Commercial Vehicle Group Inc (CVGI) 2023 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to CVG Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. And I would now like to turn the call over to Mr. Andy Cheung, Chief Financial Officer. Please go ahead.

早上好，女士們、先生們，歡迎參加 CVG 2023 年第二季度收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。我現在想把電話轉給首席財務官張安迪先生。請繼續。

Thank you, Operator, and welcome, everyone, to our conference call. Joining me on the call today is Bob Griffin, Chairman of the Board and Interim President and CEO of CVG.

謝謝運營商，歡迎大家參加我們的電話會議。今天與我一起參加電話會議的是 CVG 董事會主席兼臨時總裁兼首席執行官鮑勃·格里芬 (Bob Griffin)。

This morning, we will provide a brief company update as well as commentary regarding our second quarter 2023 results. After which, we will open the call for questions.

今天早上，我們將提供簡短的公司最新動態以及有關 2023 年第二季度業績的評論。之後，我們將開始提問。

As a reminder, this conference call is being webcast and a supplemental earnings presentation, which we will refer to during this call is available on our website. 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.

提醒一下，本次電話會議正在網絡直播，我們將在本次電話會議期間參考補充收益演示，該演示可在我們的網站上獲取。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、成本節約舉措和新產品舉措等的預期。

Actual results may differ from anticipated results because of certain risks and uncertainties. These risks and uncertainties may include, but are 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.

由於某些風險和不確定性，實際結果可能與預期結果有所不同。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的波動、財務契約合規性和流動性、與在國外開展業務相關的風險國家、貨幣和其他風險，詳見我們向SEC 提交的文件。

I will now turn the call over to Bob to provide a company update.

我現在將把電話轉給鮑勃，以提供公司的最新情況。

Thank you, Andy, and good morning, everyone. I would like to begin today's call by thanking and celebrating our CVG team members across the company for their commitment to delivering our strategic initiatives during the quarter.

謝謝你，安迪，大家早上好。在今天的電話會議開始時，我想感謝並慶祝全公司的 CVG 團隊成員致力於在本季度實施我們的戰略計劃。

These efforts have helped grow and diversify our revenue streams, optimize our cost structure through process automation and cost reduction and increase our margins to become a bigger, more profitable company.

這些努力幫助我們的收入來源增長並實現多元化，通過流程自動化和成本降低優化了我們的成本結構，並提高了我們的利潤率，成為一家規模更大、利潤更高的公司。

As we enter the next chapter for CVG, I know I can speak for myself and the Board when I say that we are excited about CVG's future supported by the strength and depth of our organization and leadership teams.

當我們進入 CVG 的下一個篇章時，我知道我可以代表我自己和董事會發言，我們對 CVG 在我們組織和領導團隊的實力和深度的支持下的未來感到興奮。

Our team successfully accelerated our commitment to the company's strategic goals, which drove significantly improved financial results year-over-year. We will continue to focus on price and cost and believe our strong revenue and margin performance will continue to show meaningful expansion versus the prior year for the second half of 2023 based on the current market outlook. Andy and I will cover this in more detail.

我們的團隊成功加速了對公司戰略目標的承諾，從而推動了財務業績逐年顯著改善。我們將繼續關注價格和成本，並相信根據當前的市場前景，我們強勁的收入和利潤表現將在 2023 年下半年繼續顯示出較上年有意義的擴張。安迪和我將更詳細地介紹這一點。

We have a solid balance sheet, winning new businesses fully embedded in our company's culture, and we have a strong leadership team, positioning us well to achieve our longer-term 2027 revenue and margin targets.

我們擁有穩健的資產負債表，贏得了完全融入我們公司文化的新業務，並且我們擁有強大的領導團隊，使我們能夠很好地實現 2027 年的長期收入和利潤目標。

Before turning to our second quarter results, I'd like to provide a brief update on our ongoing CEO search. The Board is following a very thorough vetting and selection process. And currently, we have retained a leading independent search firm to assist with this work. We're eager to find the right leader who will continue to drive our business strategy and culture.

在討論第二季度業績之前，我想先介紹一下我們正在進行的首席執行官搜尋的最新情況。董事會正在遵循非常徹底的審查和選擇流程。目前，我們聘請了一家領先的獨立獵頭公司來協助這項工作。我們渴望找到合適的領導者來繼續推動我們的業務戰略和文化。

The Board and I look forward to sharing more with you as the search process evolves, and we will continue working with the management team to ensure a seamless transition with no disruption to our accelerating momentum.

隨著搜索流程的發展，董事會和我期待與您分享更多信息，我們將繼續與管理團隊合作，確保無縫過渡，而不影響我們不斷加速的勢頭。

Now I'd like to turn your attention to the supplemental earnings presentation, starting on Slide 3. Once again, our team delivered strong results in the second quarter, highlighted by net sales of $262 million, which is up 4.5% year-over-year and adjusted EBITDA of approximately $21 million, which is up 68% year-over-year.

現在，我想將您的注意力轉向補充收益演示，從幻燈片 3 開始。我們的團隊在第二季度再次取得了強勁的業績，其中淨銷售額達到 2.62 億美元，同比增長 4.5%。年調整後EBITDA 約為2100 萬美元，同比增長68%。

This results in an adjusted EBITDA margin of 7.9%, again, putting us on track to hit our long-term target of 9% and as we continue to win new business, optimize costs and improve profitability. The strong revenue and margin performance helped drive $0.32 of adjusted earnings per share in the quarter, a substantial improvement over the prior year.

這使得調整後的 EBITDA 利潤率再次達到 7.9%，使我們有望實現 9% 的長期目標，同時我們將繼續贏得新業務、優化成本並提高盈利能力。強勁的收入和利潤率表現幫助推動本季度調整後每股收益 0.32 美元，較上年大幅改善。

We are also pleased with CVG's addition to the Russell 2000 Index in June as we look to expand our reach within the investment community.

我們還對 CVG 於 6 月份加入羅素 2000 指數感到高興，因為我們希望擴大我們在投資界的影響力。

Turning to Slide 4. As I already alluded to in my opening comments, our team continued our profitable growth strategy during the quarter. We continue to win new business with year-to-date new business awards totaling $124 million. These wins tend to be lumpy throughout the year due to customer demand. However, based on our progress this year, we remain confident in achieving our goal of $150 million of new business wins in 2023. These wins continue driving the transformation in our revenue mix toward new customers and platforms.

轉向幻燈片 4。正如我在開場白中提到的，我們的團隊在本季度繼續實施盈利增長戰略。我們繼續贏得新業務，今年迄今為止的新業務獎項總額達 1.24 億美元。由於客戶的需求，這些勝利在全年中往往是不穩定的。然而，根據今年的進展，我們仍然有信心在 2023 年實現 1.5 億美元新業務的目標。這些勝利繼續推動我們的收入結構向新客戶和平台的轉變。

As you've heard from us many times, Electrical Systems is a key growth focus area for CVG. And throughout this transformation process, we've remained focused on delivering best-in-class quality and service to our customers.

正如您多次從我們那裡聽到的那樣，電氣系統是 CVG 的一個關鍵增長重點領域。在整個轉型過程中，我們始終專注於為客戶提供一流的質量和服務。

We continue to drive price realization and cost reduction efforts, which have placed us firmly on track to deliver improved profitability this year. We are also heavily focused on optimizing working capital, increasing cash flows and paying down our debt, and we expect our debt leverage to decrease further in the coming quarters.

我們繼續推動價格實現和降低成本的努力，這使我們堅定地走上今年提高盈利能力的軌道。我們還非常注重優化營運資本、增加現金流和償還債務，我們預計未來幾個季度我們的債務槓桿將進一步下降。

Turning to Slide 5. In line with our comments from last quarter, our demand and market outlook remained positive for the balance of this year, supported by forecasts across our key markets. ACT and FTR continue to project a strong build year for both Class 8 truck builds up between 3% and 8% in 2023, forecasts that have been echoed recently by the OEMs.

轉向幻燈片 5。與我們上季度的評論一致，在我們主要市場預測的支持下，我們今年剩餘時間的需求和市場前景仍然樂觀。 ACT 和 FTR 繼續預測 2023 年 8 級卡車的產量將增長 3% 至 8%，這一預測最近得到了 OEM 廠商的響應。

For the North American Class 8 truck market, the second half of 2023 is projected to be softer year-over-year, namely in Q4 based on current forecasts. As new business wins continue to shift our mix away from the heavy-duty truck market, we expect the cyclicality of this market to have less of an impact on our future financial results.

對於北美 8 級卡車市場，預計 2023 年下半年將同比疲軟，根據目前的預測，即第四季度。隨著新業務的成功繼續將我們的產品組合從重型卡車市場轉移出去，我們預計該市場的周期性對我們未來財務業績的影響較小。

For medium-duty trucks, forecasts call for a 7% increase in 2023, but still see backlog to build ratios at 2x historical rates. We also see a long runway for continued growth in connectivity systems and electric vehicles, a key driver to our new business wins outlook.

對於中型卡車，預測 2023 年將增長 7%，但積壓建造比率仍為歷史水平的 2 倍。我們還看到連接系統和電動汽車的持續增長還有很長的路要走，這是我們新業務贏得前景的關鍵驅動力。

We also see attractive commercial vehicle aftermarket growth of 4% per year in the near future. And after a slight retracement in 2023, we see strong growth for the global earthmoving market as well.

我們還看到，在不久的將來，商用車售後市場將以每年 4% 的速度增長，極具吸引力。經過 2023 年的小幅回撤後，我們看到全球土方工程市場也出現強勁增長。

Turning to Slide 6. We continue to drive new business wins and their cumulative contribution increases by year. This chart shows the increase in expected annual contribution from our new wins in hand.

轉向幻燈片 6。我們繼續推動新業務的發展，其累積貢獻逐年增加。該圖表顯示了我們手頭的新勝利所帶來的預期年度貢獻的增加。

Year-to-date, we've added $124 million in new wins with approximately 80% of these wins within our Electrical Systems business, and more specifically tied to electric vehicle production. We continue to win business globally across both ICE and EV markets, adding new customers and product types to our mix.

今年迄今為止，我們已新增 1.24 億美元的新訂單，其中約 80% 屬於我們的電氣系統業務，更具體地說，與電動汽車生產相關。我們繼續在全球內燃機和電動汽車市場贏得業務，為我們的產品組合增加新的客戶和產品類型。

We recently achieved several important wins in Europe with both ICE and EV auto manufacturers and new wins continue to remain a key component of our culture here at CVG.

最近，我們在歐洲與 ICE 和 EV 汽車製造商取得了幾項重要的勝利，而新的勝利仍然是我們 CVG 文化的重要組成部分。

Turning to Slide 7. As we highlighted last quarter, CVG's global capacity expansion program continues to support our Electrical Systems business in multiple geographic markets, led by the 3 projects highlighted on this slide.

轉向幻燈片 7。正如我們上季度強調的那樣，CVG 的全球產能擴張計劃繼續支持我們在多個地理市場的電氣系統業務，並以本幻燈片中強調的 3 個項目為主導。

We are excited to report that we held our grand opening at our Mexico facility in July and production is now underway. Our expansion project in Tangier, Morocco just completed customer audits and will ramp up production in Q3. These expansions greatly benefit our effort to further grow our Electrical Systems business globally.

我們很高興地報告，我們於 7 月在墨西哥工廠舉行了盛大的開業典禮，目前生產正在進行中。我們在摩洛哥丹吉爾的擴建項目剛剛完成客戶審核，並將在第三季度提高產量。這些擴張極大地有利於我們在全球範圍內進一步發展電氣系統業務。

As highlighted on Slide 8, our efforts to strategically reposition the business are paying off. We have continued to reduce our exposure to Class 8 trucks, grow our revenue share of electrical systems and reduce the weight of large customers in our mix.

正如幻燈片 8 所強調的那樣，我們戰略性地重新定位業務的努力正在取得回報。我們繼續減少對 8 級卡車的投資，增加電氣系統的收入份額，並減少大客戶在我們組合中的比重。

Given the acceleration of our strategy, we expect this mix will further transform in our favor as we approach 2027, directly benefiting our profitability and ROIC profile.

鑑於我們戰略的加速實施，我們預計隨著 2027 年的臨近，這種組合將進一步向對我們有利的方向轉變，從而直接有利於我們的盈利能力和投資資本回報率 (ROIC) 狀況。

At our current win and ramp-up rate, we expect Electrical Systems to increase to approximately 40% of revenue by 2027. This business transformation will make CVG a bigger, stronger, more profitable company in the coming years.

按照我們目前的盈利和增長速度，我們預計到2027 年，Electrical Systems 佔收入的比例將增至約40%。這一業務轉型將使CVG 在未來幾年成為一家更大、更強、盈利能力更強的公司。

Turning to Slide 9. We believe we have the right strategy in place to continue driving shareholder value creation. CVG remains fully committed to our strategy to increase profits, increase free cash flow and ultimately expand and invest in our capabilities going forward.

轉向幻燈片 9。我們相信我們已經制定了正確的戰略來繼續推動股東價值創造。 CVG 仍然完全致力於我們的戰略，以增加利潤、增加自由現金流並最終擴大和投資我們的未來能力。

While we are committed to growing our exposure to the secular electrification trend, we have a strong portfolio of businesses, highlighted by a diverse customer base and decreasing cyclicality.

雖然我們致力於增加對長期電氣化趨勢的了解，但我們擁有強大的業務組合，其特點是客戶群多元化和周期性下降。

We expect this portfolio to generate strong cash flow over the coming years, and we expect to maintain a balanced capital allocation approach to reinvest in our business to drive growth, pay down debt and pursue attractive inorganic growth opportunities with the goal of driving increased shareholder value.

我們預計該投資組合將在未來幾年產生強勁的現金流，並且我們預計將保持平衡的資本配置方法，對我們的業務進行再投資，以推動增長、償還債務並尋求有吸引力的無機增長機會，以提高股東價值。

On Slide 10, we reiterate our long-term revenue and profitability targets. The first half of 2023 has been a very solid, and we continue to expect a year of record revenue, higher EBITDA and continued free cash flow and debt paydown.

在幻燈片 10 中，我們重申了我們的長期收入和盈利目標。 2023 年上半年非常穩健，我們繼續預計這一年的收入將創歷史新高，EBITDA 更高，自由現金流和債務償還將持續。

Given this year's expected performance, we have even more confidence in our ability to achieve our long-term targets. Winning new business is part of our culture here at CVG and will be the key driver of hitting our 2027 targets. These new wins continue to diversify our product portfolio and our customer base while simultaneously improving our growth and profitability.

鑑於今年的預期表現，我們對實現長期目標更有信心。贏得新業務是 CVG 文化的一部分，並將成為實現 2027 年目標的關鍵驅動力。這些新的勝利繼續使我們的產品組合和客戶群多樣化，同時提高我們的增長和盈利能力。

The progress we have made thus far on wins puts us on pace to hit $1.5 billion in revenue in 2027. And as you can see, our first half EBITDA margin run rate of 7.7% continues to close in on our 9% target for 2027.

迄今為止，我們在勝利方面取得的進展使我們有望在 2027 年實現收入 15 億美元。正如您所看到的，我們上半年 EBITDA 利潤率為 7.7%，繼續接近我們 2027 年 9% 的目標。

We expect strong cash flow over the next few years, which combined with our disciplined approach to working capital will be prioritized to fund both organic growth and additional debt paydown and to potentially fund bolt-on M&A.

我們預計未來幾年強勁的現金流，再加上我們嚴格的營運資本方法，將優先為有機增長和額外債務償還提供資金，並可能為補充併購提供資金。

Turning to Slide 11. Before I turn the call back over to Andy, I'll just provide a few thoughts on the rest of 2023. Similar to our comments last quarter, we continue to expect 2023 to be our third record revenue year in a row even when factoring in a modest slowdown in second half truck builds forecast by ACT and FTR.

轉向幻燈片 11。在我將電話轉回給 Andy 之前，我將僅提供對 2023 年剩餘時間的一些想法。與我們上季度的評論類似，我們仍然預計 2023 年將是我們在即使考慮到ACT 和FTR 預測的下半年卡車建造量將適度放緩，情況仍然如此。

We expect to continue to show significant expansion year-over-year with pricing benefits, new business ramps and cost outs. We're pleased with margins in the first half. And as we move to the second half of the year, we believe that there will be a limited impact on margins as a result of the slightly lower volumes.

我們預計，憑藉定價優勢、新業務增長和成本削減，將繼續實現同比顯著擴張。我們對上半年的利潤率感到滿意。隨著進入今年下半年，我們認為，由於銷量略有下降，對利潤率的影響有限。

The cash flow generated will drive down leverage ratios through further debt pay down in addition to the higher EBITDA levels. We continue to generate strong new business wins, focused primarily in electrical systems, which will continue to drive future growth in revenue and profits. Our cost reduction program remains on target for the year. We're on track to exit 2023 in a solid financial position with a strong future outlook and balance sheet that provides us the optionality to drive additional growth.

除了更高的 EBITDA 水平之外，產生的現金流還將通過進一步降低債務來降低杠桿率。我們繼續贏得強勁的新業務，主要集中在電氣系統領域，這將繼續推動未來收入和利潤的增長。我們的成本削減計劃仍然達到了今年的目標。我們有望在 2023 年結束時保持穩健的財務狀況，強勁的未來前景和資產負債表為我們提供了推動額外增長的選擇。

And with that, I'd like to turn the call back to Andy for a more detailed review of our financial results.

說到這裡，我想把電話轉回給安迪，讓他更詳細地審查我們的財務業績。

Thank you, Bob, and good morning, everyone. If you are following along in the presentation, please turn to Slide 13.

謝謝你，鮑勃，大家早上好。如果您正在聽演示文稿，請翻到幻燈片 13。

Second quarter 2023 revenue was $262.2 million as compared to $250.8 million in the prior year period. The increase in revenues were primarily driven by increased pricing and new electrical system business, which was partially offset by lower volume in the Industrial Automation segment.

2023 年第二季度收入為 2.622 億美元，上年同期收入為 2.508 億美元。收入的增長主要是由定價增加和新電氣系統業務推動的，但工業自動化領域銷量的下降部分抵消了收入的增長。

Foreign currency translation also favorably impacted second quarter of 2023 revenues by $0.7 million or 0.3%. The company reported consolidated operating income of $15.9 million for the second quarter of 2023 compared to income of $6.2 million in the prior year period. The increase was driven by higher margins, partially offset by higher SG&A.

外幣換算也對 2023 年第二季度的收入產生了 70 萬美元或 0.3% 的有利影響。該公司公佈 2023 年第二季度合併營業收入為 1590 萬美元，而上年同期收入為 620 萬美元。這一增長是由較高的利潤率推動的，但部分被較高的銷售管理費用所抵消。

The second quarter of 2023 adjusted operating income was $16.7 million. Adjusted EBITDA was $20.8 million for the second quarter, up 68% year-over-year compared to $12.4 million in the prior year.

2023 年第二季度調整後營業收入為 1670 萬美元。第二季度調整後 EBITDA 為 2080 萬美元，較去年同期的 1240 萬美元增長 68%。

Adjusted EBITDA margin was 7.9%, an expansion of 300 basis points as compared to adjusted EBITDA margin of 4.9% in the second quarter of 2022. Interest expense was $2.8 million as compared to $2.1 million in the second quarter of 2022. The increase in interest expense was primarily related to high interest rates on variable rate debt. However, it was partially offset by lower average debt balances during the respective periods.

調整後EBITDA 利潤率為7.9%，與2022 年第二季度調整後EBITDA 利潤率4.9% 相比，增長了300 個基點。利息支出為280 萬美元，而2022 年第二季度為210 萬美元。利息增加費用主要與浮動利率債務的高利率有關。然而，這被相應時期平均債務餘額較低所部分抵消。

Net income for the quarter was $10.1 million or $0.30 per diluted share as compared to net income of $2.5 million or $0.08 per diluted share in the prior year period.

本季度淨利潤為 1010 萬美元，即稀釋後每股收益 0.30 美元，而上年同期淨利潤為 250 萬美元，即稀釋後每股收益 0.08 美元。

Turning to the segment results on this slide. You can see the performance of our 3 vehicle-related segments on a combined basis. The combined revenues increased 14% to $253.2 million compared to $222.3 million in the year ago quarter.

轉向這張幻燈片上的分段結果。您可以看到我們 3 個與車輛相關的細分市場的綜合表現。合併收入較去年同期的 2.223 億美元增長 14%，達到 2.532 億美元。

Combined adjusted operating income was $27.7 million, an increase of 186% compared to $9.7 million in the prior year period. The growth in adjusted operating profit again demonstrates the positive impact that our profitable growth strategy has on our bottom line.

調整後合併營業收入為 2770 萬美元，比上年同期的 970 萬美元增長 186%。調整後營業利潤的增長再次表明我們的盈利增長戰略對我們的利潤產生了積極影響。

In our Vehicle Solutions segment, second quarter revenues increased 7% to $152.7 million compared to the year ago quarter, primarily due to increased pricing. Operating income for the second quarter increased 837% to $14.1 million compared to operating income of $1.5 million in the prior year period.

在我們的車輛解決方案部門，第二季度收入較去年同期增長 7%，達到 1.527 億美元，這主要是由於定價上漲。第二季度營業收入增長 837%，達到 1,410 萬美元，而上年同期營業收入為 150 萬美元。

Second quarter 2023 adjusted operating income, which excludes special costs, was $14.5 million, primarily driven by increased pricing, lower freight cost and overhead reduction.

2023 年第二季度調整後營業收入（不包括特殊成本）為 1,450 萬美元，主要是由於定價上漲、貨運成本降低和管理費用減少所致。

Our Electrical Systems segment achieved revenues of $63.6 million, an increase of 34% as compared to the year ago second quarter, resulting from increased sales volume and increased pricing. Operating income was $7.7 million, an increase of $1.8 million compared to the second quarter of 2022 due to increased volume and pricing.

由於銷量增加和價格上漲，我們的電氣系統部門實現收入 6360 萬美元，比去年同期增長 34%。由於銷量和定價的增加，營業收入為 770 萬美元，較 2022 年第二季度增加 180 萬美元。

Our aftermarket and Accessories segment, revenues increased 14.5% to $36.8 million compared to the year ago quarter, primarily resulting from increased pricing. Operating income was $5.5 million, an increase of 388% compared to operating income of $1.1 million in the prior year period. The increase was primarily attributable to strong price realization.

我們的售後市場和配件部門的收入與去年同期相比增長了 14.5%，達到 3680 萬美元，這主要是由於定價上漲。營業收入為 550 萬美元，比上年同期的營業收入 110 萬美元增長 388%。這一增長主要歸因於強勁的價格實現。

Our Industrial Automation segment produced second quarter revenues of $9 million, a decrease of 68% as compared to $28.5 million in the second quarter of 2022 due to lower demand levels.

由於需求水平下降，我們的工業自動化部門第二季度收入為 900 萬美元，比 2022 年第二季度的 2850 萬美元下降了 68%。

Operating loss was $2.1 million, a decrease compared to the operating income of $1.3 million in the year ago quarter, primarily attributable to volume reduction and an inventory charge of $1.6 million. Adjusted operating loss was $1.7 million over the second quarter.

營業虧損為 210 萬美元，較上年同期營業收入 130 萬美元有所下降，主要歸因於銷量減少和 160 萬美元的庫存費用。第二季度調整後運營虧損為 170 萬美元。

As we have highlighted in the previous calls, our restructuring efforts are expected to improve performance in this segment in the second half of 2023.

正如我們在之前的電話會議中強調的那樣，我們的重組工作預計將在 2023 年下半年改善該領域的業績。

Highlighted on Slide 14 our key financial trends and metrics for our business. During the quarter, we were able to sustain the strong financial performance we delivered last quarter with improved EBITDA and margin on a sequential basis.The sequential improvements were again driven by a strong focus on price realization and cost reduction.

第 14 張幻燈片強調了我們的主要財務趨勢和業務指標。在本季度，我們能夠維持上季度強勁的財務業績，稅息折舊及攤銷前利潤和利潤率環比改善。環比改善再次受到對價格實現和成本降低的強烈關注的推動。

As highlighted on the bottom right chart, we continue to pay down debt during the quarter, and our net leverage is trending down due to improving profitability and EBITDA generation. We expect that our net leverage will decline further in 2023 as our strategy continues to deliver strong financial results.

正如右下圖所示，我們在本季度繼續償還債務，並且由於盈利能力和 EBITDA 生成的改善，我們的淨槓桿率呈下降趨勢。隨著我們的戰略繼續帶來強勁的財務業績，我們預計 2023 年我們的淨槓桿率將進一步下降。

We remain committed to our financial priorities for fiscal 2023, which are to drive additional cost savings to generate higher profitability, generate free cash flow and invest in our growing business platforms. These efforts, combined with improving line of sight into our production schedule, give us comfort in our 2023 year-term financial targets, as Bob already alluded to.

我們仍然致力於 2023 財年的財務優先事項，即推動額外成本節約，以產生更高的盈利能力、產生自由現金流並投資於我們不斷增長的業務平台。正如鮑勃已經提到的那樣，這些努力加上我們對生產計劃的改進，讓我們對 2023 年的財務目標感到放心。

Specifically, we believe we are well on track to deliver record revenues in 2023, along with significant year-over-year margin expansion. That concludes my financial overview, and I will now turn the call back over to the operator to open the line up for questions.

具體來說，我們相信我們有望在 2023 年實現創紀錄的收入，同時利潤率同比大幅增長。我的財務概況到此結束，現在我將把電話轉回給接線員，以安排提問。

Ladies and gentlemen we will now begin the question and ask session. (Operator Instructions) Your first question comes from the line of Joe Gomes from Noble Capital.

女士們先生們，我們現在開始提問環節。 （操作員說明）您的第一個問題來自Noble Capital 的Joe Gomes。

Congrats on the quarter.

恭喜本季度。

Thank you very much.

非常感謝。

I just wanted to start on the CEO search. Thanks for giving us some insight on that. I'm wondering if maybe you can just kind of give us a little more thought on timing for this? And when you guys are hoping to have this all wrapped up and concluded?

我只是想開始尋找首席執行官。感謝您給我們一些對此的見解。我想知道您是否可以讓我們多考慮一下時間安排？你們什麼時候希望這一切都結束並結束？

Yes. I think, that obviously, is a question that's top of mind for many people. And we have -- there's a process to these searches. We have a search committee of the Board that's comprised of 4 of our independent directors. They're working with a leading search firm, a global search firm. And like all searches, it starts with a pretty large funnel at the top and then comes down to first interviewing a smaller number of people and then winnowing that down to an even smaller number and moving through quite consistent process.

是的。我認為，這顯然是許多人最關心的問題。我們有一個這些搜索的過程。我們設有一個董事會遴選委員會，由 4 名獨立董事組成。他們正在與一家領先的獵頭公司（一家全球獵頭公司）合作。與所有搜索一樣，它從頂部的一個相當大的漏斗開始，然後歸結為首先採訪較少數量的人，然後將其篩選到更小的數量，並通過相當一致的過程進行。

We're I would describe in the middle of that process at this point. I think we're excited to see people who are interested in becoming the next CEO of CVG. It's hard to pinpoint the exact timing of any of this.

我將在這一過程的中間描述我們。我認為我們很高興看到有興趣成為 CVG 下一任首席執行官的人。很難確定這一切的確切時間。

It -- all -- most of the people we talk to have jobs already. And as a result, just doing it as quickly as the Board might and the company management might prefer is not always possible. But I think it will be timely and ultimately, I would go on to say that although I'm an interim, I've been a very active interim. I'm here every week and working every day when I'm not here. And I don't think that the company and its management have lost a beat in pursuing its strategy or its short-term quarterly operating goals or goals for 2023, while I've been sitting in the chair.

與我們交談的大多數人都已經有了工作。因此，僅僅按照董事會和公司管理層希望的速度去做並不總是可行的。但我認為這將是及時的，最終，我會繼續說，雖然我是臨時工，但我一直是一個非常積極的臨時工。我每週都在這裡，不在的時候我每天都在工作。我認為，在我擔任主席期間，公司及其管理層在追求其戰略或短期季度運營目標或 2023 年目標方面並沒有失去節奏。

So more on that later. I wish I could give you a definite date, but we'll certainly keep you posted and let you know when the search is completed, and we're able to introduce our next CEO.

稍後會詳細介紹。我希望能給您一個明確的日期，但我們一定會隨時通知您，並在搜索完成後通知您，並且我們能夠介紹我們的下一任首席執行官。

And Andy, I've got all my numbers correct here, just looking. Operating margin percentage looks like it (inaudible) actually, let me skip that one because I think my numbers are incorrect. I apologize for that.

安迪，我所有的數字都正確，只是看看。營業利潤率實際上看起來像（聽不清），讓我跳過這個，因為我認為我的數字不正確。我對此表示歉意。

No problem.

沒問題。

On the Industrial Automation segment it's had a difficult, let's call it, past 12 to 18 months. You were hoping that it bottomed out last quarter continue to decline modestly, but revenues didn't continue to decline. I mean what do we see as the future of that business?

在過去的 12 到 18 個月裡，工業自動化領域經歷了一段艱難的時期。您希望上季度觸底後繼續小幅下降，但收入並沒有繼續下降。我的意思是我們對該業務的未來有何看法？

Yes, Joe, good question. So as we mentioned in the past quarters, we're seeing the bottoming of that business unit's revenues. I think this quarter is relatively close to what we have last quarter.

是的，喬，好問題。正如我們在過去幾個季度提到的，我們看到該業務部門的收入觸底。我認為本季度與上季度相對接近。

You can see year-over-year, it's still a very large decline as we expected. What we have done there is we have restructured the business. We moved the fixed costs so that we can scale it at the current revenue level. We have talked about that in the past. Longer term, we expect that the warehouse industry is still growing longer term, maybe in the double-digit 15% range. But for now, we'll have to wait for a few quarters to see some meaningful rebound.

你可以看到，與去年同期相比，正如我們預期的那樣，下降幅度仍然非常大。我們在那裡所做的是我們重組了業務。我們轉移了固定成本，以便我們可以根據當前的收入水平進行擴展。我們過去曾討論過這一點。從長遠來看，我們預計倉儲行業仍將長期增長，可能在 15% 的兩位數範圍內。但就目前而言，我們必須等待幾個季度才能看到一些有意義的反彈。

Just one look to highlight this quarter, you can see the business had a write-off of inventory. So it's embedded in the result. But as we move that right off, you can see the business is operating at a breakeven level, as we mentioned last quarter.

只需看一眼本季度的亮點，您就可以看到該業務已註銷庫存。所以它被嵌入到結果中。但當我們立即採取行動時，您可以看到該業務正在以盈虧平衡的水平運營，正如我們上季度提到的那樣。

So we're hopeful that we'll see some good news from a revenue standpoint. It will be a couple of quarters. The team is working really well, driving additional pipeline. Our leadership is really focusing on generating new business for that segment. So I think it's waning as expected. So hopefully, to see some good news in a couple of quarters down the road.

因此，我們希望從收入的角度來看會看到一些好消息。這將需要幾個季度。該團隊工作得非常好，推動了更多的管道。我們的領導層真正專注於為該細分市場創造新業務。所以我認為它正在如預期般減弱。希望在接下來的幾個季度裡能看到一些好消息。

Great. And one more for me, if I may. On the aftermarket parts business, obviously, we had a new launch of the website. Maybe give us a little more detail on how that is unfolding, how is it meeting expectations? How is that all going for that segment of the business?

偉大的。如果可以的話，再給我一份。顯然，在售後零件業務方面，我們推出了新的網站。也許可以給我們更多關於這是如何展開的細節，它如何滿足期望？該業務部門的進展如何？

Yes. So yes, we mentioned that the website has been operational since last quarter. We're still working through -- continue to drive traffic to the website. I'll be frank that the revenue is not ramping up as fast as we expected. We're still learning how to operate that.

是的。所以，是的，我們提到該網站自上季度以來一直在運營。我們仍在努力——繼續增加網站的流量。坦白說，收入的增長速度沒有我們預期的那麼快。我們仍在學習如何操作它。

The good news is we're seeing some really good mix and profitability coming through that channel. We'll continue to work to see how we can drive momentum to that channel. So more to come.

好消息是我們看到通過該渠道實現了一些非常好的組合和盈利能力。我們將繼續努力，看看如何推動該渠道的發展。未來還會有更多。

And your next question comes from the line of John Franzreb from CTM Company.

您的下一個問題來自 CTM 公司的 John Franzreb。

I'd like to start with the pricing actions. It's been an important part of the story over the past year and change. I wonder if you could just parse out of the 14% year-over-year change in vehicle-related revenue growth, how much of that is attributed to price versus volume? And if you could even drop that down the line, similarly on the gross margin overall probably then.

我想從定價行為開始。這是過去一年的故事和變化的重要組成部分。我想知道您是否可以從汽車相關收入增長 14% 的同比變化中分析出其中有多少是由價格與數量造成的？如果你甚至可以把它放下來，那麼整體毛利率也可能類似。

Yes. So John, let me give you a little bit highlights. Different segments have a little bit different flavor there. When you look at the Vehicle Solutions segment, the increase in revenues is mostly driven by price. And if you look at the Electrical Systems segment, that is mostly driven by volume, as you can see, that our expansion of that business, our new launches is working. There's some price to it, but the majority of that is in price -- in volume.

是的。約翰，讓我給您介紹一些要點。不同的部分有一點不同的味道。當你觀察車輛解決方案領域時，你會發現收入的增長主要是由價格驅動的。如果你看一下電氣系統領域，你會發現這主要是由銷量驅動的，正如你所看到的，我們對該業務的擴張，我們的新產品發布正在發揮作用。它有一定的價格，但其中大部分是價格——數量。

And then your aftermarket business, the majority of that is in place. So it's a little business -- a different business have a different situation overall. So overall, you can see it's a combination of both price and volume driven by our electrical systems.

然後是您的售後業務，其中大部分已經到位。所以這是一件小事——不同的業務總體上有不同的情況。總的來說，您可以看到這是由我們的電氣系統驅動的價格和銷量的結合。

Got it. And you talked in your presentation about a slowdown in the second half in the truck market relative to the first half. And that's kind of been transmitted by other people also. I'm curious about 2 things. There's some aggressive estimates about 2024 being weaker than 2023. I'm curious by, a, your thoughts about that? And b, is new program wins, do they start to accelerate the point that it kind of at least offset some, if not all, that potential weakness?

知道了。您在演講中談到了下半年卡車市場相對上半年的放緩。這也被其他人傳播了。我對兩件事很好奇。有一些激進的預測認為 2024 年會弱於 2023 年。我很好奇，你對此有何看法？ b，新計劃是否獲勝，他們是否開始加速這一點，至少抵消了一些（如果不是全部）潛在的弱點？

Yes, you are absolutely right. So this is exactly what we see. Second half will be a slight decline from an overall vehicle volume standpoint. It's a little bit too early for us to talk about 2024 at this point. But as Bob also alluded to, you're exactly why that we are seeing some good news in terms of our mix, because of our strategy and the new wins is actually helping us to soften the impact of the (inaudible) cyclicality.

是的，你說得完全正確。這正是我們所看到的。從整體汽車保有量的角度來看，下半年將略有下降。現在談論 2024 年還為時過早。但正如鮑勃也提到的，這正是我們在組合方面看到一些好消息的原因，因為我們的戰略和新的勝利實際上正在幫助我們減輕（聽不清）週期性的影響。

So we're actually very happy seeing the strategy and paying out the way that we wanted to. And as we mentioned, second half will be a small decline in revenues, but the impact on the margin will be rather limited. And then I believe we will have better line of sight next quarter. Maybe at that time, we can talk a little bit more about 2024.

因此，我們實際上非常高興看到該策略並按照我們想要的方式進行支付。正如我們提到的，下半年收入將小幅下降，但對利潤率的影響將相當有限。然後我相信下個季度我們會有更好的視野。也許到時候，我們可以多談談2024年。

Fair enough. And lastly, last quarter, I believe, when the discussion came around to cost savings initiatives, I think that you were able to capture about $9 million of targeted $30 million for this year. I may have missed it. How much have you been able to realize in the second quarter and is still on target for that $30 million for this year?

很公平。最後，我相信，上個季度，當討論圍繞成本節約舉措時，我認為您能夠獲得今年目標 3000 萬美元中的約 900 萬美元。我可能錯過了。您在第二季度實現了多少目標，並且仍然實現了今年 3000 萬美元的目標？

Right. Yes. We are still on track. We are actually slightly higher than our midpoint for the full year execution of that target. So you can see that our margin expansion and other components of financials that you can see the execution of the cost reduction is really helping us in terms of delivering our financial results. We're happy with the progress. We're slightly ahead of schedule. We believe that we'll continue the momentum.

正確的。是的。我們仍然在正軌上。實際上，我們的全年執行目標略高於中點。因此，您可以看到我們的利潤率擴張和財務的其他組成部分，您可以看到成本削減的執行確實有助於我們實現財務業績。我們對進展感到滿意。我們比計劃稍微提前了一些。我們相信我們將繼續保持這一勢頭。

And your next question comes from the line of Gary Prestopino from Barrington Research.

您的下一個問題來自 Barrington Research 的 Gary Prestopino。

A couple of questions. I mean already, the costs were addressed. So that was one thing I wanted to ask. But if I look at my math, it looks like you did about $39 million of new business wins in the quarter. Is that correct?

有幾個問題。我的意思是，成本已經得到解決。這就是我想問的一件事。但如果我看一下我的數學，看起來您在本季度贏得了大約 3900 萬美元的新業務。那是對的嗎？

That's about right around $40 million, yes.

是的，大約是 4000 萬美元。

Okay. So just some other things here. Your tax rate was down year-over-year. What kind of tax rate are you looking at for the back end of the year?

好的。這裡還有一些其他的事情。您的稅率逐年下降。您預計年底的稅率是多少？

Yes. So this year, we're expecting around 24% tax rate, which is a little bit of an improvement from last quarter as well as last year. As we mentioned at the end of last year, we were having some unfavorable mix because of our U.S. business wasn't making enough money last year. So that situation turned around, and it's actually helping us. So that's why we're seeing some good news there.

是的。因此，今年我們預計稅率約為 24%，比上季度和去年都有一點改善。正如我們在去年年底提到的，由於我們的美國業務去年沒有賺到足夠的錢，因此我們遇到了一些不利的組合。所以情況發生了逆轉，這實際上對我們有幫助。這就是為什麼我們在那裡看到一些好消息。

Longer term, I'll continue to expect that the rate will be around 25% plus/minus. So we'll have more line of sight as we continue to build the growth and see the mix of the company. But overall, we're seeing some good news as compared to last year.

從長遠來看，我將繼續預計該利率將在 25% 加/減左右。因此，隨著我們繼續實現增長並了解公司的組合，我們將擁有更多的視野。但總的來說，與去年相比，我們看到了一些好消息。

Okay. And then just -- I'm not looking for any exact numbers, but jumped to 7.9% in Q2. Are your expectations that on a sequential basis, the back half of the year, we will continue to see improvement? Or is it more of we will see an improvement year-over-year, but you may be at somewhat of a little bit of a high watermark in Q2 here.

好的。然後，我並不是在尋找任何確切的數字，但在第二季度躍升至 7.9%。您是否預計下半年我們將繼續看到改善？還是我們會看到同比有所改善，但第二季度的水位線可能有點高。

Yes, you're right, Gary. As we mentioned, year-over-year, we definitely see a very meaningful margin expansion. As we mentioned, second half we'll see a little slower revenue. So it puts some pressure on our margin, but we've mentioned the impact will be limited. So we're happy with the one way first half. We expect that we have limited exposure due to the downturn of the slowdown on the revenues. So I think we're rounding up in a consistent manner as we originally expected.

是的，你是對的，加里。正如我們提到的，與去年同期相比，我們肯定會看到非常有意義的利潤率擴張。正如我們提到的，下半年我們會看到收入略有放緩。因此，這對我們的利潤率造成了一些壓力，但我們已經提到影響將是有限的。所以我們對上半場的單向感到滿意。我們預計，由於收入放緩，我們的風險敞口有限。因此，我認為我們正在以與最初預期一致的方式進行匯總。

Okay. And then 2 more quick questions. You said you're on target at $150 million of new business. As I look at my notes, you -- in Q1, you said you were targeting at least $100 million in new wins in 2024 and 2025. Is that still a good number as you see it?

好的。然後還有 2 個簡單問題。您說過您的新業務目標是 1.5 億美元。當我查看我的筆記時，您在第一季度表示，您的目標是在 2024 年和 2025 年實現至少 1 億美元的新勝利。您認為這仍然是一個不錯的數字嗎？

Yes. So these are good numbers. There's a number we gave. So I think about a quarter or 2 ago, we said that on an ongoing basis, we expect about $100 million of new win longer term. As you can see, Q1, Q2, the team is really running strong, and we are expecting this year to be around 150.

是的。所以這些都是不錯的數字。我們給了一個數字。因此，我認為大約一兩個季度前，我們表示，在持續的基礎上，我們預計長期新盈利約為 1 億美元。正如你所看到的，Q1、Q2，團隊確實運行強勁，我們預計今年會達到 150 人左右。

We'll have to see these new wins are very lumpy. As you can see, it depends on the customer's launch schedule, their model change schedule. So I think we are very happy with the current momentum. So hopefully, that we'll continue to see good news in the next couple of quarters.

我們必須看到這些新的勝利非常不穩定。正如您所看到的，這取決於客戶的發佈時間表及其型號更改時間表。所以我認為我們對目前的勢頭非常滿意。希望我們能在接下來的幾個季度繼續看到好消息。

And then just the last one for me, and I'll jump off and this is for Bob. In terms of what are the qualities you're looking for in a new CEO as well as do you feel that the background has to be tangental to the businesses that you're in right now.

然後是我的最後一個，我會跳下來，這是給鮑勃的。就您正在尋找的新首席執行官的品質而言，您是否認為背景必須與您目前所在的業務無關。

Well, that's a good question. I think, optimally, we'd like to have somebody who has some successful managerial experience in the current business suite that we have. Obviously, the Electrical Systems business is a growth business for the company. The primary -- is really a focused growth area. And so having somebody who has that experience is important.

嗯，這是個好問題。我認為，最好的情況是，我們希望有人在我們現有的業務套件中擁有一些成功的管理經驗。顯然，電氣系統業務是公司的增長業務。主要的——確實是一個重點增長領域。因此，擁有具有這種經驗的人非常重要。

But equally as important is somebody who's got the gravitas and the cultural instincts that are going to keep this -- we've got a very good leadership team right now. And we want somebody who's going to come in and meld with that leadership team and his strategic minded and pushes our strategy together forward.

但同樣重要的是一個有尊嚴和文化本能的人，這將保持這一點——我們現在有一個非常好的領導團隊。我們希望有人能夠加入並與領導團隊和他的戰略思維融為一體，共同推動我們的戰略向前發展。

So one of the things that we're not looking to is to, as might typically happen is to have a CEO come in and then do a complete strategy review and a potential strategy reset.

因此，我們不希望發生的事情之一是讓首席執行官介入，然後進行完整的戰略審查和潛在的戰略重置，這通常會發生。

The Board feels that the strategy we have, although it might be modified in certain small ways is a very solid strategy for the company. And so one of the attributes is somebody who can identify with the strategy and is anxious to pursue the strong growth that we're currently experiencing.

董事會認為，我們現有的戰略儘管可能會進行某些小的修改，但對公司來說是一個非常可靠的戰略。因此，特徵之一是有人能夠認同我們的戰略，並渴望追求我們目前正在經歷的強勁增長。

Would this individual have to come from a public markets background? Or would you look at somebody who has run private companies as well?

此人必須有公開市場背景嗎？或者您會考慮也經營過私營公司的人嗎？

I think as you do with all searches, you try to create as broad cross-section of people as possible. And so we've been looking at public market people, private marketing people, someone who has a previous CEO experience, somebody who has run a large piece of a larger company.

我認為，正如您對所有搜索所做的那樣，您會嘗試創建盡可能廣泛的人員橫截面。因此，我們一直在尋找公開市場人員、私人營銷人員、有過首席執行官經驗的人、曾經營過大公司大部分業務的人。

I think experience attributes are very important to us, operational attributes. We certainly want somebody who's got a manufacturing or operational background at some point in their career and who has experienced P&L responsibility. So all these things go into a long laundry list. And then you end up defaulting in many ways to the person the Board sees who is going to be able to come on to the CEO position and drive the strategy forward. And I think we'll be able to -- based on what I've seen so far, I think we'll be successful in finding somebody like that in a timely fashion.

我覺得體驗屬性對我們來說非常重要，操作屬性。我們當然希望有人在其職業生涯的某個階段具有製造或運營背景，並且具有損益責任經驗。所以所有這些事情都被列入了一份長長的清單中。然後，你最終會在很多方面辜負董事會認為能夠擔任首席執行官並推動戰略向前發展的人選。我認為我們將能夠——根據我迄今為止所看到的情況，我認為我們將成功地及時找到這樣的人。

And we have a follow-up question that comes from the line of John Franzreb from Sidoti & Company.

我們還有一個後續問題，來自 Sidoti & Company 的 John Franzreb。

I'm just looking for a little point of clarity here. You're talking about sustainability of the margin profile. Are you talking about it as a starting point in the second quarter? Or are you talking about the first half as far as the sustainability of the margin into the second half?

我只是想在這裡尋求一點澄清。您談論的是利潤狀況的可持續性。您是在談論第二季度的起點嗎？或者您是在談論上半年的利潤率到下半年的可持續性嗎？

I would say probably closer to the first half. So then second half, we have margin pressure due to the volume, but we believe that's limited based on what we are doing in terms of driving execution. So I would say first half is probably closer to the Q2.

我想說可能更接近上半場。因此，下半年，我們因銷量而面臨利潤率壓力，但我們認為，根據我們在推動執行方面所做的工作，這一壓力是有限的。所以我想說上半年可能更接近第二季度。

Okay. And in regards to debt repayment, can you just give us an update on your thoughts on how quickly can repay debt?

好的。關於債務償還，您能否向我們介紹一下您對多快償還債務的想法？

Well, every quarter, we're paying down our debt at this point. We are not necessarily trying to aggressively paying down all the debt. As you can see, there's still some uncertainties along future recessions and the truck market. So I want to make sure that we have ample liquidity on hand. So we're managing it right now. We're generating cash flow. Our first priority is use it to fund our growth internally and then due to pay down debt as we see fit. So we're happy with the current liquidity and also the allocation strategy.

好吧，每個季度我們都會在此時償還債務。我們不一定要積極償還所有債務。正如您所看到的，未來的經濟衰退和卡車市場仍然存在一些不確定性。所以我想確保我們手頭有充足的流動性。所以我們現在正在管理它。我們正在產生現金流。我們的首要任務是用它來為我們的內部增長提供資金，然後在我們認為合適的情況下償還債務。因此，我們對當前的流動性和配置策略感到滿意。

Mr. Griffin, there are no further questions at this time. Please proceed.

格里芬先生，目前沒有其他問題。請繼續。

Well, thank you, operator, and thanks, everyone, for joining today's call. I want to emphasize that fueled by a strong focus on our strategy, a clear prioritization of initiatives, depth of our leadership team, we remain encouraged by CVG's business outlook, and we continue to believe we are on track to achieve our short-term and long-term financial targets. I wish everybody a great day.

好的，謝謝接線員，也謝謝大家參加今天的電話會議。我想強調的是，在對我們戰略的強烈關注、明確的舉措優先順序以及我們領導團隊的深度推動下，我們仍然對CVG 的業務前景感到鼓舞，並且我們仍然相信我們正在實現我們的短期和目標目標。長期財務目標。祝大家都有美好的一天。

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect.

謝謝。女士們、先生們，今天的會議到此結束。感謝大家的參與。你們都可以斷開連接。