者那個數字，或者比我們感覺更好，因為收入的增長以及在供暖、冷卻和水方面構建產品的毛利率業務方面確實很強大。過去的這個季度。我認為是 6.2%。他們有 130 個基點，這就是我們談到的 LCM，我們當然相信這是非經常性的。所以調整後的 7.5% 是一年前的 11%。這就是 EBITDA 利潤率。我說的是去年的B.11%。

And so but I think you get a normalized environment and you're certainly significantly higher than 6.2%, got some good things going on there and the water business, you will get through this destocking in the larger propane businesses and those guys and that team, I think are absolutely focused on doing the right things. The water business is showing great progress. We talked about some of the businesses historically as kind of having more upside and not really running at full speed. That's one of them, but a big improvement there. And then the core business continues to seek through what's happening now. But if you go back to kind of Andy's comments on innovation and new product development there. There's a lot going on a lot of good work being done that we think can add both to top line and to margins.

所以，但我認為你會得到一個正常化的環境，而且肯定明顯高於6.2％，那裡和水業務上發生了一些好事，你將在較大的丙烷業務以及那些人和團隊中度過這種去庫存的時期，我認為我們絕對專注於做正確的事情。水務事業呈現長足發展。我們討論了一些歷史上具有更多優勢但並未真正全速運行的業務。這是其中之一，但這是一個很大的進步。然後核心業務繼續透過現在正在發生的事情來尋求。但如果你回顧一下安迪對創新和新產品開發的評論。我們正在進行許多出色的工作，我們認為這些工作可以增加營收和利潤。

And maybe just to take it up a level, Brian, if you think about our long-term goals of driving our EBITDA margin up to 24% over the next three to five years. And everything that we do is very much focused on that. Our transformation playbook is about improving the profitability and the margin profile of the businesses. We own today. And as we think about M&A and capital that we're going to deploy into our innovation pipeline there, again, we're looking to drive not only higher margins but also higher return on capital. We talk talk a lot about returns and making more money using less capital where possible. So I think the fact that the businesses are where they are today, there is upside there. But over the long run, we fully expect that we're going to drive higher margins and that will start at the gross margin line.

布萊恩，如果你考慮我們的長期目標，即在未來三到五年內將 EBITDA 利潤率提高到 24%，也許只是為了更上一層樓。我們所做的一切都非常關注這一點。我們的轉型手冊是關於提高企業的獲利能力和利潤狀況。我們擁有今天。當我們考慮將要部署到創新管道中的併購和資本時，我們不僅希望提高利潤率，還希望提高資本回報率。我們談論了很多關於回報以及盡可能使用更少的資本賺更多的錢。所以我認為，企業發展到今天的水平，是有好處的。但從長遠來看，我們完全預期我們將提高利潤率，而這將從毛利率線開始。

That's really helpful. Thanks and just one more for me. I think all my other questions have been answered already. I'm just curious relative to your Joe or Andy or both of you relative to your your own expectations heading into the separation. I'm curious, have you run into any surprises either good or bad in your first kind of three or so months as a separate entity Yes, you know.

這真的很有幫助。謝謝，再給我一張。我認為我所有其他問題都已經得到解答。我只是對你的喬或安迪或你們倆對你們對分居的期望感到好奇。我很好奇，在作為一個獨立實體的頭三個月左右的時間裡，你是否遇到過任何意外，無論是好還是壞？是的，你知道。

I would say the process has been exceptionally smooth on the surface. You know, there's been a few struggles underneath the surface, but nothing that's really no major. I mean, look, when you take a company that it was put together over 68 years and you're trying to separate it into two public companies, that's a lot of work by a lot of people, you know, you talk about the IT group, separating systems, the finance group having to recast financials, which continues to this day. So there's just a ton of work and it's never perfect. But I would say it's been an exceptional performance by everybody involved, and we're fortunate that we get to sit here and kind of and on the surface talk about it, but it's been a tremendous effort and success, I would say, really across the board. I mean, I don't know if there's anything else to add there, Joe but we're really proud of everybody that it has been a part of it.

我想說這個過程表面非常順利。你知道，表面之下確實存在著一些掙扎，但沒有什麼是真正不重要的。我的意思是，看，當你把一家成立了 68 年的公司試圖將其分成兩家上市公司時，這是很多人的大量工作，你知道，你談論的是 IT集團，分離系統，財務集團不得不重新調整財務，這種情況一直持續到今天。因此，工作量很大，而且永遠不會完美。但我想說，這是每個參與者的出色表現，我們很幸運能夠坐在這裡，表面上談論它，但我想說，這是巨大的努力和成功，真的是跨越了一切。董事會。我的意思是，我不知道還有什麼要補充的，喬，但我們真的為每個人感到自豪，因為它是其中的一部分。

That's great. Thanks a lot. Thanks a lot, guys.

那太棒了。多謝。非常感謝，夥計們。

Kathryn Thompson.

凱瑟琳湯普森。

It has its primary and key driver. I had what you call new.

它有其主要和關鍵的驅動力。我有你所謂的新東西。

Katherine. I hope you appreciate that off to Brian for today. I had a quick follow-up on that again, but not earlier, but in the building products segment, I know you guys have called out mix kind of impacting the sales and overall, the volumes seem pretty good relative to the destocking going on that I think are only down 2%. You touched on it in the opening comments and some of the responses here. Just maybe further parse out what was maybe up or down across the different products in that category? You called out propane, you call it water. Anything else to specifically call out because it seems like there's maybe pretty good stuff going on there that might be masked by the propane destocking in the short.

凱瑟琳。我希望你感謝布萊恩今天的演講。我再次對此進行了快速跟進，但不是更早，但在建築產品領域，我知道你們已經指出了混合類型對銷售的影響，總體而言，相對於正在進行的去庫存而言，銷量似乎相當不錯我認為只下降了2%。您在開場評論和此處的一些回應中談到了這一點。也許只是進一步分析該類別中不同產品的上漲或下跌？你叫丙烷，你叫它水。還有什麼要特別指出的，因為似乎那裡可能正在發生一些非常好的事情，但可能會被短期內丙烷的去庫存所掩蓋。

Yes, that means that if you get if you get away from the LCM, which again, we think was one-time couple of million. The big the big factor was mix, honestly, and it's that destocking in those largest propane tanks. We've every every kind of, I think, Facet around home goods, building products, some consumer goods, right had had a post COVID run up and then kind of a post COVID trough. It's just that's just what's happening in that business. The water business was was solid on our other businesses. Couple of other businesses were around some of the large kind of refillable refrigerant tanks, those sort of slowed year over year just because of the same dynamics that that destocking. But other than that, there were a couple of puts and takes, but those are the those are the real drivers.

是的，這意味著如果你擺脫了 LCM，我們認為這一次性是幾百萬。老實說，最重要的因素是混合，而且是那些最大的丙烷罐的庫存減少。我認為，我們圍繞著家居用品、建築產品和一些消費品的各種方面都經歷了新冠疫情后的上漲，然後又經歷了新冠疫情后的低谷。這就是該行業正在發生的事情。水務業務對我們的其他業務表現強勁。其他一些業務涉及一些大型可再填充冷媒罐，這些業務逐年放緩，只是因為庫存減少的動力相同。但除此之外，還有一些調整和調整，但這些才是真正的驅動因素。

Thank you.

謝謝。

There are no further questions time. I'll turn the call to Andy Rose for closing remarks.

沒有其他提問時間了。我將把電話轉給安迪·羅斯，讓其致閉幕詞。

So as I said, last quarter. We're proud of our history and who we are today, but we're mostly excited for our future. We are determined to leverage our capabilities to reward our employees, our customers, our suppliers and our shareholders as our founder, John McConnell. Once said in his speech in 1980 quote, we've only scratched the surface on quote that quote is as true today as it was back then. And I think it represents how we all feel about Worthington enterprises and the opportunity in front of us. Thanks for joining us today. We'll see you next quarter.

正如我所說，上個季度。我們為我們的歷史和今天的地位感到自豪，但我們更對我們的未來感到興奮。作為我們的創辦人約翰·麥康奈爾，我們決心利用我們的能力來獎勵我們的員工、客戶、供應商和股東。他在 1980 年的演講中曾經說過，我們只觸及了這句話的皮毛，這句話在今天和當時一樣真實。我認為它代表了我們所有人對沃辛頓企業和我們面前的機會的感受。感謝您今天加入我們。我們下季見。

This concludes today's conference call. We thank you for joining. You may now disconnect your lines.

今天的電話會議到此結束。我們感謝您的加入。現在您可以斷開線路。