Zurn Elkay Water Solutions Corp (ZWS) 2025 Q1 法說會逐字稿

Good morning, and welcome to the Zurn Elkay Water Solutions Corporation first-quarter 2025 earnings results conference call with Todd Adams, Chairman and Chief Executive Officer; Dave Pauli, Chief Financial Officer; and Brian Wendland, director of FP&A for Zurn Elkay Water Solutions.

早安，歡迎參加 Zurn Elkay Water Solutions Corporation 2025 年第一季收益結果電話會議，與會人員包括董事長兼執行長 Todd Adams、財務長 Dave Pauli 和 Zurn Elkay Water Solutions FP&A 總監 Brian Wendland。

A replay of the conference call will be available as a webcast on the company's Investor Relations website. At this time for opening remarks and introduction, I'll turn the call over to Bryan Wendlandt. Please go ahead.

電話會議的重播將以網路直播的形式在公司的投資者關係網站上提供。現在，我將致開幕詞和介紹，並將電話交給 Bryan Wendlandt。請繼續。

Good morning, everyone and thanks for joining the call today. Before we begin, I'd like to remind everyone that this call contains certain forward-looking statements that are subject to the Safe Harbor language contained in the press release that we issued yesterday afternoon, as well as in our filings with the SEC.

大家早安，感謝大家參加今天的電話會議。在我們開始之前，我想提醒大家，本次電話會議包含某些前瞻性陳述，這些陳述受我們昨天下午發布的新聞稿以及我們向美國證券交易委員會提交的文件中的安全港語言約束。

In addition, some comparisons refer to non-GAAP measures. Release and SEC filings contain additional information about these non-GAAP measures, why we use them, and why we believe they are helpful to investors and contain reconciliations to the corresponding GAAP.

此外，一些比較涉及非公認會計準則衡量標準。發布和 SEC 文件包含有關這些非 GAAP 指標的更多資訊、我們使用它們的原因以及我們認為它們對投資者有幫助的原因，並包含與相應 GAAP 的對帳。

With prior quarters, we speak to certain non-GAAP metrics as we feel they provide a better understanding of our operating results. These measures are not a substitute for GAAP. We encourage you to review the GAAP information in our earnings release and in our SEC filings. With that, I'll turn the call over to Todd Adams, Chairman and CEO of Zurn Elkay Water Solutions.

在前幾季中，我們談到了某些非 GAAP 指標，因為我們認為它們可以更好地理解我們的經營業績。這些措施不能取代 GAAP。我們鼓勵您查看我們的收益報告和 SEC 文件中的 GAAP 資訊。接下來，我將把電話轉給 Zurn Elkay Water Solutions 董事長兼執行長 Todd Adams。

Thanks, Bryan, and good morning, everyone. Hopefully, everyone's had a chance to read through the release and the charts from last night. So I'll get right to it on page 3. We had a solid Q1, 5% organic growth, 110 basis points of year-over-year improvement in EBITDA margins and cash flow ahead of our expectations.

謝謝，布萊恩，大家早安。希望每個人都有機會閱讀昨晚的發布和圖表。因此我將直接在第 3 頁進行討論。我們第一季業績穩健，有機成長率達 5%，EBITDA 利潤率年增 110 個基點，現金流超出預期。

I think it's important to point out that there is little to no impact on the Q1 results from the implementation of tariffs, either in terms of additional costs arising from the tariffs, and certainly no realization yet from the new price increases we've announced that will be effective as we get into Q2.

我認為有必要指出的是，實施關稅對第一季的業績幾乎沒有影響，無論是關稅產生的額外成本，還是我們宣布的、將在第二季生效的新價格上漲，都還沒有實現。

We're going to get into the details regarding the impact of tariffs in just a few minutes and share what it means to us from both a supply chain strategy perspective as well as from a pricing standpoint. But I'll give you the punchline ahead of time. First, we have high confidence, we will be price-cost positive based on the work and actions we've already implemented and will continue to optimize.

我們將在幾分鐘內詳細討論關稅的影響，並從供應鏈策略角度和定價角度分享它對我們的意義。但我會提前告訴你笑點。首先，我們信心十足，我們將在已經進行的工作和行動的基礎上，實現價格成本的積極性，並將繼續進行優化。

Second, which is really important because there's been some confusion by the sell side on this. By the end of 2026, only 2% to 3% of our COGS will be coming from China based on a glide path that Dave will share in a bit.

第二，這一點非常重要，因為賣方對此有些困惑。根據 Dave 稍後分享的下滑路徑，到 2026 年底，我們的 COGS 中只有 2% 到 3% 將來自中國。

But before I turn it over to Dave, I think perhaps the most important takeaway this morning is that organizationally, our deep expertise and track record going back decades and tested throughout the initial tariff environment in 2017 and '18, and again, during the pandemic has only been enhanced through the breakthrough work we've been at for years now.

但在交給戴夫之前，我認為今天早上最重要的收穫可能是，從組織上來說，我們的深厚專業知識和業績記錄可以追溯到幾十年前，並在 2017 年和 2018 年的初始關稅環境中以及大流行期間經過了考驗，而這些都通過我們多年來的突破性工作得到了增強。

That breakthrough work is us spending the last four to five years to restructure our supply chain towards a scenario where we are sourcing as close to zero as possible from China in the medium term. And as you'll see and hear this morning, we come very close to that by the end of 2026.

這項突破性的工作是我們花了過去四到五年的時間重組我們的供應鏈，以實現中期從中國採購盡可能接近零的局面。正如你們今天早上所看到和聽到的，到 2026 年底，我們將非常接近這一目標。

While our supply chain exposure gets smaller by the day, it's also likely that we may end up with some level of new tariffs from non-China sources moving forward. Even with that understanding, we believe we have repositioned our supply chain to be both competitively advantaged relative to our industry and with the lowest total cost supply chain in whatever the new world might look like, along with being dual sourced.

雖然我們的供應鏈風險敞口日益縮小，但我們最終仍有可能面臨來自非中國產地一定程度的新關稅。即使有這樣的認識，我們相信我們已經重新定位了我們的供應鏈，使其相對於我們的行業具有競爭優勢，並且無論新世界是什麼樣子，都擁有最低的總成本供應鏈，同時擁有雙重來源。

For the time being, we're accelerating everything that can be accelerated and like everyone else, hoping for a little more clarity and certainty on what this ultimately looks like over the coming months. Now I'll hand it over to Dave to take you through some more color on the quarter.

目前，我們正在加速一切可以加速的事情，和其他人一樣，希望在未來幾個月內能夠對最終結果有更清晰和確定的了解。現在我將把時間交給戴夫，讓他向大家介紹本季的更多情況。

Thanks, Todd. Please turn to slide number 4. Our first quarter sales totaled $389 million, which represents 5% core growth. Our reported growth was 4% and impacted by 1 point of currency. In the first quarter, we generally saw our end markets perform in line with the guidance we provided 90 days ago.

謝謝，托德。請翻到第 4 張投影片。我們第一季的銷售額總計 3.89 億美元，核心成長率為 5%。我們的報告成長率為 4%，受到 1 個貨幣點的影響。在第一季度，我們總體上看到我們的終端市場表現與我們 90 天前提供的指導一致。

Mid-single-digit core sales growth in our non-residential end markets were partially offset by softness in residential and pockets of the commercial segment within non-residential. Solid execution on our growth initiatives drove our sales performance to the higher end of the outlook we provided 90 days ago, as our first quarter results were volume-driven, and as Todd said, not impacted by the announced tariff-related price increases as those start in the second quarter.

我們非住宅終端市場核心銷售額的中位數成長被非住宅領域內住宅和商業領域的疲軟所部分抵消。我們穩步執行的成長計劃使我們的銷售業績達到了 90 天前給出的預期的較高水平，因為我們的第一季業績是由銷量驅動的，而且正如 Todd 所說，不會受到從第二季度開始宣布的關稅相關價格上漲的影響。

Turning to profitability, our first quarter adjusted EBITDA was $98 million, and our adjusted EBITDA margin expanded 110 basis points year-over-year to 25.2% in the quarter. The strong margin and year-over-year expansion was driven by the benefits of our productivity initiatives, leveraging our Zurn Elkay business system, and continuous improvement activities across the organization as well as some carryover benefits of the synergy actions we took last year.

談到獲利能力，我們第一季的調整後 EBITDA 為 9,800 萬美元，本季調整後的 EBITDA 利潤率年增 110 個基點至 25.2%。強勁的利潤率和同比增長得益於我們的生產力舉措、利用我們的 Zurn Elkay 業務系統、整個組織的持續改進活動以及我們去年採取的協同行動的一些延續效益。

Please turn to slide 5, and I'll touch on some balance sheet and leverage highlights. Back to our net debt leverage, we ended the quarter with leverage below 1 at 0.9 times. Our 0.9 times leverage is inclusive of the $77 million we deployed to repurchase shares in the quarter, $55 million of our share repurchases were part of the share offering that we executed in mid-February. Our balance sheet, leverage and cash flow generation are in a good spot as we continue to evaluate our funnel of M&A opportunities.

請翻到投影片 5，我將介紹一些資產負債表和槓桿亮點。回到我們的淨債務槓桿率，本季末我們的槓桿率低於 1，為 0.9 倍。我們的 0.9 倍槓桿包括我們在本季用於回購股票的 7,700 萬美元，其中 5,500 萬美元的股票回購是我們在 2 月中旬執行的股票發行的一部分。隨著我們繼續評估併購機會，我們的資產負債表、槓桿率和現金流量產生都處於良好狀態。

I'll turn the call back over to Todd.

我會把電話轉回給托德。

Thanks, Dave, and I'm back on page 6. Here's a glimpse at our Q1 sustainability performance. We've certainly not lost any focus on delivering amazing sustainability outcomes for our customers amidst everything that's going on.

謝謝，戴夫，我又回到了第 6 頁。以下是我們第一季可持續發展表現的概況。在發生的一切事情中，我們當然不會忘記為我們的客戶提供令人驚嘆的永續發展成果。

And in the past few weeks, we've been recognized for those efforts, including winning a Best Sustainability Reporting Award from IR Magazine as well as being recognized as one of America's climate leaders. Number 1 in Wisconsin, number 55 out of the top 5 --- 100 -- and number 3 in the capital goods industry.

在過去的幾周里，我們的努力得到了認可，包括贏得《投資者關係雜誌》頒發的最佳永續發展報告獎，並被公認為美國氣候領袖之一。在威斯康辛州排名第一，在前 5 名（100 名）中排名第 55 位，在資本貨物行業排名第三。

I'll highlight just one thing here, and that's the 600 million gallons of filtered water delivered in Q1. That's up 33% over the prior year Q1, driven both by the growth in the installed base of filtered units and improved filtration attachment rates that we've been driving.

我在這裡只強調一件事，那就是第一季交付了 6 億加侖的過濾水。這比去年第一季增長了 33%，這得益於過濾裝置安裝基數的增長以及我們一直在推動的過濾附件率的提高。

Lots of things happening in and around drinking water and filtration with new products and traction in new markets and more to come on that over the course of the year, but I'll get at it on page 7. The purpose of the next several pages is to give everyone a sense of the current state of our spend, split out to identify the tariff impact by geography, what it looks like throughout the balance of 2025 and directionally into 2026.

飲用水和過濾領域及其周圍發生了很多事情，新產品和新市場的吸引力以及今年將發生更多的事情，但我將在第 7 頁介紹。接下來幾頁的目的是讓每個人都了解我們目前的支出狀況，按地區劃分以確定關稅影響，以及 2025 年全年以及 2026 年的發展方向。

Finally, to give you a sense of the price impact necessary to recover the incremental costs as well as other things we're doing to mitigate the impact of tariffs. As I mentioned earlier, we've been driving a multiyear change to our supply chain strategy, which has been guided by two fundamental principles: number one, minimize our exposure to China; and two, competitively advantage ourselves from a cost, lead time, quality and dual sourcing perspective while leveraging third parties, both domestically and internationally.

最後，讓您了解收回增量成本所需的價格影響以及我們為減輕關稅影響而採取的其他措施。正如我之前提到的，我們多年來一直在推動供應鏈策略的變革，該策略遵循兩個基本原則：第一，盡量減少對中國的依賴；第二，從成本、交貨時間、品質和雙重採購的角度獲得競爭優勢，同時利用國內外第三方。

Some of the constraints or, I guess, realities are is, as an industry, there is minimal to no available domestic capacity for significant portions of what we source. That's before taking into consideration the cost based on things like material costs, labor availability as well as capital expenditures required to scale to the levels we and other industry participants would require to meet the market demand.

我猜想，一些限制因素或現實情況是，作為一個行業，我們採購的大部分產品的國內產能極低甚至沒有。這還沒有考慮材料成本、勞動力可用性以及擴展到我們和其他行業參與者滿足市場需求所需的資本支出等因素。

But the thing everyone is gaining a better understanding of in the recent months is that the lead time to make the kind of sophisticated changes we've made to our supply chain is measured in years. As a result of just basic things like equipment lead times, product quality protocols and processes and not to mention building relationships and trust with our supply chain partners.

但最近幾個月，大家逐漸意識到，我們對供應鏈進行如此複雜的變革，其準備時間是以年為單位的。這只是設備交付週期、產品品質協議和流程等基本事項的結果，更不用說與我們的供應鏈合作夥伴建立關係和信任了。

Given our decades of experience with this type of supply chain model, we've been very intentional and measured in our approach to assure that we can scale all these new or duplicate capabilities without impacting our customers.

鑑於我們在這種供應鏈模式上擁有數十年的經驗，我們在方法上非常謹慎和慎重，以確保我們能夠在不影響客戶的情況下擴展所有這些新的或重複的功能。

And finally, we and virtually every other industry participant and competitor has responded with price increases, above and beyond the normal annual price increases to reflect and offset the cost increases we're all seeing if and when these tariffs get implemented.

最後，我們以及幾乎所有其他行業參與者和競爭對手都採取了漲價措施，漲價幅度超出了正常的年度漲幅，以反映和抵消這些關稅實施後我們所看到的成本上漲。

On the next page, Dave will take everyone through some of the initial details to ground everyone on the numbers, and I'll come back with a wrap-up. Go ahead, Dave.

在下一頁中，戴夫將向大家介紹一些初步細節，讓大家了解這些數字，然後我會回來進行總結。繼續吧，戴夫。

Thanks, Todd. I'm on slide 8 and I want to spend some time on our supply chain-related cost structure. As you can imagine, we've had a number of questions on our supply chain, where direct material is coming from and how tariffs will ultimately impact our business?

謝謝，托德。我在第 8 張投影片上，我想花一些時間介紹我們的供應鏈相關的成本結構。你可以想像，我們對我們的供應鏈有很多疑問，直接材料來自哪裡，以及關稅最終將如何影響我們的業務？

Starting with the box in the upper left-hand corner of the slide, we provide a breakdown of the $860 million of 2024 actual cost of goods sold. $507 million of our cost of goods sold relates to direct material spend and the remainder, roughly $350 million relates to all other cost of goods sold.

從幻燈片左上角的框開始，我們提供了 2024 年 8.6 億美元實際銷售成本的明細。我們的銷售成本中有 5.07 億美元與直接材料支出有關，其餘約 3.5 億美元與所有其他銷售成本有關。

So 59% of our COGS relates to direct material spend, and the remaining 41% labeled as all other cost of goods sold relates to everything else, items like freight, direct labor and overhead. At the center of the tariff discussion is where goods are being sourced. And the box on the bottom left of the page helps to clarify what that looks like for Zurn Elkay.

因此，我們的 COGS 中有 59% 與直接材料支出有關，其餘 41% 標記為所有其他銷售成本，與其他所有項目有關，例如運費、直接人工和間接費用。關稅討論的核心是貨物的來源。頁面左下角的方框有助於闡明 Zur Elkay 的情況。

Of the total 2024 direct material spend, 44% of that spend or $222 million came from North America. North America represents our largest concentration of both COGS and direct material. Our 2024 direct material spend out of China was $127 million or 25% of our total direct material spend.

在 2024 年直接材料總支出中，44% 或 2.22 億美元來自北美。北美是我們銷售成本和直接材料的最大集中地。2024 年，我們在中國的直接材料支出為 1.27 億美元，占我們直接材料總支出的 25%。

And finally, on this box, our 2024 spend coming from countries outside of China and North America is roughly $158 million or 31% of our direct material spend. Shifting to the box in the upper right corner, approximately $285 million or 33% of our cost of goods sold are on the surface subject to some level of tariffs. That $285 million is divided up into two buckets, products sourced from China of $127 million and product sourced from all other countries of $158 million.

最後，在這個方塊中，我們 2024 年來自中國和北美以外國家的支出約為 1.58 億美元，占我們直接材料支出的 31%。轉到右上角的方框，大約 2.85 億美元或 33% 的銷售成本表面上受到一定程度的關稅。這 2.85 億美元被分成兩部分：來自中國的產品 1.27 億美元，以及來自所有其他國家的產品 1.58 億美元。

With the tariffs in place today, most material purchases coming from China are subject to a tariff as high as 145%. However, there are some exclusions like products that is primarily iron steel or aluminum that result in a tariff significantly lower than the 145%. The $158 million of product being sourced in all other countries outside of North America and China, there's generally a 10% reciprocal tariff in place, again, with some exception.

根據目前實施的關稅，大多數來自中國的物資採購將被徵收高達 145% 的關稅。然而，有些產品（例如主要由鋼鐵或鋁組成的產品）的關稅將遠低於 145%。價值 1.58 億美元的產品來自北美和中國以外的所有其他國家，一般都徵收 10% 的互惠關稅，但也有例外。

When we add up everything for Zurn Elkay with the tariff environment in place today, we expect our tariff cost impact before any price for 2025 to be between $45 million and $55 million. Todd will cover our response to the tariffs and pricing in a bit.

當我們將 Zurn Elkay 的所有費用與當前的關稅環境結合時，我們預計 2025 年任何價格之前的關稅成本影響將在 4500 萬美元至 5500 萬美元之間。托德稍後將介紹我們對關稅和定價的回應。

But before we get to that, I want to cover the last box on the slide. As a business, we navigated the initial tariffs that were put in place several years ago very well. While we successfully managed the day-to-day impact of those first tariffs, we also implemented a multiyear strategy to significantly reduce our exposure to China that we are now seeing the benefits of.

但在我們討論這個之前，我想先講一下投影片上的最後一個方塊。作為一家企業，我們很好地應對了幾年前實施的初始關稅。在我們成功應對首批關稅帶來的日常影響的同時，我們也實施了一項多年戰略，以大幅減少對中國的敞口，現在我們已經看到了其好處。

China is at the center of the tariff conversation today. And the last box in the lower right hand side illustrates the work we have done and are currently doing to substantially reduce our exposure to China over the coming quarters.

中國是當今關稅討論的焦點。右下角的最後一個方框展示了我們已經完成的和正在進行的工作，以在未來幾季大幅減少對中國的曝險。

As you can see, our direct material spend from China will be under $30 million by the end of 2026 and significantly reduces each quarter as we move forward. This has been an intentional project over the past several years, and we have an exceptional supply chain team, both here and in Southeast Asia managing the process.

如您所見，到 2026 年底，我們在中國的直接材料支出將低於 3,000 萬美元，隨著我們的發展，每季都會大幅減少。這是過去幾年有意為之的項目，我們擁有一支出色的供應鏈團隊，在國內和東南亞負責管理這項流程。

As we continue to gain clarity on the tariff environment, this chart will evolve as we accelerate moves out of China, shift production to dual sources and respond to the latest set of rules around tariffs. In the end, what this all means is that by the end of 2026, we are looking at a combined Zurn Elkay business that has less than 2% to 3% of COGS coming from China.

隨著我們對關稅環境的了解不斷加深，隨著我們加快撤出中國、將生產轉移到雙重來源以及響應最新的關稅規則，該圖表也將隨之演變。最終，這一切意味著，到 2026 年底，我們將看到合併後的 Zurn Elkay 業務中來自中國的銷貨成本將不到 2% 至 3%。

I'll turn the call back over to Todd to wrap up the tariff discussion.

我將把電話轉回給托德來結束關稅討論。

Thanks, Dave. And just to wrap it up on supply chain and price cost, and I'm sure there'll be some questions. Our response to the tariff situation or other derivatives of it is grounded in finding the best combination of highest quality, most reliable and best cost supply chain we can.

謝謝，戴夫。就供應鏈和價格成本進行總結，我相信會有一些問題。我們對關稅情勢或其衍生問題的應對是基於找到我們所能找到的最高品質、最可靠和最佳成本供應鏈的最佳組合。

It feels like there will be multiple episodes or layers to how tariffs will unfold moving forward. However, it does feel like we're going to be in operating an environment with some level of new tariff or added costs for at least the foreseeable future.

看起來，未來關稅的演變將會有多個階段或多個層次。然而，至少在可預見的未來，我們確實感覺我們將處於一個具有一定程度的新關稅或額外成本的環境中。

Based on our response to the situation, both through our supply chain actions and selective price increases, we have high confidence in our ability to manage above it and stay in front of it. As Dave said, our China spend gets smaller each and every day.

根據我們透過供應鏈行動和選擇性漲價對情勢的反應，我們對自己能夠控制情況並保持領先地位的能力充滿信心。正如戴夫所說，我們在中國的支出每天都在減少。

And by the end of '26 will represent only 2 to 3 points of COGS, which means -- as we cover the cost in '25, it actually gets easier to cover those costs into 2026. In the meantime, we're going to continue to do what we have been doing, which is managing this on a SKU by SKU basis, supplier by supplier, country by country, and we've got the experience and track record to make it happen.

到 26 年底，這將只佔 COGS 的 2 到 3 個點，這意味著 - 當我們在 25 年覆蓋成本時，實際上更容易在 2026 年覆蓋這些成本。同時，我們將繼續做我們一直在做的事情，即根據 SKU、供應商和國家來管理這個問題，我們擁有實現這一目標的經驗和記錄。

And just to clarify, what we're outlining this morning is based on the scenario in place as of last night. As things change, we'll adjust and adapt accordingly. But in any event, our hope is that we gave you a better sense of how well positioned we are to manage in this environment. So that's what we know at this point, and I'll turn it to Dave for the Q2 outlook.

需要澄清的是，我們今天早上所概述的內容是基於昨晚的情況。隨著情況的變化，我們會做出相應的調整和適應。但無論如何，我們希望您能更了解我們在這種環境下的管理能力。這就是我們目前所知道的，我將把話題轉向戴夫，談談第二季的展望。

Thanks, Todd. Before I jump into guidance, I wanted to take a minute to give an update on our #CI projects. As you recall from our last earnings call, these are projects submitted by our associates and aimed at getting incrementally better each and every day.

謝謝，托德。在我開始指導之前，我想花一點時間來更新我們的#CI 專案。正如您從我們上次的收益電話會議上所記得的那樣，這些都是我們的同事提交的項目，旨在每天都逐步改進。

We challenged our team at the start of the year to have a substantial increase in the #CI submissions. And through the first quarter, our associates have responded. Year-over-year, the submitted #CI projects are up 60%. These are items that save time, eliminate waste and improve day-to-day processes and are then shared across the organization.

我們在年初向我們的團隊提出了挑戰，要求大幅增加#CI 提交的數量。在第一季度，我們的員工已經做出了回應。與去年同期相比，提交的#CI 項目增加了 60%。這些項目可以節省時間、消除浪費、改善日常流程，然後在整個組織內共享。

Now to the guidance. For the second quarter of 2025, we are projecting core sales growth to increase in the low to mid-single digits over the prior year, and we anticipate our adjusted EBITDA margin to be in the range of 25.5% to 26%, which is 20 to 70 basis point margin expansion over the prior year.

現在開始指導。對於 2025 年第二季度，我們預計核心銷售額成長率將比前一年增加低至中個位數，我們預計調整後的 EBITDA 利潤率將在 25.5% 至 26% 之間，比上年增加 20 至 70 個基點。

With slide 10, we've included our second quarter outlook assumptions for interest expense, non-cash stock compensation expense, depreciation and amortization, adjusted tax rate and diluted shares outstanding. Our first quarter actual results and second quarter guidance puts us well on track with the first pace -- with the first half pace needed to deliver the full year guidance we provided 90 days ago, and we are affirming our original full year guidance. We'll now open the call up for questions.

在第 10 張投影片中，我們列出了第二季利息支出、非現金股票薪資支出、折舊和攤提、調整後稅率和稀釋流通股的展望假設。我們第一季的實際業績和第二季的指引使我們順利地達到了第一步——上半年的指引需要實現我們 90 天前提供的全年指引，並且我們確認了我們最初的全年指引。我們現在開始回答問題。

(Operator Instructions) Bryan Blair, Oppenheimer.

（操作員指示）布萊恩·布萊爾，奧本海默。

Thank you. Good morning, guys.

謝謝。大家早安。

Good morning Bryan.

早安，布萊恩。

Good morning Bryan.

早安，布萊恩。

A nice start to the year and it kind of goes without saying that a lot has changed since early February when you initiated the 2025 guidance. But it's encouraging that you've maintained your outlook for core growth margin expansion. But I imagine the bridge looks quite a bit different from the original framework. I apologize if I missed some of this detail, I had some technical difficulty at the outset.

今年的開局不錯，而且毋庸置疑，自 2 月初啟動 2025 年指導以來，很多事情都改變了。但令人鼓舞的是，您仍然保持著核心成長利潤率擴張的前景。但我想像這座橋看起來與原來的框架有很大不同。如果我錯過了一些細節，我深感抱歉，因為一開始我遇到了一些技術困難。

I mean relative to the roughly 3 points of volume, 1 point of price that you had discussed previously, what's your team now contemplating for volume and price contribution for the year? And then beyond pricing, maybe you can offer a little more color on some of the operating adjustments repositioning that it will help your team to navigate the uniqueness of this backdrop?

我的意思是，相對於您之前討論過的大約 3 個點的銷量、1 個點的價格，您的團隊現在正在考慮今年的銷量和價格貢獻是多少？除了定價之外，您是否可以對一些營運調整和重新定位提供更多的細節，以幫助您的團隊應對這一背景的獨特性？

Yeah, Bryan, I think I'll answer it this way, which is, I would say, separate for a moment what our current outlook is versus what we expect to achieve. I think we've got eight months left in 2025. And as you point out, there's been a lot of moving parts.

是的，布萊恩，我想我會這樣回答，也就是說，暫時將我們當前的前景與我們期望實現的目標分開。我認為到 2025 年還剩下八個月的時間。正如您所指出的，有很多活動部件。

So there's a premium on being both agile and experienced. And so I think the price increases that we've announced into the market would generate price well above the 1% that we're talking about. But we also have eight months to go, and I think it wouldn't be prudent to identify what would be the incremental change to our guidance from a price perspective without sort of contemplating what would be the impact to the end markets over the course of the next eight months, which nobody knows.

因此，敏捷和經驗豐富非常重要。因此我認為，我們向市場宣布的價格上漲將使價格漲幅遠高於我們所謂的 1%。但我們還有八個月的時間，我認為，如果不考慮未來八個月對終端市場的影響，那麼從價格角度確定我們的指導方針的增量變化是不明智的，因為沒有人知道這將對終端市場產生什麼影響。

So I think what we're saying to tell you this morning is our initial framework contemplated a wide range of scenarios. Our response, both from a supply chain perspective and a price increase gives us great comfort that we can manage to, at a minimum, the guidance that we had in February and are reiterating this morning.

所以我認為我們今天早上要告訴你們的是，我們的初步框架考慮了各種各樣的情況。從供應鏈角度和價格上漲的角度看，我們的反應讓我們感到非常欣慰，我們至少可以達到我們在二月做出的指導，並且今天早上重申了這一點。

And as this thing unfolds over the course of the balance of the second quarter and potentially longer, we'll update accordingly. But I think as Dave shared, we've got, I think, a really solid view on Q2. We think we're really well positioned from the work we're doing on the supply chain front.

隨著此事在第二季餘下時間甚至更長時間內得到進展，我們將進行相應更新。但我認為，正如戴夫所說，我們對第二季有著非常堅定的看法。我們認為，從我們在供應鏈方面所做的工作來看，我們處於非常有利的地位。

And obviously, we've announced some price increases as well as the entire industry, and we're all sort of managing this sort of week by week, but I think the guidance that we put out is very durable, regardless of the environment, but that's the way to think about it.

顯然，我們和整個行業都宣布了一些價格上漲，我們每週都在進行此類管理，但我認為，無論環境如何，我們發布的指導都非常持久，但這就是思考的方式。

Okay, I appreciate the color, and that does make sense. And appreciating that we are early days here. Is there anything that you can speak to in terms of impact to project timing or phasing or any notable change in MRO order trends over the last few weeks since the industry has had. Clear understanding that pricing was going to go up materially over the near term.

好的，我很欣賞這個顏色，而且這確實很有道理。並且很高興我們在這裡還處於早期階段。您能否談談對專案時間安排或分階段的影響，或自該行業出現以來過去幾週 MRO 訂單趨勢的任何顯著變化？清楚地認識到價格在短期內將會大幅上漲。

Yeah. So we pointed out that we really had no revenue impact in the first quarter from it. We did see orders accelerate maybe the last 7 to 10 days of March and into the first couple of weeks of April, ahead of our 4/15 price increase.

是的。因此我們指出，第一季的營收確實沒有受到任何影響。我們確實看到訂單在 3 月最後 7 到 10 天以及 4 月前幾週加速增長，這比我們 4 月 15 日的價格上漲要早。

But notably, nothing has been, at least that I know, has been pushed, moved or changed. I think that these are buildings that are likely going to be built on the new construction side and really no notable change in the MRO activity, at least from what we've seen so far.

但值得注意的是，至少據我所知，沒有任何東西被推動、移動或改變。我認為這些建築很可能將在新建築方面建造，而 MRO 活動實際上沒有明顯變化，至少從我們目前看到的情況來看是如此。

Yeah, that is encouraging. I'll leave it there. Thanks again.

是的，這令人鼓舞。我就把它留在那裡。再次感謝。

Thank you.

謝謝。

Nathan Jones, Stifel.

內森瓊斯（Nathan Jones），Stifel。

Good morning, everyone.

大家早安。

Good morning.

早安.

Good morning.

早安.

I guess I'll talk a little bit about tariffs and price. I'm sure that's all we're going to talk about today.

我想我會談一下關稅和價格。我確信這就是我們今天要討論的全部。

That's shocking. That's shocking.

這太令人震驚了。這太令人震驚了。

No, I know. I'm sure you're shocked. About $50 million of overall cost increase here implies that you probably need mid-single-digit pricing to cover that. So first, a clarification, when you say price cost neutral, are you talking on a dollar basis or at the margin line?

不，我知道。我確信你一定很震驚。這裡大約 5000 萬美元的總成本增加意味著您可能需要中等個位數的定價來彌補這一成本。首先，需要澄清的是，當您說價格成本中性時，您是在以美元為基礎還是以邊際線為基礎？

I think what we're trying to highlight, Nathan, is at a minimum, at the dollar level based on the scenario that we've laid out.

內森，我認為我們試圖強調的至少是根據我們所列出的情景在美元層面上的情況。

Fair enough. And I guess, I know it's very difficult to kind of speculate on what the price -- impact the price increases will have on demand. But you guys kind of reaffirm the full year guidance. Obviously, price is going to be a fair bit higher. Do you just assume that there's some demand destruction that goes along with that and you kind of end up at the same place at the end of the year?

很公平。我想，我知道很難推測價格上漲對需求會產生什麼影響。但你們重申了全年指引。顯然，價格將會高出不少。您是否只是假設隨之而來的是一些需求破壞，並且在年底時仍會處於同一位置？

I don't think that's the way we've constructed it. I think the perspective I would offer is there could be some demand destruction, but we don't know to the degree what that is at this point. So I think the way to think about it is, it's not going to put across. Old guidance plus price, minus something doesn't equal where we are today. I think we're putting it as a placeholder for the time being.

我不認為這是我們建造它的方式。我認為我的觀點是，可能會出現一些需求破壞，但目前我們還不知道破壞的程度如何。所以我認為思考這個問題的方式是，它不會被傳達。舊的指導加上價格，減去一些東西並不等於我們今天的水平。我認為我們暫時將其作為佔位符。

And as things become a little bit more clear over the course of the quarter, we'll update people as we can. But I think our -- if I had to call it now, I think that we would benefit from the net price increases on our top line guide for the course of the year. And obviously, that would probably have at a minimum some relatively positive EBITDA impact. But I think it's a little bit too early to make any of those calls at this juncture.

隨著本季情況變得更加明朗，我們將盡快向大家通報最新情況。但我認為——如果我現在必須這麼說的話，我認為我們將受益於全年頂線指南的淨價格上漲。顯然，這至少會對 EBITDA 產生一些相對正面的影響。但我認為現在做出任何決定都為時過早。

Okay. I have one hypothetical question for you. I expect that you guys are raising price to cover what the current tariff environment will be. Over the next 1.5 years, you're going to significantly decrease the amount of product that you're importing from China, which should decrease your costs. And then you have the potential, Trump was out yesterday saying tariffs on China are going to come down a significant amount.

好的。我有一個假設性的問題想問你。我希望你們提高價格以適應當前的關稅環境。在接下來的一年半里，您將大幅減少從中國進口的產品數量，這將降低您的成本。然後你就有可能，川普昨天表示對中國的關稅將大幅下降。

If this price goes through and then you start reducing the cost and then potentially the US administration starts reducing the cost, do prices go down? Or does Zurn hold the line on that pricing?

如果這個價格得以通過，然後你開始降低成本，然後美國政府也有可能開始降低成本，價格會下降嗎？或者 Zurn 是否堅持這項定價？

Well, I think it is very hypothetical. There's only about 6 nested questions in there. The way to think about it is, Nathan, the normal price increases that we put in for decades, we've never retraced price. I think this sort of feels like a little bit of an unusual environment. And I think we'll have to be smart about it to support the industry and support our customers.

嗯，我認為這是非常假設的。其中只有大約 6 個嵌套問題。內森，我們應該這麼想，幾十年來我們一直實行正常的價格上漲，從來沒有回撤過價格。我認為這有點像是一種不尋常的環境。我認為我們必須明智地對待這個問題，以支持這個行業並支持我們的客戶。

I will tell you that we monitor all competitive price increases, and we're all sort of grouped at the same level. And so I think being advantaged from a supply chain perspective, in whatever the environment going forward is, will ultimately benefit our profitability. And -- but I think those are a lot of nested hypotheticals. And I think as things clarify, we'll clarify it for you.

我會告訴你，我們監控所有競爭性價格上漲，並且我們都處於同一水平。因此，我認為，無論未來的環境如何，從供應鏈角度來看，優勢最終都將有利於我們的獲利能力。而且——但我認為這些都是很多嵌套的假設。我認為，隨著事情明朗化，我們會為您澄清。

I think that answers the question. Thanks very much.

我想這回答了這個問題。非常感謝。

Andrew Krill, Deutsche Bank.

德意志銀行的安德魯·克里爾。

Hi, thanks. Good morning, everyone. I wanted to ask on like your education vertical. Obviously, that's one of your biggest, most important vertical. So have you seen any slowing there or like increased hesitancy from customers on the spend? And I think that spirit of the question is it like DOGE and the Trump administration cut some spending or have any impact there? Thanks.

你好，謝謝。大家早安。我想問一下您的教育垂直領域。顯然，這是你們最大、最重要的垂直領域之一。那麼，您是否發現消費速度有所放緩，或者客戶在支出方面猶豫不決的現象增加？我認為問題的核心是 DOGE 和川普政府削減了一些開支或產生了什麼影響？謝謝。

We have not.

我們沒有。

Okay, great, that is good. And then one more on the full year guide. I think going back to tariffs, just I think it seems like one of the bigger potential risks is that this rest of world tariff right now that's at 10% assumed in the guide?

好的，太好了，這很好。然後再介紹一下全年指南。我認為回到關稅問題，我認為似乎最大的潛在風險之一是，目前世界其他地區的關稅在指南中假設為 10%？

It goes back or goes up to a 40% plus type of number, and this does seem to impact where you have been moving the supply chain to. So if that were to happen, what's your level of confidence that you can quickly react to that? And can you still affirm this full year guide, if that were to happen?

它會回落或上升到 40% 以上的數字，這似乎會影響您將供應鏈轉移到哪裡。那麼，如果發生這種情況，您對於能夠迅速做出反應的信心程度如何？如果發生這種情況，您還能確認全年指南嗎？

Well, I guess, Andrew, I've tried to answer it, I think, at least a couple of times. I think that we believe we have the best cost supply chain in the industry. We are clearly a market leader. If we look at the competitive responses and basically the competitive manufacturing footprints, we feel very comfortable with how we positioned ourselves.

好吧，我想，安德魯，我已經嘗試回答這個問題了，至少有幾次了。我認為我們相信我們擁有業內最佳的成本供應鏈。我們顯然是市場領導者。如果我們看一下競爭對手的反應以及基本上是競爭性的製造足跡，我們對自己的定位感到非常滿意。

In terms of affirming a hypothetical guide based on a hypothetical tariff increase, I don't think that, that would be very wise to do in this moment other than to say you, amongst others, thought that we had a big problem heading into this quarter.

至於根據假設的關稅增加來確認假設的指南，我認為，目前這樣做並不是很明智，只能說，您和其他人都認為我們在本季度遇到了大問題。

Here is -- here are the facts as we know them today. Hopefully, the takeaway is that we're managing it really effectively. And I think whatever the change ultimately turns out to be, and it may be multiple twists and turns, I think you can count on us managing it very effectively.

以下是我們今天所了解的事實。希望我們能夠真正有效地管理它。我認為，無論最終的變化如何，儘管可能會出現多次曲折，但我認為您可以相信我們會非常有效地應對它。

Yeah, I think too, Andrew, what I would add is just around the tariffs, there's a number of actions that we can take, right? We can accelerate moves out of a certain country. There's levels of consignment inventory. There's levels of inventory that we've bought ahead.

是的，安德魯，我也這麼認為，我想補充的是，僅就關稅而言，我們可以採取一些行動，對嗎？我們可以加速撤出某個國家。有不同等級的寄售庫存。我們已經提前購買了一定數量的庫存。

We can manage receipts, timing of receipts. We can shift production. We're not single sourced on any major product category so we can shift to a different source. So whatever the ultimate tariff ends up being, I think it's going to change here, we feel like we're in a very good position to react to that and put ourselves in a favorable position.

我們可以管理收據、收據時間。我們可以轉移生產。我們不是任何主要產品類別的單一來源，因此我們可以轉向不同的來源。因此，無論最終關稅是多少，我認為它都會發生變化，我們覺得我們處於非常有利的位置來對此做出反應，並使自己處於有利地位。

Got it, thanks.

明白了，謝謝。

Yeah.

是的。

Michael Halloran, Baird.

麥可·哈洛倫，貝爾德。

Hey, good morning, everyone. So first question is just if you look back historically and think about channel, and obviously, this is unique, but how does the government channel and specifically in the drinking water side of things, how do they react on the CapEx side when you get these periods of uncertainty.

嘿，大家早安。因此，第一個問題是，如果你回顧歷史並思考管道，顯然這是獨一無二的，但是政府管道如何運作，特別是在飲用水方面，當你遇到這些不確定時期時，他們在資本支出方面如何反應。

Because you're kind of balancing really good seculars, a lot of need for the drinking water fountain replacement cycle in the filtration with limitations potentially on funding or something else. Historically, how does that play out in your mind?

因為您要平衡真正好的長期因素，過濾中對飲水機更換週期的大量需求與資金或其他方面的潛在限制。從歷史角度來看，您認為這在當時是如何發生的？

Yeah. I mean, again, specifically the drinking water, Mike, I'm not sure that we have a long history. I do think that the government vertical for us is relatively small. And so I think when we think about drinking water and where we're investing, it's a combination of, as we've talked about, education, health care and then a lot of other sub-verticals beyond that, of which government is one. So I don't see it as being particularly -- I don't see it creating a particular headwind, I guess, is the way to say it most simply. But I guess we'll find out.

是的。我的意思是，特別是飲用水，麥克，我不確定我們是否有悠久的歷史。我確實認為，對我們來說，政府垂直領域相對較小。因此，我認為，當我們考慮飲用水和投資領域時，它是教育、醫療保健以及其他許多子垂直領域的結合，政府就是其中之一。所以我不認為它特別——我不認為它會產生特別的阻力，我想，這是最簡單的說法。但我想我們會找到答案的。

But again, I think we've got enough other really good things going on in terms of product channel, adjacency, new products, filtration, attachment, those are all things that are -- that we can control or in our favor. I don't know how to handicap the size or the impact of the government piece, but my sense is that we'll be able to outrun it without much of a problem.

但是，我認為我們在產品管道、鄰接、新產品、過濾、配件方面已經有足夠多其他真正好的事情正在進行，這些都是我們可以控製或對我們有利的事情。我不知道如何衡量政府部門的規模或影響，但我的感覺是，我們能夠毫無問題地超越它。

Okay, that makes sense. Thanks for that. And then just from a timing perspective, you made the point of purchasing inventory from your side to get in front of some of these headwinds. It seems if I'm thinking about the second quarter and then the back half of the year that the inventory side keeps you at a pretty good cost contained position for the second quarter and then the pricing is more of a 3Q impact.

好的，這很有道理。謝謝。然後，僅從時間角度來看，您就提出從自己這邊購買庫存，以應對其中的一些不利因素。如果我考慮第二季以及下半年的情況，似乎庫存方面會讓你在第二季保持相當好的成本控制地位，而定價對第三季的影響更大。

And so that's how the balancing works out. Am I thinking about that timing appropriately? Or does that inventory stretch further thus far and just kind of thinking about the cadencing if that makes sense.

這就是平衡的原理。我對這個時機的考慮是否恰當？或者該庫存是否會進一步延伸，並且只是考慮一下節奏，如果這有意義的話。

I think at a high level, it's a reasonable assumption taken as a whole. And obviously, the devil is in all the details in terms of what we bought ahead, what we've moved, what we're transitioning over the balance of the year. But I think in general, it's not a bad way to think about it.

我認為從高層次來看，這是一個整體合理的假設。顯然，魔鬼藏在所有細節中，例如我們提前購買了什麼、我們搬運了什麼、我們在今年餘下時間要轉移什麼。但我認為總的來說，這並不是一個不好的思考方式。

Take care, appreciate it.

保重，珍惜。

Thanks Mike.

謝謝邁克。

Andrew Buscaglia, BNP Paribas.

安德魯·巴斯卡利亞，法國巴黎銀行。

Hey, good morning guys.

嘿，大家早安。

Good morning.

早安.

I just wanted to ask on -- you're one of the first couple of companies to report so far. And you guys are doing a great job managing through this tariff environment. And I'm wondering, post-COVID, we saw a ton of inflation, we had to raise prices above average levels.

我只是想問一下——你們是迄今為止首批報告的公司之一。你們在應對這種關稅環境方面做得非常出色。我想知道，在新冠疫情之後，我們看到了大量通貨膨脹，我們不得不將價格提高到平均以上。

Similarly with tariffs, we're taking more price, I just wonder for -- this is a question maybe for all companies, but are you sort of borrowing pricing in a way from the future? And like does something have to give at some point, right? I understand your commentary on demand destruction, but at some point, what -- how does this end if you just keep taking price to offset these costs?

同樣，對於關稅，我們正在提高價格，我只是想知道——這可能是所有公司都會遇到的問題，但你們是否在某種程度上借用了未來的定價？在某些時候是否必須做出一些讓步，對嗎？我理解您對需求破壞的評論，但在某種程度上，如果您只是繼續以價格來抵消這些成本，那麼這一切將如何結束？

Well, I don't think anyone knows the answer to that. I would tell you that if you look at our end market, which is primarily North America, there's only a handful of market participants. It's protected through highly specified products through reps and channels and everything else.

嗯，我認為沒有人知道這個問題的答案。我想告訴你，如果你看看我們的終端市場，主要是北美，你會發現只有少數市場參與者。它透過代表、通路和其他一切高度指定的產品受到保護。

So I think we're all sort of in the same canoe. And so to the degree there's going to be a school built, a hospital built, a stadium built, I think that it will need the products that we sell. And obviously, I think for a lot of reasons, if these do go through at the levels that they're talking about, it will create inflation.

所以我認為我們都處於同一條船上。因此，我認為，只要要蓋學校、醫院、體育場，就需要我們銷售的產品。顯然，我認為出於很多原因，如果這些措施確實達到他們所談論的水平，就會引發通貨膨脹。

What that does long term, I don't know. It's probably not great. But I think for the near term, we feel very confident in our ability to navigate front of it. And I also think it's going to be a moving target. I think I read some things last night and this morning around the 145% on China is too high and likely coming down, but not to zero.

我不知道這從長遠來看會有什麼效果。這可能不太好。但我認為，就短期而言，我們對自己應對這項挑戰的能力非常有信心。我還認為這將是一個移動的目標。我想我昨晚和今天早上讀到了一些關於針對中國的 145% 的稅率太高並且可能會下降，但不會降至零的言論。

I think our working assumption is that, that 10% sticks at a minimum and maybe it goes higher. And so I think we've just got to navigate through all of these moving parts for a period of time. But the thing that I think is, again, the most important aspect of this, we've operated this model for decades, and navigated through a lot of different dynamics, and this is just one more.

我認為我們的工作假設是，10% 保持在最低水平，甚至可能更高。所以我認為我們必須花一段時間來處理所有這些活動部件。但我認為，最重要的一點是，我們已經運行這個模型幾十年了，並且經歷了許多不同的動態，這只是其中之一。

And I think that we feel very confident with the team we have, the processes we have in place, our connectivity and the way we manage it with our business system is going to keep us in great shape moving forward. And there's a premium on being agile and experienced in this sort of environment, and we think we like our chances.

我認為，我們對現有的團隊、現有的流程、我們的連結性以及我們透過業務系統管理的方式非常有信心，這些將使我們在未來保持良好的狀態。在這種環境下，敏捷和經驗很重要，我們認為我們喜歡這樣的機會。

Yeah, and when I first saw press release and you guys grew organic 5% and made the comment, not a lot of price in there. I thought maybe you had some pull forward. But then I see on a slide, you're managing customers ordering ahead. So effectively, you're not really seeing pull forward.

是的，當我第一次看到新聞稿，看到你們實現了 5% 的有機增長並發表評論時，價格並沒有上漲多少。我以為你也許已經向前邁進了一步。但我在幻燈片上看到，您正在管理提前訂購的客戶。因此實際上，你並沒有真正看到向前拉動。

So I'm wondering what's that dynamic like? Are you building a backlog effectively trying to control that level of pull forward in order to maintain some normalcy, I guess?

所以我想知道這種動態是什麼樣的？我猜，您是否正在有效地建立積壓，試圖控制這種程度的提前，以保持某種正常狀態？

Well, again, I think it comes down to a bunch of things, right? I think just we're sort of minimizing the amount of just pure buy ahead from a price perspective because we've got other customers that need it as opposed to someone buying it and putting it on a shelf. That's for the MRO piece.

好吧，我再說一遍，我認為這取決於很多因素，對吧？我認為，從價格角度來看，我們正在盡量減少純粹提前購買的數量，因為我們有其他客戶需要它，而不是有人購買它並將其放在貨架上。這是有關 MRO 的部分。

I would tell you there's not a lot of people that are buying drains and large backflow forward just based on the size and space constraints and things like that. So we want to maintain a high level of availability. We don't want to get into a position where we're creating waste by expediting things or working over time for something that's not really needed in the moment.

我想告訴你，沒有多少人會因為尺寸和空間限制等原因而購買排水管和大型回流裝置。因此我們希望保持高水準的可用性。我們不想陷入這樣的境地：為了某些目前並不真正需要的東西而加快進度或加班，從而造成浪費。

So yes, we are managing that backlog to date it in ways that make sense for our customers, protect what's been bought to a degree and seek more clarity on what the rest of the year looks like. So I think we're managing it literally day-to-day, customer by customer, SKU by SKU. And I think our teams are doing a really good job of that and are very experienced in doing that.

所以是的，我們正在以對客戶合理的方式來管理迄今為止的積壓訂單，在一定程度上保護已購買的商品，並更清楚地了解今年剩餘時間的銷售情況。所以我認為我們實際上是在每天管理一個客戶、一個 SKU 和一個 SKU。我認為我們的團隊在這方面做得非常好，並且經驗豐富。

Got it. Thanks Todd.

知道了。謝謝托德。

Yeah.

是的。

Jeff Hammond, KeyBanc Capital Markets.

KeyBanc 資本市場公司的 Jeff Hammond。

Hey, good morning guys.

嘿，大家早安。

Morning, Jeff.

早安，傑夫。

Thanks for the color and a lot of good detail here. Just want to go back to the bottom right chart on slide 8. As you think about the ramp down, is this kind of as it was always planned? Or is that an acceleration? And then, two, I think the shift has been to Southeast Asia. And I think, Todd, you mentioned there'd be some tariff. But are you continuing to shift where you thought you'd shift? Or are you contemplating other locales?

感謝這裡的色彩和大量精彩的細節。只想回到第 8 張投影片右下方的圖表。當您考慮下降時，這是否就像它一直計劃的那樣？還是那是一種加速？其次，我認為這種轉變已經轉移到東南亞。托德，我認為你提到過會有一些關稅。但是，您是否會繼續按照您認為會改變的方向進行轉變？還是您正在考慮其他地點？

I think the only thing incremental, Jeff, would be we have done some work to source in the US maybe on an accelerated basis over the course of the last three to six months. So yes, it's Southeast Asia. Yes, it's parts of Mexico, but I think we've -- I think the only thing that's changed maybe from our plan is to bring some more sourcing to the US, and that's reflected, I think, in all the numbers that we're giving you.

傑夫，我認為唯一的增量是，我們在過去三到六個月內可能以加速的方式在美國開展了一些採購工作。是的，它是東南亞。是的，這是墨西哥的部分地區，但我認為我們——我認為唯一與我們的計劃不同的地方就是將更多的採購帶到美國，我認為這反映在我們提供的所有數字中。

Okay. And then the $45 million to $55 million was a little bit lower, just kind of doing the simple math. And I guess, one, I wanted to understand better that the exclusion, what portion of the China is excluded and what kind of the tariff rate on that?

好的。然後 4500 萬美元到 5500 萬美元這個數字稍微低一點，這只是簡單的計算。我想，首先，我想更了解排除，中國的哪些部分被排除在外，以及對此徵收什麼樣的關稅稅率？

And then I guess the other moving pieces would be your downshift in mix and kind of how much inventory you have on there. But it just seems like the pricing looks like you have two prices that kind of add up to low 20%. Just seems like a big number relative to a pretty manageable impact. Thanks

然後我想其他變動因素可能是你的組合降檔以及你有多少庫存。但看起來定價就像是兩個價格加起來只有 20% 以下。相對於相當可控的影響來說，這似乎是一個很大的數字。謝謝

Yeah, so I'll take the first part of your question, Jeff, just on actual expected tariff costs. So the $45 million to $55 million, there's a lot of nuances in there. But essentially, if you look at just the tariffs coming out of China, there's what folks are calling the IEEPA tariffs, the International Emergency Economic Powers Act. There's the reciprocal tariffs that stack on top of IEEPA.

是的，傑夫，我將回答你問題的第一部分，即實際預期的關稅成本。因此，4500 萬美元到 5500 萬美元之間有很多細微差別。但本質上，如果你只看來自中國的關稅，你會發現人們所說的IEEPA關稅，也就是《國際緊急經濟權力法案》。在國際經濟和平等政策協議 (IEEPA) 之上也有互惠關稅。

There's the Section 232 steel tariffs. There's the existing from years ago Section 301 tariffs. And so all of those different tariffs that I just mentioned carry a different weight, The highest being the 145%, the lowest being 20%.

這是第 232 條鋼鐵關稅。幾年前就存在第 301 條關稅。因此，我剛才提到的所有不同關稅都有不同的權重，最高為 145%，最低為 20%。

And so when you start looking at our receipts, you've got to go literally down to the HTS code to understand what HTS code that's being received under, and then that impacts what rate you're ultimately paying. And so I think on the surface, folks are thinking it's all 145%. That's actually not the case. And so there's a decent portion of our products that fall under that steel, aluminum type exception that are being tariff much lower than the 145%.

因此，當您開始查看我們的收據時，您必須仔細查看 HTS 代碼，以了解接收的 HTS 代碼是什麼，然後這會影響您最終支付的費率。所以我認為從表面上看，人們認為這都是 145%。但事實並非如此。因此，我們有相當一部分產品屬於鋼鐵、鋁類豁免範圍，其關稅遠低於 145%。

Yeah, Jeff, it's all predicated on the HTS code or the harmonized tariff schedule that Dave talked about. And so each thing that people import gets imported under this particular code. And each code has a particular tariff assigned to it based on the properties and principles of it.

是的，傑夫，這一切都基於戴夫談到的 HTS 代碼或協調關稅表。因此，人們進口的每件物品都是根據這個特定的代碼進口的。並且每個代碼都根據其屬性和原則分配有特定的關稅。

And so this is not a top-down exercise. This is what our -- based on our receipts and our receipt profile and the HTS codes and quantities that we're importing, this is what it looks like.

所以這不是一個自上而下的做法。根據我們的收據、收據資料以及我們導入的 HTS 代碼和數量，它看起來是這樣的。

Okay, that's really helpful color. Thanks guys.

好的，這顏色真的很有幫助。謝謝大家。

Yeah.

是的。

Joe Ritchie, Goldman Sachs.

高盛的喬·里奇。

Hey guys, good morning. And just want to say thank you for the transparency on slide 8. It's very detailed, super helpful, thanks for that. First question, really, as you kind of think about your kind of relative competitive positioning to some of your biggest peers, I know [Watts] isn't going to report for another couple of weeks. How do you think you're positioned from a cost structure standpoint relative to your biggest peers?

大家好，早安。我只想對第 8 張投影片上的透明度表示感謝。非常詳細，非常有幫助，謝謝。第一個問題，實際上，當您考慮與一些最大的同行相比您的相對競爭地位時，我知道 [Watts] 還要過幾週才會發表報告。從成本結構的角度來看，您認為與最大的同行相比，您的定位如何？

We think we are extraordinarily well positioned from a cost perspective.

我們認為，從成本角度來看，我們處於極為有利的地位。

Okay. Is there any other color you can provide just on what you've heard from either your customers or suppliers in terms of like what that actually -- like is there a way to quantify that or what that actually means, more details around that?

好的。您是否能根據從客戶或供應商那裡聽到的消息提供其他信息，例如，有沒有辦法量化這一點，或者這實際上意味著什麼，以及更多有關這一點的細節？

Not that we're willing to talk about. I mean, I don't think that -- I think everyone makes capacity and fulfillment decisions based on what their core competencies are. We have some competitors that clearly are more vertically integrated for relatively small portions of what we compete with them on.

我們並不願意談論這個。我的意思是，我不認為——我認為每個人都會根據自己的核心競爭力來做出能力和履行決策。我們有一些競爭對手，他們顯然在與我們競爭的領域中垂直整合程度更高，但份額相對較小。

And so I think if you listen to the original comments, the capacity -- available capacity for the stuff that the products that we have is very limited. And yes, there is some captive capacity that certain of our competitors have, but I would just highlight that it's relatively small.

因此，我認為，如果你聽聽最初的評論，你會發現我們現有產品的可用容量非常有限。是的，我們的某些競爭對手確實擁有一些自備產能，但我要強調的是，這些產能相對較小。

And so when you look at the competitive response with respect to price increases and other things, we're all sort of lined up at roughly the same prices, some people ahead, some people behind. And then the decision is how do you want to service that demand from a quality, reliability, lead time and cost position. And I think we're really happy with where we sit competitively really across the board.

因此，當您觀察價格上漲和其他方面的競爭反應時，您會發現我們都在以大致相同的價格排隊，有些人領先，有些人落後。然後需要決定的是如何從品質、可靠性、交貨時間和成本的角度來滿足這一需求。我認為，我們對於自己在各方面的競爭地位感到非常滿意。

Okay, great. And then just my quick follow up for Dave. I saw you guys accelerated your buyback this quarter. How are you thinking about continuing to maybe more aggressively buy back your shares, just given the current environment?

好的，太好了。然後我再快速跟進戴夫的問題。我看到你們本季加快了回購速度。鑑於目前的環境，您如何考慮繼續更積極地回購股票？

Sure. So we bought back $77 million in the quarter. I mentioned at the start, the $55 million was part of the offering that we did in mid-February. I think our original cash flow guidance was $290 million for the year. We're confident in our ability to hit that.

當然。因此我們在本季回購了 7,700 萬美元。我在一開始就提到過，這 5500 萬美元是我們在二月中旬所發行股票的一部分。我認為我們最初的年度現金流指引是 2.9 億美元。我們有信心實現這個目標。

And we'll just continue to monitor as we have done, call it, the past two years and make smart decision from what the stock price is and how much we buy in a quarter. But I think given where our leverage is, given where our cash position and future cash flow generation is, we've got the ability to continue to buy back.

我們將繼續進行監控，就像過去兩年所做的那樣，根據股價以及一個季度的購買量做出明智的決定。但我認為，考慮到我們的槓桿率、現金狀況和未來現金流的產生情況，我們有能力繼續回購。

Okay, thank you.

好的，謝謝。

Thanks, Joe.

謝謝，喬。

There are no further questions at this time. With that, I will turn the call back over to Bryan Wendlandt for final closing remarks. Please go ahead.

目前沒有其他問題。說完這些，我將把電話轉回給 Bryan Wendlandt，請他做最後的總結發言。請繼續。

Thanks, everyone, for joining us on the call today. We appreciate your interest in Zurn Elkay Water Solutions, and we look forward to providing our next update when we announce our second quarter results in late July. Have a good day.

感謝大家今天參加我們的電話會議。感謝您對 Zurn Elkay Water Solutions 的關注，我們期待在 7 月下旬公佈第二季業績時提供下一次更新。祝你有美好的一天。

Ladies and gentlemen, this concludes today's conference call. We thank you for participating and ask to please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。感謝您的參與，並請您斷開線路。