Titan Machinery Inc.(TITN) 首席执行官 David Meyer 在 2020年 第一季度业绩 - 盈利电话会议记录

Titan Machinery Inc. (NASDAQ:TITN) Q1 2020 Results Earnings Conference Call May 30, 2019 8:30 AM ET

Titan Machinery Inc.(纳斯达克股票代码:[TITN])2020年第一季度业绩收益电话会议2019年5月30日美国东部时间上午8:30

公司参与者

John Mills - ICR, Inc., IR
David Meyer - Chairman and CEO
Mark Kalvoda - Chief Financial Officer

  • John Mills - ICR,Inc.,IR
  • David Meyer - 董事长兼首席执行官
  • Mark Kalvoda - 首席财务官

电话会议参与者

Steve Dyer - Craig-Hallum
Mig Dobre - Robert W. Baird
Rick Nelson - Stephens, Inc.
Larry De Maria - William Blair

  • Steve Dyer - Craig-Hallum
  • Mig Dobre - Robert W. Baird
  • Rick Nelson - Stephens,Inc。
  • 拉里德玛丽亚 - 威廉布莱尔

会议主持员

Greetings. And welcome to the Titan Machinery First Quarter Fiscal 2020 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]
As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. John Mills, with ICR. Thank you. You may begin.

问候。 欢迎来到泰坦机械第一季度2020财年盈利电话会议。 此时所有参与者都处于只听模式。 问答环节将在正式演讲之后进行。 [操作说明]

提醒一下,这次会议正在录制中。 我现在想通过ICR将会议转交给您的主持人John Mills先生。 谢谢。 你可以开始吧。

约翰米尔斯

Great. Thank you. Good morning, ladies and gentlemen. And welcome to the Titan Machinery first quarter fiscal 2020 earnings conference call. On the call today from the company are David Meyer, Chairman and Chief Executive Officer; and Mark Kalvoda, Chief Financial Officer.
By now, everyone should have access to the earnings release for the fiscal first quarter ended April 30, 2019, which went out this morning at approximately 6.45 a.m. Eastern Time. If you have not received the release, it is available on the Investor Relations page of Titan’s website at ir.titanmachinery.com. This call is being webcast and a replay will be available on the company’s website as well.
In addition, we are providing a presentation to accompany today’s prepared remarks. You may access the presentation now by going to Titan’s website at ir.titanmachinery.com. The presentation is available directly below the webcast information in the middle of the page.
You will see on the slide two of the presentation our Safe Harbor statement. We would like to remind everyone that the prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions.
These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These forward-looking statements are based on current expectations of management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of Titan’s most recently filed annual report on Form 10-K.
These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Except as may be required by applicable law, Titan assumes no obligation to update any forward-looking statements that may be made in today’s release or call.
Please note that during today’s call, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater transparency into Titan’s ongoing financial performance, particularly when comparing underlying results from period-to-period. We have included reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures in today’s release.
The call will last approximately 45 minutes. At the conclusion of our prepared remarks, we will open the call to take your questions.
Now, I’d like to introduce the company’s Chairman and CEO, Mr. David Meyer. Go ahead, David.

非常好。谢谢。早上好,女士们,先生们。并欢迎泰坦机械第一季度财政2020年财报电话会议。今天公司的电话会议是主席兼首席执行官David Meyer

David Meyer

Thank you, John. Good morning, everyone. Welcome to our first quarter fiscal 2020 earnings conference call. On today’s call, I will provide a summary of results, then an overview for each of our business segments. Mark will then review financial results for the first quarter of fiscal 2020 and then conclude by reviewing our updated modeling assumptions for our fiscal 2020.
If you turn to slide three, you will see an overview of our first quarter financial results. Our first quarter revenue was $278 million, with adjusted pretax income of $600,000 and adjusted earnings per diluted share of $0.02.
We generated solid top and bottomline results during the first -- the fiscal first quarter by achieving healthy growth across all segments of our business, despite challenging industry conditions that continue to persist.
We are particularly pleased with strong increases in our higher margin parts and service businesses, which grew double digits in the quarter. The solid performance in this area, combined with higher equipment sales drove increased profitability across all our reporting segments versus the prior year period.
I will now provide additional detail for our three operating segments, consisting of our domestic agriculture and construction segments, and our international segment.
On slide four is an overview of our domestic agricultural segment. Across most of our ag footprint, our former customers are experiencing an abnormally late cold and wet spring. This has caused the delayed planting and this prolonged wet spell has the potential to impact yields, crop selection and in some cases fields will not be planted and growers will opt for the multi-peril crop insurance payment.
Farmers’ incomes continue to be negatively impacted by low commodity prices, which is partially attributable to retaliatory Chinese tariffs. In response, last week, the USDA announced the 2019 market facilitation program, which will provide $14.5 billion in direct payments to farmers.
According to a recent USDA press release, President Trump directed Secretary Perdue to craft a release strategy to support American agricultural producers, while the administration continues work on free, fair and reciprocal trade deals to open more markets in the long run to help American farmers compete globally.
While all the final details of this program are yet to be released, early indications point to a high percentage of the aid going to soybean and wheat producers. We continue to see our growers fleet duty cycle increasing as their current fleet is becoming more aged, along with incurring a higher number of our machine hours. This aged fleet along with the benefits of new technology is creating replacement demand for new equipment purchases.
Positive yield trends and carryover from last year’s excellent crop is supporting farmers’ ability to maintain current, productive and reliable equipment fleets. In addition, for the growers who are not updating their fleets, the aged and high yield equipment typically requires more parts and service repair, and our customers will be looking to us for aftermarket support, which is an important part of our business model and integral to our long-term strategy and focus.

谢谢你,约翰。大家,早安。欢迎参加我们的第一季度2020财年电话会议。在今天的电话会议上,我将提供结果摘要,然后概述每个业务部门。然后,Mark将审核2020财年第一季度的财务业绩,然后审核我们2020财年的最新建模假设。

如果您转到幻灯片三,您将看到我们第一季度财务业绩的概述。我们的第一季度收入为2.78亿美元,调整后的税前收入为600,000美元,调整后每股摊薄收益为0.02美元。

尽管行业环境仍然充满挑战,但我们在第一季度 - 第一财季实现了稳健的增长,并在所有业务部门实现了健康增长。

我们对高利润率零件和服务业务的强劲增长感到特别满意,该业务在本季度增长了两位数。该领域的稳健表现加上较高的设备销售额推动了我们所有报告分部与去年同期相比的盈利能力提升。

我现在将为我们的三个经营部门提供更多细节,包括我们的国内农业和建筑业务,以及我们的国际部门。

第四张幻灯片是我们国内农业部门的概况。在我们的大部分农业足迹中,我们的前客户正在经历一个异常晚的冷湿春天。这导致种植延迟,这种长时间的湿润有可能影响产量,作物选择,在某些情况下,不会种植田地,种植者将选择多重作物保险支付。

农产品收入继续受到商品价格低迷的负面影响,部分原因是报复性的中国关税。作为回应,美国农业部上周宣布了2019年市场便利化计划,该计划将向农民提供145亿美元的直接支付。

根据美国农业部最近的新闻稿,特朗普总统指示秘书长Perdue制定一项支持美国农业生产者的释放战略,同时政府继续致力于自由,公平和互惠的贸易协议,从长远来看开放更多市场,以帮助美国农民参与竞争全球。

虽然该计划的所有最终细节尚未公布,但早期迹象显示,大豆和小麦生产者的援助比例很高。我们继续看到我们的种植者车队的工作周期越来越长,因为他们现在的车队变得越来越老化,同时我们的机器时间也越来越多。这种老化的车队以及新技术的好处正在为新设备的购买创造替代需求。

去年优质作物的良好产量趋势和结转正在支持农民维持现有,高效和可靠的设备车队的能力。此外,对于未更新车队的种植者而言,老化和高产设备通常需要更多零件和维修服务,我们的客户将寻求我们的售后支持,这是我们业务模式和整体的重要组成部分。我们的长期战略和重点。

Turning to slide five, you will see an overview of our domestic construction segment. The strong economy continues to positively impact the construction equipment industry. In addition, the higher oil prices we have been experiencing spurs demand for construction equipment for both oil production and related infrastructure.
While we are seeing stronger demand in the metro areas, the rural construction equipment markets continue to be negatively impacted by the depressed farm commodity prices. We continue to target our farmer customers as an outlet for used construction equipment.
Our rental utilization is trending positively due to the steady demand and our fleet rationalization efforts. The operational improvements we have been implementing in our construction equipment stores are producing results as evidenced by our year-over-year first quarter improvements to our top and bottomlines in our construction equipment segment.
In addition, with our strong first quarter and confidence in our construction equipment business for the balance of the year, we have raised our construction segment revenue modeling assumptions from up 0% to 5%, to up 5% to 10%.
On slide six, we have an overview of our international segment, including our markets within the countries of Bulgaria, Germany, Romania, Serbia and Ukraine. Crop development and growing conditions across much of our footprint is good to average.
We see overall stability in these regions, continued global investment and with the aged machine population a long runway of parts and service revenue growth as the machinery part increases along with the complexity and sophistication that comes with modern farming in these developing markets. Again, we experienced another quarter of solid performance and bottomline contribution from our international segment.
Before I turn the call over to Mark, I want to thank all our employees for their efforts in executing on a solid first quarter. As noted in our release, we paid off the remaining principal balance of our original $150 million senior convertible notes on May 1 in conjunction with the maturity of the security.
Again, I want to thank our team for their operational execution that allowed us to retire this debt in the face of some very challenging industry conditions. Our balance sheet remains strong and put us in a good position as acquisition opportunities arise.
Now, I’d like to turn the call over to Mark to review our financial results in more detail.

转到第五张幻灯片,您将看到我们国内建筑领域的概况。强劲的经济继续对建筑设备行业产生积极影响。此外,我们一直在经历的油价上涨刺激了对石油生产和相关基础设施的建筑设备的需求。

虽然我们看到大都市地区的需求增加,但农村建筑设备市场继续受到农产品价格下跌的负面影响。我们继续将我们的农民客户作为二手建筑设备的出口。

由于稳定的需求和我们的车队合理化努力,我们的租赁利用率呈现积极趋势。我们在建筑设备商店中实施的运营改进正在产生结果,这可以从我们在建筑设备部门的最高和最低水平的第一季度同比改进中得到证明。

此外,凭借我们强劲的第一季度以及对本年度余额的建筑设备业务的信心,我们将建筑业务收入模型假设从0%上调至5%,上调至5%至10%。

在第六张幻灯片中,我们概述了我们的国际细分市场,包括保加利亚,德国,罗马尼亚,塞尔维亚和乌克兰等国家的市场。我们的大部分土地上的作物开发和生长条件都很好。

我们看到这些地区的整体稳定性,持续的全球投资以及随着机械部件的增加以及这些发展中市场中现代农业带来的复杂性和复杂性,老化机器人口部件和服务收入增长的长跑道。同样,我们的国际细分市场再次实现了另一季度的稳健表现和底线贡献。

在我把电话转给马克之前,我要感谢所有员工在第一季度坚实执行的努力。如我们的发布所述,我们已于5月1日支付了我们原先的1.5亿美元优先可转换票据的剩余本金余额以及证券的到期日。

同样,我要感谢我们的团队的运营执行,这使我们能够在面对一些非常具有挑战性的行业条件时退还这笔债务。我们的资产负债表依然强劲,随着收购机会的出现,我们处于有利位置。

现在,我想将电话转到马克,以更详细地审查我们的财务结果。

Mark Kalvoda

Thanks, David. Turning to slide seven, we achieved total revenue of $278 million for the fiscal 2020 first quarter, an increase of 14.2% compared to last year. Our revenue increase was across all our business segments and across all revenue categories.
Equipment revenue was up 15.6%, parts and service was up 10.7% and 14%, respectively. All these of these revenue categories benefited from our AGRAM acquisition, which occurred in July of last year. Excluding this acquisition, our same-store sales were up 11.1%, compared to the first quarter last year that was down about 7%.
Our rental and other revenue increased 6.7% in the first quarter due to a higher level of inventory rentals. Our dollar utilization of our designated rental fleet in our construction segment improved to 20.5% for the current quarter, compared to 18.3% in the same period last year.
On slide eight, our gross profit of $54 million for the quarter was an increase of 13.2% compared to the same period last year, primarily driven by higher revenues. Gross margin decreased by 10 basis points to 19.4% versus the prior year due to slightly lower equipment margins and a shift in gross profit mix.
Our operating expenses increased by $5.9 million to $53 million for the first quarter of fiscal 2020. The increase was impacted by our AGRAM acquisition in the third quarter last year, costs associated with the transition of our ERP application, as well as higher variable expenses such as commissions on the increased revenues.
As we previously communicated, we are undergoing an ERP system implementation, which is expected to impact GAAP earnings this fiscal year by approximately $0.25 per share. We view these expenses as non-recurring in nature and for the first quarter these expenses were just over $1 million or $0.04 per share.
Despite these increases, we were able to achieve greater operating leverage during the quarter. As a percentage of revenue, operating expenses improved in the first quarter to 18.9%, compared to 19.2% in the same quarter last year.
Floorplan and other interest expense decreased 26.5% to $2.5 million in the first quarter of fiscal 2020, compared to $3.4 million in the same quarter last year. This reduction was primarily due to our lower level of interest bearing inventory and a decrease in interest expense on our lower principal balance of senior convertible notes.
In the first quarter of fiscal 2020, our adjusted net income was $500,000, compared to an adjusted loss of $1.6 million in the prior year. Our adjusted earnings per diluted share were $0.02, compared to an adjusted loss per diluted share of $0.07 in the first quarter of last year.
For the first quarter of fiscal 2020, adjusted EBITDA improved to $6.3 million, compared to $5.3 million in the first quarter of last year. You can find a reconciliation of adjusted net income, adjusted EPS and adjusted EBITDA to their most directly comparable GAAP amounts in the appendix to the slide presentation.
On slide nine, you will see an overview of our segment results for the first quarter of fiscal year 2020. Agriculture revenues were $154 million, an increase of 8.3%. We experienced a good start to the year, despite ongoing industry headwinds, with healthy increases in equipment, parts and service revenue compared to an ag segment that was down 12.5% in the first quarter last year. The increased revenue generated the improved adjusted pretax income of $1.9 million, compared to $1.3 million in the prior year period.

谢谢,大卫。谈到第七个幻灯片,我们在2020财年第一季度实现了2.78亿美元的总收入,比去年增长了14.2%。我们的收入增长涵盖所有业务部门和所有收入类别。

设备收入增长15.6%,零部件和服务分别增长10.7%和14%。所有这些收入类别都得益于我们去年7月收购的AGRAM。不计这次收购,我们的同店销售额增长了11.1%,而去年第一季度的销售额下降了约7%。

由于库存租金较高,我们第一季度的租金和其他收入增长了6.7%。我们建设分部的指定租赁车队的美元利用率在本季度提升至20.5%,而去年同期为18.3%。

在第8栏中,我们本季度的总利润为5400万美元,与去年同期相比增长了13.2%,主要是由于收入增加。毛利率较去年同期下降10个基点至19.4%,原因是设备利润率略有下降及毛利率组合转移。

我们的营业费用在2020财年第一季度增加了590万美元,达到5300万美元。这一增长受到去年第三季度AGRAM收购,ERP应用转型相关成本以及可变费用等因素的影响。作为增加收入的佣金。

正如我们之前所传达的那样,我们正在实施ERP系统,预计本财年GAAP收益将每股约0.25美元。我们认为这些费用属于非经常性费用,第一季度这些费用仅为100万美元或每股0.04美元。

尽管有这些增长,但我们能够在本季度实现更大的经营杠杆。占收入的百分比,第一季度的运营支出改善至18.9%,而去年同期为19.2%。

2020财年第一季度的平面图和其他利息支出减少26.5%至250万美元,而去年同期为340万美元。减少的主要原因是我们的计息存货水平较低以及我们较低的优先可换股票据本金余额减少利息支出。

在2020财年第一季度,我们的调整后净收入为50万美元,而去年的调整后亏损为160万美元。我们调整后每股摊薄收益为0.02美元,而去年第一季度每股摊薄收益为0.07美元。

对于2020财年第一季度,调整后的EBITDA提高至630万美元,而去年第一季度为530万美元。您可以在幻灯片演示文稿的附录中找到调整后净收入,调整后每股盈利和调整后EBITDA与其最直接可比GAAP金额的对账。

在第九张幻灯片中,您将看到2020财年第一季度的细分结果概览。农业收入为1.54亿美元,增长了8.3%。尽管存在行业逆风,但我们在今年经历了一个良好的开端,设备,零件和服务收入的健康增长与去年第一季度下降12.5%的农业部门相比。收入增加导致调整后的税前收入增加190万美元,而去年同期为130万美元。

Turning to our construction segment. Revenue increased 15.9% to $71 million compared to the prior year period. The segments adjusted pretax loss improved by $800,000 to a first quarter loss of $2.1 million. The improvement in segment results was primarily the result of increased revenue. This marks the third consecutive quarter of increased quarter-over-quarter top and bottomline results in this segment as we continue to drive this segment to profitability.
In the first quarter of fiscal 2020, our international segment revenue was $54 million, an increase of 32.2% compared to the same quarter last year. The revenue increase was driven by contributions from our AGRAM acquisition, which was completed early in the third quarter of fiscal 2019, as well as revenue increases throughout the rest of our European footprint. Our international segment adjusted pretax income was $200,000, compared to an adjusted pretax loss of $100,000 in the same quarter last year.
On slide 10, we provide an overview of our balance sheet highlights at the end of the first quarter of fiscal 2020. We had cash of $63 million as of April 30, 2019. Our equipment inventory at the end of the first quarter was $490 million, an increase of $73 million from January 31, 2019, reflecting a $94 million increase in new equipment, partially offset by a $22 million decrease in used equipment.
The equipment inventory turns increased to 1.8 in the current year, compared to 1.7 in the prior year. I will provide a little more color on our inventory on the next slide.
Our rental fleet assets at the end of the first quarter increased to $114 million, compared to $111 million at the end of fiscal 2019. We continue to anticipate that our fleet size will be around the $110 million level by the end of fiscal 2020.
As of April 30, 2019, we had $374 million of outstanding floorplan payables on $640 million of total floorplan lines of credit. We continue to have ample capacity in our credit lines to handle our equipment financing needs.
Our total liabilities to tangible net worth ratio was a healthy 2.1. This ratio was impacted by the current quarter adoption of the new lease accounting standard, which require the recording of lease liabilities have an approximate impact of 0.4 on this metric. The ratio of 2.1 is well below the ratio of 3.5, which is the leverage covenant required of our larger bank facilities.
At the end of the first quarter, we had $46 million of outstanding senior convertible notes. On May 1, 2019, the maturity date of this security, we repaid the outstanding principal balance using cash on hand and our existing lines of credit.
Significant cash generation over the past few years allowed us to repay these notes in full without having to replace them with another long-term debt facility. With the retirement of this debt behind us and our expectation of another good year of generating cash from operations, we are in a solid liquidity position during a period of volatility and uncertainty, particularly within our ag segment.

转向我们的建筑部门。与去年同期相比,收入增长15.9%至7100万美元。调整后的税前亏损额增加了80万美元,第一季度亏损210万美元。分部业绩的改善主要是收入增加的结果。由于我们继续推动该细分市场盈利,这标志着该细分市场连续第三个季度实现季度和季度业绩增长。

在2020财年第一季度,我们的国际部门收入为5400万美元,与去年同期相比增长了32.2%。收入增长的原因是我们的AGRAM收购的贡献,该收购于2019财年第三季度初完成,以及我们欧洲其他部门的收入增长。我们的国际分部调整后的税前收入为20万美元,而去年同期的调整后税前亏损为100,000美元。

在幻灯片10中,我们概述了截至2020财年第一季度末的资产负债表亮点。截至2019年4月30日,我们的现金为6300万美元。第一季度末我们的设备库存为4.9亿美元自2019年1月31日起增加了7,300万美元,反映新设备增加9,400万美元,部分被二手设备减少2,200万美元所抵消。

本年度设备库存增加至1.8,而去年同期为1.7。我将在下一张幻灯片上为我们的库存提供更多颜色。

我们在第一季度末的租赁车队资产增加到1.14亿美元,而2019财年末为1.11亿美元。我们继续预计到2020财年末我们的车队规模将达到1.1亿美元左右。

截至2019年4月30日,我们拥有3.74亿美元的优秀平面图应付款项,总计划信贷额度为6.4亿美元。我们的信贷额度仍然充足,可以满足我们的设备融资需求。

我们对有形净资产比率的总负债为2.1。该比率受新租赁会计准则当前季度采用的影响,该准则要求记录租赁负债对该指标的影响约为0.4。 2.1的比率远低于3.5的比率,这是我们较大的银行设施所需的杠杆契约。

在第一季度末,我们有4600万美元的优秀可转换债券。在2019年5月1日,即该证券的到期日,我们使用现金和现有信贷额度偿还了未偿还的本金余额。

过去几年的大量现金产生使我们能够全额偿还这些票据而无需用另一个长期债务工具取而代之。随着这笔债务的退出以及我们对业务产生现金的又一个好年景的预期,我们在波动和不确定的时期处于稳固的流动性状态,特别是在我们的银行业务部门。

Turning to slide 11, I would like to provide additional information on our equipment inventory. As I just mentioned a few minutes ago, in the current quarter we experienced seasonal stocking of new equipment inventory and saw a nice reduction in used inventory levels. These changes are reflected in the size of the red and blue bars in the current quarter on this slide.
We are maximizing our non-interest bearing terms from our manufacturers. The dollar amount of non-interest bearing inventory is reflected in the grey bars next to the inventory levels. As an example, in the current quarter, we had total equipment inventory of $490 million, of which $232 million or 47.4% was non-interest bearing. Since fiscal 2017, the chart clearly demonstrates increasing levels of non-interest bearing inventory on relatively flat total equipment inventory levels.
The primary driver of this improvement is the reduced aging of our inventory as a result of our ongoing life cycle management efforts, as more of our inventory remains under interest free terms with our manufacturers. This improvement has been the primary reason for the reduction in floorplan interest expense over the past few years.
We expect that equipment inventories will increase in the second quarter of fiscal 2020 and then reduce in the back half of the year. Non-interest bearing inventory levels will follow that seasonal trending as well.
Slide 12 provides an overview of our cash flows from operating activities for the first three months of fiscal 2020. The GAAP reported cash flow provided by operating activities for the period was $3 million.
As part of our adjusted cash flow used for operating activities, we include all equipment inventory financing, including non-manufacturer floorplan activity, our adjustments for non-manufacturer floorplan payables was $13 million for the first three months of fiscal 2020.
We also adjust our cash flow to reflect the constant equity in our equipment inventory, which enables us to evaluate operating cash flows, exclusive of changes in our equipment inventory financing decisions.
The equity and our equipment inventory decreased 10.8 points to 23.6% during the three months period ended April 30, 2019 and the adjustment for constant equity in equipment inventory represents a $53 million use of cash. The decrease in equipment -- or the decrease in equity in our inventory is primarily due to the seasonal stocking of new equipment inventories in the current quarter and the higher level of floorplan financing available on such inventories, as well as borrowing more on our floorplan lines in preparation for the repayment of the outstanding balance of our convertible notes, which occurred on May 1, 2019.
After all the adjustments, our adjusted cash flow used for operating activities was $37 million for the three months period ended April 30, 2019, compared to $26 million for the same period last year.
Slide 13 shows our updated fiscal 2020 annual modeling assumptions. We are increasing our revenue modeling assumptions for construction to reflect the relative strength we had -- we experienced during the first quarter and our expectations for the balance of fiscal 2020. Our updated construction segment assumption is a growth of 5% to 10% versus flat to up 5% previously.

转到幻灯片11,我想提供有关我们设备库存的更多信息。正如我刚才提到的那样,在本季度,我们经历了新设备库存的季节性库存,并且看到了二手库存水平的显着降低。这些变化反映在此幻灯片上当前季度的红色和蓝色条的大小中。

我们正在最大化我们的制造商的无息条款。无息库存的美元金额反映在库存水平旁边的灰色栏中。例如,在本季度,我们的设备总库存为4.9亿美元,其中2.32亿美元或47.4%不计息。自2017财年以来,该图表清楚地表明,在相对平稳的总设备库存水平上,无息库存水平不断上升。

这一改进的主要驱动因素是由于我们正在进行的生命周期管理工作,我们的库存减少了老化,因为我们的更多库存仍与我们的制造商保持免息期限。这一改善是过去几年减少平面图利息费用的主要原因。

我们预计2020财年第二季度设备库存将增加,然后在下半年减少。无息库存水平也将遵循季节性趋势。

幻灯片12概述了我们在2020财年前三个月的经营活动产生的现金流量.GAAP报告称,该期间经营活动提供的现金流量为300万美元。

作为用于经营活动的调整后现金流量的一部分,我们包括所有设备库存融资,包括非制造商平面图活动,我们对2020年前三个月的非制造商平面图应付款的调整为1300万美元。

我们还调整现金流量以反映我们设备库存的不变权益,这使我们能够评估经营现金流量,不包括我们设备库存融资决策的变化。

截至2019年4月30日的三个月期间,股权和我们的设备库存减少了10.8个百分点至23.6%,而设备库存的不变权益调整代表了5300万美元的现金使用。设备减少 - 或者我们库存的权益减少主要是由于本季度新设备库存的季节性库存以及此类库存可用的平面图融资水平较高,以及我们的平面图线路上的更多借款准备偿还2019年5月1日发生的可换股票据未偿还余额。

经过所有调整后,截至2019年4月30日的三个月期间,我们用于经营活动的经调整现金流为3700万美元,而去年同期则为2600万美元。

幻灯片13显示了我们更新的2020财年年度建模假设。我们正在增加建筑业的收入模型假设,以反映我们在第一季度所经历的相对强度以及我们对2020财年余额的预期。我们更新的建筑业务假设增长率为5%至10%以前增加了5%。

We are maintaining the assumptions for agriculture at flat and international add up 10% to 15%. Recall that our range for international includes the revenue contribution from the AGRAM acquisition, which closed in July 2018.
Despite the solid first quarter performance, we remain cautious due to the uncertainty in the ag industry. Therefore, we are maintaining our expectation for adjusted diluted earnings per share in the range of $0.75 to $0.95 for fiscal 2020.
Operator, we are now ready for the question-and-answer session of our call.

我们维持农业的平均和国际假设增加10%至15%。 回想一下,我们的国际范围包括AGRAM收购的收入贡献,该收购于2018年7月结束。

尽管第一季度表现稳健,但由于农业行业的不确定性,我们仍保持谨慎态度。 因此,我们维持对2020财年调整后每股摊薄收益的预期,在0.75美元至0.95美元之间。

接下来,我们现在准备好接听电话会议的问答环节了。

问答环节

Thank you. [Operator Instructions] Our first question comes from the line of Steve Dyer with Craig-Hallum. Please proceed with your question.

谢谢。 [操作员说明]我们的第一个问题来自Steve Dyer与Craig-Hallum的合作。 请继续你的问题。

Steve Dyer

Thank you. Good morning. A question on ag in the quarter, obviously, a really strong resilient quarter, given a pretty tough backdrop for your footprint. What do you sort of attribute that to, is that just upgrade cycle or maybe a little bit more color as to what drove that strength?

谢谢。 早上好。 本季度关于ag的问题显然是一个非常强劲的弹性季度,因为你的足迹非常艰难。 你认为那是什么,只是升级周期,或者更多的颜色,是什么推动了这种力量?

David Meyer

Steve, good morning. This is Dave. I think there -- if you look at last year, I think, there was some carryover there, we had actually use pretty much across our whole footprint and some of that typically carries over into the following year.
Definitely a replacement demand is real out there in the age and the hours on the equipment started increasing. And another -- at the end of the year last year, the soybean growers from this 2018 markets facilitation program pickup another $1.65 for our report of the soybeans they had.
If you look at the last year -- this time of year last year, a lot of the growers they were able to contract soybeans up over that $10 level. I think there were some pretty good corn contracts at times. So with that good year last year, with some pretty good contracting, the $1.65 market facilitation shot in the arm, put while our growers and some pretty good position here to really take care of their equipment needs as they go into this year’s planting season. So that’s what we attribute that to.

史蒂夫,早上好。这是戴夫。我认为 - 如果你去年看一下,我认为,那里有一些结转,我们实际上已经在我们的整个足迹中使用了很多,其中一些通常延续到下一年。

当然,在这个时代,替代需求是真实存在的,并且设备上的时间开始增加。另一个 - 去年年底,来自2018年市场促进计划的大豆种植者为我们的大豆报告再提供了1.65美元。

如果你看一下去年 - 去年的这个时候,很多种植者能够将大豆合约超过10美元。我认为有时候有一些非常好的玉米合约。因此,在去年那个好年头,有一些相当不错的合约,1.65美元的市场促销活动,同时我们的种植者和一些相当不错的位置真正照顾他们的设备需求,因为他们进入今年的种植季节。所以这就是我们的意思。

Steve Dyer

Great. Got it. Helpful. And then, corn, which you guys have always been fairly correlated to despite nicely north of $4 a bushel here in the last few weeks, I guess, one, do you have any view on the sustainability of that? And then, two, is that something that can change sentiment in your view, and if so, sort of that need to stay that way before farmers start sort of viewing things differently? Thank you.

非常好。 得到它了。很有帮助。 然后,玉米,你们一直相互关联,尽管在过去的几周内每蒲式耳4美元以上,我想,其中一个,你对这种可持续性有什么看法吗? 然后,两个是,你的观点中可以改变情绪的东西,如果是这样,那么在农民开始以不同的方式观察事物之前,还需要保持这种状态吗? 谢谢。

David Meyer

Yeah. Over the last couple of days, yeah, definitely, that put a little more bounce on some of the farmers steps seeing this movement on the corn price and I would say a lot of that’s attributed to the potential for a lot less acres going. Fortunately in most of our footprint with the exception of South Dakota, our farmers are making progress and I think with this week, most of our corn will be in the ground. But if you look at Indiana, you look at Ohio, you look at Illinois, they are way behind in their corn planting and continues to be very, very wet.
So there could be on a supply side shot in the arm we are less supply yield to really that corn might go up. So, I know some of our growers are locking in some at today’s price and they just going to keep selling more as if they keep growing up obviously. I’d say that’s definitely has the potential for a real positive and it could be a real nice thing depending on how much corn gets planted, really what happens to the yield as we get later in the year like that typically that yield potential starts diminishing too. So, if you take less acres and less yield across the U.S., there are people are already speculating here what that supply side could do for a potential corn price.

是啊。在过去的几天里,是的,当然,这会让一些农民看到玉米价格走势的反弹,我会说很多因为可能会减少更多的土地。幸运的是,在南达科他州的大部分地区,我们的农民正在取得进展,我认为本周,我们的大部分玉米将在地下。但是如果你看看印第安纳州,你看看俄亥俄州,你看看伊利诺斯州,他们在玉米种植方面落后了,并且仍然非常非常潮湿。

因此,供应方可能会出现供应量减少,因此玉米的供应量可能会减少。所以,我知道我们的一些种植者以今天的价格锁定了一些种植者,他们只是继续卖得更多,好像他们一直在成长。我会说这肯定有可能产生真正的积极因素,这可能是一个非常好的事情,取决于种植玉米的数量,真正的产量会发生什么,因为我们在今年晚些时候得到的产量潜力开始减少太。因此,如果你在美国占用较少的土地和较低的产量,那么人们已经在猜测供应方可以为潜在的玉米价格做些什么。

Steve Dyer

Got it. Thank you

得到它了。 谢谢

会议主持员

Thank you. Our next question comes from the line of Mig Dobre with Robert W. Baird. Please proceed with your question.

谢谢。 我们的下一个问题来自Mig Dobre与Robert W. Baird的合作。 请继续你的问题。

Mig Dobre

Thank you. Good morning, guys. I -- maybe want to start at construction. Obviously, you are raising the guidance there and you had a really nice strong start to the year. So I am looking for a little more color in terms of what’s driving all of this and especially what’s different versus your initial expectations that you had embedded in your outlook?

谢谢。 早上好家伙。 我 - 也许想从建筑开始。 显然,你正在那里提高指导,你今年有一个非常好的强势开始。 因此,我正在寻找更多的颜色来推动所有这些,特别是与您在展望中嵌入的最初期望有什么不同?

Mark Kalvoda

Yeah. I think with construction now, I think, as we mentioned in our prepared remarks it’s three quarters now -- three consecutive quarters of that improved top and bottomline results and it’s really, call it, blocking and tackling, and just focus on all the fundamentals out there.
One of the areas of improvement is the inventory improvement that we have had there. That’s driving better margins and lower floorplan interest expense in that area. Particularly within this quarter you saw some of this parts and service. Our focus in that expert team on driving that parts and service business really came through in the first quarter.
Some of that may had to and maybe to -- and without late start to the construction season, and our customers really wanted to make sure out there continue to ready to go out there on the construction side as they get at compressed season here to get their jobs done.
I think the last thing is on the rental. We talked about the rental utilization being up 2 percentage points. Again, I think, some of that re-fleet rationalization that we have done, done some benefits here as well as just better execution on that side of the business and getting those rental deals in place. So I don’t know that it’s any one particular things, it’s a combination I think of a lot of things that will continue -- expecting to continue to happen and get us to profitability in this segment this year.

是啊。我认为现在的建设,我认为,正如我们在准备好的评论中所提到的那样,现在是四分之三 - 连续三个季度改善了顶线和底线的结果,它真的,称之为,阻挡和解决,只关注所有的基本面在那里。

其中一个改进领域是我们在那里的库存改进。这推动了该领域更高的利润率和更低的平面图利息费用。特别是在这个季度,你看到了一些这样的零件和服务。我们专注于推动零件和服务业务的专家团队在第一季度真正实现了这一目标。

其中一些可能不得不也可能 - 并且没有迟到的施工季节开始,我们的客户真的想确保那里继续准备去建筑方面,因为他们在这里得到压缩季节得到他们完成了工作。

我想最后一件事就是出租。我们谈到租金利用率提高了2个百分点。我认为,再一次,我们所做的一些重新合理化,在这里做了一些好处,以及在业务的这一方面更好地执行并获得这些租赁交易。所以我不知道这是什么特别的东西,这是一个组合,我想到很多事情将继续 - 期待继续发生并让我们在今年的这一部分获利。

Mig Dobre

To be clear, I am mostly wondering what’s going on with the topline, right? I mean you are going from 0% to 5%, to 5% to 10%. And I mean, correct me if I am wrong, the parts and service and rentals are not enough to generate this change in guidance, seems like equipment demand has to be part of it.

要明确的是,我主要想知道背线会发生什么,对吧? 我的意思是你从0%到5%,到5%到10%。 我的意思是,纠正我,如果我错了,零件,服务和租赁不足以在指导中产生这种变化,似乎设备需求必须成为其中的一部分。

David Meyer

Yes.

是。

Mark Kalvoda

Yeah. Yeah. And I think some of the same things it’s happening on the equipment side. Just going out and getting that business. I think Dave indicated in some of his remarks, just with the strength of oil, some of the sustained strength in oil that’s happening particularly up here in the Bakken we are seeing some better activity. But that’s flowing through to some of the other areas in the strength in our metro markets and it is -- it came through better than what we anticipated, particularly late in the quarter here in April where we saw some good positive results there on the equipment sales side.

是啊。是啊。 而且我认为它在设备方面发生了一些相同的事情。 刚出门去做那件事。 我认为戴夫在他的一些言论中表示,只是凭借石油的实力,在巴肯特别发生的一些持续的石油强度,我们看到了一些更好的活动。 但是,这种情况正在流向我们地铁市场的其他一些领域 - 它比我们预期的更好,特别是在4月份的季度末,我们在设备上看到了一些好的积极成果 销售方。

Mig Dobre

I see. Okay. And then maybe we can talk a little bit about your guidance in ag, you are still calling for flat that implies in the subsequent quarters, call it, slight decline. But I am wondering how you are thinking the second quarter versus the second half, what is sort of the progression here because your comparisons, obviously, are varied. So how do you think about it from a modeling perspective?

我知道了。 好的。 然后,也许我们可以谈谈你在ag中的指导,你仍然要求在随后几个季度暗示平价,称之为小幅下跌。 但我想知道你是如何思考第二季度与下半年的关系,这是什么样的进展,因为你的比较显然是多种多样的。 那你怎么从建模的角度思考它呢?

Mark Kalvoda

Yeah. I think, from -- as far as sequentially in the quarters here, I think, Q2 will see -- still see some positive, I think, Q2, Q3, and then once you get out to Q4 where we had a very strong Q4 this last year, you will see some of that come off a little bit. So I’d say some level of growth in Q2, Q3 and then going negative to a small degree in Q4, which is our highest equipment revenue quarter.

是啊。 我认为,从 - 在这里的季度顺序,我认为,Q2会看到 - 仍然看到一些积极的,我认为,Q2,Q3,然后一旦你走到Q4我们有一个非常强大的Q4 去年,你会看到其中的一些有点过时。 因此,我会说第二季度,第三季度会有一定程度的增长,然后在第四季度出现负增长,这是我们设备收入最高的季度。

Mig Dobre

Okay. And then, obviously, you are not guiding any more to equipment margins and I understand that. But when I am looking at Q1 you came pretty close to what you have described as the new normal up 11%. Is there any variability that you would call out for the rest of the year directionally for us?

好的。 然后,显然,你不再指导设备利润,我理解这一点。 但是当我看到第一季度时,你已经非常接近你所描述的新常态上升了11%。 是否有任何可变性,你会在今年余下的时间里为我们定向?

Mark Kalvoda

I think, overall, yes, we kind of alluded to last year getting to that that normal, we have came a little bit short in the first quarter here. But I don’t see, I mean, I -- there’s always some risk in all of this, but I think 11% for the year is certainly still attainable, even though we started out a little bit low here in the first quarter.
So, no, I think, in -- I think, Q2, Q3, tends to be a little bit stronger as well and then when we get out to Q4 it will come off a little bit. I think we will be higher than we were last year in Q4, but -- Q4 will be a little bit lower than the other quarters of the year.

我认为,总的来说,是的,我们有点提到去年达到正常水平,我们在这里第一季度有点短暂。 但我没有看到,我的意思是,我 - 所有这一切都存在风险,但我认为今年11%仍然可以实现,尽管我们在第一季度开始时有点低。

所以,不,我认为,在 - 我认为,Q2,Q3,往往会更强一点,然后当我们走向Q4时,它会稍微偏离。 我认为我们将比去年第四季度更高,但是 - 第四季度将略低于今年其他季度。

Mig Dobre

That’s helpful. And then maybe last question for me, I remember having this discussion on parts and service last quarter, because things were already looking like we are going to have a -- maybe a challenging plant season and that proves to be the case. Your performance was really, really good here. So it looks to me like it surprise you positively, correct me if I am wrong, I mean, I am wondering sort of what was different than what you were initially contemplating? And then as you look at the rest of the year with comparisons getting tougher in both parts and service, how do you think about growth going forward?

这很有帮助。 然后也许对我来说可能是最后一个问题,我记得上个季度有关于零件和服务的讨论,因为事情已经看起来像我们将会有一个 - 也许是一个具有挑战性的工厂季节,事实证明是这样的。 你的表现非常非常好。 所以我觉得它让你感到惊讶,如果我错了就纠正我,我的意思是,我想知道你最初在考虑什么不同? 然后,当你看到今年剩下的时间里,通过比较在部件和服务方面变得更加艰难,你如何看待未来的增长?

Mark Kalvoda

Yeah. I think, it did surprise us a little bit. It was higher than what we had expected. We did expect some nice growth last year in the first quarter it was off a decent amount versus the prior year.

是啊。 我想,它确实让我们感到惊讶。 它高于我们的预期。 我们确实预计去年第一季度的增长会比去年有所增长。

Mig Dobre

The comp [ph].

comp [ph]。

Mark Kalvoda

I think another thing -- yes. Yeah, the comp will be tougher like you said later in the year. And the other reason why it’s going to be tougher is because of the AGRAM acquisition. So we are benefiting from the AGRAM acquisition to the tune of, probably, 2 percentage points to 3 percentage points here in the first quarter, second quarter it will be similar to that and then that goes away.
I think it’s similar to what I said maybe on construction, we saw more strength in April, late in the quarter in parts and service where it really came on. And again, some of that may have been just due to our customers wanted to make sure that they are prepared for getting out into the field in this case to minimize the breakdowns that occur and I think that’s partially to do with that.
I think the other thing we are learning is, this parts and service tends to be somewhat lumpy and it’s hard to predict between quarter-to-quarter. As you mentioned, last quarter we were a little disappointed particularly in the service results last quarter and that did come back strong. So it tends to be a little bit lumpy at times.
But as far as to the full year, we still expect, I think, what we mentioned before kind of that that mid single-digit growth for the full year. The biggest quarter is, Q2 is going to be bigger but Q3 is the largest quarter, of course, with the harvest. So that all kind of make it or break it, I think, as far as attaining that mid-single digits in our parts and service growth for the year.

我想另一件事 - 是的。是的,比如你在今年晚些时候所说的那样,comp会更加强硬。而另一个原因是因为收购AGRAM会更加困难。所以我们从第一季度AGRAM的收购中获益可能是2个百分点到3个百分点,第二季度它将与此类似,然后就会消失。

我认为它与我所说的可能在建设方面类似,我们在4月份看到了更多的实力,在本季度晚些时候,部分和服务实际上出现了。而且,其中一些原因可能只是因为我们的客户希望确保他们为在这种情况下进入现场做好准备,以尽量减少发生的故障,我认为这部分与此有关。

我认为我们正在学习的另一件事是,这些零件和服务往往有点粗糙,而且很难在季度与季度之间进行预测。正如你所提到的,上个季度我们对上季度的服务业绩感到有些失望,而且确实恢复了强劲势头。所以有时候它往往会有点粗糙。

但就全年而言,我们仍然期望,在我们提到全年中单位数增长之前,我们仍然提到了这一点。最大的一个季度是,Q2将会更大,但第三季度是最大的季度,当然,收获。因此,我认为,只要达到我们的部件和服务增长的中等个位数,所有这一切都可以实现或打破它。

Mig Dobre

Right. So, Mark, to be clear, when you are saying Q3, the largest you are talking about dollars in revenue not growth, correct?

对。 所以,马克,很清楚,当你说Q3时,你所说的最大的收入是收入而不是增长,对吗?

Mark Kalvoda

That’s correct. Yes.

那是对的。 是。

Mig Dobre

Okay. Good job, guys, and thanks for the color.

好的。 干得好,伙计们,并感谢你的颜色。

David Meyer

Thanks, Mig.

谢谢,米格。

会议主持员

Thank you. Our next question comes from the line of Rick Nelson with Stephens, Inc. Please proceed with your question.

谢谢。 我们的下一个问题来自Rick Nelson与Stephens,Inc。的合作。请继续提问。

里克·尼尔森

Thanks. Good morning.

谢谢。 早上好。

David Meyer

Hi, Rick.

嗨,里克。

里克·尼尔森

I’d like to drill down into the equipment margins, we did see some pressure this quarter, is that on the new side or the used side and if you could comment on inventory in the channel, are other dealers taking advantage of these interest free deals and where you see channel inventory?

我想深入了解设备利润,我们确实看到了本季度的一些压力,是新的一面还是二手的,如果你可以对渠道中的库存发表评论,其他经销商是否会利用这些免息利息 交易和渠道库存的位置?

Mark Kalvoda

I think, so I will take it at least the first part here, as far as the equipment margins go, most of that pressure we saw coming from the ag side on the new, used continues to be stable, and I think, due to those industry supplies, and specifically, our improved inventory condition that we had.
But I think that the pressures -- there is pricing pressure on that new from competition and difficulty fully passing on some of those OEM price increases to the customer, especially in this difficult environment. As far as other others taking…

我想,所以我至少会把它放在这里的第一部分,就设备利润率而言,我们看到的大部分压力来自于新的侧面,使用继续保持稳定,我认为,由于 那些行业供应,特别是我们改善的库存状况。

但我认为存在压力 - 这种新的竞争存在价格压力,并且很难将一些OEM价格上涨完全传递给客户,特别是在这种困难的环境中。 至于其他人采取...

David Meyer

Yeah. I can talk to inventory, Rick, a little bit, so we are comfortable with our current level of inventory right now. What we need we have right plus additional units in Q3 and Q4 to hit our full year revenue number, so we have got the ability to flex up and down with the Q4 orders, but we have to get a little more visibility into the both -- commodity prices and what’s going on with the yields and then, I can say, we have got that opportunity to flex up and down.
So we talked a little bit earlier about corn, but if that stays on that same price trajectory during -- due to less acres on -- and our order slots in that fourth quarter they could be starting to get -- they could fill up pretty fast. We always -- we have to be kind of cognizant of that.
Then like -- what like Mark explained too in his -- during our presentation that higher percentage of inventory on that non-interest bearing that really helps, that’s helpful too. So the whole picture, we feel pretty good, it’s pretty well thought out plan, and I’d say, we are right on track right now.

是啊。我可以和库存,Rick谈谈,所以我们现在对目前的库存水平感到满意。我们需要的是什么,加上第三季度和第四季度的额外单位,以达到我们的全年收入数字,因此我们有能力随着Q4订单上下调整,但我们必须更加了解两者 - - 商品价格和收益率发生了什么,然后,我可以说,我们有机会上下弯曲。

所以我们早些时候谈过玉米,但是如果由于占地面积减少而保持相同的价格轨迹 - 并且我们在第四季度的订单位置可能会开始变得更好 - 它们可能会填满相当的价格快速。我们总是 - 我们必须认识到这一点。

然后就像 - 马克在他的演讲中所解释的那样 - 在我们的演讲中,那些非利息的库存百分比确实很有帮助,这也是有帮助的。所以整个画面,我们感觉非常好,这是一个非常好的计划,我会说,我们现在正好在轨道上。

里克·尼尔森

Great. So ag segment, the revenues were up 8%, you are guiding to flat, we heard some of the cautionary comments that you made that could cause a slow down. What are the sign posts, you mentioned corn prices that we should be looking for to shift your expectations?

非常好。 所以ag部门,收入增长了8%,你指引持平,我们听到你提出的一些可能会导致放缓的警示性评论。 什么是标志杆,你提到我们应该寻找的玉米价格来改变你的期望?

David Meyer

Well, I think, as you look ahead, so -- but, again, if we just go back to last year a little bit, excellent yields and in some cases record yields across our footprint. Our growers had the ability to contract this time of year last year at a much higher numbers than what you are seeing today. We had a $1.65 soybean market facilitation program. So that drove a lot of last year’s business.
Now this year we don’t know about -- we don’t know what the yields are going to be. We are not sure what the price is going to be. We still haven’t seen the details of the market facilitation program. So definitely there is a level of uncertainty and volatility out there.
So we need some type of resolution to all of this trade information that’s out there. But, so this year a lot of that first quarter, I’d say, is carryover from last year, and then, I guess, that’s still yet to be seen for the balance of the year and so I’d say stay tuned.

嗯,我认为,当你向前看时,那么 - 但是,如果我们回到去年一点点,优良的收益率,并在某些情况下记录我们的足迹收益率。 我们的种植者有能力在去年的这个时候以比你今天看到的更高的数量收缩。 我们有一个1.65美元的大豆市场促进计划。 因此,这推动了去年的大部分业务。

今年我们不知道 - 我们不知道收益率会是多少。 我们不确定价格会是多少。 我们还没有看到市场促进计划的细节。 所以肯定存在一定程度的不确定性和波动性。

因此,我们需要某种类型的解决方案来处理所有这些交易信息。 但是,所以今年第一季度的很多东西,我会说是去年的结转,然后,我想,今年的余额还有待观察,所以我要说保持关注。

里克·尼尔森

Got it. Got it. That make sense. How about capital allocation, your thoughts today, you have got that converts now off the books, you are sitting on $63 million in cash. Do you continue to build the cash or do you think you would be putting it to work, any update there?

得到它了。 得到它了。 有道理。 如何进行资本配置,你今天的想法,你现在已经转换成书籍,你将获得6300万美元现金。 你是继续建立现金,还是认为你会把它投入使用,那里有任何更新?

Mark Kalvoda

Yeah. I think, certainly, getting that convert behind us is big and critical. I think, as we have talked, I think, there’s a lot of opportunity. We believe there’s a lot of opportunity particularly on the ag -- domestic ag side and the length of this being in the trough of this cycle that we have been in. There is good opportunities to go out and get some good quality acquisitions done on the ag side and we are focused on that and that’s, I think, that’s the top of our list from a priority standpoint in regards to capital allocation.

是啊。 我认为,当然,让我们背后的转变是巨大而关键的。 我认为,正如我们所说,我认为,有很多机会。 我们认为特别是在农业 - 国内农业方面存在很多机会,并且这种情况的长度处于我们所处的这个周期的低谷。有很好的机会走出去并获得一些高质量的收购。 ag方面,我们专注于那个,我认为,从资本配置的优先角度来看,这是我们列表中的首要问题。

里克·尼尔森

Great. Thanks and good luck.

非常好。 谢谢,祝你好运。

Mark Kalvoda

Thank you.

谢谢。

David Meyer

Thanks, Rick.

谢谢,里克。

会议主持员

Thank you. [Operator Instructions] Our next question comes from the line of Larry De Maria with William Blair. Please proceed with your question.

谢谢。 [操作员说明]我们的下一个问题来自Larry De Maria与William Blair的合作。 请继续你的问题。

Larry De Maria

Hi. Good morning, everybody. I know that maybe this is difficult, there’s a lot of moving parts, but we have prevent plant dates coming up and you have the new program from the government that is worth mentioned. So how are you thinking about overall, let’s say, farmer income in your territory this year, because assume there is going to be maybe some less acres and more prevent plant. So can you kind of piece it all together and think about how you are thinking about farmer income with, obviously, probably, less yields, et cetera, but higher prices. So just overarching trying to understand if this is potentially a real pivot for your market or at the end of the day, we are still going to talking about trades in the another markets and it’s just sorted out? Thanks.

你好。 大家早上好。 我知道也许这很困难,有很多活动部件,但我们已经阻止了工厂日期的到来,你有政府的新计划值得一提。 那么你如何考虑整体,比如今年你所在地区的农民收入,因为假设可能会有更少的土地和更多的防止植物。 那么你能不能把它们拼凑起来思考你如何考虑农民收入,显然可能是收益率较低等等,但价格较高。 因此,只是总体上试图了解这是否可能是您市场的真正支点,或者在当天结束时,我们仍然会谈论另一个市场的交易并且它刚刚解决了? 谢谢。

David Meyer

Okay. So I think we are pretty fortunate, Larry. Let’s say, if you look at Minnesota, North Dakota, Nebraska and Iowa, they are actually not too far off from a year ago on their -- getting their corn planted, and like, I say, this week it’s 80 degree and in some cases maybe the weather is sunshine, and I’d say, we are going to get all that corn planted this week and some of the corn is up already. So I think South Dakota is the only thing state we have that’s probably a little bit on the left side.
So I am fairly confident that our growers are pretty resilient and pretty resourceful. I’d say, you are going to see that corn get down and then soybeans are going to follow up right after that. So we are fortunate from that standpoint.
Definitely, we have got the market facilitation program, we got the trade issues going on and all, and we need to get some closure to that so -- to get some of this uncertainty out of the marketplace like that. So I think everybody is pushing for that.
I’d say, this 2019 market facilitation program, that’s a positive and that’s going to help our growers and I think it’s going to be especially helpful for soybean growers, we are -- and if you look at our five states, our five ag states, we raise a lot of soybeans. So that’s going to be good for that.
I think one thing that, as we start to see this corn price start improving a little bit. I am not sure if everybody is aware of the amount of corn on hand, on the farms, in the storage, there is in some cases one year’s worth of crops two, even we have got some of our growers out with three years worth of crops on hand.
So any spike in that corn price, I think, is going to be a benefit not only to this year’s crop but that grain on storage is going to get -- be able to get sold in that standpoint, again for some of these guys it could even be a little bit of a tax problem.
So I’d say, I think some of our growers are challenged right now, the banks are become have a real conservative pulling to them. I think that some of our growers out there are putting their crop in this year without an operating note. So that’s going to be a little bit challenging for some of them.
But I think when you get all said and done, I like our five states. I think we are going to be in pretty good shape as we get through this, and like we say, we just need to get that the trade issues, the tariff issues resolved and get this crop through and get it in the bin. So, hopefully, that gives you a pretty good summary.

好的。拉里,所以我觉得我们非常幸运。让我们说,如果你看一下明尼苏达州,北达科他州,内布拉斯加州和爱荷华州,他们实际上距离一年前他们的种植玉米并不太远 - 就像我说的那样,本周它是80度和一些可能天气是阳光,我会说,我们将在本周种植所有玉米,一些玉米已经上涨。所以我认为南达科他州是我们所拥有的唯一一个可能左侧的东西。

因此,我相信我们的种植者非常有弹性且非常有资源。我会说,你会看到玉米下降,然后大豆将在此之后跟进。所以我们从这个角度来看是幸运的。

当然,我们已经得到了市场促进计划,我们得到了所有的贸易问题,我们需要对此进行一些关闭 - 从这样的市场中获得一些不确定性。所以我认为每个人都在为此而努力。

我会说,这个2019年的市场促进计划,这是一个积极的,这将有助于我们的种植者,我认为它对大豆种植者特别有帮助,我们是 - 如果你看看我们的五个州,我们的五个农业各州,我们养了很多大豆。所以那将是好事。

我认为有一点,我们开始看到玉米价格开始有所改善。我不确定是否每个人都知道手头,农场,储藏中的玉米数量,在某些情况下有一年的作物价值两年,甚至我们的一些种植者都有三年的价值手上的庄稼。

因此,我认为玉米价格的任何飙升都不仅有利于今年的收成,而且储存的谷物将会得到 - 能够在这个角度出售,对于其中一些人来说也是如此甚至可能是一个税收问题。

所以我想说,我认为我们的一些种植者现在受到了挑战,银行已经变成了一个真正的保守派。我认为我们的一些种植者在今年没有作业记录。这对他们中的一些人来说会有点挑战。

但我想当你说完所有的话,我就喜欢我们的五个州。我认为,当我们通过这个时,我们将处于非常好的状态,就像我们说的那样,我们只需要解决贸易问题,关税问题得到解决并获得批准并将其收入垃圾箱。所以,希望这能给你一个很好的总结。

Larry De Maria

Okay. No. It does. It sounds like you guys are in better position than a lot of others. And I guess, you guys kept the ag outlook, and obviously, you raised construction, but maintained the EPS guide a fairly wide range. I am just curious about the puts and takes to that and why not narrow it given the slightly better construction?
And secondly, correct me if I am wrong, it sounds like if there is upside to ag, mostly going to come later in the year once we drove this and then maybe orders getting better later as opposed to near-term, is that right?

好的。 不,确实如此。 听起来你们比其他很多人都处于更好的位置。 而且我想,你们保持了ag的前景,显然,你们提高了建筑面积,但保持了EPS指南的相当广泛的范围。 我只是对这些看法感到好奇并接受了这一点,为什么不给它稍微更好的结构呢?

其次,如果我错了,请纠正我,这听起来好像是否存在ag的上行空间,一旦我们开车就会在今年晚些时候到来,然后订单可能会在晚些时候变得更好而不是近期,是吗?

Mark Kalvoda

Yeah. I think, so first of all, in regards to ag, just with all the different uncertainties out there that Dave mentioned with the commodity prices, trade war, weather, you mentioned prevent plant, all of these things are just a lot of uncertainty out there.
And on the CE side, with the revenue increase there, that’s obviously going to be the positive, a little bit of the offset here as we did run a little bit higher in expenses than what we had anticipated, so that will come off a little bit.
And I think just keeping in mind that it’s a range there on that EPS and we are early in the year with a relatively seasonally low first quarter here. So there’s a lot of the year left to achieve that full year EPS range.

是啊。 我想,首先,关于ag,只有Dave提到的商品价格,贸易战,天气所提到的所有不同的不确定性,你提到防止植物,所有这些都是很多不确定性 那里。

而在CE方面,随着收入的增加,这显然是积极的,稍微有点抵消,因为我们的开支比我们预期的要高一点,所以这会有所收获位。

而且我认为只要记住这是EPS的一个范围,我们在今年年初的第一季度相对季节性较低。 因此,今年还有很多时间可以实现全年的EPS范围。

Larry De Maria

Okay. And then last question -- thank you. You have talked about obviously potentially putting some money to work in the M&A, are there ample opportunities in your territory in the Midwest, are you looking overseas, just curious how things are shaking out now, and obviously, that kind of an odd backdrop as well. So what kind of opportunities are there right now, are they there?

好的。 然后是最后一个问题 - 谢谢。 你曾经谈到过明显有可能在并购中投入一些资金,你们在中西部地区是否有充足的机会,你是在寻找海外,只是好奇现在情况如何发展,显然,这种奇怪的背景如同 好。 那么现在有什么样的机会,他们在那里吗?

David Meyer

No. I think the opportunities are, we like this Upper Midwest footprint we are in, and I think, we definitely there is ample opportunities, still fairly fragmented number of dealerships, your aged dealer principles, I think, there some capital challenges. So, yeah, I think, we definitely have some good opportunities either contiguous or in this same footprint that we are in today.

不,我认为机会是,我们喜欢这个中西部的中西部足迹,我认为,我们肯定有充足的机会,仍然相当分散的经销商数量,您的老年经销商原则,我认为,存在一些资本挑战。 所以,是的,我认为,我们肯定有一些好的机会要么是连续的,要么就是我们今天所处的足迹。

Larry De Maria

Okay. Thanks and good luck guys.

好的。 谢谢,祝你们好运。

David Meyer

Okay. Thanks, Larry.

好的。 谢谢,拉里。

会议主持员

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Meyer for any final comments.

谢谢。 女士们,先生们,我们的问答环节结束了。 我将请发言回到梅耶先生的任何最后评论。

David Meyer

Okay. Thank you everyone for being on this call today and look forward to updating you on our progress on our next call and have a good day.

好的。 感谢大家今天接到这个电话,期待在下次电话会议上向我们介绍我们的进展情况,祝大家有个美好的一天。

会议主持员

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

谢谢。 这就结束了今天的电话会议。 您可以在此时断开线路。 感谢您的参与。

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