Quanex Building Products Corporation (NX) 首席执行官 Bill Griffiths 在 2019年 第二季度业绩 - 收益电话会议记录

Quanex Building Products Corporation (NYSE:NX) Q2 2019 Earnings Conference Call June 5, 2019 11:00 AM ET

Quanex Building Products Corporation(纽约证券交易所代码:[NX])2019年第二季度收益电话会议2019年6月5日美国东部时间上午11:00

公司参与者

Scott Zuehlke - VP, IR & Treasurer
Brent Korb - CFO
Bill Griffiths - Chairman, President & CEO

  • Scott Zuehlke - IR和财务主管副总裁
  • Brent Korb - 首席财务官
  • Bill Griffiths - 董事长,总裁兼首席执行官

电话会议参与者

Daniel Moore - CJS Securities
Reuben Garner - Seaport Global Securities
Steven Ramsey - Thompson Research Group
Julio Romero - Sidoti & Company

  • 丹尼尔摩尔 - CJS证券
  • 鲁本加纳 - 海港全球证券
  • 史蒂文拉姆齐 - 汤普森研究小组
  • Julio Romero - Sidoti&Company

会议主持员

Good day, ladies and gentlemen, and welcome to the Second Quarter 2019 Quanex Building Products Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's program is being recorded.
And now I'd like to introduce your host for today's program, Scott Zuehlke, Vice President, Investor Relations and Treasurer. Please go ahead, sir.

美好的一天,女士们,先生们,欢迎参加2019年第二季度Quanex建筑产品公司收益电话会议。 此时,所有参与者都处于只听模式。 之后,我们将进行问答环节,并在那时给出指示。 [操作员说明]提醒一下,今天的节目正在录制中。

现在,我想介绍一下今天的主持人,Scott Zuehlke,投资者关系副总裁兼财务主管。 请继续,先生。

Scott Zuehlke

Thanks for joining the call this morning. On the call with me today is Bill Griffiths, our Chairman, President and Chief Executive Officer; Brent Korb, our Chief Financial Officer; and George Wilson, our Chief Operating Officer.
This conference call will contain forward-looking statements and some discussion of non-GAAP measures. Forward-looking statements and guidance discussed on this call and in our earnings release are based on current expectations. Actual results or events may differ materially from such statements and guidance, and Quanex undertakes no obligation to update or revise any forward-looking statement to reflect new information or events. For more detailed description of our forward-looking statement disclaimer and a reconciliation of non-GAAP measure to the most directly comparable GAAP measures, please see our earnings release issued yesterday and posted to our website.
I'll now turn the call over to Brent to discuss the financial results.

谢谢你今天早上加入了这个电话。 今天与我同意的是Bill Griffiths,我们的董事长,总裁兼首席执行官

布伦特Korb

Thanks, Scott. I'll begin with the review of the income statement and finish with comments on cash flow and the balance sheet, before handing the call over to Bill to provide some color on our performance and expectations for the rest of the year. We generated net sales of $218.2 million during the three months ended April 30, 2019 compared to $214.2 million for the three months ended April 30, 2018. The increase was mainly due to strong revenue growth in our European Fenestration segment, which was driven by above market growth and price increases related to raw material inflation recovery.
We reported a net loss of $24 million or $0.73 per diluted share for the second quarter of 2019 compared to net income of $4.1 million or $0.12 per diluted share during the same period 2018. The decrease in reported earnings was primarily the result of a $30 million or $0.91 per share non-cash goodwill impairment in the North American Cabinet Components segment, mainly due to lower volume expectations related to the continued shift in the cabinet industry away from the semi-custom segment to the stock segment.
On an adjusted basis, net income increased to $6.3 million or $0.19 per diluted share during the second quarter of 2019 compared to $4.8 million or $0.14 per diluted share during the second quarter of 2018. The adjustments being made for earnings per share are restructuring and related severance expenses, non-cash impairment charges, foreign currency transaction impacts, transaction and advisory fees, and adjustments related to the Tax Cuts and Jobs Act. On an adjusted basis, EBITDA for the quarter increased to $23.4 million compared to $21.7 million in the second quarter of last year. The increase in adjusted earnings year-over-year was primarily attributable to operational efficiency gains and the successful implementation of pricing initiatives.
Moving on to cash flow and the balance sheet; cash provided by operating activities was $20.4 million for the three months ended April 30, 2019 compared to cash provided by operating activities of $13.4 million for the three months ended April 30, 2018. We generated free cash flow of $13.6 million in the second quarter of 2019, which is more than double the $6 million we generated during the same period of 2018. This allowed us to repay $5 million in bank debt during the quarter and repurchase approximately $2.7 million of common stock.
Our leverage ratio of net debt to adjusted EBITDA decreased to 2.3 times. As of April 30, 2019, we had approximately $23.3 million remaining under our existing share repurchase program. We are confident in our ability to generate strong free cash flow in the second half of this year, and expect to continue paying down debt, while opportunistically buying back stock. We also continue to expect to exit fiscal 2019 with a net leverage ratio between 1.5 times to 2 times.
I will now turn the call over to Bill.

谢谢,斯科特。我将首先审查损益表并结束对现金流量和资产负债表的评论,然后再将电话交给比尔,以便为我们今年剩余时间的业绩和预期提供一些颜色。截至2019年4月30日止三个月,我们的净销售额为2.182亿美元,截至2018年4月30日止三个月的净销售额为2.142亿美元。这一增长主要是由于我们的欧洲门窗活动部门收入增长强劲,这是由上述因素推动的。市场增长和价格上涨与原材料通胀复苏有关。

我们报告2019年第二季度净亏损2400万美元或每股摊薄收益0.73美元,而2018年同期净收入为410万美元或每股摊薄收益0.12美元。报告收益减少主要是由于3000万美元的结果或北美橱柜部件分部每股0.91美元的非现金商誉减值,主要是由于内阁行业从半定制部门向股票部门的持续转变所带来的销量预期下降。

在调整后的基础上,2019年第二季度净收入增加至630万美元或每股摊薄收益0.19美元,而2018年第二季度为480万美元或每股摊薄收益0.14美元。对每股收益的调整是重组和相关的遣散费,非现金减值费,外币交易影响,交易和咨询费,以及与“减税和就业法”相关的调整。经调整后,本季度的EBITDA增至2340万美元,而去年第二季度为2170万美元。调整后收益同比增长主要归因于运营效率提升和定价举措的成功实施。

继续现金流和资产负债表

比尔格里菲斯

Thanks, Brent. We are pleased to report another strong quarter with revenue growth and margin expansion across all segments, combined with the doubling of free cash flow compared to the same period of last year. More specifically, our European Fenestration segment led the way again with revenue growth of more than 15% excluding foreign exchange impact and margin expansion of almost 400 basis points. Similar to last quarter, this performance was largely driven by above market growth and price increases implemented late last year.
As you know, North America was plagued by poor weather across much of the country during the quarter. This negatively impacted results in both segments. Notwithstanding this, our North American Fenestration segment still outperform the market with revenue growth of 1% compared to Ducker's latest calendar first quarter window shipment estimate of negative 4%. Ducker recently reduced their full year 2019 window shipment growth estimate to 0.7%, down from 1.5%. During the first half of our fiscal year, our North American Fenestration segment has reported sales growth of 3.5%. We also realized 50 basis points of margin expansion in this segment in the second quarter.
Moving on to our North American Cabinet Components segment, the semi-custom segment of the cabinet industry continues to be challenged with KCMA reporting negative 5.7% and negative 5.2% growth for the three and six months ended April 30, 2019. We outperformed the semi-custom market with growth of 0.3% and negative 1.6% for the three and six months ended April 30, 2019. Unfortunately, we expect negative sales growth in this segment for the remainder of the year, as comps get more difficult, and the shift from semi-custom to stock continues. Not surprisingly, this was the biggest driver of the impairment charge and the revision to our revenue guidance for fiscal 2019.
On a positive note, however, efficiencies continue to improve, resulting in margin expansion of 110 basis points for the quarter. Assuming, we do see a continuation of negative single-digit growth in revenues in this segment during the second half of the year, we would expect margins to remain flat for this combined six-month period, with margin degradation in Q3 due to the tough comp, a margin expansion again in Q4. Despite the revenue headwinds in cabinets, on a consolidated basis, and excluding foreign exchange impact, we reported revenue growth of approximately 3.2% for the quarter, with a margin expansion of approximately 70 basis points. As Brent mentioned, free cash flow for the quarter was solid and more than doubled year-over-year to $13.6 million.
Revenue growth for the six months ended April 30, 2019 was approximately 3.4% excluding foreign exchange impact, which is below the low end of our original revenue guidance. We expect a stronger second half in our North American Fenestration segment and continued strong growth in our European Fenestration segment. However, revenue headwinds are expected in our North American Cabinet Components segment.

谢谢,布伦特。我们很高兴地报告另一个强劲的季度,所有细分市场的收入增长和利润率增长,加上自由现金流量与去年同期相比翻了一番。更具体地说,我们的欧洲门窗部门再次领先,收入增长超过15%,不包括外汇影响和近400个基点的利润率扩张。与上个季度类似,这一表现主要受到上述市场增长和去年年底实施的价格上涨的推动。

如你所知,北美地区在本季度大部分时间都受到恶劣天气的困扰。这种负面影响导致两个部分。尽管如此,我们的北美门窗部门仍然表现优于市场,收入增长率为1%,而Ducker的最新日历第一季度窗口出货量估计为负4%。 Ducker最近将2019年全年窗口出货量增长预期从1.5%下调至0.7%。在本财政年度上半年,我们的北美门窗活动部门的销售额增长率为3.5%。我们还在第二季度实现了该细分市场50个基点的利润率扩张。

转向我们的北美橱柜部件细分市场,橱柜行业的半定制部门继续受到挑战,KCMA报告在截至2019年4月30日的三个月和六个月中负5.7%和负5.2%的增长。我们的表现超过半 - 截至2019年4月30日的三个月和六个月,海关市场增长0.3%,负增长1.6%。不幸的是,我们预计今年剩余时间内该部门的销售增长将出现负增长,因为补偿变得更加困难,而且转变从半定制到库存继续。毫不奇怪,这是2019财年减值费用和收入指引修订的最大驱动因素。

然而,从积极的方面来看,效率继续提高,导致本季度利润率扩大110个基点。假设我们确实看到下半年这一细分市场的收入持续出现负单位数增长,我们预计这个合并后的六个月期间利润率将保持不变,第三季度利润率将因强硬而下降comp,第四季度再次扩大利润率。尽管内阁在合并基础上的收入逆风,并且不包括外汇影响,但我们报告本季度收入增长约3.2%,利润率增长约70个基点。正如布伦特所提到的那样,本季度的自由现金流量稳固,同比增长超过一倍,达到1360万美元。

截至2019年4月30日止六个月的收入增长约为3.4%,不包括外汇影响,低于我们原始收入指引的低端。我们预计北美开窗行业的下半年将走强,而我们的欧洲门窗行业将继续强劲增长。然而,我们的北美橱柜组件部门预计会出现收入不利因素。

Our first half sales growth performance combined with our current expectations and outlook for the second half, mainly in our North American Cabinet Components segment have caused us to revise our fiscal 2019 revenue guidance down slightly to between 2% and 3% growth. Despite the lower growth expectations, we remain very confident in our original adjusted EBITDA guidance of $97 million to $107 million. We also expect to generate enough free cash flow in the second half to continue paying down bank debt and still expect to exit the year well below 2 times leverage ratio. We also expect to continue to opportunistically buyback stock at a similar rate to the first half repurchases.
And now, operator, we're ready for questions.

我们上半年的销售增长表现加上我们当前对下半年的预期和展望,主要是我们在北美橱柜部件领域,导致我们将2019财年的收入指引略微下调至2%至3%的增长。 尽管增长预期较低,但我们对最初的调整后EBITDA指引仍然非常有信心,即9700万美元至1.07亿美元。 我们还预计下半年将产生足够的自由现金流以继续偿还银行债务,并且仍然预计将在年度远低于杠杆率的2倍。 我们还预计继续以与上半年回购类似的速度回购股票。

现在,运营商,我们已准备好提问。

问答环节

[Operator Instructions] Our first question comes from the line of Daniel Moore from CJS Securities. Your question please.

[操作员说明]我们的第一个问题来自CJS Securities的Daniel Moore。 请问你的问题。

丹尼尔摩尔

Good morning. Thanks for taking my questions. Bill, Brent want to start -- and George start with EU Fenestration obviously continues to be really strong and taking share. Last quarter we thought maybe a little bit of inventory building going on ahead of Brexit, is your sense that still the case this quarter and maybe just talk about the underlying drivers there? And then if you could just break out the 7% growth FX between volume and price?

早上好。 谢谢你回答我的问题。 比尔,布伦特想要开始 - 而乔治从欧盟开窗术开始显然仍然非常强大并且占据了份额。 上个季度我们认为可能会在英国退欧之前进行一些库存建设,您觉得本季度的情况仍然存在,也许只是谈论那里的潜在驱动因素? 然后,如果你能在价格和价格之间突破7%的增长外汇?

比尔格里菲斯

So similar to last quarter, about half of the growth is really driven by the price actions we took late last year. And we do continue to take share, particularly at HL. We do not see any change in inventory build as a result of Brexit. I think that's finished, we did not see inventory drawdowns, I mean, hedge the strong growth profile there. So we're very pleased. We expect to see that continue through the balance of the year at this point.

与上个季度类似,大约一半的增长实际上是由我们去年年底采取的价格行动所推动的。 我们确实继续分享,特别是在HL。 我们认为英国退欧的库存构建没有任何变化。 我认为已经完成,我们没有看到库存下降,我的意思是,对冲那里强劲的增长情况。 所以我们非常高兴。 我们预计此时会持续到今年的余额。

丹尼尔摩尔

And then shifting gears, the North American Cabinets, maybe just obviously you gave good color there and the shift towards stock. But that maybe you can give a little more detail on what you're seeing in the market and what if anything longer term, you can do to kind of shift as tastes [ph] and mix shifts there?

然后换挡,北美橱柜,显然你可以在那里提供良好的颜色和向库存的转变。 但是,也许你可以更详细地介绍一下你在市场上看到的东西,以及如果有更长期的东西,你可以做些什么样的转变,因为口味[ph]和混合转变呢?

比尔格里菲斯

Yes. Clearly, if you look at the KCMA data adjusted for our fiscal year, for the first six months of our fiscal year, the semi-custom market is down 5.2% and the stock segment is up 6%, and the full custom is about flat year-over-year. So clearly, the industry is trending in that direction. The forecast for the second half of the year are for similar numbers. And so while we continue to look at how can we do better inside the operations, it's prudent to at least flag we could see mid-single digit decreases in revenues particularly against some stronger comps as we go through the second half of the year. We are clearly looking at longer term strategies as to how to get better positioned in the stock segment, and the challenge of course is the price points in the margin profile is not necessarily as attractive. So we don't have an answer yet, but it's very much front and center of our long-term plan in particularly as we start getting into next year's operating plans.

是。 显然,如果你看一下我们会计年度调整的KCMA数据,在本财政年度的前六个月,半定制市场下降5.2%,股票市场上涨6%,完全定制大致持平 年复一年。 很明显,该行业正朝着这个方向发展。 今年下半年的预测数字相似。 因此,虽然我们继续研究如何在运营中做得更好,但至少可以看到我们可以看到收入中位数会下降,特别是在我们经历下半年时会出现更强劲的收益。 我们显然正在考虑如何在股票市场中更好地定位的长期策略,当然挑战当然是保证金概况中的价格点不一定具有吸引力。 所以我们还没有答案,但它是我们长期计划的前沿和中心,特别是在我们开始进入明年的运营计划时。

丹尼尔摩尔

Very helpful. Appreciate it, Bill. And one more and I'll jump out. Wood prices clearly coming down a little bit, maybe just talk about raw materials trends in general, and how much of an impact they may have had on gross margin in the quarter and the outlook going forward?

很有帮助。 比尔,欣赏它。 还有一个,我会跳出来。 木材价格明显有所下降,或许只是谈论一般的原材料趋势,以及它们可能对本季度的毛利率和前景展望有多大影响?

比尔格里菲斯

I wouldn't say that raw materials in total had a material impact in improving profitability. It didn't hurt us, but it didn't help us significantly either. Most of the improvement is productivity and efficiency gains that are finally flowing through the P&L.

我不会说原材料总体上对提高盈利能力有重大影响。 它没有伤害我们,但它也没有显着帮助我们。 大多数改进都是生产力和效率的提升,最终流经损益表。

丹尼尔摩尔

Helpful, appreciate it. And I'll jump out with any follow-ups. Thanks.

有帮助,欣赏它。 任何后续行动我都会跳出来。 谢谢。

会议主持员

Thank you. Our next question comes from the line of Reuben Garner from Seaport Global Securities. Your question please.

谢谢。 我们的下一个问题来自Seaport Global Securities的Reuben Garner。 请问你的问题。

鲁本加纳

Just a follow-up on the cabinets question. So -- or against your outlook, so you guys, I think, you said in the first half the cabinets data would have been down something like mid-single digits, and you guys clearly outperformed that. Is your expectation that the market may be down mid-single digits in the second half and you can outperform that. And if so, what's driving that outperformance on your end. Is there a difference in exposure between you and the overall industry data or it's something you're doing that's driving that outperformance?

只是对橱柜问题的跟进。 所以 - 或者反对你的观点,所以你们,我想,你们在上半年说过,橱柜数据可能已经下降到中等个位数,你们明显优于那些。 您是否期望下半年市场可能会下降到个位数,您可以超越这个数字。 如果是这样,是什么推动了你的优异表现。 您与整个行业数据之间的风险是否存在差异,或者您正在做的事情是否会推动其表现优异?

比尔格里菲斯

Well, it is a little bit of both actually, where it isn't as clear-cut that we are 100% semi-custom and zero stock. We clearly participate in that stock segment, but on a limited basis. So, I think, our ability to outperform the raw statistics is partly because of that, and partly some of it is driven by pricing actions that we took earlier in the year that are helping sort of improve our revenue profile over the market in general.

嗯,它实际上是一点点,它不是那么明确,我们是100%半定制和零库存。 我们明确参与该股票市场,但数量有限。 因此,我认为,我们表现优于原始统计数据的能力部分是因为这一点,部分原因是我们今年早些时候采取的定价行动有助于改善我们在整个市场上的收入状况。

鲁本加纳

Okay, that's helpful. And then, I guess, outside of the -- I guess, secular pressures, if you will, on the cabinets side, what's your general outlook for the next six to 12 months as you're talking to customers just on R&R and new construction growth going forward?

好的,这很有帮助。 然后,我想,除了 - 在内阁方面,如果你愿意的话,世界的压力,你在未来6到12个月的整体前景是什么,因为你只是在与R&R和新建筑的客户谈话 增长前进?

比尔格里菲斯

We're actually optimistic, and most of our customers, I would say, are perhaps even overly optimistic. Clearly weather impacted the first half of the year. There is a high expectation that both new construction and R&R is going to recover in the second half. Next year is kind of too far out to tell right now, but I think if we see interest rates either fall in or at least remaining static here, I think we're going to see a ground swell back towards the whole residential sector here. So we actually feel very good about where we are and what the outlook is for the second half, and we're optimistic for next year.

我们实际上是乐观的,我会说,我们的大多数客户甚至可能过于乐观。 显然天气影响了今年上半年。 人们高度期望新建筑和R&R将在下半年恢复。 明年有点太过分了,但我认为如果我们看到利率下降或者至少保持不变,我认为我们将会看到这里的整个住宅市场的地面膨胀。 因此,我们实际上对自己的状况以及下半年的前景感到非常满意,而且我们对明年持乐观态度。

鲁本加纳

And then last one for me. So the margin expansion you talked about, some of your internal efforts starting to flow through. How much of the margin expansion in your guidance for the second half is kind of items within your control, whether it's savings from reorganization or things you've been working on the cabinets business? How much is within your control and how much is price cost, volume growth, etcetera?

然后最后一个给我。 所以你谈到的利润扩张,你的一些内部努力开始流行。 您下半年指导中的保证金扩张有多少是您控制范围内的项目,无论是重组带来的节省还是您从事过橱柜业务的事情? 您控制了多少,价格成本,数量增长等等多少?

比尔格里菲斯

It's essentially the outlook for the balance of the year, any margin improvement is completely within our control. The only thing that we are nervous about is, if in fact, the cabinet business in semi-custom continues to deteriorate, and for whatever reason we can't beat the market, those volume declines are severe enough. It's going to be hard to continue to get expansion, probably can tread water, although as I said in the remarks, the third quarter comps are pretty strong compared to last year. So I think it's likely, we could actually see some margin shrinkage in cabinets, but we will recover that in Q4 when the comps are little easier.

这基本上是今年余额的前景,任何保证金的改善完全在我们的控制之内。 我们唯一担心的是,如果事实上,半定制的内阁业务继续恶化,无论出于什么原因我们无法击败市场,那些数量的下降是非常严重的。 虽然正如我在发言中所说的那样,第三季度的比赛与去年相比非常强劲,但是很难继续进行扩张。 所以我认为很可能,我们实际上可以看到机柜中的利润率有所下降,但我们将在第四季度恢复,因为这些比较容易。

鲁本加纳

Perfect. Thank you.

完善。 谢谢。

会议主持员

Thank you. Our next question comes from the line of Steven Ramsey from Thompson Research. Your question please.

谢谢。 我们的下一个问题来自Thompson Research的Steven Ramsey。 请问你的问题。

史蒂文拉姆齐

Good morning. Thinking on cabinets, you know, if we were to kind of think two years out from now, are you still working to get into that position where you can be equally as profitable on stock as semi-custom? And does the looming potential consolidation in the space and even tariffs now in Mexico, does that change where you think you can take the business over a 1-year to 2-year timeframe?

早上好。 对于橱柜的思考,你知道,如果我们从现在开始思考两年后,你是否还在努力进入这个位置,在那里你可以像半定制一样有利可图? 现在墨西哥即将出现的潜在整合,甚至是墨西哥的关税,这会改变您认为可以在1年到2年的时间内完成业务吗?

比尔格里菲斯

No, we are still very confident and very optimistic about the profitability level in that business, particularly if we look out over the next two or three years. But we will adjust the mix shift accordingly, and we are working on plans to do that. And I think the whole tariff issue could end up being a positive for us. I think the worst case scenario we see is, this is a slightly smaller revenue business, but more profitable.

不,我们对该业务的盈利水平仍然非常充满信心和乐观,特别是如果我们在未来两三年内关注它们。 但我们会相应地调整组合调整,我们正在制定计划。 我认为整个关税问题最终可能对我们有利。 我认为最糟糕的情况是,这是一个略小的收入业务,但更有利可图。

史蒂文拉姆齐

Excellent. And can you share more on how tariffs end up being a positive for you?

优秀。 您能否分享更多有关关税如何最终对您有利的信息?

比尔格里菲斯

Yes, I think if the tariffs end up sticking or if there is no immediate end in sight to tariffs, it will drive more business back to the U.S., which is clearly a benefit for us, because I think you understand most of the cabinet manufacturers don't have a lot of excess capacity. And I think we will be a beneficiary, and we have clearly seen increased quotation activity, particularly as it relates to the Chinese tariffs and the anti-dumping case.

是的,我认为如果关税最终会停滞不前,或者如果关税没有立即结束,它将推动更多的业务回到美国,这显然对我们有利,因为我认为你了解大多数的橱柜制造商 没有太多的容量。 我认为我们将成为受益者,我们已经清楚地看到报价活动增加,特别是因为它与中国的关税和反倾销案有关。

史蒂文拉姆齐

And then last for me, stock movement, your stock that is not stock cabinets, but your stock moving up a good bit today clearly on good results. What zone does the stock price get less attractive for a buyback? And if that happens, do you build cash to maintain leverage? Or do you increase the ongoing dividend, even consider a special dividend, kind of, if the stock stays a little more permanently elevated here, how does that change your view on the buyback?

然后对我来说,库存运动,你的股票不是库存柜,但你的股票今天明显上涨了很好的结果。 什么区域的股票价格对回购的吸引力较小? 如果发生这种情况,你会建立现金来维持杠杆吗? 或者你是否会增加持续的股息,甚至考虑一种特殊的股息,如果股票在这里持续升高一点,那么这会如何改变你对回购的看法呢?

比尔格里菲斯

Well, I think very clearly, the number one priority in the second half of the year, when we start generating some pretty serious cash is to continue to delever with a target of getting ultimately down to around 1.5 times. And depending what happens to the stock price here, if it continues to be strong, I think you'll see us buyback limited amounts of stock in preference to paying down debt. Assuming we do close the year as we expect, closer to 1.5 times, certainly below 2 times, and if the stock is performing as we think it should at the levels we expect to close the year at, then I think we'll have a nice problem to worry about next year in terms of what we do with our excess cash. I would say it's unlikely based on what we know today that we will do anything more with the dividend in the short term. But if 2020 looks like it's going to be a strong year relative to 2019, then I -- and with the strong stock price, I would expect this to hoard cash for a period of time. But that will be a very nice problem to worry about.

嗯,我非常清楚地认为,今年下半年我们开始产生一些非常严重的现金的首要任务是继续推迟,目标是最终降至1.5倍左右。根据这里的股价发生了什么,如果它继续保持强势,我认为你会看到我们回购有限数量的股票而不是偿还债务。假设我们按照预期接近年份,接近1.5倍,当然低于2倍,如果股票表现正常,我们认为它应该达到我们预期接近年度的水平,那么我认为我们将有一个关于我们对多余现金的处理方式,明年担心的问题很好。我认为根据我们今天所知的情况,我们不太可能在短期内对股息做更多的事情。但是,如果2020年看起来相对于2019年将是一个强劲的一年,那么我 - 并且凭借强劲的股票价格,我希望这会在一段时间内囤积现金。但是担心这将是一个非常好的问题。

史蒂文拉姆齐

All right, okay. Thanks so much.

好的,好的。 非常感谢。

会议主持员

Thank you. Our next question comes from the line of Julio Romero from Sidoti & Company. Your question please.

谢谢。 我们的下一个问题来自Sidoti&Company的Julio Romero。 请问你的问题。

Julio Romero

Good morning. I wanted to start off with the screens and insulated glass spacer products. Can you just talk about the trends you're seeing there and how that kind of squares away with your expectation for revenue in the North American Fenestration for the year?

早上好。 我想从屏幕和隔热玻璃隔板产品开始。 你能谈谈你在那里看到的趋势,以及你对今年北美开窗活动的收入预期有多大的影响吗?

比尔格里菲斯

Yes, we -- certainly in screens, we continue to take share. I think one of the reasons we're outperforming the Fenestration market is, as we have mentioned before, we are taking on some additional screen business. The spacer business continues to improve, not as rapidly as the other segments. And then the other portion of the outperformance to market in Fenestration is really additional business that's now in production in vinyl extrusions. So hence, our confidence level that we will see a stronger second half of the year, our customers are pretty optimistic that we'll see a bounce back here both in new construction and R&R once the weather clears. So we feel pretty good about where growth goes. It's just not going to be enough to offset potential negative growth in cabinets.

是的,我们 - 当然在屏幕上,我们继续分享。 我认为,正如我们之前提到的,我们正在采取一些额外的屏幕业务,其中一个原因是我们的表现超过了门窗幕墙市场。 间隔业务继续改善,而不是像其他业务一样迅速。 然后,在Fenestration中超越市场的另一部分实际上是另外的业务,现在正在生产乙烯基挤压件。 因此,我们的信心水平将使我们看到今年下半年更加强劲,我们的客户非常乐观地认为,一旦天气晴朗,我们将在新建筑和R&R中看到反弹。 所以我们对增长的进展感觉非常好。 这还不足以抵消橱柜中潜在的负增长。

Julio Romero

Okay, understood. And then just switching gears over to cabinets, I guess, you saw some nice margin expansion despite the flat sales. Maybe talk about some of the underlying efficiencies you're seeing there, I know you've done some layout improvements. Is that -- is the improvement in margins driven by layout improvements or just any further color on what's going on in that segment?

好的,明白了。 我猜,尽管销量持平,但你看到了一些不错的利润扩张。 也许谈谈你在那里看到的一些潜在的效率,我知道你已经做了一些布局改进。 那是 - 由布局改进带来的利润率的改善,还是该细分市场正在发生的任何进一步的颜色?

比尔格里菲斯

Yes, it's a combination. As you well know, we've put a lot of effort in the productivity in general, layouts, automation and just general efficiency gains along with some pricing we put in place in the earlier part of this year. That combination is really driven that margin expansion, and we've -- I think been pretty transparent about the opportunity that still exists in cabinets to improve the profitability. We've been slow getting there, but I think we are finally starting to see it and it's kind of unfortunate that we may have negative growth in the second half of the year. But I think even with that, we'll be able to hold margins flat. I wouldn't expect a complete second half margin shrinkage. We may not be able to expand margins much further though, and that's the second half combined, as I said, Q3 has a pretty tough comp. I doubt we're going to be able to beat that.

是的,这是一个组合。 众所周知,我们在一般的生产力,布局,自动化和一般的效率提升方面投入了大量精力,同时我们在今年早些时候实施了一些定价。 这种组合确实推动了利润率的扩张,而且我们 - 我认为对于机柜中仍然存在的提高盈利能力的机会非常透明。 我们一直很慢,但我认为我们终于开始看到这一点,我们可能会在今年下半年出现负增长,这很不幸。 但我认为即使这样,我们也能保持利润率持平。 我不希望下半年完全收缩。 我们可能无法进一步扩大利润率,而且正如我所说的那样,下半年结合起来,Q3有一个非常艰难的比赛。 我怀疑我们是否能够击败它。

Julio Romero

And maybe just more broadly piggybacking on the question earlier about the potential divestiture activity from the OEMs and the consolidation there. Just how are you guys thinking about the potential changes in the value chain and potential opportunities and threats that can come from that?

而且可能只是更广泛地讨论早期关于原始设备制造商的潜在剥离活动以及那里的合并的问题。 您是如何思考价值链中的潜在变化以及可能产生的潜在机遇和威胁?

比尔格里菲斯

Yes, we -- I don't want to talk too much directly about our customers. Obviously, we are very close to all of them and kind of like we've seen in windows, our expectation is for the most part that as consolidation continues to take place, we will not be harmed by that. And I think you have to look at it in terms of the current capacity at our customer's facilities combined with our ability to produce more product simply because we've continued to drive down our cost structure, improve productivity. So we're actually freeing up capacity as we get more profitable. So we have the ability here to take on incremental business whereas even with the consolidation, most of our customers do not, now there maybe some exceptions to that, we'll see how it plays out, but we're obviously monitoring it very closely. It is not something that keeps us awake at night. So, I think, by the time we all is said and done, there will be as many opportunities as there will be risks, so we're not concerned about it. We still think this is a good space to be in over the next several years.

是的,我们 - 我不想直接谈论我们的客户。显然,我们非常接近所有这些,就像我们在windows中看到的那样,我们的期望在很大程度上是随着整合的继续发生,我们不会受到这种伤害。而且我认为你必须从我们客户设施的现有容量以及我们生产更多产品的能力来看,因为我们不断降低成本结构,提高生产力。因此,随着我们获得更多利润,我们实际上正在释放容量。因此,我们有能力承担增量业务,而即使整合,我们的大多数客户都没有,现在可能有一些例外,我们会看到它是如何发挥作用的,但我们显然非常密切地监控它。它不是让我们夜不能寐的东西。所以,我认为,当我们所有人都这么说时,会有很多机会和风险一样,所以我们并不关心它。我们仍然认为这是未来几年的良好发展空间。

Julio Romero

Okay, very good. And just lastly for me, SG&A outlook, can you just talk about the outlook for the year and what the cadence might be for the next two quarters? Thank you.

好的,非常好。 最后,对我来说,SG&A展望,您能谈谈今年的前景以及未来两个季度的节奏吗? 谢谢。

布伦特Korb

Yes, I mean, I think, when you look at last year's -- last year's SG&A is about $103.5 million, we're kind of in that level, is it $103 million, $105 million range in terms of how that flows over the back half of the year pretty consistent Q3, Q4 levels in the $25 million plus range. So pretty even in these past two quarters.

是的,我的意思是,我认为,当你看去年的去年 - 去年的SG&A大约是1.035亿美元时,我们就处于这个水平,是1.03亿美元,1.05亿美元的范围来自后面的流量 半年的Q3,Q4水平相当稳定,在2500万美元以上的范围内。 即使在过去的两个季度也是如此。

Julio Romero

Okay, that's helpful. Thank you for taking the questions and best of luck in the back half of the year.

好的,这很有帮助。 感谢您在今年下半年提出问题并祝您好运。

比尔格里菲斯

Thank you.

谢谢。

会议主持员

Thank you. Our next question comes from the line of Ken Jenner [ph] from KeyBanc. Your question please.

谢谢。 我们的下一个问题来自KeyBanc的Ken Jenner [ph]。 请问你的问题。

身份不明的分析师

Good morning, gentlemen. So I think the SG&A guidance you just gave was a bit down from what you guys had before, been dollar value. I assume that's associated with your lower revenue, and are there cost actions that you guys are taking?

先生们,早上好。 因此,我认为您刚刚给出的SG&A指引与您之前的指数相比略有下降,一直是美元价值。 我认为这与您较低的收入有关,是否存在您正在采取的成本操作?

布伦特Korb

No, I mean it's slightly down. I think we talked about $105 million before. So it's kind of $103 million to $105 million. We took some actions in the first quarter -- in the first quarter that, obviously, we've seen some benefit from here in Q2, and would expect to continue in the back half of the year.

不,我的意思是它稍微下降了。 我想我们之前谈过的是1.05亿美元。 所以它有1.03亿美元到1.05亿美元。 我们在第一季度采取了一些行动 - 第一季度,显然,我们在第二季度看到了一些好处,并且预计将在今年下半年继续。

身份不明的分析师

Sorry, I said [indiscernible]. Now, EU is very impressive. What's happening there in terms of margins? I believe, and I could be mistaken, but I think you guys beat your margin guidance that you gave back in, you know, on the last quarter. Could you talk about what the factors were there and why you think that business is doing so, given all the noise. I don't know if that's right term, that we're hearing from the UK?

对不起,我说[音频不清晰]。 现在,欧盟令人印象深刻。 在保证金方面发生了什么? 我相信,我可能会弄错,但我认为你们在最后一个季度击败了你所提供的保证金指引。 你能谈谈这些因素是什么以及为什么你认为业务正在这样做,考虑到所有的噪音。 我不知道这是否正确,我们是否听说过英国?

比尔格里菲斯

Yes. So a good part of it is, we put price increases through at the end of last year that kind of caught up with rising input costs, both in the spacer business and in the vinyl profile business. Since then in Europe, in particular, both of those cost increases have abated. And in fact some of the costs are coming back down, but we've maintained price levels, because if you recall, Ken, there are no contractual pass-throughs in Europe. So we've enjoyed some margin expansion as a result of that. I think the reason that this business outperforms the general economy is when a window fails, you have to replace it. And because the infrastructure is so old and the replacement cycle continues there. It's a little bit insulated from the general economy. In addition of which remember almost all of our business in Europe, particularly in the UK is repaired and remodeled. Almost none of it, is tied to new construction. So I think the combination of all of those things, plus there are a couple of competitors that are having some challenging times in the UK in particular, and we are gaining some market share. So in this case, we have all three things working in our favor. That's why the exceptional performance.

是。因此,其中很大一部分是,我们将去年年底的价格上涨赶上了间接器业务和乙烯基材料业务中不断增加的投入成本。从那时起,特别是在欧洲,这两项成本的增加都有所减少。事实上,一些成本已经回落,但我们维持了价格水平,因为如果你还记得Ken,欧洲没有合同转嫁。因此,我们享受了一些利润扩张。我认为这个业务优于整体经济的原因是当一个窗口失败时,你必须更换它。而且由于基础设施太旧而且更换周期仍在继续。它与整体经济有点隔离。除此之外,我们几乎记得我们在欧洲的所有业务,尤其是在英国的业务都经过修缮和改造。几乎没有一个与新建筑相关联。所以我认为所有这些事情的结合,加上有几个竞争对手在英国尤其具有挑战性,我们正在获得一些市场份额。所以在这种情况下,我们有三件事对我们有利。这就是出色表现的原因。

身份不明的分析师

And thank you for that, that's very useful. Sticking with that, I mean, could you give us, I don't know where your share is now, versus let's say, at the time of acquisition. I mean if you think about that way so we can understand how your -- given success is relative to peers?

谢谢你,这非常有用。 坚持这一点,我的意思是,你能否给我们,我不知道你的份额现在在哪里,而不是说,在收购时。 我的意思是,如果你考虑这种方式,那么我们就能理解你的成功与同龄人的关系如何?

比尔格里菲斯

Yes, there are about six, almost all that started out a couple of years ago with very similar market share. So, all in the low to mid-teens, and we've improved by 1% or 2% relative to some others over that period of time.

是的,大约有六个,几乎所有这些都是几年前开始的,市场份额非常相似。 所以,所有人都处于中低阶段,在这段时间内,相对于其他人,我们的成绩提高了1%或2%。

身份不明的分析师

So it sounds like it's really your pricing, and it's okay. In the U.S. obviously cabinets has taken companies that are in the space larger than yourself by surprise on this mix shift. But in terms of the Fenestration, and I believe recent share gains with some old customers on the extrusion side, could you maybe update us there in terms of how oil might be flowing through your input costs and your customers coming back to you and how that's helping your utilization? Thank you very much.

所以听起来这真的是你的定价,而且没关系。 在美国,显然,在这种混合转变中,橱柜已经让那些比你自己更大的公司感到惊讶。 但就开窗术而言,我相信最近在挤出方面与一些老客户的份额增加了,您是否可以根据您的投入成本以及您的客户回馈给您的方式更新我们以及如何 帮助您使用? 非常感谢你。

比尔格里菲斯

Yes, we haven't seen much in the way of raw material price escalation. And if we do see particularly on the resin side, it's a pass-through anyway, so that shouldn't have a material effect on us. I think, we are now in full production with one customer that started ramping up at the beginning of this year. We'll see that continued utilization through the back half. We have another customer is not yet in production. We're still going through pre-production trials. We'll see some improvement in Q3, but full ramp up in Q4 . So that clearly will help us on the Fenestration side as well. The screen, a business we continue to get awarded, but relatively small dollar amounts. So those two combined really put together all the bulk of our share improvement in the Fenestration side. But we feel pretty good about where that's heading for the future.

是的,我们没有看到原材料价格上涨的方式。 如果我们确实特别注意到树脂方面,那么无论如何它都是通过,所以这不会对我们产生实质性影响。 我认为,我们现在已经全面投入生产,其中一位客户在今年年初开始加速发展。 我们将看到通过后半部分继续使用。 我们还有另一位客户尚未投入生产。 我们仍在进行预生产试验。 我们会看到第三季度有所改善,但在第四季度全面上升。 所以这显然也将帮助我们在开窗术方面。 屏幕,我们继续获得的业务,但相对较小的美元金额。 因此,这两个组合确实将我们在Fenestration方面的所有份额改进整合在一起。 但是我们对未来的发展方向感到非常满意。

身份不明的分析师

Thank you very much.

非常感谢你。

会议主持员

Thank you. Our next question comes from the line of Daniel Moore from CJS Securities. Your question please.

谢谢。 我们的下一个问题来自CJS Securities的Daniel Moore。 请问你的问题。

丹尼尔摩尔

Thanks, again. Just housekeeping, obviously confident about cash flow coming in really strong in the back half. Are we still looking at cash flow from ops in the $50 million to $55 million range and CapEx $25 million to $30 million, any changes there?

再次感谢。 只是家务管理,显然对后半段真正强劲的现金流充满信心。 我们是否还在考虑从5亿美元到5500万美元范围内的运营现金流以及2500万到3000万美元的资本支出,那里有任何变化吗?

布伦特Korb

No changes for free cash flow in that level, yes, and CapEx, no changes to any of those forecast at this point, right.

对于那个级别的自由现金流没有变化,是的,和资本支出,此时没有对这些预测做出任何改变,对。

丹尼尔摩尔

Perfect. Okay, thank you.

完善。 好的谢谢你。

会议主持员

Thank you. This does conclude the question-and-answer session of today's program. I would like to hand the program back to Bill Griffiths for any further remarks.

谢谢。 这确实结束了今天计划的问答环节。 我想把这个程序交给Bill Griffiths再发一番。

比尔格里菲斯

Thanks everyone for joining the call, and we look forward to speaking to you next quarter. Thank you, and good bye.

感谢大家加入电话,我们期待下个季度与您交谈。 谢谢,再见。

会议主持员

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

女士们,先生们,感谢您参加今天的会议。 这确实结束了该计划。 您现在可以断开连接。 美好的一天。

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写在最后

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