Bel Fuse Inc (BELFA) 2024 Q3 法說會逐字稿

Good morning, and welcome to Bel Fuse third quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.

早安，歡迎參加 Bel Fuse 2024 年第三季財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。

I would now like to turn the call over to Jean Marie Young with Third Part Advisors. Please go ahead, Ms. Jean.

現在我想將電話轉給第三方顧問公司的 Jean Marie Young。請繼續，Jean 女士。

Thank you and good morning, everyone. Before we begin, I'd like to remind everyone that during today's conference call, we will make statements relating to our business that will be considered forward-looking statements under federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2024. These statements are based on the company's current expectations and reflect the company use only as of today and should not be considered representative of the company's views as of any subsequent date. The company disclaims any obligation to update any forward-looking statements or outlook. Actual results for future periods may differ materially from those projected by these forward-looking statements due to a number of risks, uncertainties and other factors. These material risks are summarized in the press release that we issued after market closed yesterday. Additional information about the material risks and other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our filings with the Securities and Exchange Commission.

謝謝大家，早安。在我們開始之前，我想提醒大家，在今天的電話會議中，我們將發表與我們的業務有關的聲明，這些聲明將根據聯邦證券法被視為前瞻性聲明，例如有關公司未來期間預期運營和財務業績的聲明，包括對 2024 年未來期間的指引。這些聲明是基於公司目前的預期，僅反映公司截至今天的情況，不應被視為代表公司在任何後續日期的觀點。本公司不承擔更新任何前瞻性陳述或展望的義務。由於多種風險、不確定性和其他因素，未來期間的實際結果可能與這些前瞻性陳述所預測的結果有重大差異。這些重大風險在我們昨天收盤後發布的新聞稿中進行了總結。我們向美國證券交易委員會提交的文件中討論了有關可能影響我們的財務表現並導致實際結果與我們的預期存在重大差異的重大風險和其他重要因素的更多資​​訊。

Including our most recent annual report on form 10-K for the fiscal year ended December 31st 2023 and our quarterly reports and other documents that we have filed or may file with the SEC from time to time. We may also discuss non-GAAP results during this call and reconciliations of our GAAP results to non-GAAP results have been included in our press.

包括我們最新的截至 2023 年 12 月 31 日財政年度的 10-K 表格年度報告以及我們已向或可能不時向美國證券交易委員會提交的季度報告和其他文件。我們也可能在本次電話會議中討論非 GAAP 結果，而我們的 GAAP 結果與非 GAAP 結果的對帳表已包含在我們的新聞發布中。

Our press release and our SEC filings are all available at the IR section of the website. Joining me today on the call is Dan Bernstein, President and CEO; Farouq Tuweiq, CFO and Lynn Hutkin, Vice President of Financial Reporting and Investor Relations. With that, I'd like to turn the call over to Dan. Dan?

我們的新聞稿和美國證券交易委員會 (SEC) 文件均可在網站的 IR 部分查閱。今天與我一起參加電話會議的還有總裁兼執行長 Dan Bernstein； Farouq Tuweiq，財務長和Lynn Hutkin，財務報告和投資者關係副總裁。說完這些，我想把電話轉給丹。擔？

Yes. Thank you, Jean and we appreciate everyone joining our call this morning.

是的。謝謝你，Jean，我們感謝大家今天早上參加我們的電話會議。

We are pleased that our third quarter sales and growth margins each landed above the midpoint of our guidance. As anticipated our connectivity segment at strong quarter driven by robust sales into Aerospace, Defence and Space applications. And our magnetic segment experienced incremental growth on a potential basis from Q2 2024, which is good to see. The Power segment sales were within our expectations for the quarter, given the previously discussed seasonality in Europe and during August. And the impact from trade restrictions on one of our former suppliers in China.

我們很高興看到第三季的銷售額和成長利潤率都超過了我們預期的中點。正如預期的那樣，我們的連接部門在本季度表現強勁，這得益於航空航天、國防和太空應用領域的強勁銷售。從 2024 年第二季度起，我們的磁性部分在潛在基礎上經歷了增量增長，這是令人欣喜的。考慮到先前討論過的歐洲和八月的季節性，本季電力部門的銷售額符合我們的預期。以及貿易限制對我們在中國以前的一家供應商的影響。

The only new factor which can impact the revenue of a connectivity segment was a strike at one of our aerospace customers, which slowed the value of shipments late in the third quarter.

唯一可能影響連接部門收入的新因素是我們的一家航空航太客戶的罷工，這導致第三季末的出貨價值下降。

During the third quarter, we have made two key additions to the corporate team as we continue to add high impact individuals. In the new creative role, Uma Pingali has joined as Global Head of Sales and Marketing, and Anubhav Gothi has joined as Global Head of Corporate Contracts.

在第三季度，我們繼續吸收具有影響力的人才，並對公司團隊進行了兩個關鍵補充。在新的創意職位中，Uma Pingali 已加入擔任全球銷售和行銷主管，而 Anubhav Gothi 已加入擔任全球企業合約主管。

Uma was most recently the President of Global Sales at Farnell, a premier distributor in the electronic industry. To add his long-term tenure career, Uma has proven a track record of growing sales through a variety of efforts, including the turnaround of unperforming regions, entering new geographic markets, pursuing a tailored approach to product technology, and identifying and executing cross-selling opportunities. Uma will be responsible for creating executing strategies that drive growth beyond the current trends, identifying areas for improvement, challenging existing processes and implementing innovative solutions to optimize sales performance.

Uma 最近擔任電子行業頂級分銷商 Farnell 的全球銷售總裁。在其長期任職的職業生涯中，Uma 已證明自己能夠透過各種努力來提高銷售額，包括扭轉業績不佳的地區、進入新的地理市場、採取客製化的產品技術方法，以及識別和執行交叉銷售機會。Uma 將負責制定執行策略，推動超越當前趨勢的成長，找出需要改進的領域，挑戰現有流程，並實施創新解決方案以優化銷售業績。

Anubhav is a seasoned proven supply chain and procurement leader with a heavy history of securing efficiencies and short-saving outcomes for multibillion dollar companies including CommScope, Motorola Mobility and Google. He's been tasked with developing and implementing a procurement strategy, culminating robust vendor relations, negotiating context and championing cost effective, sustainable procurement practice on a global basis.

Anubhav 是一位經驗豐富的供應鏈和採購領導者，曾為康普、摩托羅拉移動和谷歌等價值數十億美元的公司確保效率和節省短期成本。他的任務是製定和實施採購策略、建立穩固的供應商關係、協商談判環境以及在全球範圍內倡導具有成本效益的永續採購實踐。

We are very much looking forward to the contribution that each Uma and Anubhav will bring to develop future position of the company for long-term success. Now I'd like to turn over to Lynn.

我們非常期待 Uma 和 Anubhav 各位員工為公司未來發展和長期成功所做的貢獻。現在我想把麥克風交給 Lynn。

Thank you, Dan. From a financial perspective, in summary, we saw continued margin expansion on a lower sales base when looking at Q3 2024 versus Q3 2023.

謝謝你，丹。總而言之，從財務角度來看，與 2023 年第三季相比，我們看到 2024 年第三季在較低的銷售基數上利潤率持續擴大。

Third quarter, 2024 sales came in at $123.6 million representing a 22.1% decline from the third quarter of 2023. The sales fluctuation was driven by our Power and Magnetic segments. As we will discuss further, partially offset by growth in connectivity sales versus Q3 last year.

2024 年第三季的銷售額為 1.236 億美元，比 2023 年第三季下降 22.1%。銷售額的波動是由我們的電力和磁性部門推動的。正如我們將進一步討論的那樣，與去年第三季相比，連接銷售額的成長部分抵消了這一影響。

Our gross margin increased to 36.1% in Q3 2024 from 35% in Q3 2023. And these profitability improvements were largely driven by our Magnetics and connectivity segments.

我們的毛利率從 2023 年第三季的 35% 上升至 2024 年第三季的 36.1%。這些獲利能力的提升主要得益於我們的磁性材料和連接部門。

Turning to some details at the product group level, Power Solutions and Protection sales for the quarter were $48.7 million, representing a 35% decline from Q3 last year. The decline in sales was mainly due to lower sales of our power products used in networking and consumer applications.

談到產品組層面的一些細節，本季電源解決方案和保護銷售額為 4,870 萬美元，比去年第三季下降 35%。銷售額下降主要是由於用於網路和消費應用的電源產品銷售下降。

On a positive note, we saw continued strength in sales of our rail products which grew over 40% from Q3 2023, accounting for a $2.6 million increase in sales from Q3 2023. The segment posted a gross margin of 39.4% in the third quarter of 2024 as compared to 41.7% in the third quarter of 2023.

積極的一面是，我們看到鐵路產品銷售持續強勁，較 2023 年第三季成長 40% 以上，銷售額較 2023 年第三季增加 260 萬美元。該部門 2024 年第三季的毛利率為 39.4%，而 2023 年第三季的毛利率為 41.7%。

Turning to our Connectivity Solutions group sales for Q3 2024 came in at $55.7 million, up 7.6% from Q3 2023. The main growth driver within connectivity was within the distribution channel, where sales were up $1.2 million as compared to Q3 2023. Sales into commercial air applications totalled $12.5 million for Q3 2024, an increase of $1.2 million or 10.3% from Q3 2023.

談到我們的連結解決方案集團，2024 年第三季的銷售額為 5,570 萬美元，比 2023 年第三季成長 7.6%。連接性的主要成長動力來自分銷管道，與 2023 年第三季相比，其銷售額增長了 120 萬美元。2024 年第三季商業空氣應用的銷售總額為 1,250 萬美元，比 2023 年第三季增加 120 萬美元或 10.3%。

Military sales amounted to $11.6 million for the quarter, a level consistent with Q3 2023. The gross margin for this group was 36.6% for the third quarter of 2024, which represents continued improvement from the 35.8% gross margin in the third quarter of 2023.

本季軍事銷售額為 1,160 萬美元，與 2023 年第三季水準一致。該集團 2024 年第三季的毛利率為 36.6%，較 2023 年第三季的 35.8% 毛利率持續改善。

This margin expansion was made possible due to the operational efficiencies achieved through facility consolidations that were completed in 2023, along with implementation of contract renewals on more balanced terms and a favourable impact of FX-related to the peso versus Q3 2023. These favourable margin factors were partially offset by minimum wage increases in Mexico that went into effect in Q1 2024.

利潤率的擴大得益於 2023 年完成的設施整合所帶來的營運效率提高，以及以更平衡的條款實施的合約續約，以及與 2023 年第三季相比比索相關的外匯產生的有利影響。這些有利的利潤因素被 2024 年第一季生效的墨西哥最低工資上調所部分抵銷。

Lastly, our Magnetic Solutions Group posted sales of $19.2 million in Q3 2024, representing a 40% decrease from Q3 2023. This reduced sales level was generally in line with expectations discussed on last quarter's earnings call and largely related to lower shipments into a large networking customer as they continue to work through inventory on hand. The gross margin for this group was 27.3% in the third quarter of 2024. As compared to 22% in the third quarter of 2023.

最後，我們的磁性解決方案集團在 2024 年第三季的銷售額為 1,920 萬美元，比 2023 年第三季下降 40%。銷售水準的下降與上個季度的收益電話會議上討論的預期基本一致，很大程度上與一家大型網路客戶的出貨量下降有關，因為他們繼續處理手頭上的庫存。2024 年第三季該集團的毛利率為 27.3%。相比之下，2023 年第三季這一比例為 22%。

This improvement in margin was primarily driven by lower fixed overhead costs resulting from the facility consolidations in China completed in late 2023, partially offset by unfavourable FX related to the Chinese Renminbi versus Q3 2023. R&D expenses were $5.4 million in Q3 2024. A level consistent with Q3 2023. We expect future quarters to be generally in line with Q3 2024 expense.

利潤率的提高主要得益於 2023 年底完成的中國設施整合導致的固定間接成本降低，但與 2023 年第三季相比，人民幣匯率出現不利變化，部分抵銷了這一影響。2024 年第三季的研發費用為 540 萬美元。與 2023 年第三季一致的水平。我們預計未來幾季的支出將與 2024 年第三季的支出大致一致。

Our selling general and administrative expenses were $26.7 million as compared to $23.8 million in Q3 2023. Excluding the $4.2 million of legal and other costs related to the Enercon acquisition. Our SG&A expenses were lower by $1.3 million as compared to Q3 2023, primarily due to lower variable expenses such as commissions and incentive compensation.

我們的銷售一般和行政費用為 2,670 萬美元，而 2023 年第三季為 2,380 萬美元。不包括與 Enercon 收購相關的 420 萬美元法律費用和其他費用。與 2023 年第三季相比，我們的銷售、一般及行政費用減少了 130 萬美元，主要是由於佣金和激勵薪酬等變動費用減少。

Our effective tax rate for the third quarter of 2024 was 27.8%, up significantly from the 18.2% of Q3 2023. There was a one-time item contained in the third quarter tax provision in the amount of $1.3 million. Excluding this item, the company's effective tax rate would have been 15.7% in the third quarter of 2024.

我們 2024 年第三季的有效稅率為 27.8%，較 2023 年第三季的 18.2% 大幅上升。第三季稅收準備金包含一項一次性項目，金額為 130 萬美元。不包括此項，該公司 2024 年第三季的有效稅率將為 15.7%。

Turning to balance sheet and cash flow items. We ended the quarter with $163.8 million in cash and securities. An increase of $36.9 million from year end. We generated $65.7 million in cash flows from operating activities during the first nine months of 2024 and had capital expenditures of $7.9 million.

轉向資產負債表和現金流量項目。本季結束時，我們的現金和證券為 1.638 億美元。較年底增加3,690萬美元。2024 年前 9 個月，我們從經營活動產生了 6,570 萬美元的現金流，資本支出為 790 萬美元。

From an inventory perspective, the downward trend that we experienced over the past several quarters has continued into Q3, reflecting a $12.3 million reduction from year end. The lower inventory levels were primarily seen in the areas of raw materials and finished goods, as we continue to work through our own inventory on hand, I'll now turn the call over to Farouq for additional commentary.

從庫存角度來看，過去幾季我們經歷的下降趨勢一直延續到第三季度，較年底減少了 1,230 萬美元。庫存水準較低主要體現在原材料和成品領域，隨著我們繼續處理自己的庫存，我現在將電話轉給 Farouq 以進行進一步評論。

Thank you, Lynn. As we are rounding the corner here on inventory in the channel and starting to see some green shoots of recovery, the team has been laser focused on executing on operational improvements as we have been doing for the last few years. During the third quarter, we initiated a consolidation of our fuse manufacturing operation.

謝謝你，林恩。隨著我們在通路庫存方面取得進展並開始看到一些復甦的跡象，團隊一直專注於執行營運改進，就像我們過去幾年一直在做的那樣。在第三季度，我們開始整合我們的保險絲製造業務。

Currently, our fuses are manufactured at a separate site in China and will be transitioned to other existing sites as a means of further reducing our operational footprint and adding efficiencies to our overhead costs. The fuse initiative is expected to result in a restructuring cost of approximately $4.2 million of which $200,000 was incurred in the third quarter. $2.1 million is expected to be recorded in the fourth quarter of 2024. With the balance of $1.9 million expected to be incurred in 2025.

目前，我們的保險絲在中國的一個獨立工廠生產，並將轉移到其他現有工廠，以進一步減少我們的營運足跡並提高我們的管理成本效率。預計此次保險絲計劃將產生約 420 萬美元的重組成本，其中第三季發生的重組成本為 20 萬美元。預計 2024 年第四季將錄得 210 萬美元。預計 2025 年將產生 190 萬美元的餘額。

This project is scheduled for completion by the end of Q1 2025 and is expected to result in annualized cost savings of $1.5 million once complete. The previously announced restructuring project at our Glen Rock, Pennsylvania facility is progressing as planned with scheduled completion by the end of 2024. With cumulative expected annualized cost savings of $2.5 million. We've been benefiting from approximately $1.5 million of the Glen Rock cost savings throughout 2024 and expect $1 million to be incremental in 2025.

該項目計劃於 2025 年第一季末完成，預計完成後每年可節省 150 萬美元的成本。我們先前宣布的位於賓州格倫羅克工廠的重組項目正在按計劃進行，預計於 2024 年底完成。預計年度累計成本節省 250 萬美元。2024 年全年，我們從 Glen Rock 的成本節省中獲益約 150 萬美元，預計 2025 年將增加 100 萬美元。

Turning to M&A and as announced in mid-September, Bell has agreed to acquire 80% of Enercon Technologies with a path to acquire the remaining 20% by early 2027. With 100% of their sales within aerospace and defence in markets. The addition of Enercon accelerates our strategy of moving further to critical applications with nice sole source positions. This creates more cohesion across our product segments and introduces exciting cross-selling opportunities.

談到併購，正如 9 月中旬宣布的那樣，貝爾已同意收購 Enercon Technologies 80% 的股份，並預計在 2027 年初收購剩餘的 20% 股份。其 100% 的銷售額都集中在航空航太和國防市場。Enercon 的加入加速了我們利用良好的唯一來源地位進一步向關鍵應用邁進的策略。這使得我們的產品部門之間更加緊密地聯繫在一起，並帶來了令人興奮的交叉銷售機會。

We've been working very closely with the Enercon management team since signing and are very much looking forward to collaborating with them to define our new go-to market strategies for our combined businesses supporting the aerospace and defence end markets across the regions in which we collectively serve. The transaction is expected to close during the fourth quarter of this year and we look forward to sharing additional details as we work through our post close integration process.

自簽約以來，我們一直與 Enercon 管理團隊密切合作，並非常期待與他們合作，為我們共同服務地區的航空航太和國防終端市場制定新的合併業務市場策略。該交易預計將於今年第四季完成，我們期待在後續整合過程中分享更多細節。

Looking ahead to the fourth quarter, we're anticipating base Bel to be largely in line with Q3 2024 levels as there are some offsetting factors at play. The range noted in our earnings release of $117 million to $125 million is inclusive of some rebound in rail sales and slight recovery, networking and distribution across the business.

展望第四季度，我們預計基準 Bel 將與 2024 年第三季的水平基本一致，因為存在一些抵消因素。我們在收益報告中指出的 1.17 億至 1.25 億美元範圍包括鐵路銷售的反彈以及整個業務的輕微復甦、網絡和分銷。

This is offset by our normal seasonal slowdown in Q4 each year given the Golden Week holiday in China in October and other holiday closures in the U.S. and Europe later in the quarter.

由於十月份中國有黃金周假期，且本季晚些時候美國和歐洲有其他假期，因此每年第四季的正常季節性放緩將抵消這一影響。

We are pleased that we did start to see an uptick in bookings during the third quarter. To provide some context around what we saw. Within our power segment, Q3 2024 bookings were double what they were in Q2 2024 representing their highest level since Q3 2023. Within our magnetic segment, Q3 2024 was their highest bookings quarter since Q4 of 2022.

我們很高興看到第三季預訂量開始上升。提供一些我們所見的背景資訊。在我們的電力領域，2024 年第三季的預訂量是 2024 年第二季的兩倍，達到自 2023 年第三季以來的最高水準。在我們的磁性細分市場中，2024 年第三季是自 2022 年第四季以來預訂量最高的季度。

Given our standard lead times, this increase in bookings will largely translate into higher sales going into 2025. Looking at 2025, we've kicked off our planning for the coming year and are looking forward to it. We're early in this process against the backdrop of few moving pieces. The overall message for next year is the expectation of year-over-year growth across all segments.

考慮到我們的標準交貨時間，預訂量的增加將在很大程度上轉化為 2025 年更高的銷售額。放眼2025年，我們已經開始了對來年的規劃，並對此充滿期待。我們正處於這一進程的早期階段，背景因素很少。明年的總體訊息是預計所有領域都將實現同比增長。

Our power segment is forecasting growth to be driven by a networking, e-mobility and distribution and growth within AI specific applications. Our connectivity segment is projecting growth to largely be driven by the same factors as 2024 including defence application and a growing space end market along with distribution and networking.

我們的電力部門預測成長將受到網路、電子移動和分銷以及人工智慧特定應用的成長所推動。我們的連接部門預計成長將主要受到與 2024 年相同的因素推動，包括國防應用和不斷增長的太空終端市場以及分銷和網路。

We think Magnetics will have the largest percentage growth based on current forecast demand from our network and distribution customers. There are a number of factors and variables within each segment that can change these projections. But this is what we see today. It is this new view of 2025 upon which will be assessing our SG&A spend and making needed adjustments to align our fixed costs with these anticipated sales levels.

根據我們網路和分銷客戶的當前預測需求，我們認為 Magnetics 將實現最大的百分比成長。每個部分內都存在許多因素和變量，可以改變這些預測。但這就是我們今天所看到的。我們將根據對 2025 年的新看法來評估我們的銷售、一般和行政費用 (SG&A) 支出，並做出必要的調整，以使我們的固定成本與預期的銷售水準保持一致。

As a reminder, this commentary is only related to Bell's based business and does not include incremental sales related to the Enercon acquisition which is expected, as noted, to close in the fourth quarter this year. Shifting over to capital allocation and as previously discussed, we'll be taking on new debt of $240 million in connection with the acquisition of Enercon and the interest on that debt will be approximately 6.5%. This will bring our total outstanding debt to $300 million with a blended interest rate of approximately 5.7%.

提醒一下，本評論僅與貝爾的基本業務有關，並不包括與 Enercon 收購相關的增量銷售額，如上所述，預計該收購將於今年第四季完成。轉向資本配置，正如前面所討論的，我們將在收購 Enercon 時承擔 2.4 億美元的新債務，該債務的利息約為 6.5%。這將使我們的未償債務總額達到 3 億美元，混合利率約為 5.7%。

In addition to our regular weight dividends and continue to invest in the business through CapEx. Our next immediate priority from a capital allocation in the near-term will be on debt paydown to deleverage and avoid interest expense. We'll continue to assess our capital priorities as we have done on an ongoing basis.

我們除了定期分紅外線，還繼續透過資本支出對業務進行投資。我們近期資本配置的下一個當務之急是償還債務以去槓桿並避免利息支出。我們將繼續評估我們的資本優先事項，就像我們一直以來所做的那樣。

Overall, we are pleased with the progress we have made in strengthening Bel's based business over the past four years and are excited about the road ahead with Enercon and the new members of our corporate team. We feel this is a pivotal moment for Bel as it marks the transition from our self-help phase to a new growth phase of Bel's journey and I could not be more excited to embark on this next chapter.

總的來說，我們對過去四年來在加強 Bel 業務方面所取得的進展感到滿意，並對與 Enercon 和我們公司團隊的新成員的未來之路感到興奮。我們覺得這對貝爾來說是一個關鍵時刻，因為它標誌著從我們的自助階段過渡到貝爾旅程的新成長階段，我非常興奮能夠踏上下一個篇章。

And with that, I'll turn the call back over to Dan.

說完這些，我會把電話轉回給丹。

Thank you, Farouq. At this point, we'd like to open up the call for questions.

謝謝你，法魯克。現在，我們想開始提問。

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員指令）

The first question comes from the line of Bobby Brooks with Northland capital markets. Please go ahead.

第一個問題來自北國資本市場的 Bobby Brooks。請繼續。

Hey guys, good morning. Thank you for taking my question. So, with the Power and Protection obviously there's a pretty notable step down sequentially and you guys touched on it a little bit.

嘿，大家早安。感謝您回答我的問題。因此，在功率和防護方面，顯然有一個相當明顯的順序下降，你們稍微談到了這一點。

I know you had the supplier that you lost because the recently enacted trade restrictions. But that was only for $3 million to $4 million of business per quarter and we were down more like $10 million. So, could you just discuss a little bit more what drove that sequential step down and maybe compare that with what the factors you're seeing as why you see year-over-year growth in 2025?

我知道你們失去了一個供應商，因為最近實施的貿易限制。但每季的業務額僅 300 萬到 400 萬美元，而我們的損失卻超過了 1,000 萬美元。那麼，您能否進一步討論一下導致這種連續下降的原因，並將其與您看到的 2025 年同比增長的因素進行比較？

So, Bobby and you are you looking at it sequentially from Q2 to Q3?

那麼，Bobby，您是從 Q2 到 Q3 依序查看的嗎？

Yeah.

是的。

Yeah.

是的。

So, the other impact. So, in addition to the supplier on the trade restriction, so the largest thing impacting power from Q2 to Q3 is actually the seasonality that we have every year in Europe in Q3. So, things like rail and e-mobility, those are all based out of our, our Europe segment and those are just naturally lower in the third quarter because there are some closures at our Slovakia site for a few weeks in August each year. So that would be the largest dip in addition to the CUI business that we previously discussed.

所以，還有其他影響。因此，除了供應商的貿易限制之外，對第二季到第三季電力影響最大的因素實際上是歐洲每年第三季的季節性。因此，鐵路和電動車等業務都基於我們的歐洲分部，而這些業務在第三季度自然會較低，因為每年 8 月我們斯洛伐克工廠都會關閉幾週。因此，這將是除了我們之前討論過的 CUI 業務之外的最大跌幅。

And then just the bookings that you guys saw in September and October is given you guys that confidence that you're going to see year-over-year growth return in the Power and Protection segment?

那麼，你們在九月和十月看到的訂單是否讓你們有信心看到電力和防護領域將出現同比增長？

Yeah, we think that is the case, Bobby. Obviously, a fair amount of moving pieces here, But I think as we noted, we do expect that a return to growth here across the business, including power, looking at inventory levels, looking at the conversations are going on with our customers the MPI and especially as we're coming into kind of the year end, right, more discussions. So, I'd say we're feeling better and, and a return to growth, again, commentary across the business including, Power.

是的，我們認為情況就是這樣，鮑比。顯然，這裡有相當多的變動因素，但我認為，正如我們所指出的，我們確實預計整個業務將恢復成長，包括電力、庫存水準、與客戶 MPI 的對話，尤其是當我們即將進入年底時，會有更多討論。因此，我想說我們感覺更好，並且再次恢復成長，包括電力在內的整個業務的評論。

That's terrific to hear. Then maybe just an update on finding that new supplier to replace that, that business that was lost because of the trade restriction.

聽到這個消息真是太好了。然後可能只是更新尋找新供應商來取代因貿易限製而失去的業務。

Yeah, so we are in the process of identifying replacements, as we talked about. And as you know, we are in a longer design cycle business. So, step one is identifying which we have identified some replacement parts. It's going to take a little bit of time to go and have the customers requalify their design to substitute the parts from the old vendor to the new vendor. So that's going to take some time. And when considering the inventory channel, I would say that sense of urgency that might not entirely be there off the bat here as folks are burning down inventory, so probably the best bet for recoverability there would be something along the lines of redesigns or demand pickup within their own segments on the customer side. So that's why we think we'll cover some of that as we go through 2025. But we're kind of seeing where that shakes out. But it's not going to be a quick flip the switch just because we identify as an alternative.

是的，正如我們討論的那樣，我們正在尋找替代方案。如您所知，我們的設計週期較長。因此，第一步是確定我們已經確定了一些替換部件。這將需要一點時間，讓客戶重新確認他們的設計，將舊供應商的零件替換為新供應商的零件。所以這需要一些時間。當考慮庫存管道時，我想說，由於人們正在消耗庫存，這種緊迫感可能不會完全存在，因此，從可恢復性的角度來看，最好的選擇可能是在客戶端自己的細分市場中進行重新設計或回升需求。所以我們認為在 2025 年時我們會涵蓋其中的一些內容。但我們大概能看到事情會如何發展。但僅僅因為我們認定這是一種替代方案，我們不會很快改變主意。

Okay. That's awesome. And then last one for me, just trying to dig a little bit more into the strong bookings. I know back in the first quarter call we talked or discussed about, the really interesting AI opportunities for, especially within the power and protection. So, I was just curious if any of those bookings that you guys saw in September and October have been related to any AI orders or AI in products or maybe any other, the kind of emerging growth opportunities for you, whether that's e-mobility space or rail.

好的。太棒了。對我來說這是最後一個，只是想更深入地了解強勁的預訂量。我知道在第一季的電話會議上我們談論過真正有趣的人工智慧機會，特別是在電力和保護領域。所以，我只是好奇，你們在九月和十月看到的預訂是否與任何人工智慧訂單或產品中的人工智慧有關，或者可能是任何其他新興的成長機會，無論是電子移動領域還是鐵路。

Yeah, I think the answer in short is, yes. So, some of the bookings have come from AI customers. And as we also, so we have to kind of follow hard orders, bookings that we got. Also, as we just look at the conversations being had in the forecast with other guys are about to or have yet put bookings on the books yet. We expect that to kind of come in short order as well. So, I think the answer to your question is correct. The other one that we saw in the booking that had a nice growth is our fuses business and fuses generally, it's considered one of the earlier recovery items in our industry. So, it is a good leader indicator. So, Fuses was up pretty materially for us in Q3.

是的，我認為簡短的回答是肯定的。因此，部分預訂來自 AI 客戶。因此，我們也必須遵循收到的嚴格訂單和預訂。此外，我們只看了預測中與其他人的對話，他們即將或已經預訂。我們預計這也將很快實現。所以，我認為你的問題的答案是正確的。我們在預訂中看到的另一個成長良好的業務是我們的保險絲業務和保險絲一般被認為是我們行業中較早恢復的項目之一。所以，它是一個很好的領導指標。因此，對我們來說，第三季的保險絲數量大幅增加。

And I think when it was roughly 30% to 35%, I think it was up, right. So, it was nice to see the fuses up coupled with the bookings, these are good solid indicators.

我認為當它達到大約 30％ 到 35％ 時，它就上升了，對吧。因此，很高興看到保險絲和預訂量一起上升，這些都是很好的可靠指標。

I would completely agree with that. But thank you for the call here guys and I'll return to the queue and hats off on the nice quarter.

我完全同意這一點。但還是感謝大家來電，我會回到隊列並為這個美好的季度致敬。

Thank you. Next question comes from the line of Jim Ricchiuti with Needham and Co. Please go ahead.

謝謝。下一個問題來自 Needham and Co 的 Jim Ricchiuti。

Hi, thank you. Good morning. You may have provided this detail. I apologize if you did. But I'm wondering, we quantify the impact from the strike at Bel in the quarter and follow-up to that is just whether the guidance for Q4 has taken into account the potential for a longer strike, which I guess now appears to be the case. Thanks

你好，謝謝。早安.您可能已經提供了此詳細資訊。如果你這麼做了，我深感抱歉。但我想知道，我們量化了本季 Bel 罷工的影響，後續的問題是，第四季的指導是否已經考慮到了更長時間罷工的可能性，我猜現在看起來確實如此。謝謝

Yeah, so, we haven't quantified that Jim, we definitely had an impact on us in terms of our amount of we let's say couldn't ship. But I would say it was, it was nothing. It wasn't overly material for this quarter. So, I think the team did a nice job reacting to that kind of working on other things and other products. Heading into Q4, our guidance is reflective of an impact of the strike. I think that's kind of what we're alluding to earlier in terms of some of the volatility around that. So, we try to capture our best guess kind of base case if you will. Obviously, we're through October here and have an impact. So, I think, I really think it said, we had to take in account our guests on November and December. So, I would say we're hoping for some recovery, but it's not, we don't think it will be material in Q3 just given by the time they all come back to work will take a few weeks for everything to get going.

是的，所以，我們還沒有量化吉姆，就我們無法發貨的數量而言，這肯定會對我們產生影響。但我想說，這不算什麼。對於本季來說這並不是什麼重要的事情。因此，我認為團隊對其他事物和其他產品的此類工作做出了很好的反應。進入第四季度，我們的指引反映了罷工的影響。我認為這有點像我們之前提到的一些波動。因此，如果願意的話，我們會嘗試捕捉最佳猜測的基本情況。顯然，我們已經度過了十月並產生了影響。所以，我認為，我真的認為我們必須考慮到 11 月和 12 月的客人。因此，我想說我們希望出現一些復甦，但事實並非如此，我們認為這不會在第三季度實現實質復甦，因為當他們全部回來工作時，一切還需要幾週的時間才能開始。

I would think to say position we take the way things look, most likely we won't see sales for aerospace for this one customer for the rest of the year.

我想說的是，從目前的情況來看，很可能今年剩餘時間我們不會看到該客戶的航空航太銷售。

Got it. Thanks. And, just on the green shoots that you guys cited in networking and industrial. Is this a case of perhaps just the excess inventory being worked down enough and some restocking and or, and this may be a harder question to answer, just signs of actual improvement in some of these markets. And where you think there may be some actual improvement particularly in the industrial area?

知道了。謝謝。而且，只是你們在網路和工業領域提到的綠芽。這是否只是過剩庫存被充分消化並進行一些補貨的情況，或者，這可能是一個較難回答的問題，只是其中一些市場實際改善的跡象。您認為哪些方面可能會有實際改善，特別是在工業領域？

Sorry, Jim. So, If I'm understanding a question. Are you saying how much of the bookings is a replenishment of the actual demand growth at the customer level?

對不起，吉姆。所以，如果我理解了一個問題。您是說有多少預訂量是客戶層面實際需求成長的補充？

Yeah, I guess what I'm saying. We know we've heard this a bit that in some cases there may be inventories have been worked down and some of what we're hearing is just some natural replenishment, but not necessarily these signs of actual demand driving that yet. And don't know if that's something you've noticed or better yet. I mean, if you see something in the industrial market because you guys sell pretty broadly can you tell where some of these green shoots are coming from?

是的，我猜我這麼說。我們知道我們已經聽到一些這樣的說法，在某些情況下，庫存可能已經減少，我們聽到的一些只是一些自然補充，但不一定是實際需求推動這一點的跡象。並且不知道您是否注意到了這一點或有更好的發現。我的意思是，如果你在工業市場上看到了一些東西，因為你們的銷售範圍很廣，你能說出這些綠芽來自哪裡嗎？

Yes, Jim. I think when we talk industrial, it's a little more harder to pick out. But for us, when we look at new growth opportunities, not replenishment opportunities are really the areas that we see that we see space, for example, we picked up 160 customers and distribution that are buying orders today that might go in the high volume. And then with EV, we see those are new opportunities and of course AI, I think probably our two largest customers we're going to pick up next year might come from AI. So, I think if you look at new creation, new demand, I would think AI, space and EV are the driving force of new customers that are buying from us.

是的，吉姆。我認為，當我們談論工業時，挑選起來就比較困難。但對我們來說，當我們尋找新的成長機會時，補貨機會才是我們真正看到的空間，例如，我們獲得了 160 個客戶和分銷商，他們今天的購買訂單可能會大量增加。然後對於電動車，我們看到了新的機遇，當然還有人工智慧，我認為我們明年要迎接的兩個最大客戶可能來自人工智慧。因此，我認為，如果你看看新創造、新需求，我會認為人工智慧、太空和電動車是新客戶向我們購買的驅動力。

And I think I agree with Dan on the new, some of the new customers, the win that we're seeing are pretty good. I think on the existing customers because remember Jim, I think when inventory gets backed up and Dan, correct me if I'm [here] when inventory generally gets backed up, it's not as bad of a picture from our customer's perspective. Right. Because they still have inventory to sell. So, I think once the inventory comes down, you return to a little more normal cadence of ordering that a little bit more reflective of demand. So, they kind of go a little bit hand in hand. So obviously, we were down pretty decent numbers this year and I would attribute that not, demand not being down that much from our customers, so to speak, but it was really kind of working down the inventory side of it.

我認為我同意丹對新客戶的看法，對於一些新客戶來說，我們看到的勝利是相當不錯的。我認為是現有客戶，因為記得吉姆，我認為當庫存積壓時，丹，如果我在這裡糾正我，當庫存通常積壓時，從我們客戶的角度來看情況並沒有那麼糟糕。正確的。因為他們還有庫存要賣。因此，我認為一旦庫存下降，您就會恢復到更正常的訂購節奏，從而更能反映需求。所以，他們有點齊頭並進。顯然，今年我們的數字下降了相當多，我認為這不是因為客​​戶需求下降太多，而是因為庫存方面下降了。

Yeah. That's helpful. And just did you give a commercial space revenue number? I know it's a small part of the business, but there, it's obviously a growth area.

是的。這很有幫助。您剛才有沒有給出商業航太收入的數字？我知道這只是業務的一小部分，但這顯然是一個成長領域。

Yeah. So, the space revenue for Q3 was $2 million. So that brings our year-to-date up to $6.3 million.

是的。因此，第三季的空間收入為 200 萬美元。這樣，今年迄今我們的收入就已達到 630 萬美元。

Got it. Thanks very much.

知道了。非常感謝。

Thank you. Next question comes from the line of Theodore O'Neill with Litchfield Hills Research. Please go ahead.

謝謝。下一個問題來自 Litchfield Hills Research 的 Theodore O’Neill。請繼續。

Thank you very much and congratulations on a good quarter. My first question is about Enercon Technologies, and I was wondering if you could talk a bit more about what this brings to the table in terms of products that you may not have had before in the aerospace and defence industry and what the cross-selling opportunities are?

非常感謝，並祝賀您本季業績良好。我的第一個問題是關於 Enercon Technologies 的，我想知道您是否可以進一步談談這項交易將為航空航天和國防工業帶來哪些以前可能沒有的產品，以及有哪些交叉銷售機會？

Yeah. So, thank you for that. So, for Enercon which for everybody's benefit, it will be sitting in our and ultimately roll into our power segment. Today, our power segment does not service these end markets. So, it is a new market edition both on the defence, commercial air and emerging space as well. So now we start creating some interesting cross pollination between the connectivity and the power segment. So that's one. Two is Enercon also opens up a couple of new markets potentially for us that we are not in today.

是的。所以，謝謝你。因此，對於 Enercon 來說，為了每個人的利益，它將駐紮在我們的電力部門，並最終進入我們的電力部門。今天，我們的電力部門並不服務這些終端市場。因此，它是國防、商業航空和新興太空領域的新市場版本。所以現在我們開始在連接性和電源部分之間創建一些有趣的交叉影響。這就是其中之一。二是 Enercon 也可能為我們開闢一些我們目前尚未涉足的新市場。

And the other thing from a product perspective, I would say generally if you ask power supplies, we say power supplies or power supplies or there's some nuances and sophistication to each of them. I would say their product set is a little bit different than ours, but also kind of the same, right. So, we sell some of that product into the rail that's pretty highly sophisticated, highly custom type applications. Where Enercon excels is their MOQs are one piece, right. So, they're highly, highly custom.

從產品角度來看，另一件事是，我想說，一般來說，如果你問電源，我們會說電源或電源，或者它們每個都有一些細微差別和複雜性。我想說他們的產品系列與我們的有點不同，但也有點相同，對吧。因此，我們將部分產品銷售到鐵路領域，這些產品是相當複雜、高度客製化的應用。Enercon 的優勢在於他們的 MOQ 都是一件，對吧。所以，它們是高度客製化的。

And they are, given the conservative nature of the customer side with various regulatory requirements and manufacturing elements around product tracing and the like they obviously have that side of it as well. So, you've got to look at it while we may know the product and we do know some of these products. It's really the ecosystem, the customer relationships that go to market and the brand name that they bring is what differentiates them. So, we tend to think about more of an end market expansion and some opportunity potentially for the cost side which we would underwrite as part of our base case. But we think there's opportunity there. But really, it's a revenue play here.

鑑於客戶端的保守性質，以及圍繞產品追蹤等的各種監管要求和製造要素，他們顯然也有這方面的要求。所以，你必須看一下，我們可能會了解該產品，並且我們確實了解其中一些產品。真正的區別在於生態系統、進入市場的客戶關係以及他們帶來的品牌名稱。因此，我們傾向於更多地考慮終端市場擴張和成本方面的潛在機會，我們將把它作為我們基本情況的一部分來承保。但我們認為那裡有機會。但實際上，這是一種創收行為。

Just to add some more flavour to it, just for example, one of the target areas they were looking at before we acquired that was Europe. And they realized to be successful in Europe, they had to have a manufacturing base and we have a ideal factory that could support their needs. We're going to be with them next week. I'm sorry, in two weeks for them to look at our factory and see what the possibilities are we can offer them also from, besides cross-selling opportunities, many of our customers are the same, but we do have some customers that they sell to them. We don't sell to back and forth. But a bigger solution for us is the more we can go to any military aerospace customer and give them a full basket of products, the more we can build up our relationship with that customer. And now there's very few customers that can offer both connectivity and power supply, which takes a lot of their purchasing table. So, this way they can meet with one group or a company to solve a lot of their problems going forward. So, we think it's just a very exciting opportunity across the board.

為了增加一些趣味，舉個例子，在我們收購之前，他們關注的目標區域之一就是歐洲。他們意識到要想在歐洲取得成功，就必須擁有一個製造基地，而我們擁有一個可以滿足他們需求的理想工廠。下週我們將和他們在一起。很抱歉，兩週後他們會來參觀我們的工廠，看看我們能為他們提供哪些可能性，除了交叉銷售機會之外，我們的許多客戶都是一樣的，但我們確實有一些客戶是他們賣給他們的。我們不進行來回銷售。但對我們來說，更大的解決方案是，我們越能接觸到任何軍用航空航太客戶並為他們提供全套產品，我們就越能與該客戶建立良好的關係。現在能夠同時提供連接和電源的客戶非常少，這佔據了他們很大一部分的採購空間。這樣，他們就可以與一個團體或一家公司會面，解決未來的許多問題。所以，我們認為這是一個非常令人興奮的機會。

Okay, yeah. Makes sense. My other question is just about the rail business, is this a highly regional business? And what region is showing the strength of the rail?

好的，是的。有道理。我的另一個問題是關於鐵路業務，這是一個高度區域性的業務嗎？哪些地區反映出了鐵路的強勢？

I think the way we you think of our is largely our manufacturing comes out of Slovakia. And the customers that we service are global. So, when we talk about rail, obviously [or] maybe other parts of the world are working from our customer's perspective. But given our normal cadence in the European shutdown, that's why it impacts the business because our manufacturing occurs in Slovakia. That's how I kind of think about the manufacturing impact for us.

我認為，我們的製造業主要來自斯洛伐克。我們服務的客戶遍佈全球。因此，當我們談論鐵路時，顯然[或]也許世界其他地區正在從客戶的角度出發。但考慮到我們在歐洲停工的正常節奏，這會影響業務，因為我們的製造發生在斯洛伐克。這就是我對製造業對我們的影響的看法。

We would say a good portion of our sales are European based customer rail customers and sell throughout the world.

我們可以這麼說，我們銷售的很大一部分是歐洲的鐵路客戶，並且銷往世界各地。

Correct, yeah. So, we'll kind of transact there then they should ship it around. So, [let's] that's good point.

是的，正確。因此，我們會在那裡進行交易，然後他們就會將其運送出去。所以，這是很好的觀點。

Okay, thanks very much.

好的，非常感謝。

Thank you. As there are no further questions at this time. Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Dan Bernstein for closing comments.

謝謝。因為現在沒有其他問題。女士們、先生們，我們的問答環節已經結束。現在我想請丹伯恩斯坦發表最後評論。

Just once again, thank you for joining our call today and we're looking forward to continued success and we speak to the final fourth quarter next year. Have a good day.

再次感謝您今天參加我們的電話會議，我們期待繼續取得成功，並討論明年第四季的最終事宜。祝你有美好的一天。

Thank you. This concludes our today's teleconference. (Operators Instructions)

謝謝。今天的電話會議到此結束。（操作人員指示）

Thank you for your participation.

感謝您的參與。

Thank you very much.

非常感謝。