Allison Transmission Holdings, Inc. (ALSN) 2023 Q3 法說會逐字稿

Good afternoon. Thank you for standing by. Welcome to Allison Transmission's Third Quarter 2023 Earnings Conference Call. My name is Alicia, and I'll be your conference call operator today. (Operator Instructions) As a reminder, this conference call is being recorded. (Operator Instructions)

午安。感謝您耐心等候。歡迎參加 Allison Transmission 2023 年第三季財報電話會議。我是 Alicia，今天將擔任本次電話會議的接線員。（接線員指示）提醒各位，本次電話會議將被錄音。（接線員指示）

I would now like to turn the conference call over to Jackie Bolles, Executive Director of Treasury and Investor Relations. Please go ahead, Jackie.

現在我想將電話會議交給資金管理與投資人關係執行董事 Jackie Bolles。Jackie，請開始。

Thank you, Alicia. Good afternoon, and thank you for joining us for our third quarter 2023 earnings conference call. With me this afternoon are Dave Graziosi, our Chairman and Chief Executive Officer; and Fred Bohley, our Senior Vice President, Chief Financial Officer and Treasurer. As a reminder, this conference call, webcast and this afternoon's presentation are available on the Investor Relations section of allisontransmission.com. A replay of this call will be available through November 8. As noted on Slide 2 of the presentation, many of our remarks today contain forward-looking statements based on current expectations.

謝謝你，Alicia。午安，感謝各位參加我們 2023 年第三季財報電話會議。今天下午與我一同出席的有：董事長兼執行長 Dave Graziosi；以及資深副總裁、財務長兼財務主管（Treasurer）Fred Bohley。提醒各位，本次電話會議、網路直播以及今天下午的簡報可於 allisontransmission.com 的投資人關係專區取得。本次電話會議的重播將提供至 11 月 8 日。如簡報第 2 頁所示，我們今天的多項發言包含以前瞻性陳述為主，係基於目前的預期。

These forward-looking statements are subject to known and unknown risks including those set forth in our third quarter 2023 earnings press release, our annual report on Form 10-K for the year ended December 31, 2022, and other general economic factors. Should 1 or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those that we express today.

這些前瞻性陳述受到已知與未知風險的影響，包括我們 2023 年第三季財報新聞稿、截至 2022 年 12 月 31 日止年度之 Form 10-K 年報，以及其他一般經濟因素中所列之風險。若其中一項或多項風險或不確定性發生，或基本假設或估計被證明不正確，實際結果可能與我們今天所表達者有重大差異。

In addition, as noted on Slide 3 of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an appendix to the presentation and to our third quarter 2023 earnings press release. Today's call is set to end at 5:45 p.m. Eastern Time. In order to maximize participation opportunities on the call, we'll take just one question from each analyst. Please turn to Slide 4 of the presentation for the call agenda.

此外，如簡報第 3 頁所示，我們今天的部分發言包含 SEC 所定義之非 GAAP 財務衡量指標。非 GAAP 財務衡量指標與最具可比性的 GAAP 指標之調節表，已附於簡報附錄以及我們 2023 年第三季財報新聞稿中。今天的電話會議預計於美東時間下午 5:45 結束。為了讓更多人有機會參與提問，我們將僅接受每位分析師一個問題。請翻到簡報第 4 頁查看本次電話會議議程。

During today's call, Dave Graziosi will review highlights from our third quarter 2023 results and provide an update on recent announcements across our product portfolio. Fred Bohley will then review our third quarter financial performance and the full year 2023 guidance. Dave will close with a review of our wide-body mining dump and defense end market growth opportunities prior to commencing the Q&A.

在今天的電話會議中，Dave Graziosi 將回顧我們 2023 年第三季業績重點，並就我們產品組合近期公告提供最新進展。接著 Fred Bohley 將回顧第三季財務表現以及 2023 年全年財測指引。Dave 將在 Q&A 開始前，最後回顧我們在寬體礦用自卸車與國防終端市場的成長機會。

Now I'll turn the call over to Dave Graziosi.

現在我把電話交給 Dave Graziosi。

Thank you, Jackie. Good afternoon, and thank you for joining us. During the third quarter, net sales increased 4% year-over-year to $736 million. Sales gained momentum throughout the quarter after a slow start, driven by supply chain constraints and expanded OEM shutdowns in July, resulting in August and September sales volumes above monthly levels in the first half of the year. Net sales growth was outperformed by growth in net income, up 14% and diluted EPS up 21% to $1.76. Furthermore, our team's efforts towards price realization and cost mitigation drove gross margin expansion of 230 basis points year-over-year.

謝謝你，Jackie。午安，感謝各位加入我們。第三季淨銷售額年增 4% 至 7.36 億美元。由於供應鏈限制以及 7 月 OEM 停工範圍擴大，季度初期表現較慢，但銷售在季度內逐步回升動能，使得 8 月與 9 月的銷售量高於上半年各月水準。淨銷售額成長幅度不及淨利成長，淨利年增 14%，稀釋後 EPS 年增 21% 至 1.76 美元。此外，我們團隊在價格實現與成本緩解方面的努力，推動毛利率年增擴張 230 個基點。

Our capital investments continue to fund the ongoing expansion of our technology capabilities as well as product development focused on value propositions that address the challenges of our evolving end markets. These next-generation initiatives, along with the various financial, operational and strategic milestones that we have achieved over the last several years demonstrate the power of Allison to capitalize on market opportunities with new products to drive innovation and growth and create value for all of our stakeholders. The next-generation initiatives also underscore our dedication to remain a leader in propulsion solutions across all of the end markets we serve and are instrumental to driving future growth. Allison is committed to offering a portfolio of conventional electric hybrid and fully electric propulsion solutions designed to meet the needs of customers.

我們的資本投資持續挹注於技術能力的持續擴充，以及聚焦於價值主張的產品開發，以因應終端市場演變所帶來的挑戰。這些次世代計畫，加上過去數年我們達成的各項財務、營運與策略里程碑，展現 Allison 以新產品掌握市場機會、推動創新與成長並為所有利害關係人創造價值的實力。次世代計畫也凸顯我們致力於在所服務的各終端市場中，持續保持推進解決方案領導地位，並且是驅動未來成長的關鍵。Allison 致力於提供涵蓋傳統、電動混合動力及純電的推進解決方案產品組合，以滿足客戶需求。

Today, I would like to highlight recent announcements across our on-highway product portfolio. Starting with alternative fuel sources for our Conventional products in the quarter, we announced our currently exclusive release with Mack Trucks for their compressed natural gas-powered Granite model truck. To meet the need of refuse collection customers, Allison's proven 4000 Series transmission was seamlessly paired with a CNG engine. This partnership is the latest example of Allison's ability to deliver optimized performance and capability and demanding locations indifferent to the fuel source for the powertrain.

今天，我想重點說明我們公路（on-highway）產品組合近期的幾項公告。首先就本季傳統產品的替代燃料來源而言，我們宣布與 Mack Trucks 目前的獨家合作，為其壓縮天然氣（CNG）動力的 Granite 車型卡車推出配置。為滿足垃圾清運客戶的需求，Allison 經驗證的 4000 系列變速箱可與 CNG 引擎無縫搭配。此合作是 Allison 能夠在嚴苛作業環境中提供最佳化性能與能力的最新例證，且不受動力系統燃料來源影響。

Moving forward with Allison's transit hybrid offering, our eGen Flex system, adding to the many nationwide releases we have highlighted in recent quarters, we are pleased to announce earlier this month that the B Metro, the public transit system in Brownsville, Texas has chosen to equip their buses with the Allison eGen Flex system. Brownsville joins the growing list of transit properties in states such as Indiana, Wisconsin, Nevada and California that will utilize the eGen Flex electric-only capabilities, activated by geofencing technology, to automatically switch to engine off mode in densely populated areas of the city. We are excited for this partnership and remain committed to collaborating with transit agencies nationwide to support them in their emissions reduction goals.

接著談到 Allison 的大眾運輸混合動力產品——eGen Flex 系統。除了我們在近幾季強調的多項全國性發布之外，我們很高興在本月稍早宣布，德州布朗斯維爾（Brownsville）的公共運輸系統 B Metro 已選擇在其巴士上配備 Allison eGen Flex 系統。布朗斯維爾加入了印第安納州、威斯康辛州、內華達州與加州等州日益增加的運輸業者名單，這些業者將運用 eGen Flex 的純電行駛能力，並透過地理圍欄（geofencing）技術啟動，在城市人口稠密區域自動切換至引擎關閉模式。我們對此合作感到振奮，並將持續與全國各地的運輸機構合作，協助其達成減排目標。

Wrapping up with our eGen Power of fully electric e-axles, we were excited to launch the eGen Power 85S, the newest addition to the eGen Power family partnering with Anadolu Isuzu, the 85S was integrated into a fully electric 8-meter minibus and released at Busworld Europe in early October. The eGen Power 85S was specifically developed to address the needs of minibus and small truck applications and joins the larger 100S and 130S in the single motor eGen Power e-axle family. The introduction of the 85S is the latest example of Allison's commitment to expanding our propulsion solution portfolio to meet the demand of the wide range of applications and market segments we serve.

最後談到我們純電 e-axle 的 eGen Power 產品線，我們很高興推出 eGen Power 85S，這是 eGen Power 家族的最新成員。我們與 Anadolu Isuzu 合作，將 85S 整合至一款 8 公尺純電小巴，並於 10 月初在 Busworld Europe 發表。eGen Power 85S 專為滿足小巴與小型卡車應用需求而開發，並與較大型的 100S 與 130S 一同構成單馬達 eGen Power e-axle 家族。85S 的推出是 Allison 致力於擴展推進解決方案產品組合、以滿足我們所服務之廣泛應用與市場區隔需求的最新例證。

In summary, Allison's third quarter results demonstrate strong operating performance with the business well positioned across our fuel source in different product portfolio. Our products have been developed to support our customers' needs as they adopt to different technology sources and driving future growth across our business.

總結而言，Allison 第三季業績展現強勁的營運表現，且我們在不同燃料來源與不同產品組合上均具備良好布局。我們的產品開發旨在支援客戶在採用不同技術來源時的需求，並推動我們整體業務的未來成長。

Thank you, and I'll now turn the call over to Fred.

謝謝各位，現在我把電話交給 Fred。

Thank you, Dave. Following Dave's third quarter 2023 comments, I'll discuss the Q3 2023 performance summary and the Q3 2023 cash flow performance, I'll then reaffirm the full year 2023 guidance. Please turn to Slide 5 of the presentation for the Q3 2023 performance summary. Third quarter net sales increased 4% from the same period in 2022 to $736 million. The increase in year-over-year results was led by a $36 million increase in net sales in the North American On-Highway end market principally driven by strength in customer demand for Class 8 vocational and medium-duty trucks and price increases on certain products. And a $14 million increase in the service parts, support equipment and other end market, principally driven by strength in North American on-highway service parts and support equipment and price increases on certain products.

謝謝你，Dave。延續 Dave 對 2023 年第三季的評論，我將說明 2023 年第三季績效摘要與第三季現金流表現，接著我將重申 2023 年全年財測指引。請翻到簡報第 5 頁查看 2023 年第三季績效摘要。第三季淨銷售額較 2022 年同期增加 4% 至 7.36 億美元。年增主要來自北美公路（On-Highway）終端市場淨銷售額增加 3,600 萬美元，主要受惠於 Class 8 職業用車與中型卡車客戶需求強勁，以及部分產品的漲價；以及服務零件、支援設備及其他終端市場淨銷售額增加 1,400 萬美元，主要受惠於北美公路服務零件與支援設備需求強勁，以及部分產品的漲價。

Year-over-year results were also improved by an $8 million increase in the net sales in the defensive market, principally driven by increased demand for tracked and wheeled vehicle applications. Gross profit for the quarter was $357 million, an increase of $29 million from $328 million for the same period in 2022. The increase was principally driven by price increases on certain products, partially offset by higher manufacturing expense. Net income for the quarter was $158 million compared to $139 million from the same period in 2022. The increase was principally driven by higher gross profit, partially offset by increased selling, general and administrative expense.

年對年結果亦因防務市場淨銷售額增加800萬美元而改善，主要由履帶式與輪式車輛應用需求增加所帶動。本季毛利為3.57億美元，較2022年同期的3.28億美元增加2,900萬美元。增加主要由部分產品提價所驅動，但部分被較高的製造費用所抵銷。本季淨利為1.58億美元，較2022年同期的1.39億美元增加。增加主要由較高毛利所驅動，但部分被銷售、一般及行政費用增加所抵銷。

Adjusted EBITDA for the quarter was $267 million compared to $245 million for the same period in 2022. The increase was principally driven by higher gross profit partially offset by increased selling, general and administrative expenses. Diluted earnings per share increased 21% from the same period in 2022. Third quarter diluted EPS of $1.76 was driven by higher net income and lower total shares outstanding. A detailed overview of our net sales by end market and Q3 2023 financial performance can be found on Slide 6 and 7 of the presentation.

本季調整後EBITDA為2.67億美元，較2022年同期的2.45億美元增加。增加主要由較高毛利所驅動，但部分被銷售、一般及行政費用增加所抵銷。稀釋後每股盈餘較2022年同期增加21%。第三季稀釋後EPS為1.76美元，主要由淨利增加及流通在外總股數減少所帶動。有關我們按終端市場劃分的淨銷售額及2023年第三季財務表現的詳細概覽，請參閱簡報第6與第7頁。

Please turn to Slide 8 of the presentation for the Q3 2023 cash flow performance summary. Adjusted free cash flow for the quarter was $182 million, flat from the same period in 2022 driven by increased net cash provided by operating activities, offset by increased capital expenditures. During the third quarter, we returned capital to shareholders through a quarterly dividend of $0.23 per share. We also repurchased $20 million of our common stock with nearly 4% of our shares outstanding, repurchased in the first 3 quarters of 2023. Since our IPO in 2012, we have repurchased over 60% of our outstanding shares.

請翻到簡報第8頁，查看2023年第三季現金流表現摘要。本季調整後自由現金流為1.82億美元，與2022年同期持平，主要因營運活動提供的淨現金增加，但被資本支出增加所抵銷。第三季期間，我們透過每股0.23美元的季度股利向股東返還資本。我們亦回購2,000萬美元的普通股；2023年前三季累計回購的股份約占我們流通在外股份的近4%。自2012年IPO以來，我們已回購超過60%的流通在外股份。

We ended the quarter with a net leverage ratio of 1.9x, $501 million of cash and $645 million of available revolving credit facility commitments. In addition, we continue to maintain a flexible, long-dated and covenant-light debt structure with the earliest maturities due in 2026. Over $2.5 billion of outstanding debt, $620 million is subject to variable interest rates, of which $500 million is hedged, resulting in 95% of our debt being fixed through the third quarter of 2025.

本季結束時，我們的淨槓桿比率為1.9倍，現金5.01億美元，且可用循環信貸額度承諾為6.45億美元。此外，我們持續維持具彈性、期限較長且限制性條款較少的債務結構，最早到期日為2026年。在超過25億美元的未償債務中，6.20億美元採浮動利率，其中5.00億美元已進行避險，使得截至2025年第三季，我們95%的債務為固定利率。

Please turn to Slide 9 of the presentation to review our 2023 guidance. Given third quarter results and current end market conditions, we are reaffirming our full year 2023 guidance provided to the market on July 27, 2023. Allison expects net sales to be in the range of $2.96 billion to $3.04 billion. At the midpoint, this represents over 8% year-over-year growth based on the continued strength in demand in the majority of our end markets, price increases on certain products and the continued execution of our growth initiatives, leading to another anticipated record net sales year.

請翻到簡報第9頁以檢視我們的2023年指引。鑑於第三季結果及目前終端市場狀況，我們重申於2023年7月27日向市場提供的2023年全年指引。Allison預期淨銷售額將介於29.6億美元至30.4億美元之間。以中位數計算，這代表年對年成長超過8%，主要基於我們多數終端市場需求持續強勁、部分產品提價，以及持續執行成長計畫，預期將再創淨銷售額新高的一年。

In addition to Allison's 2023 net sales guidance, we anticipate net income in the range of $575 million to $625 million, adjusted EBITDA in the range of $1.05 billion to $1.1 billion. Net cash provided by operating activity in the range of $675 million to $725 million and capital expenditures in the range of $125 million to $135 million and adjusted free cash flow in the range of $550 million to $590 million.

除Allison的2023年淨銷售額指引外，我們預期淨利將介於5.75億美元至6.25億美元之間，調整後EBITDA介於10.5億美元至11億美元之間。營運活動提供的淨現金介於6.75億美元至7.25億美元之間，資本支出介於1.25億美元至1.35億美元之間，調整後自由現金流介於5.50億美元至5.90億美元之間。

Thank you, and I'll now turn the call over to Dave for an update on our wide-body mining dump and defense end market opportunities.

謝謝，接下來我將把電話交給Dave，請他更新我們在寬體礦用自卸車及防務終端市場的機會。

Thank you, Fred. During the quarter, we announced that several Chinese mining equipment manufacturers have expanded their exports of wide-body mining dump trucks equipped with Allison transmissions to the Americas, Asia and the Middle East. Increasing export opportunities for wide-body mining dump trucks was one factor that led to our resizing of the opportunity to $100 million of annual incremental revenue during the first quarter. Our long-standing partnerships with major mining OEMs in China continue to lead to further global penetration in this location. Allison is growing our international defense business through partnerships with global defense OEMs such as Hanwha Aerospace, with utilization of Allison products not only in South Korea, but in various tracked and wheeled applications for customers around the world.

謝謝你，Fred。本季期間，我們宣布數家中國礦山設備製造商已擴大其配備Allison變速箱的寬體礦用自卸車出口至美洲、亞洲及中東。寬體礦用自卸車出口機會增加，是促使我們在第一季將機會規模調整為每年新增1億美元增量營收的因素之一。我們與中國主要礦業OEM的長期合作夥伴關係，持續推動在該地點進一步的全球滲透。Allison正透過與全球防務OEM（如Hanwha Aerospace）的合作夥伴關係，擴展我們的國際防務業務；Allison產品不僅在南韓使用，也在全球客戶的各式履帶式與輪式應用中採用。

Last week, we announced that our Allison X1100 cross-drive transmission was selected as the propulsion solution for the Hanwha Redback armored vehicle. The Redback is Hanwha's newest track vehicle chosen to be Australia's inventory fighting vehicle of the future and selected for Australia's Land 400 Phase III program. The Redback strives to duplicate the success of Hanwha's K9 self-propelled howitzer family of vehicles, which has been chosen for numerous European, Asian and North African programs, utilizing the Allison X1100.

上週，我們宣布Allison X1100 交叉驅動變速箱獲選為Hanwha Redback裝甲車的推進解決方案。Redback是Hanwha最新的履帶式車輛，獲選為澳洲未來的步兵戰鬥車，並入選澳洲Land 400第三階段（Phase III）計畫。Redback致力於複製Hanwha K9自走砲車系的成功；該車系已獲多項歐洲、亞洲及北非計畫採用，並使用Allison X1100。

During the quarter, Allison was awarded a $13 million second phase low-rate initial production contract for the U.S. Army's M10 Booker light tank program formally the MPF. We look forward to ramping into higher production volumes with the M10 Booker utilizing Allison's new 3040 MX medium-weight cross-drive transmission. Development of new products such as the 3040 MX will drive international growth in the near future as the demand for medium-weight armored combat vehicles increases with shifts in geopolitical dynamics. Also during the quarter, Allison signed a memorandum of understanding with PGZ, a Polish defense holding group and one of the largest defense companies in Europe. The MOU includes cooperation on tracked vehicle programs as well as partnership to provide service and repair in Poland, adding to Allison's network of authorized dealers and distributors.

本季期間，Allison獲得美國陸軍M10 Booker輕型坦克計畫（前稱MPF）的1,300萬美元第二階段低率初始量產合約。我們期待隨著採用Allison新款3040 MX中量級交叉驅動變速箱的M10 Booker，逐步提升至更高的產量。隨著地緣政治動態轉變而使中量級裝甲戰鬥車需求增加，3040 MX等新產品的開發將在不久的將來推動國際成長。同樣在本季，Allison與PGZ（波蘭國防控股集團、亦為歐洲最大國防公司之一）簽署合作備忘錄（MOU）。該MOU包含在履帶式車輛計畫上的合作，以及在波蘭提供服務與維修的夥伴關係，進一步擴充Allison授權經銷商與代理商網絡。

Poland has contracted to purchase several hundred Abrams tanks as well as hundreds of Hanwha's K9 howitzers, using Allison product. The PGC has also recently been awarded a contract for over 1000 or so inventory fighting vehicles. This partnership will further Allison's relationships with global defense industry participants and advance the realization of our $100 million incremental annual revenue opportunity.

波蘭已簽約採購數百輛Abrams坦克以及數百門Hanwha的K9自走砲，均使用Allison產品。PGC近期亦獲得一份合約，內容為超過約1,000輛步兵戰鬥車。此合作夥伴關係將進一步深化Allison與全球防務產業參與者的關係，並推動我們每年1億美元增量營收機會的實現。

This concludes our prepared remarks. Alicia, please open the call for questions.

以上為我們預先準備的發言。Alicia，請開放提問。

(Operator Instructions) Our first question comes from the line of Larry De Maria with William Blair.

（接線員指示）我們的第一個問題來自William Blair的Larry De Maria。

Question, the -- you had very strong operating performance in the quarter, especially in margins. Sales were a little bit below, but you noted you had a slow start on supply chain. So to clarify that, did you catch up throughout the quarter? Were there some more wood to chop that goes into the fourth quarter? And the second part is, can you describe the UAW situation, both upstream, downstream and how that's implied in the guidance for the rest of the year, whether that becomes an issue or not?

提問，你們——本季營運表現非常強勁，尤其是毛利率。銷售額略低一些，但你們提到供應鏈一開始較慢。為了釐清這點，你們是否在整個季度逐步追上？是否還有一些工作要做、會延續到第四季？第二部分是，你能否說明UAW的情況，包括上游、下游，以及這在今年剩餘期間的指引中如何反映，是否會成為問題？

Larry, it's Dave. I appreciate the questions. On your first question in terms of the activity that we saw in the third quarter. The slow start really referred to component constraints at the OEM level. So as we entered, our expectation was more of a normal run rate, frankly, for July, that proved to be a bit disconnected from what the OEMs were experiencing. I would refer you to the OEMs that have publicly reported already in terms of some of their commentary around the constraints that, unfortunately, they were dealing with, and we reacted accordingly.

Larry，我是Dave。感謝你的提問。關於第一個問題，就我們在第三季看到的活動而言，「一開始較慢」主要是指OEM層級的零組件限制。因此在進入第三季時，我們原本預期7月會是較正常的運行水準，但坦白說，這與OEM當時的實際狀況有些脫節。我會請你參考那些已公開發布的OEM，他們對於不幸面臨的限制所做的一些評論，而我們也據此作出相應調整。

As we noted in the prepared remarks, certainly, August and September run rated at a higher level or more consistent with what we saw in the second quarter. So in terms of carryover into the fourth quarter, obviously, as our midpoint implies which is a lack of change in the midpoint, we see a number of activities happening in the fourth quarter. Some of that will be some level of carryover at least expectation that constraints will be mitigated a bit. So -- and I think, again, referring you back to the public comments of OEMs, I think that's consistent with some of the comments that they've made as well.

正如我們在事先準備的發言中提到的，8 月與 9 月的運行速率確實處於較高水準，或更符合我們在第二季所看到的情況。因此，就延續到第四季而言，顯然，如同我們的中位數所暗示的（也就是中位數沒有變化），我們看到第四季會有多項活動發生。其中一部分將會有一定程度的延續效應，至少我們預期限制因素會稍微緩解一些。所以——我想再次請你參考 OEM 的公開評論，我認為這也與他們所做的一些評論一致。

So in terms of your question on the UAW negotiations. Allison is certainly committed to providing competitive wages and benefits to all our employees, which includes those represented by the United Auto Workers. A team of Allison management and UAW Local 933 leaders have begun discussions at an off-site location. The company is focused on negotiating an agreement that creates flexibility, simplicity and efficiency. This focus allows us to continue to provide the highest quality product to all of our current and future customers in terms of the activities that are going on with the automakers. I would just offer that, and I'm sure you know, at Allison, our UAW represented employees have a labor contract that is unique to our organization and negotiated separately from the contracts of the big 3, so to speak. So as such, the UAW strike affecting the big 3 does not have any direct impact on our local operations.

至於你關於 UAW 談判的問題。Allison 當然致力於為所有員工提供具競爭力的薪資與福利，其中也包括由美國汽車工人聯合會（United Auto Workers）代表的員工。Allison 管理團隊與 UAW 第 933 分會的領導人已在一處場外地點開始討論。公司專注於協商一份能創造彈性、簡化並提升效率的協議。這樣的重點使我們能在與汽車製造商相關的各項活動中，持續為所有現有與未來客戶提供最高品質的產品。我只想補充一點，而且我相信你也知道，在 Allison，我們由 UAW 代表的員工所適用的勞動合約是我們組織特有的，並且是與所謂「三大」的合約分開談判的。因此，影響三大的 UAW 罷工不會對我們當地營運造成任何直接影響。

Our next question comes from the line of Rob Wertheimer with Melius Research, I apologize.

我們的下一個問題來自 Melius Research 的 Rob Wertheimer，我先致歉。

I know it's not your biggest business, but the reasonably sharp decline in off-highway, both domestically and international was a bit of a surprise. Your slides called out, I guess, energy. And I'm just curious what happened there. I don't quite know your mix within those segments, if it's just energy, if there's anything, construction on mining that materially (inaudible). And I don't know if that's a synchronous or coincidental decline because I assume the international is more China gas tracking. Anyway, could you maybe just elucidate what happened there?

我知道這不是你們最大的業務，但非公路（off-highway）無論在國內或國際都出現相當明顯的下滑，這讓我有點意外。你們的投影片提到，我想是能源。我只是好奇那裡發生了什麼事。我不太清楚你們在那些細分市場中的組合，是只有能源，還是建築或礦業中有任何部分對此有實質影響（聽不清）。另外我也不確定這是同步或只是巧合的下滑，因為我猜國際部分更多是中國的天然氣追蹤。總之，你們能否更清楚說明一下那裡發生了什麼？

Rob, it's Dave. So a few things. Just a little context. The off-highway business by definition is probably one of our more volatile end markets and history has certainly proven that. As we entered this year, our expectation was certainly more of a stable setting in terms of players, especially within the North America energy market. I think as you know, there's been a number of transactions that have been announced. That was certainly not part of our plan coming into the year. That has naturally led to a reconsideration of those impacted players. And I would say the broader industry around fleet sizing capital deployment as well as replenishment. So we're seeing some of that, frankly, played way.

Rob，我是 Dave。幾點說明，先提供一些背景。非公路業務按定義來說，可能是我們波動性較高的終端市場之一，歷史也確實證明如此。進入今年時，我們的預期是在參與者方面會更穩定，尤其是在北美能源市場。我想你也知道，已宣布了多起交易。這當然不在我們年初的計畫之內。這自然導致受影響的參與者重新評估。我會說，整個產業在車隊規模、資本投放以及補充（replenishment）方面也都在重新考量。因此我們確實看到其中一些影響，坦白說，正在發酵。

The market, North America, I think, as you well know, is largely an energy market for us. So the other thing that continues is the high level of capital discipline within that particular end market and the increased cost of cap has certainly proven that out as the players continue to focus on cash flow and return on their operations, and frankly, margins. So we would expect that situation to play out near to medium term. Our sense is the fleets are pretty well equipped at this point. They've done a number of refurb projects. Some of that has then led into some new unit sales. But our sense is that there is an adequate amount of equipment when you look at supply-demand balance, and I think service companies will naturally try to maintain that balance.

就市場而言，北美如你所知，對我們來說主要就是能源市場。另一個持續存在的因素，是該終端市場高度的資本紀律，而資本成本上升也確實印證了這一點，因為各家業者持續聚焦於現金流、營運報酬，坦白說還有利潤率。因此我們預期這種情況會在短期到中期持續。我們的感覺是，目前車隊的設備配置相當完善。他們做了不少翻新（refurb）專案，其中一部分也帶動了一些新機銷售。但我們的看法是，從供需平衡來看，設備量是足夠的，而我認為服務公司自然會試圖維持這種平衡。

Outside North America, that portfolio is more evenly split between energy and mining construction hauling, if you will. So that portfolio continues to evolve well in our prepared remarks, referring to the wide-body mining dump I would say, to my comment in terms of one of our more volatile end markets, some of that activity is really tied to tenders that are being executed by the vehicle OEMs. So to the extent that they are occurring on time or the buyers are actually executing the tenders that really drives the -- obviously, the volume through our side. Our experience at least entering the fourth quarter and a portion of the third quarter was some of those tenders getting pushed a bit. So we'll be revisiting all of that, as you would expect, as part of our 2024 guidance in the first quarter, but it's something we're obviously staying close to from a volume and timing and expectation.

在北美以外，該產品組合在能源與礦業／建築運輸（hauling）之間的分布更為平均。因此該組合仍在持續演變；在我們事先準備的發言中提到寬體礦用自卸車（wide-body mining dump），我想呼應我先前關於「這是我們波動性較高的終端市場之一」的評論，其中一些活動其實與車輛 OEM 正在執行的標案（tenders）高度相關。因此，這些標案是否按時發生，或買方是否實際執行標案，會驅動——顯然——我們這邊的出貨量。至少以我們的經驗來看，進入第四季以及第三季的一部分期間，有些標案被稍微往後推了。因此我們會如你所預期的，在第一季提出 2024 年指引時重新檢視這些情況，但這也是我們在量、時程與預期方面持續密切關注的事項。

Perfect. And if I can just ask one that matters more, I guess. Vocational and medium-duty outlook or customer orders or your impression of the current state of the market there. I don't suppose it's experiencing the kind of weakness you might see in the -- on how freight at the haul side, but just to make sure that, that still looks on track. I'll stop.

很好。如果我可以再問一個我想更重要的問題：職業用車（vocational）與中型車（medium-duty）的展望、客戶訂單，或你們對目前市場狀態的看法。我不認為它正在經歷你可能在——在貨運牽引端（haul side）看到的那種疲弱，但只是想確認一下，那邊看起來仍然在軌道上。我就先到這裡。

We wouldn't disagree with your assessment there. I think it's -- we're fortunate with our portfolio, as you all know, being weighted in medium-duty as well as vocational and municipal as well, but those markets continue to hold up well. Again, the public comments by the OEMs, the -- references back to some continued gaps in what fleets are looking for from a replacement perspective. And I think the industry is still trying to catch up a bit. The average age of vehicles continues to increase. So we're following that trend, but we -- as you mentioned, continue to see a pretty firm market for medium duty as well as Class 8 vocational. And I think as, again, public comments by the OEMs are consistent in that view.

我們不會不同意你的評估。我想——我們很幸運，我們的產品組合如各位所知，在中型車以及職業用車與市政（municipal）領域的比重較高，而這些市場仍持續表現良好。同樣地，OEM 的公開評論——也提到車隊在汰換（replacement）角度仍存在一些缺口。我認為整個產業仍在努力追趕一些。車輛平均車齡持續上升。因此我們在追蹤這個趨勢，但我們——如你所提到的——仍看到中型車以及 8 級職業用車（Class 8 vocational）的市場相當穩健。我想 OEM 的公開評論也一致支持這個觀點。

Our next question comes from the line of Tim Thein with Citigroup.

我們的下一個問題來自 Citigroup 的 Tim Thein。

The question, Dave is -- or Fred, just on pricing, I think the expectation for the year was maybe just under 500 basis points of price capture for this year. Is that -- is that still the expectation? And then just to continue on your -- on that last thread in terms of what the OEMs seem to be signaling in terms of relative strength in the on-highway market is most important to you, especially the vocational segment and I think somewhat communicated at least the attempts -- initial attempts for price increases in '24. How do you think, Allison fares in that kind of backdrop should that hold.

問題是，Dave——或 Fred，關於定價。我想今年的預期可能是略低於 500 個基點的價格取得（price capture）。這——仍然是預期嗎？另外延續你——剛才那條脈絡，關於 OEM 似乎在訊號上所指出的公路（on-highway）市場相對強勢，對你們最重要的是職業用車細分市場；而且我想他們也多少傳達了——至少在 2024 年初步嘗試調漲價格。若這種情況持續，你認為 Allison 在這樣的背景下表現會如何？

Tim, this is Fred. From a pricing standpoint, it was another strong quarter from a pricing standpoint. As you know, we passed on pricing throughout 2022. So the comps become difficult as you progress through the year. But over $30 million in price, close to 470 basis points in the quarter, revenue really up about 400 basis points. So you're really looking at price driving the revenue performance. I'd say what's encouraging about that is on fairly constant volume. Our gross margins are up 230 basis points. EBITDA margins up 180 basis points. So we're in a situation where we clearly have price out running cost, and you're seeing those really drop through from a margin standpoint.

Tim，我是 Fred。就定價而言，從定價角度來看這又是一個強勁的季度。如你所知，我們在 2022 年全年都有進行價格轉嫁。因此隨著年度推進，可比基期會變得困難。但本季價格貢獻超過 3,000 萬美元，接近 470 個基點；營收實際上約上升 400 個基點。所以你看到的是，價格在推動營收表現。我會說，令人鼓舞的是，在銷量相對持平的情況下，我們的毛利率上升 230 個基點，EBITDA 利潤率上升 180 個基點。因此我們目前很清楚處於「價格增幅跑贏成本」的狀態，而你也看到這些從利潤率角度確實反映出來。

For the full year, we're still tracking to that total 500 basis points, roughly $150 million in price realization on a year-over-year basis. And relative to 2024, as we've talked about on numerous calls, as the vehicles continue to increase in price, our value prop is that we make those vehicles run more efficiently, less repair time, more vehicle uptime, Ultimately, you can get from point A to point B quicker, you can size fewer vehicles than your fleet. So as the vehicles continue to advance, whether it's inflation cost pressures driving that or outside North America, moving up the emissions curve and adding safety features, it just significantly increases our value proposition, and we've been in a position to both take advantage of that from a price and a share standpoint.

就全年而言，我們仍在追蹤合計500個基點，約1.5億美元的年度（年對年）價格實現。而相較於2024年，正如我們在多次電話會議中談到的，隨著車輛價格持續上升，我們的價值主張在於讓這些車輛運行得更有效率、維修時間更短、車輛可用時間更長。最終，你可以更快地從A點到B點，你的車隊所需車輛數也可以更少。因此，隨著車輛持續進步，無論是通膨成本壓力所驅動，或是在北美以外地區沿著排放曲線提升並增加安全功能，都會顯著提高我們的價值主張；而我們也一直處於能夠在價格與市占兩方面加以把握的有利位置。

So we're certainly going to continue to monitor what the OEM price actions will look like going into 2024, but we do anticipate another, I think, historically pre-pandemic, 50 to 100 basis points of price. We do anticipate in 2024 pricing significantly above those historical pre-pandemic levels.

因此，我們當然會持續監測OEM在進入2024年時的價格行動會是什麼樣子，但我們預期還會有另一波，我認為在疫情前的歷史水準，大約50到100個基點的漲價。我們也預期2024年的定價將顯著高於那些疫情前的歷史水準。

Our next question comes from the line of Ian Zaffino with Oppenheimer.

我們的下一個問題來自Oppenheimer的Ian Zaffino。

This is Isaac Sellhausen on for Ian. Just a follow-up on off-highway. Does the reaffirm guidance assume we see off-highway recover in the fourth quarter? Or will on-highway perhaps make up for some lower performance there given the dynamics you discussed in off-highway.

我是代替Ian的Isaac Sellhausen。針對非公路（off-highway）再追問一下：重申的指引是否假設我們會在第四季看到非公路市場復甦？或者，鑑於你們在非公路所提到的動態，公路（on-highway）可能會彌補那邊較低的表現？

Yes. I think as Dave commented on off-highway, our expectation with outside North America is there's been an element of timing. And we do have an elevated expectation for Q4 and outside North America off-highway versus what we saw in Q3. Relative to North America, that's something we're going to continue to closely monitor. North America on-highway, I mean, Dave hit on it, I mean there's a significant amount of demand for medium duty and Class 8 straight and we feel very solid about where that order book is going into the fourth quarter.

是的。我想如Dave對非公路所評論的，我們對北美以外地區的預期，存在一些時點因素。我們確實對第四季以及北美以外的非公路表現有較高的期待，相較於我們在第三季看到的。至於北美，我們會持續密切監測。北美的公路市場方面，Dave也提到了，中型車與8級（Class 8）直式車（straight）需求相當強勁，我們對進入第四季的訂單簿狀況感到非常踏實。

Our next question comes from the line of Tami Zakaria with JPMorgan.

我們的下一個問題來自JPMorgan的Tami Zakaria。

So my question is on the impressive gross margin expansion to 30 basis points. I think this is the highest you've seen this year. How should we think about it for the fourth quarter? And also, how should we think about gross margin in general as you start lapping these expansions next year?

我的問題是關於毛利率擴張到30個基點的亮眼表現。我想這是你們今年以來看到的最高水準。第四季我們應該如何看待？另外，當你們明年開始進入這些擴張的比較基期（lapping）時，整體毛利率又該如何看待？

Tami, this is Fred. Obviously, I think if us providing full year guide, you can back into the midpoint guide for fourth quarter. We -- historically, fourth quarter has been our lowest margin quarter. Obviously, a lot of that is dependent on top line revenue. But North America, you've got the holidays in November and December, which traditionally, you have a little bit more fixed cost. It puts a little pressure on our margins in the quarter. As things play forward, there's a lot of moving pieces.

Tami，我是Fred。很明顯地，我想我們既然提供了全年指引，你可以回推第四季指引的中位數。我們——從歷史來看，第四季一直是我們毛利率最低的季度。當然，其中很大一部分取決於營收（top line）。但在北美，11月與12月有假期，傳統上固定成本會稍微高一些，這會在該季度對我們的毛利率造成一些壓力。隨著情勢推進，變動因素很多。

We've seen commodity prices come off. That's been advantageous to us. But we continue to see labor pressure through our supply chain that's driving increases to our value add. As we talked about, still the challenges in the supply chain and some inefficiencies that are out there for us to get after expedited freight, some manufacturing efficiencies within our facilities, carrying a little bit more inventory than you'd like. And then obviously, I commented earlier on where we are from a price expectation. So we continue to form our view on 2024 and all those puts and takes will be taken into consideration when we provide that initial guide in February.

我們看到大宗商品價格回落，這對我們有利。但我們仍持續看到供應鏈中的勞動力壓力，推動我們的增值成本上升。正如我們所談到的，供應鏈仍有挑戰，以及一些效率不彰之處，例如我們需要處理加急運輸（expedited freight）、我們廠內的一些製造效率、以及持有的庫存略高於理想水準。然後，當然我先前也評論了我們對價格的預期。因此，我們會持續形成對2024年的看法，所有這些利弊因素都會在我們2月提供初步指引時納入考量。

Our next question comes from the line of Jerry Revich with Goldman Sachs.

我們的下一個問題來自Goldman Sachs的Jerry Revich。

Fred, I'm wondering if you could just talk about capital deployment from here. Obviously, you've a strong track record of returning cash to shareholders. You ended the quarter, I think with your highest quarterly balance as a public company. So I'm just wondering how you folks are thinking about capital deployment from here and why we've been seeing more significant stock buyback in the quarter given the cash generation?

Fred，我想請你談談接下來的資本部署。顯然，你們在向股東返還現金方面有很強的紀錄。本季結束時，你們的季度現金餘額我想是作為上市公司以來最高。想請教你們接下來如何思考資本部署，以及在現金創造能力之下，為什麼我們在本季看到較為顯著的股票回購？

Sure, Jerry. I mean, our capital allocation priorities have been consistent. I mean we're going to fund the business for organic revenue, earnings growth, focus on new product technology development. And you really see that in the capital expenditures that we've had, the engineering and R&D, the fact that we kept our foot down on those investments throughout the pandemic, what's out there from strategic acquisitions, but we've returned a significant amount of capital to shareholders. I mean, we've repurchased over 60% of our shares, we've raised the dividend over the last 5 years on a dividend payout per share by over 50%.

當然，Jerry。我們的資本配置優先順序一直很一致。我們會為業務提供資金，以支持內生成長（organic）的營收與獲利成長，並聚焦於新產品技術開發。你也確實能從我們的資本支出、工程與研發投入中看到這一點；我們在疫情期間也持續加大這些投資。同時也會評估策略性併購的機會，但我們已向股東返還了相當可觀的資本。我們已回購超過60%的股份，過去5年每股股利的配發金額也提高了超過50%。

Obviously, a big driver for us is to always have to be managed in the balance sheet and have low-cost flexible prepayable debt structure, long-dated maturities. So as we sit here, the priorities, they haven't changed. We're -- at this point, obviously, as you mentioned, carrying a little higher cash balance than we have historically. We're also earning quite a bit higher interest rate than we have historically. But we'll continue to ultimately return the cash to our shareholders in the most opportunistic way.

顯然，對我們而言，一個重要驅動因素是始終要把資產負債表管理好，並維持低成本、具彈性且可提前償還的債務結構，以及較長的到期年限。因此在目前這個時間點，我們的優先順序沒有改變。我們——如你所提到的，現在持有的現金餘額確實比過去歷史水準略高。同時，我們目前賺取的利率也比過去歷史水準高得多。但我們最終仍會以最具機會性的方式，持續把現金返還給股東。

There are no further questions at this time. I would like to turn the floor back over to David Graziosi for closing comments.

目前沒有其他問題。我想把時間交還給David Graziosi作結語。

Thank you, Alicia. Thank you for your continued interest in Allison and for participating on today's call. Enjoy your evening.

謝謝你，Alicia。感謝各位持續關注Allison並參與今天的電話會議。祝各位晚安。

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

今天的電話會議到此結束。您現在可以掛斷電話線。感謝您的參與。