Commercial Vehicle Group Inc (CVGI) 2022 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to CVG's Third Quarter 2022 Earnings Conference Call. During today's presentation, all parties will be on listen-only mode. Following the presentation, the conference will be opened for questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Andy Cheung, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

女士們先生們，早上好，歡迎來到 CVG 2022 年第三季度收益電話會議。在今天的演講中，所有各方都將處於只聽模式。演講結束後，會議將開始提問，屆時將進行說明。提醒一下，這次會議正在錄製中。我現在想把電話轉交給執行副總裁兼首席財務官張國榮先生。請繼續，先生。

Thank you, operator, and welcome, everyone, to our conference call. I'm very excited to join the CVG team and participate in my first earnings call with the company. Joining me on the call today is Harold Bevis, President and CEO of CVG. This morning, we'll provide a brief company update as well as commentary regarding our third quarter 2022 results, after which, we'll open the call for questions. As a reminder, this conference call is being webcast and a supplemental earnings presentation is available on our website, which we will refer to during the call. Both may contain forward-looking statements, including, but not limited to, expectations for future periods regarding market trends, cost-saving initiatives and new product initiatives, among others.

謝謝接線員，歡迎大家參加我們的電話會議。我很高興加入 CVG 團隊並參加我與公司的第一次財報電話會議。今天和我一起參加電話會議的是 CVG 總裁兼首席執行官 Harold Bevis。今天早上，我們將提供簡短的公司更新以及對我們 2022 年第三季度業績的評論，之後，我們將開始提問。提醒一下，本次電話會議正在進行網絡直播，我們的網站上提供了補充收益報告，我們將在電話會議期間參考。兩者都可能包含前瞻性陳述，包括但不限於對未來時期市場趨勢、成本節約計劃和新產品計劃等的預期。

Actual results may differ from anticipated results because of certain risks and uncertainties. These risks and uncertainties may include, but not limited to, economic conditions in the markets in which CVG operates, fluctuations in the production volumes of vehicles for which CVG is a supplier, financial covenant compliance and liquidity, risks associated with conducting business in foreign countries and currencies and other risks as detailed in our SEC filings. I will now turn the call over to Harold to provide a company update.

由於某些風險和不確定性，實際結果可能與預期結果不同。這些風險和不確定性可能包括但不限於 CVG 運營所在市場的經濟狀況、CVG 作為供應商的車輛產量波動、財務契約合規性和流動性、與在國外開展業務相關的風險貨幣和其他風險，詳見我們向美國證券交易委員會提交的文件。我現在將電話轉給 Harold 以提供公司更新。

Thank you, Andy, and a sincere welcome to the team, and good morning, everyone. I will be referring to our earnings presentation, which is found on our website. So if you could locate that document that'll be helpful in the dialogue this morning. CVG delivered solid results in the third quarter across key metrics, and we continue to build strong momentum in our business transformation. And as part of this transformation and as a result of the new wins over the past several years, CVG is positioning itself as a leading global electric system supplier and we remain on track for electrical systems to become our largest product line. As we have outlined in previous calls, this shift will prove to be accretive to our organic growth and profitability, all while reducing the cyclicality and historical customer concentration of our business. If you could turn to Slide 3 of the earnings call -- or the Q3 earnings presentation, you'll see that our business transformation efforts are gaining traction with sales growth of nearly 5% in the quarter, driven by our pricing efforts with key customers this year as well as the impact of our new business wins.

謝謝你，安迪，真誠地歡迎來到團隊，大家早上好。我將指的是我們網站上的收益報告。所以，如果你能找到那份文件，那將對今天上午的對話有所幫助。 CVG 在第三季度的關鍵指標上取得了可喜的成績，我們繼續在業務轉型中建立強勁勢頭。作為這一轉型的一部分，以及過去幾年取得新勝利的結果，CVG 將自己定位為全球領先的電氣系統供應商，我們將繼續努力使電氣系統成為我們最大的產品線。正如我們在之前的電話會議中概述的那樣，這種轉變將證明會增加我們的有機增長和盈利能力，同時減少我們業務的周期性和歷史客戶集中度。如果您可以轉到收益電話會議的幻燈片 3——或第三季度收益演示文稿，您會看到我們的業務轉型努力正在獲得牽引力，本季度銷售額增長近 5%，這主要得益於我們與主要客戶的定價努力今年以及我們新業務獲勝的影響。

Our year-to-date business wins are tracking above $150 million on an annualized basis, including $39 million of new wins in the third quarter. We're also continuing to push for additional pricing with customers where necessary to both cover inflation and earn a fair return for our value add. Free cash flow generation was strong in the quarter as expected, and our efforts to transform our cost structure remain ahead of schedule, which will further improve our competitive positioning. This includes investments in new low-cost facilities in low-cost countries as well as next-generation manufacturing processes. Furthermore, with the relief we're seeing in steel pricing and freight costs, we believe inflation pressures for CVG may have peaked. We are on track with the first phase of our vertical integration and regionalization plan. We will eliminate approximately 50% of our ocean freight from China to North America in early '23 by switching from sourcing certain components from China to producing those same components in-house in Mexico.

我們年初至今的年化業務贏利超過 1.5 億美元，其中包括第三季度的 3900 萬美元新贏利。我們還將繼續在必要時向客戶推動額外定價，以應對通貨膨脹並為我們的增值賺取公平回報。正如預期的那樣，本季度產生的自由現金流強勁，我們的成本結構轉型工作也提前完成，這將進一步提升我們的競爭地位。這包括在低成本國家投資新的低成本設施以及下一代製造工藝。此外，隨著我們看到鋼鐵價格和運費成本有所下降，我們認為 CVG 的通脹壓力可能已經見頂。我們正在進行垂直整合和區域化計劃的第一階段。我們將在 23 年初取消從中國到北美的大約 50% 的海運，方法是從從中國採購某些組件轉為在墨西哥內部生產這些相同的組件。

This will further reduce our working capital, increase our cash flow, lower our costs and improve our service competitiveness. Turning to Slide 4. You will see the initial evidence of the second half improvement that we discussed during last quarter's call. We drove sequential improvement across key metrics due to improved pricing, continued cost restructuring efforts and the impact of new business wins. We also continue to make progress returning working capital back to pre-COVID levels, helping boost our free cash flow generation of $34 million in the quarter, supporting the company's strategic initiative to self-fund its growth and pay down our debt. We expect to hit the high end of our debt paydown range for the full year and expect to fully pay off our revolver during the fourth quarter. In fact, it's almost paid off as of today.

這將進一步減少我們的營運資金，增加我們的現金流，降低我們的成本並提高我們的服務競爭力。轉到幻燈片 4。您將看到我們在上一季度的電話會議中討論的下半年改進的初步證據。由於定價的改善、持續的成本重組工作以及贏得新業務的影響，我們推動了關鍵指標的連續改進。我們還在將營運資金恢復到 COVID 之前的水平方面繼續取得進展，幫助我們在本季度產生 3400 萬美元的自由現金流，支持公司的戰略計劃，以自籌資金增長和償還債務。我們預計將達到全年債務償還範圍的高端，並預計在第四季度完全還清我們的左輪手槍。事實上，截至今天，它幾乎還清了。

Despite ongoing supply chain pressures, especially in semiconductors and transitory demand headwinds within our Warehouse Automation segment, we're on pace to deliver a record sales year. Moving to Slide 5. Our team continues to do a great job winning targeted new business and particularly within the Electrical Systems segment. In year-to-date, we've secured over 30 new customers for our company worth $143 million in annualized revenue when fully ramped up. In looking to the balance of the fiscal year, our new business pipeline is robust and remain on track to achieve greater than $150 million of new annualized business wins. Ending the third quarter, our pipeline of new business stood at approximately $5 billion in platform value and spans electric vehicles, earthmoving equipment, heavy and medium-duty trucks as well as emerging opportunities in commercial aerospace and defense.

儘管供應鏈壓力持續存在，尤其是在我們的倉庫自動化部門的半導體和暫時性需求逆風中，但我們有望實現創紀錄的銷售年度。轉到幻燈片 5。我們的團隊繼續出色地贏得有針對性的新業務，尤其是在電氣系統領域。今年迄今，我們已經為我們公司爭取到 30 多個新客戶，在全面提升後，年收入將達到 1.43 億美元。展望本財年的平衡，我們的新業務渠道穩健，並有望實現超過 1.5 億美元的新年度業務收益。截至第三季度，我們的新業務管道平台價值約為 50 億美元，涵蓋電動汽車、土方設備、重型和中型卡車以及商業航空航天和國防領域的新興機遇。

This visibility to potential future business wins and continued momentum for our business transformation efforts. As highlighted on Page 6, if you can turn to that page, we are well on our way to making electric systems our largest product line for CVG as I've mentioned previously and today and simply layer in the contribution of our new business wins on top of our current revenue base, gives a picture of the expected shift in the business mix. As a reminder, our Electric Systems segment generates much higher OI margins in the other segments of CBG, making for a powerful profit growth story in the coming years. We remain focused on becoming a leader in electrification systems across commercial vehicles, passenger vehicles, material handling equipment, earthmoving equipment and power sports. We're also making strong initial progress, as mentioned, entering brand-new markets for us like aerospace and defense.

這種對未來潛在業務的可見性贏得了我們業務轉型工作的持續動力。正如第 6 頁所強調的那樣，如果您可以翻到該頁，我們正在努力使電氣系統成為 CVG 最大的產品線，正如我之前和今天提到的那樣，並且簡單地將我們新業務的貢獻分層我們當前收入基礎的頂部，描繪了業務組合的預期轉變。提醒一下，我們的電氣系統部門在 CBG 的其他部門產生更高的 OI 利潤率，從而在未來幾年實現強勁的利潤增長。我們仍然專注於成為商用車、乘用車、物料搬運設備、土方設備和動力運動電氣化系統的領導者。如前所述，我們也取得了強勁的初步進展，為我們進入了航空航天和國防等全新市場。

On Slide 7, we lay out an update for our e-commerce aftermarket business. We spent a little bit of time getting the business ready for launch and getting the product lines ready, getting the software platform ready, getting our production and logistics capabilities ready. We expect to go live in early '23 with aftermarket seats in North America being the first product to launch. We'll follow that up with launches in wipers, mirrors and road sensors. We will also design and trial new aftermarket seats on multiple platforms including our first-ever super comfortable low-profile suspension seats for top-selling pickup trucks and 4-wheel drive vehicles. It will be a first for us. In looking to '24 and beyond, we expect to expand our platform geographically and continue to broaden our seating products to include delivery vans, school buses, construction equipment and tractors, while also expanding our North American footprint.

在幻燈片 7 中，我們展示了電子商務售後市場業務的更新。我們花了一點時間讓業務做好啟動準備，準備好產品線，準備好軟件平台，準備好我們的生產和物流能力。我們預計在 23 年初上線，北美的售後市場席位將成為第一個推出的產品。隨後，我們將推出雨刮器、後視鏡和道路傳感器。我們還將在多個平台上設計和試用新的售後市場座椅，包括我們首款用於最暢銷皮卡和四輪驅動車輛的超舒適低調懸架座椅。這對我們來說是第一次。展望 24 世紀及以後，我們希望在地理上擴展我們的平台，並繼續擴大我們的座椅產品，包括送貨車、校車、建築設備和拖拉機，同時擴大我們在北美的足跡。

Turning to Slide 8. We're reiterating here our key initiatives to drive value for shareholders. We have a dual approach to optimizing our core business with proper pricing and aggressive cost reduction, and we continue to make substantial progress on both fronts. We'll continue to advance our new business endeavors and use our free cash flow to pay down our debt and fund growth. Turning to Slide 9. CVG is executing against its long-term goals and business transformation plan, and we are determined to improve or exit underperforming segments of our business and replace it with new business and strengthen our balance sheet.

轉到幻燈片 8。我們在此重申我們為股東創造價值的關鍵舉措。我們採用雙重方法通過適當定價和積極降低成本來優化我們的核心業務，並且我們繼續在這兩個方面取得實質性進展。我們將繼續推進我們的新業務努力，並利用我們的自由現金流來償還我們的債務和資金增長。轉到幻燈片 9。CVG 正在執行其長期目標和業務轉型計劃，我們決心改善或退出表現不佳的業務部門，並用新業務取而代之，並加強我們的資產負債表。

We believe we are on track to reduce the cyclicality of our business as we expand in secular growth industries, and we are reaffirming our long-term targets of delivering $1.9 billion in sales and approximately 8.5% adjusted OI margins. Turning to Page 10. While we're proud of the progress we're making in our year-to-date performance, inflation and FX rates continue to mask our results. With that being said, we expect inflationary pressures to cool and our vertical integration plans to kick in, and we expect that CVG will experience less inflation-based profit compression in '23. CVG continues to win in electric vehicle markets, and those wins are fundamentally transforming our top line and our margin outlook. And as we look to the fourth quarter and into '23, we're confident that the momentum we have built, particularly as it relates to price, cost structure, base demand, verticalization and new business wins will further position us for further growth and profitability improvements. Now I'd like to turn the call back to Andy for a more detailed review of our financial results. Andy?

我們相信，隨著我們在長期增長的行業中擴張，我們有望減少業務的周期性，並且我們重申我們的長期目標，即實現 19 億美元的銷售額和約 8.5% 的調整後 OI 利潤率。翻到第 10 頁。儘管我們為年初至今的業績取得的進展感到自豪，但通貨膨脹和匯率繼續掩蓋我們的業績。話雖如此，我們預計通脹壓力會降溫，我們的垂直整合計劃將啟動，我們預計 CVG 在 23 年將經歷較少的基於通脹的利潤壓縮。 CVG 繼續在電動汽車市場取勝，這些勝利正在從根本上改變我們的收入和利潤前景。當我們展望第四季度和 23 年時，我們相信我們已經建立的勢頭，特別是與價格、成本結構、基本需求、垂直化和新業務勝利相關的勢頭，將使我們進一步增長和盈利能力改善。現在我想把電話轉回給安迪，以便對我們的財務業績進行更詳細的審查。安迪？

Thank you, Harold. If you are following along in the investor deck, please turn to Slide 12. Third quarter 2020 revenues were $251.4 million as compared to $139.6 million from the prior year period. The 4.9% year-over-year increase was primarily attributable to higher pricing to offset material cost increases and volume, but offset by a volume decrease in our warehouse automation business. Front currency translation also unfavorably impacted third quarter 2022 revenues by $6.5 million or 2.7%. Gross profit was $26.8 million in the third quarter as compared to $30.1 million in the third quarter of 2021. Gross profit margins decreased to 10.7% as compared to 12.6% in the third quarter of 2021.

謝謝你，哈羅德。如果您正在關注投資者平台，請轉到幻燈片 12。2020 年第三季度的收入為 2.514 億美元，而去年同期為 1.396 億美元。同比增長 4.9% 的主要原因是更高的定價以抵消材料成本的增加和數量，但被我們的倉庫自動化業務的數量減少所抵消。前台貨幣換算也對 2022 年第三季度的收入產生了 650 萬美元或 2.7% 的不利影響。第三季度的毛利潤為 2680 萬美元，而 2021 年第三季度為 3010 萬美元。毛利率下降至 10.7%，而 2021 年第三季度為 12.6%。

And primarily due to global supply chain and market disruptions, which have resulted in increased labor cost, raw material inflation and freight cost increases. As GVC stated, we expect to improve our gross margins in the coming quarters due to renegotiated pricing, continued cost restructuring and an improving supply chain environment. The company reported consolidated operating income of $9.5 million for the third quarter of 2022 compared to $11.4 million in the prior year period, primarily due to the aforementioned lag in price increases, combined with $2.9 million of new business start-up costs and $0.6 million of restructuring expenses due to the continued execution of our core business optimization.

主要是由於全球供應鍊和市場中斷，導致勞動力成本增加、原材料通脹和運費增加。正如 GVC 所說，由於重新協商定價、持續的成本重組和供應鏈環境的改善，我們預計未來幾個季度的毛利率將提高。該公司報告稱，2022 年第三季度的綜合營業收入為 950 萬美元，而去年同期為 1140 萬美元，這主要是由於上述價格上漲滯後，加上 290 萬美元的新業務啟動成本和 60 萬美元的由於繼續執行我們的核心業務優化而產生的重組費用。

On an adjusted basis, operating income was $10.6 million compared to $12.2 million in the third quarter of 2021. Adjusted EBITDA was $14.3 million for the third quarter as compared to $16.9 million in the prior year. Adjusted EBITDA margins were 5.7% as compared to 7.1% in the third quarter of 2021. Interest expense was $2.8 million as compared to $1.6 million in the third quarter of 2021. The increase in interest expense was primarily related to higher base interest rates on our variable rate debt. Net income for the quarter was $3.6 million or $0.11 per diluted share as compared to net income of $7.5 million or $0.23 per diluted share in the prior year period. 

在調整後的基礎上，營業收入為 1060 萬美元，而 2021 年第三季度為 1220 萬美元。第三季度調整後的 EBITDA 為 1430 萬美元，而去年同期為 1690 萬美元。調整後的 EBITDA 利潤率為 5.7%，而 2021 年第三季度為 7.1%。利息支出為 280 萬美元，而 2021 年第三季度為 160 萬美元。利息支出的增加主要與我們較高的基準利率有關可變利率債務。本季度淨收入為 360 萬美元或攤薄後每股收益 0.11 美元，而去年同期的淨收入為 750 萬美元或攤薄後每股收益 0.23 美元。

Turning to our segment results on Slide 13. Our Vehicle Solutions segment's third quarter revenues increased 30.6% to $154 million compared to $117.9 million in the year ago quarter, primarily due to material cost pass-through and high volume. Operating income for the third quarter increased 227% to $9.6 million compared to operating income of $2.9 million in the prior year period. primarily driven by volume leverage, increased pricing and lower health care costs. Third quarter of 2022 adjusted operating income was in line with GAAP operating income of $9.6 million.

轉向我們在幻燈片 13 上的分部業績。我們的車輛解決方案分部第三季度收入增長 30.6% 至 1.54 億美元，而去年同期為 1.179 億美元，這主要是由於材料成本轉嫁和高產量。與去年同期的 290 萬美元營業收入相比，第三季度營業收入增長 227% 至 960 萬美元。主要受數量槓桿、價格上漲和醫療保健成本降低的推動。 2022 年第三季度調整後營業收入與 GAAP 營業收入 960 萬美元相符。

Our Electrical Systems segment achieved revenues of $46.1 million, an increase of 15.1% as compared to $40.1 million in the year ago third quarter, resulting from material cost pass-through and contributions from the new business wins. Operating income was $5.2 million, an increase of 5% compared to $4.9 million in the third quarter of 2021 due to a decrease in SG&A expenses, partially offset by increased labor cost, raw material inflation and freight cost increases. Adjusted operating income was the same as GAAP operating income in both periods. Our aftermarket and accessory segment revenues increased 24.1% to $37.1 million compared to $29.9 million in the year ago quarter, primarily resulting from increased volume and pricing to offset material cost increases.

我們的電氣系統部門實現了 4610 萬美元的收入，與去年同期的 4010 萬美元相比增長了 15.1%，這是由於材料成本轉嫁和新業務勝利的貢獻。營業收入為 520 萬美元，比 2021 年第三季度的 490 萬美元增長 5%，原因是 SG&A 費用減少，部分被勞動力成本增加、原材料通脹和運費增加所抵消。兩個時期的調整後營業收入與 GAAP 營業收入相同。我們的售後市場和配件部門收入增長 24.1% 至 3710 萬美元，而去年同期為 2990 萬美元，這主要是由於銷量和定價的增加以抵消材料成本的增加。

Operating income was $5.4 million compared to operating income of $2.3 million in the prior year period. The increase is primarily attributable to the increase in pricing to offset higher material and labor costs. Adjusted operating income was $5.4 million, an increase of 130% compared to the year ago third quarter. Our warehouse automation segment produced third quarter revenues of $14.1 million, a decrease as compared to $51.7 million in the third quarter of 2021 due to lower demand levels. Operating loss was $1 million decrease compared to the operating income of $8 million in the year ago quarter, primarily attributable to the previously mentioned lower volumes. Adjusted operating loss was $0.7 million compared to income of $8.1 million in the prior year period. This concludes my comments on the quarter, and I would like to add that I'm really excited to have joined the CVG team and look forward to driving the transformation of the business. Now I'll turn the call back over to Harold for some additional remarks.

營業收入為 540 萬美元，而去年同期的營業收入為 230 萬美元。增加的主要原因是價格上漲以抵消較高的材料和勞動力成本。調整後的營業收入為 540 萬美元，與去年同期相比增長 130%。由於需求下降，我們的倉庫自動化部門第三季度的收入為 1410 萬美元，低於 2021 年第三季度的 5170 萬美元水平。與去年同期的 800 萬美元營業收入相比，營業虧損減少了 100 萬美元，這主要是由於前面提到的銷量下降。調整後的營業虧損為 70 萬美元，而去年同期的收入為 810 萬美元。我對本季度的評論到此結束，我想補充一點，我很高興加入 CVG 團隊，並期待推動業務轉型。現在，我將把電話轉回哈羅德，聽取一些補充意見。

Thank you, Andy. Turning to Page 14 in your deck. -- looking ahead, looking forward, we see stable order demand in our vehicle markets. However, we do expect order demand to remain weak in the warehouse automation segment in the near future. We have additional pricing actions underway in our vehicle markets, and we expect to continue to generate stable positive free cash flow. We are having continued wins in Electrical Systems as this vehicle architecture naturally fits CVG's core strengths. In order to support our growth in these markets, we are implementing new low-cost plants in both Mexico and Northern Africa. Our operations team is kicking in with aggressive vertical integration to lower our costs, improve our service and generate further free cash flow. Our entire team here at CVG is committed to driving significant continued transformation. This concludes our prepared remarks, and I'll now turn the call back over to the operator, Sergio, to open the line up for questions. Thank you.

謝謝你，安迪。翻到你套牌中的第 14 頁。 ——展望未來，我們看到汽車市場的訂單需求穩定。然而，我們確實預計在不久的將來，倉庫自動化領域的訂單需求將保持疲軟。我們在我們的汽車市場正在進行額外的定價行動，我們預計將繼續產生穩定的正自由現金流。我們在電氣系統方面繼續取得勝利，因為這種車輛架構自然符合 CVG 的核心優勢。為了支持我們在這些市場的增長，我們正在墨西哥和北非實施新的低成本工廠。我們的運營團隊正在積極進行垂直整合，以降低我們的成本、改善我們的服務並產生更多的自由現金流。我們在 CVG 的整個團隊都致力於推動重大的持續轉型。我們準備好的發言到此結束，現在我將把電話轉回給接線員塞爾吉奧，讓他開始提問。謝謝。

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have questions. You will hear a ringtone prompt acknowledging your request and your questions will be bold in the order they are received. Should you wish to return from the point process, please start followed by the #2 . We are using a speaker phone, please leave the handset before pressing any test. One moment, please, first question. First question comes from Joe Gomes from [Robo Capital].

謝謝你。女士們，先生們，我們現在開始問答環節。如果你有問題。您將聽到確認您的請求的鈴聲提示，您的問題將按照收到的順序以粗體顯示。如果您想從積分過程中返回，請開始，然後按#2。我們正在使用揚聲器電話，請在按任何測試之前離開聽筒。請稍等，第一個問題。第一個問題來自 [Robo Capital] 的 Joe Gomes。

So last quarter, you talked about you still needed about 20% of the contracts that needed to be repriced. I was wondering where that stands today. Given the recent or ongoing increases in inflation here, how does that play on some of the contracts that you had already replaced. Are you still looking at getting acceptable margins on that business?

所以上個季度，你談到你仍然需要大約 20% 的合同需要重新定價。我想知道它今天的位置。鑑於這裡最近或持續的通貨膨脹上升，這對您已經更換的一些合同有何影響。您是否仍在尋求在該業務上獲得可接受的利潤？

Yes. So 2 questions there. So we have roughly 20% of our revenue that's trapped in money-losing contracts. We're inside of a year on them now, and we have open negotiations with regards to repricing them and new terms and conditions. But that negative band of business is still in our reported results in the quarter. With regards to the 80% that we can act on, yes, we're still continuing to actively negotiate pricing and inflation recovery as we go along, and we have a set of price increase actions underway right now for the fourth quarter, and we have another set underway for Q1. It's an ongoing thing for us, Joe, and I'm sure our peers and fellow reporters are doing the same thing. We're labor intensive, and we're having labor inflation and energy inflation. And so we have active pricing negotiations as we go along here. We expect that to continue through '23.

是的。所以有 2 個問題。因此，我們大約有 20% 的收入被困在虧本的合同中。我們現在已經在一年之內了，我們就重新定價以及新的條款和條件進行了公開談判。但我們在本季度報告的業績中仍然存在負面業務。關於我們可以採取行動的 80%，是的，我們仍在繼續積極協商定價和通脹復甦，我們目前正在為第四季度採取一系列提價行動，我們為第一季度準備另一套。喬，這對我們來說是一件持續的事情，我相信我們的同行和記者同事也在做同樣的事情。我們是勞動密集型國家，我們正在經歷勞動力通脹和能源通脹。因此，我們在這裡進行積極的定價談判。我們預計這將持續到 23 年。

Okay. And you talked about improving or exiting underperforming legacy businesses. I was wondering if you might give us just a little bit more color of what segments of the business are you identifying there that really need to be improved or potentially exited?

好的。你談到了改善或退出表現不佳的傳統業務。我想知道您是否可以給我們更多的顏色，說明您確定哪些業務部門真正需要改進或可能退出？

Yes. So we set financial goals that we want to achieve in order to have a proper financial returns so we can reinvest into the business and be competitive. We've had 2 losses, if you will, where we have not we resecured the business on a go-forward basis. One was in Electrical Systems, one was in seating. So it's not necessarily a product category or a sector. It's really customer-specific where we have underperforming profit rates. We're just going in and either we're trying to get a deal that both sides can mutually agree to, which, in most cases, means we're trying to increase our price. We've had only 2 losses that are noteworthy in the last 1.5 years.

是的。因此，我們設定了我們想要實現的財務目標，以便獲得適當的財務回報，這樣我們就可以對業務進行再投資並保持競爭力。如果你願意的話，我們有 2 次損失，在我們沒有的地方，我們在前進的基礎上重新獲得了業務。一個在電氣系統，一個在座位。所以它不一定是產品類別或部門。在我們表現不佳的利潤率方面，這確實是針對特定客戶的。我們只是進入，或者我們試圖達成雙方都能同意的協議，在大多數情況下，這意味著我們試圖提高我們的價格。在過去的 1.5 年裡，我們只有 2 次值得注意的損失。

Okay. And one more for me, if I may. So you talked about the '22 forecast for Class 8 and 57, Classes 5 to 7 production. Can you give us an idea of early -- What you're seeing here for 2023 in that market?

好的。如果可以的話，再給我一個。所以你談到了 8 級和 57 級、5 級到 7 級生產的 22 年預測。你能告訴我們早期的想法——你在那個市場上看到的 2023 年是什麼嗎？

Yes. So the reports came out this morning on the orders and the orders are very high. The current backlogs for vehicles are approaching 1.5 years now. The entire year of '23 appears to be sold out from the order books right now. ACT is the third party that we usually quote, they're predicting a similar year to this year. And there's various opinions on that. But right now, with the order books have been opened for 23 by all the main OEs globally, there's been a big in rush of initial orders in the orders have increased significantly, and they are a very high rate that exceed the industry's ability to produce on a practical basis, the supply chain issues that our OE customers have had are continuing, and they seem to all be reporting that semiconductors are becoming less of a problem. However, they continue to have problems, axles, brakes and other componentry. So it's still a supply chain constrained outlook for '23 and orders exceed the abilities in the industry's ability to produce. So we believe that next year right now looks very similar to this year and its supply chain based.

是的。所以今天早上關於訂單的報告出來了，訂單非常多。目前車輛積壓已接近 1.5 年。整個 23 年的訂單現在似乎都已售罄。 ACT 是我們通常引用的第三方，他們預測的年份與今年相似。對此有不同的看法。但是現在全球各大主機廠都已經開放了23家的訂單，首批訂單出現了巨大的搶購潮，訂單量大幅增加，而且是一個非常高的速度，已經超過了行業的生產能力。實際上，我們的 OE 客戶所遇到的供應鏈問題仍在繼續，而且他們似乎都在報告說半導體正變得不再是一個問題。然而，他們仍然有問題，車軸、剎車和其他部件。因此，23 年的供應鏈前景仍然受限，訂單超過了行業的生產能力。因此，我們認為明年現在看起來與今年及其基於供應鏈的情況非常相似。

Great. Much appreciate it.

偉大的。非常感謝。

Your next question comes from John Franzreb from Sidoti.

你的下一個問題來自 Sidoti 的 John Franzreb。

Harold. Welcome aboard, Andy. I'd like to try to start with the warehouse automation business. How about some updated thoughts there on when you reached the trough in that business? What kind of recovery are you thinking about? I think last time you talked about maybe mid next year, is that still on target? Or has that moved left or the right.

哈羅德。歡迎加入，安迪。我想嘗試從倉庫自動化業務開始。當你在那個行業達到低谷時，有一些最新的想法怎麼樣？你在考慮什麼樣的恢復？我想你上次談到也許明年年中，這是否仍在目標中？或者它向左或向右移動了。

Yes. So you can tell from our numbers that, that segment is our disappointment. Our vehicle businesses are doing what we wanted them to do and behaving. We have good demand. But warehouse automation really went through a cliff event. The big public reporter here is Amazon, and we're not allowed to really say our customer due to NDA, but they publicly report, they publicly said, and they do consume half of the industry's supply. So if you look at what's happened with e-commerce and how it inflected up during COVID and now the shippers are reporting negative year-over-year comps, they put a hold on their infrastructures. It's not forever.

是的。所以你可以從我們的數字中看出，那個部分是我們的失望。我們的汽車業務正在按照我們的意願行事。我們有很好的需求。但倉儲自動化確實經歷了斷崖事件。這裡最大的公共記者是亞馬遜，由於 NDA，我們不能真正說出我們的客戶，但他們公開報告，他們公開表示，他們確實消耗了該行業一半的供應。因此，如果你看看電子商務發生了什麼，以及它在 COVID 期間是如何變化的，現在托運人報告同比下降，他們就會暫停他們的基礎設施。這不是永遠的。

They can't hold on forever. But definitely, there's less spending in the physical infrastructures for e-commerce shipping, FedEx, UPS, Walmart, the top 50 e-commerce shippers and retailers. So, it is in a pause right now. We're suffering from it. We've pulled in our horns, John. We've closed one of our plants, 1 of our 2 plants, one in Monona, Iowa and the cost -- our costs are still in Q3. But Q4 is going to look different in that business because we've adjusted our fixed cost structure, and we've aggressively reduced our staff. So us as a supplier into the industry, we've rightsized our cost structure around our current run rate.

他們不能永遠堅持下去。但可以肯定的是，電子商務運輸、聯邦快遞、UPS、沃爾瑪、前 50 大電子商務托運人和零售商在物理基礎設施方面的支出較少。所以，它現在處於暫停狀態。我們正在受苦。約翰，我們已經屈服了。我們已經關閉了我們的一家工廠，我們的 2 家工廠中的 1 家，一家位於愛荷華州莫諾納和成本——我們的成本仍在第三季度。但第四季度在該業務中看起來會有所不同，因為我們已經調整了固定成本結構，並且我們已經大幅裁員。因此，作為該行業的供應商，我們已經圍繞當前的運行率調整了成本結構。

Okay. Fair enough. You mentioned that you're in process, I believe, of building greenfielding 2 new facilities, manufacturing facilities, one in Africa and one in Mexico. Could you talk a little bit about the CapEx associated with that and when do you expect that to be completed?

好的。很公平。我相信你提到你正在建設綠地 2 個新設施，製造設施，一個在非洲，一個在墨西哥。您能否談談與此相關的資本支出以及您預計何時完成？

Yes. So the new wins that we've won, we need additional capacity that we don't have in North America and in Europe and the plant in Central Mexico. We haven't announced location yet, but it's in Central Mexico. It will be now it's probably within about 4 weeks. We're still kind of negotiating for the best deals we can get. That one will be coming on line in Q3, and we'll begin producing products probably in Q4, the end of Q4. The one in Northern Africa is a little closer in. We need to begin producing in Q3. And so the plant will be coming online in Q2. With regards to capital, our Electrical Systems business is CapEx light.

是的。因此，我們贏得了新的勝利，我們需要在北美和歐洲以及墨西哥中部的工廠沒有的額外產能。我們還沒有宣布地點，但它在墨西哥中部。現在可能會在大約 4 週內。我們仍在就我們可以獲得的最佳交易進行談判。那個將在第三季度上線，我們可能會在第四季度末開始生產產品。北非的那個更近一些。我們需要在第三季度開始生產。因此，該工廠將在第二季度上線。在資本方面，我們的電氣系統業務的資本支出很少。

But the spending will be inside of our corporate guidance of $20 million to $25 million of capital. That will be a similar number for next year. And we're running to the low end of that number this year but it's just a few million dollars, John. It's not a lot it's not expensive to expand in that business. It's mainly setting up a good, low-cost hourly workforce. So we already have the equipment for one of the plants, and we have the equipment for the other one about ready to order it.

但支出將在我們 2000 萬至 2500 萬美元資本的公司指導範圍內。明年將是類似的數字。今年我們正接近這個數字的低端，但只有幾百萬美元，約翰。擴展該業務並不昂貴。它主要是建立一支優秀的、低成本的小時工。所以我們已經為其中一家工廠準備了設備，我們也為另一家工廠準備了設備，準備訂購。

Okay. Got it. And just for clarity, why the 2-step process in price increases in 4Q and 1Q again?

好的。知道了。為清楚起見，為什麼在第 4 季度和第 1 季度再次採用兩步提價流程？

Yes. So actually, this year, we had 4 separate price increases and that it gets down to our terms and conditions, like the 2 that are going to start on January 1, the deals we cut with them were that it's really when can you impact new POs. So this crowd gives you POs that go out a period of time so that they can secure supply for themselves. And in a couple of instances, we acknowledged POs through 12/31. So when we renegotiate prices, they come into effect on the next set of POs that we accept. That's why there's a little bit of a timing lag because we honor their desire -- it's a partnership, and so they need certain oversupply. And so when they put in the ADI portal set of POs and we acknowledge them, then we have to honor the price on them. It's kind of just layers in, John.

是的。所以實際上，今年我們有 4 次單獨的價格上漲，這取決於我們的條款和條件，比如 2 次將於 1 月 1 日開始，我們與他們達成的交易是，你真的什麼時候可以影響新的訂單。所以這群人給你 PO 一段時間，這樣他們就可以為自己確保供應。在一些情況下，我們在 12 月 31 日之前確認了採購訂單。因此，當我們重新協商價格時，它們會在我們接受的下一組 PO 上生效。這就是為什麼會有一點時間滯後，因為我們尊重他們的願望——這是一種夥伴關係，所以他們需要一定的供過於求。因此，當他們放入 ADI 門戶的 PO 集並且我們承認他們時，我們必須兌現他們的價格。約翰，這只是一層一層的。

Okay. And one last question, I'll get back into queue. Your aftermarket business took a nice step-up in the third quarter. What's driving all that?

好的。最後一個問題，我會回到隊列中。您的售後市場業務在第三季度取得了長足的進步。是什麼推動了這一切？

Yes. So 2 things. Well, I guess the main one is getting our production in order in both wipers and aftermarket seats in North America. We had a lot of part shortages in those businesses from Asia, and we've worked our way through them, and we vertically integrated in both of those areas. And in the case of seeding, aftermarket seedinh, we've built an entire new plant and [Fimat], Alabama and the plant is online now. In the case of Vipers, we renovated our plant, which is in Indiana and did not need to build an additional plant.

是的。所以兩件事。好吧，我想最主要的是讓我們在北美的雨刷和售後市場的生產井井有條。我們在亞洲的這些業務中存在很多零件短缺，我們已經解決了這些問題，並且我們在這兩個領域進行了垂直整合。在播種、售後市場種子方面，我們已經建立了一個全新的工廠和 [Fimat]，阿拉巴馬州和工廠現在在線。在 Vipers 的案例中，我們翻新了位於印第安納州的工廠，不需要建造額外的工廠。

And so we worked through our backlog mainly. It's mainly us working through our backlog, and we're still working through our backlog, John. We're not caught up yet on that one. It's one reason why we haven't launched the e-commerce second step on this because we have to build an inventory profile. Fundamentally, we're going to go from make to order to ship from stock, and we've traditionally lost all of that business because we haven't had any available inventory, and that's going to be a big move for us, and we're coupling it with an electronic storefront. So the website is done. We have our Earl name that's called aftermarket truckparks.com. The website's ready with Shopify in the background. But the covers are there because we still have a backlog we're working through. So, we expect to see a similar kind of flow in the fourth quarter in that business, John, and then picked up next year when we have a more proactive inventory position.

因此，我們主要處理了我們的積壓工作。約翰，這主要是我們在處理我們的積壓工作，我們仍在處理我們的積壓工作。我們還沒有趕上那個。這是我們沒有啟動電子商務第二步的原因之一，因為我們必須建立一個庫存檔案。從根本上說，我們將從製造到訂單再到庫存發貨，傳統上我們已經失去了所有這些業務，因為我們沒有任何可用庫存，這對我們來說將是一個重大舉措，我們將它與電子店面結合起來。這樣網站就做好了。我們有我們的伯爵名字，叫做售後市場 truckparks.com。該網站已準備就緒，後台有 Shopify。但封面還在，因為我們還有待處理的積壓工作。因此，我們預計第四季度該業務會出現類似的流量，約翰，然後在明年我們擁有更主動的庫存狀況時回升。

And I guess we should allow for higher inventory on a go-forward basis and leading into working capital a little bit?

而且我想我們應該在前進的基礎上允許更高的庫存並稍微引入營運資金？

Yes and so we're going to have a bigger inventory profile in that business on an ongoing basis. Hopefully, it's a very good return for us. It's a very good return on investment. That's a capital business for us. So it will be accretive to return on invested capital, but it will have more inventory. Yes.

是的，因此我們將持續在該業務中擁有更大的庫存概況。希望這對我們來說是一個很好的回報。這是一個非常好的投資回報。這對我們來說是一項資本業務。因此，投資資本回報率會增加，但庫存會增加。是的。

Your next question comes from Stephen Emerson, private investor.

你的下一個問題來自私人投資者 Stephen Emerson。

I was just thinking to what extent you're able to reposition warehouse automation to all the reshoring of factories automation and such prime contractors like Rockwell. It strikes me that it's very similar systems and equipment.

我只是在想你能在多大程度上將倉庫自動化重新定位到工廠自動化的所有回流以及像羅克韋爾這樣的主要承包商。令我印象深刻的是，它們是非常相似的系統和設備。

Correct. And we -- Rockwell is a supplier to us. So we buy automation parks and pieces and make subsystems. But your first point is correct. And so what are we trying to do in warehouse automation. We're trying to reboot it, add customers and expand our service offering. We fundamentally offer service, which is assembling automation components and to put away systems, take off and put away systems and kind of low-end robotics in these automated facilities. We hired a new business leader from the industry, and we are modifying our system solution, and we're repurposing our inventory into systems that we can sell to other people. Rockwell, they would be a consumer of this internally for their own manufacturing, but primarily, they're pushing -- They would like us to get on with what we're doing because we procure their components and put them into implementations.

正確的。而我們——羅克韋爾是我們的供應商。所以我們購買自動化園區和部件並製造子系統。但你的第一點是正確的。那麼我們在倉庫自動化方面試圖做什麼。我們正在嘗試重新啟動它、增加客戶並擴展我們的服務範圍。我們從根本上提供服務，即組裝自動化組件並在這些自動化設施中存放系統、起飛和存放系統以及各種低端機器人。我們從行業中聘請了一位新的商業領袖，我們正在修改我們的系統解決方案，我們正在將我們的庫存重新用於我們可以出售給其他人的系統。羅克韋爾，他們將成為他們自己製造的內部消費者，但主要是，他們正在推動——他們希望我們繼續我們正在做的事情，因為我們採購了他們的組件並將它們投入實施。

When do you think you'll be putting out a bit for components and suppliers of automated factories.

你認為你什麼時候會為自動化工廠的組件和供應商投入一點。

So we have a lot of RFQs out. We're bidding on one of the -- well, the largest retailer in the world, you can get to that. We're bidding on their warehouses and their subsystems. We have an active pipeline in that business. That pipeline is inclusive to the $5 billion pipeline that we refer to. That includes all of our pipeline activities for warehouse automation. But the industry is in a pause. So with Amazon taking a time out and FedEx taking a time out and they publicly reported it, you can surmise that the whole industry is in a wait-and-see mode here on what the steady state need is for their distribution networks. And so we're bidding, but there's not a lot of active building right now, Steve. It's really -- the industry is down right now.

所以我們有很多 RFQ。我們正在競標世界上最大的零售商之一，你可以做到這一點。我們正在競標他們的倉庫和子系統。我們在該業務中有一個活躍的管道。該管道包括我們提到的 50 億美元管道。這包括我們所有的倉庫自動化管道活動。但該行業正處於停頓狀態。因此，隨著亞馬遜暫停和聯邦快遞暫停並公開報告，你可以推測整個行業都處於觀望模式，他們的分銷網絡需要什麼樣的穩定狀態。所以我們正在競標，但現在沒有很多活躍的建築，史蒂夫。真的——這個行業現在不景氣。

I'm referring to new segments that use your kind of skill sets, which is automated factories that are reshoring from the Orient.

我指的是使用你那種技能的新細分市場，這是從東方回流的自動化工廠。

Correct. We have a -- we're mainly focused on distribution and parcel handling, and our know-how is in warehousing and logistics versus like a factory. We don't have a skill set there.

正確的。我們有一個——我們主要專注於配送和包裹處理，我們的專業知識是倉儲和物流，而不是工廠。我們在那裡沒有技能。

The next question comes from Flor Deli from VT Capital.

下一個問題來自 VT Capital 的 Flor Deli。

Good morning. Following up on that question, what product the new plant in Mexico and Northern Africa, what products or product lines will they be feeding into? Then following on that, what -- to the extent that they are replacing that supply out of third-party supply out of China, what percent of those products that you were buying will they be replacing?

早上好。跟進這個問題，墨西哥和北非的新工廠生產什麼產品，他們將生產什麼產品或產品線？然後接下來，他們將更換中國第三方供應的供應，他們將更換您購買的產品的百分比是多少？

Okay. So the answer is different for each of those plants. So in Mexico, we're doing 2 things. One is we're building a brand-new plant to make electrical harnesses in Central Mexico to make high-voltage electrical systems for electric vehicles. We ran out of capacity with the amount of business that we won, and it's a big plant. It will grow to be a big plant like a 1,000-person plan, and it will be focused in on making electric quire harnesses for electric vehicles for North America. We have another plant in Saltillo, Mexico, which I can say that name. And that is a place where we're vertically integrating and reshoring metal fabrications and stampings that we've traditionally bought from China from vendors, and we bought equipment over the last year robotic welding equipment and finishing equipment. And we've installed it in our plant in Mexico and sell to our existing plant in Mexico to make components for our seeding business and the amount of components in Phase I, we attacked our --  what we did is we attack our escalating ocean 3.

好的。因此，對於這些植物中的每一種，答案都是不同的。所以在墨西哥，我們正在做兩件事。一是我們正在墨西哥中部建立一個全新的工廠來生產電線束，為電動汽車製造高壓電氣系統。我們贏得的業務量已經用完了，而且這是一個大工廠。它將發展成為一個像1000人計劃一樣的大工廠，並將專注於為北美生產電動汽車的電動線束。我們在墨西哥的薩爾蒂約有另一家工廠，我可以說出那個名字。這是我們垂直整合和回流我們傳統上從中國供應商那裡購買的金屬製造和沖壓件的地方，我們在去年購買了設備機器人焊接設備和精加工設備。我們已經將它安裝在我們在墨西哥的工廠，並出售給我們在墨西哥的現有工廠，為我們的播種業務和第一階段的組件數量製造組件，我們攻擊了我們——我們所做的是攻擊我們不斷升級的海洋3.

And we attacked 50% of our ocean freight spend. The ocean freight spend is coincident with the weight of the part. So we attacked 50% of our weight. It's not 50% of our buy, no. It's not 50% and of our spend, but it is 50% of our weight. And so our Phase 1, which is underway right now, and we'll kick in in Q1, will obviate eliminate 50% of our ocean freight. Phase 2 of that is also next year, and we are going to be bringing in-house and onshoring our new Unity seat components, and we currently source those from China also and bring them into Mexico. We also bring them into Europe, but we are going to be putting in place the production capacity. Again, in that case, it will be in our U.S. plant. We're targeting or Tennessee to make our Unity seed products instead of sourcing them. That will be about another 20% of the weight. So we will have brought we will have eliminated a big portion of our ocean freight, which has been in our cost model and in our business model for 14 years. So we will have redesigned that portion of our supply chain.

我們削減了 50% 的海運支出。海運費用與零件的重量一致。所以我們攻擊了我們體重的50%。這不是我們購買的 50%，不。這不是我們支出的 50%，而是我們權重的 50%。因此，我們目前正在進行的第一階段，我們將在第一季度開始，將避免消除 50% 的海運費。第二階段也是明年，我們將引進內部和外包我們新的 Unity 座椅組件，我們目前也從中國採購這些組件並將它們帶到墨西哥。我們還將它們帶入歐洲，但我們將建立生產能力。同樣，在那種情況下，它將在我們的美國工廠。我們的目標是在田納西州生產我們的 Unity 種子產品，而不是採購它們。這將是另外 20% 的重量。所以我們將帶來我們將消除我們的大部分海運，這已經在我們的成本模型和我們的商業模型中存在了 14 年。因此，我們將重新設計供應鏈的這一部分。

Just to add more, the new plant in Africa is also going to be our electrical business cabin -- Bring more of the new businesses. We are adding capacity over there to support our European-based customers.

補充一點，非洲的新工廠也將成為我們的電氣業務艙——帶來更多的新業務。我們正在那裡增加容量以支持我們的歐洲客戶。

Thank you, Andy. Yes. That helpful... Thank you...

謝謝你，安迪。是的。很有幫助...謝謝...

Ladies and gentlemen, as a reminder, should you have a question on -- there are no further questions at this time. You may proceed.

女士們先生們，請提醒一下，如果您有任何問題，目前沒有其他問題。你可以繼續。

Thank you, Sergio. Well, thank you for listening in and asking questions. You can see that our vehicle businesses are doing well and improving and have a good outlook in terms of demand and our warehouse automation business is suffering right now as the industry is in a wait-and-see mode. We've made a decision to rightsize our cost structure down, but we are bidding aggressively to add new customer positions when the business and the industry rebounds. And thank you for calling in this quarter, and we look forward to speaking with you in our next quarter. And with that, Sergio will end the call for today.

謝謝你，塞爾吉奧。好的，感謝您收聽和提問。你可以看到，我們的汽車業務表現良好，正在改善，在需求方面前景看好，而我們的倉庫自動化業務目前正遭受重創，因為該行業處於觀望模式。我們已決定縮減成本結構，但我們正在積極競標以在業務和行業反彈時增加新的客戶職位。感謝您在本季度致電，我們期待在下一個季度與您交談。說完，Sergio 將結束今天的電話會議。

Thank you, in, and as that you please disconnect your lines.

謝謝你，在，那麼你請斷開你的線路。