Commercial Vehicle Group Inc (CVGI) 2025 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to CVG's second-quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們、先生們，早安，歡迎參加 CVG 2025 年第二季財報電話會議。（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 Mr. Andy Cheung, Chief Financial Officer. Please go ahead.

現在我想將電話轉給財務長 Andy Cheung 先生。請繼續。

Thank you, operator, and welcome, everyone, to our conference call. Joining me on the call today is James Ray, President and CEO of CVG. This morning, we will provide a brief company update as well as commentary regarding our second quarter 2025 results, after which we will open the call for questions. As a reminder, this conference call is being webcast and a Q2 2025 earnings call 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.

謝謝接線員，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 總裁兼執行長詹姆斯·雷 (James Ray)。今天上午，我們將提供簡短的公司更新以及有關 2025 年第二季業績的評論，之後我們將開始提問。提醒一下，本次電話會議正在進行網路直播，我們將在本次電話會議中參考的 2025 年第二季財報電話會議簡報可在我們的網站上找到。兩者都可能包含前瞻性陳述，包括但不限於對未來市場趨勢、成本節約措施和新產品措施等的預期。

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 covenants, compliance and liquidity, risks associated with conducting business in foreign countries and currencies and other risks as detailed in our SEC filings.

由於存在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 營運所在市場的經濟狀況、CVG 作為供應商的汽車產量波動、財務契約、合規性和流動性、在國外和貨幣開展業務相關的風險以及我們向美國證券交易委員會提交的文件中詳述的其他風險。

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

現在我將把電話轉給詹姆斯，讓他提供公司的最新情況。

Thank you, Andy. Before I speak to the earnings presentation, I want to take a moment to thank Ruth Gratzke, a CVG Board member since July 2021 for her contributions as she leaves our Board for personal reasons, effective August 7. Additionally, I also want to thank Scott Reed, our current COO, for his contributions to the company. Scott will be leaving the company to pursue consulting opportunities effective August 29. We have a solid team in place and expect to fully execute on our plans going forward.

謝謝你，安迪。在談到收益報告之前，我想花點時間感謝 Ruth Gratzke，她自 2021 年 7 月起擔任 CVG 董事會成員，由於個人原因，她將於 8 月 7 日離開董事會，感謝她所做的貢獻。此外，我還要感謝我們現任營運長 Scott Reed 對公司的貢獻。自 8 月 29 日起，斯科特將離開公司尋求諮詢機會。我們擁有一支強大的團隊，並期望全面執行我們未來的計劃。

Now I'd like to turn your attention to the supplemental earnings presentation, starting on slide 3. As we have highlighted on this slide, CVG delivered solid second quarter results and continued improvement in our profitability and free cash generation in a very challenging market environment. During the quarter, we delivered an adjusted gross margin of 12%, which is up 120 basis points on a sequential basis and up 70 basis points compared to last year. The continued improvement in profitability was again driven by the operational efficiency initiatives we have spoken to in prior calls. I will cover this in more detail in a minute.

現在我想請大家注意一下補充收益報告，從投影片 3 開始。正如我們在這張投影片上所強調的那樣，CVG 在極具挑戰性的市場環境下取得了穩健的第二季業績，並繼續提高獲利能力和自由現金產生能力。本季度，我們的調整後毛利率為 12%，比上一季成長 120 個基點，比去年同期成長 70 個基點。獲利能力的持續改善再次受到我們在先前的電話會議中提到的營運效率措施的推動。我將在稍後更詳細地介紹這一點。

Also highlighted on this slide is our continued improvement in free cash generation. During the quarter, we delivered $17.3 million in free cash flow, which is an improvement of $16.5 million compared to last year. I will also provide more detail regarding our free cash flow performance in a moment.

這張投影片也強調了我們在自由現金產生方面的持續改善。本季度，我們實現了 1,730 萬美元的自由現金流，比去年同期增加了 1,650 萬美元。我稍後還將提供有關我們的自由現金流表現的更多詳細資訊。

Another highlight of the quarter is our improved performance within the Global Electrical Systems segment. For the quarter, we saw segment performance stabilize with revenues flat compared to prior year. Despite flat revenue, we delivered an adjusted operating income improvement of $0.4 million, driven by lower salary expense as we continue to ramp production in our new low-cost facilities.

本季的另一個亮點是我們全球電氣系統部門業績的提升。本季度，我們看到部門業績趨於穩定，營收與去年同期持平。儘管收入持平，但我們的調整後營業收入仍增加了 40 萬美元，這得益於我們繼續在新的低成本工廠提高產量，從而降低了工資支出。

Before I move on, I'd also like to comment on our recently announced debt refinancing, which we completed and announced during the second quarter. These transactions provide us with significantly more financial flexibility as we look to advance our operational initiatives, including further cost reductions, margin improvement and overall operational efficiency.

在繼續之前，我還想評論一下我們最近宣布的債務再融資，該再融資已於第二季完成並宣布。這些交易為我們提供了更大的財務靈活性，讓我們能夠推進我們的營運計劃，包括進一步降低成本、提高利潤率和提高整體營運效率。

Turning to slide 4. I want to provide additional color as it relates to the continued sequential improvement we are seeing at the gross margin line. As we highlighted last quarter, the operational efficiency improvements made related to freight, labor and plant level overhead continue to benefit our profitability. As a reminder, we have reduced our reliance on expedited freight, optimize our terms with suppliers and improved our lead times and order quantities. We also continue to flex our direct labor to better align with customer volume changes and have continued to balance our production more toward lower-cost facilities.

翻到幻燈片 4。我想提供更多細節，因為它與我們在毛利率方面看到的持續連續改善有關。正如我們上個季度所強調的那樣，與貨運、勞動力和工廠層級管理費用相關的營運效率改進繼續有利於我們的獲利能力。提醒一下，我們減少了對加急貨運的依賴，優化了與供應商的條款，並縮短了交貨時間並減少了訂單數量。我們也將繼續靈活調整直接勞動力，以更好地適應客戶數量的變化，並繼續平衡我們的生產，使其更傾向於低成本的設施。

And finally, our new segment alignment has provided a more optimal overhead structure, and we are continuously evaluating selling, general and administrative expenses, SG&A, for efficiency improvements. We are pleased to see our focus on operational efficiency pay off, which has supported our financial performance in a lower demand environment. While we acknowledge the broader market and macroeconomic uncertainty, we have and will continue to take the necessary proactive actions. Looking ahead, we believe we are well positioned to drive accretive growth, accelerate margin expansion, increase our capital efficiency and ultimately enhance shareholder value as our end markets recover.

最後，我們新的部門調整提供了更優化的管理費用結構，並且我們正在不斷評估銷售、一般及行政費用（SG&A），以提高效率。我們很高興看到我們對營運效率的關注獲得了回報，這在需求較低的環境下支撐了我們的財務表現。儘管我們承認更廣泛的市場和宏觀經濟存在不確定性，但我們已經並將繼續採取必要的主動行動。展望未來，我們相信，隨著終端市場的復甦，我們有能力推動增值成長、加速利潤率擴張、提高資本效率並最終提升股東價值。

Moving to slide 5. I'd like to again highlight a graphic we have shared in our last 2 earnings calls. Again, while the strategic portfolio actions we took last year led to cash flow headwinds in 2024, we are seeing these actions reverse meaningfully year-to-date in 2025. Through June of this year, our discontinued operations were net cash generative, and we had minimal restructuring spend at less than $2 million. We've also driven a $12 million improvement in inventory versus the end of 2024.

移至投影片 5。我想再次強調我們在最近兩次財報電話會議上分享過的一張圖表。再一次，雖然我們去年採取的策略性投資組合行動導致 2024 年現金流逆風，但我們看到這些行動在 2025 年年初至今出現了顯著逆轉。截至今年 6 月，我們已終止的業務均為淨現金產生業務，重組支出極少，不到 200 萬美元。與 2024 年底相比，我們的庫存也增加了 1,200 萬美元。

Improvement in each of these areas helped drive free cash generation of $17.3 million in the quarter. which brings our year-to-date free cash generation up to $28.5 million. As Andy will cover in a moment, we have raised our free cash flow outlook for the year to be at least $30 million as we expect to build on our year-to-date progress in the back half of the year.

這些領域的改進有助於推動本季自由現金產生量達到 1,730 萬美元，這使我們今年迄今的自由現金產生量達到 2,850 萬美元。正如安迪稍後將要介紹的那樣，我們已將今年的自由現金流預期提高到至少 3000 萬美元，因為我們預計在今年下半年的基礎上再接再厲。

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結果。

Thank you, James, and good morning, everyone. If you are following along in the presentation, please turn to slide 6. Consolidated second quarter 2025 revenue was $172 million as compared to $193.7 million in the prior year period. The decrease in revenues is due primarily to a softening in customer demand across our Global Seating and Trim Systems and Components segments. Adjusted EBITDA was $5.2 million for the second quarter compared to $8.2 million in the prior year.

謝謝你，詹姆斯，大家早安。如果您正在關注演示，請翻到幻燈片 6。2025 年第二季綜合營收為 1.72 億美元，去年同期為 1.937 億美元。收入下降主要是由於我們全球座椅和裝飾系統及組件部門的客戶需求疲軟。第二季調整後 EBITDA 為 520 萬美元，去年同期為 820 萬美元。

Adjusted EBITDA margins were 3.0%, down 120 basis points as compared to adjusted EBITDA margins of 4.2% in the second quarter of 2024, driven primarily by lower volumes, but offset by reductions in SG&A expenses.

調整後的 EBITDA 利潤率為 3.0%，與 2024 年第二季度的 4.2% 調整後的 EBITDA 利潤率相比下降了 120 個基點，這主要歸因於銷量下降，但被銷售、一般及行政費用的減少所抵消。

Interest expense was $2.3 million as compared to $2.4 million in the second quarter of 2024, driven by lower debt levels. Net loss for the quarter was $4.1 million or a loss of $0.12 per diluted share as compared to a net loss of $1.3 million or a loss of $0.04 per diluted share in the prior year. Adjusted net loss for the quarter was $2.9 million or a loss of $0.09 per diluted share as compared to adjusted net income of $1.5 million or $0.05 per diluted share in the prior year.

由於債務水準下降，利息支出為 230 萬美元，而 2024 年第二季為 240 萬美元。本季淨虧損為 410 萬美元，即每股虧損 0.12 美元，去年同期淨虧損為 130 萬美元，即每股虧損 0.04 美元。本季調整後淨虧損為 290 萬美元，即每股攤薄虧損 0.09 美元，而去年同期調整後淨收入為 150 萬美元，即每股攤薄虧損 0.05 美元。

Net loss and adjusted net loss were impacted by softened customer demand. Free cash flow from continuing operations for the quarter was $17.3 million compared to $0.8 million in the prior year. The free cash flow generated in the quarter was supported by the company's ongoing strategic and working capital initiatives. At the end of the second quarter, our net leverage ratio calculated as our net debt divided by our trailing 12-month adjusted EBITDA from continuing operations was 4.8x, down from 5.0x at the end of the first quarter.

淨虧損和調整後淨虧損受到顧客需求疲軟的影響。本季來自持續經營的自由現金流為 1,730 萬美元，去年同期為 80 萬美元。本季產生的自由現金流得益於公司正在進行的策略和營運資本計畫。在第二季末，我們的淨槓桿率（即我們的淨債務除以過去 12 個月持續經營調整後的 EBITDA）為 4.8 倍，低於第一季末的 5.0 倍。

Moving to the segment results, starting slide 7. Our Global Seating segment achieved revenues of $74.5 million, a decrease of 10% as compared to the year ago quarter, with the decrease primarily driven by lower sales volume as a result of reduced customer demand. Adjusted operating income was $3.1 million, an increase of $0.2 million compared to the second quarter of 2024. While operating income was negatively impacted by lower sales volume and increased freight costs, we saw an improvement in adjusted operating income margin, primarily attributable to lower SG&A expenses.

轉到細分結果，從第 7 張投影片開始。我們的全球座椅部門實現了 7,450 萬美元的收入，與去年同期相比下降了 10%，主要原因是客戶需求減少導致銷售量下降。調整後的營業收入為 310 萬美元，與 2024 年第二季相比增加 20 萬美元。雖然營業收入受到銷售量下降和運費增加的負面影響，但調整後的營業收入利潤率有所提高，主要歸因於銷售、一般及行政費用的降低。

Turning to slide 8. Our Global Electrical segment's second quarter revenues remained essentially flat compared to the year ago quarter at $53.6 million as new business wins offset weaker construction and agriculture demand. Adjusted operating income for the second quarter was $1.2 million, an increase of $0.4 million compared to the prior year, primarily attributable to lower salary expense as we benefit from our new low-cost facilities. We are beginning to see the benefits of the restructuring actions we have taken in this segment, and we are encouraged by the stabilization we are seeing. Global Electrical Systems remains a key area of focus for growth and cash generation moving forward.

翻到第 8 張投影片。由於新業務的勝利抵消了建築和農業需求的疲軟，我們的全球電氣部門第二季度的收入與去年同期相比基本持平，為 5,360 萬美元。第二季調整後的營業收入為 120 萬美元，比前一年增加 40 萬美元，主要因為我們受益於新的低成本設施而導致薪資支出降低。我們開始看到我們在該領域採取的重組行動所帶來的好處，並且我們對所看到的穩定性感到鼓舞。全球電氣系統仍然是未來成長和現金創造的重點領域。

Moving to slide 9. Our Trim Systems and Components' revenues in the second quarter decreased 24% to $43.9 million compared to the year ago quarter due to lower sales volume as a result of decreased customer demand. As a reminder, this segment solely serves the North American market and is most directly impacted by the reduction in Class 8 production volumes. Adjusted operating income for the second quarter was $0.3 million, a decrease of $3.7 million compared to the prior year. The decrease is primarily attributable to lower sales volumes.

移至幻燈片 9。由於客戶需求下降導致銷售量下降，我們的裝飾系統和組件第二季度的收入與去年同期相比下降了 24%，至 4,390 萬美元。需要提醒的是，該部門僅服務於北美市場，並受到 8 級產量減少的最直接影響。第二季調整後營業收入為 30 萬美元，較前一年減少 370 萬美元。下降主要歸因於銷售量下降。

We continue working through the last of our operational inefficiencies in this segment, and we are taking further actions to stabilize operations and improve operational efficiency and financial performance.

我們將繼續努力解決該部門最後的營運效率低下問題，並正在採取進一步措施穩定營運並提高營運效率和財務表現。

That concludes my financial overview commentary. I will now turn the call back over to James to cover our market outlook, key strategic actions being taken and our updated guidance.

這就是我的財務概覽評論。現在我將把電話轉回給詹姆斯，以介紹我們的市場前景、正在採取的關鍵策略行動以及我們的最新指導。

Thank you, Andy. I will start with our key end market outlooks on slide 10. According to ACT's Class 8 heavy truck build forecast, 2025 estimates imply a 24% decline in year-over-year volumes. ACT has removed any prebuy impact related to the proposed 2027 emissions standard from their 2026 projections and now forecast truck builds flat in 2026. Looking ahead to 2027, ACT is forecasting a 12% improvement in truck builds.

謝謝你，安迪。我將從第 10 張投影片開始介紹我們的主要終端市場前景。根據 ACT 的 8 級重型卡車製造預測，2025 年的產量預計將年減 24%。ACT 已從其 2026 年預測中消除了與擬議的 2027 年排放標準相關的任何預購影響，並且目前預測 2026 年卡車產量將持平。展望 2027 年，ACT 預測卡車產量將成長 12%。

Moving to our construction and agriculture market outlook. Based on recent commentary and outlooks from our customers and key market players, we continue to expect construction market to be down approximately 5% to 15% and agriculture market to be down in the same range as higher interest rates, weaker housing starts, slower commercial real estate activity and lower commodity prices continue to weigh on demand. Despite the continued market softness, which mostly directly impacts our Global Electrical System business, we continue to remain optimistic about the long-term potential of both construction and agriculture markets as we see ongoing replacement needs and underlying secular trends driving a recovery in these markets in 2026 and beyond.

轉向我們的建築和農業市場展望。根據我們客戶和主要市場參與者的最新評論和展望，我們繼續預計建築市場將下滑約 5% 至 15%，農業市場也將下滑相同幅度，因為利率上升、新屋開工減少、商業房地產活動放緩以及大宗商品價格下跌將繼續對需求造成壓力。儘管市場持續疲軟，並直接影響到我們的全球電氣系統業務，但我們仍然對建築和農業市場的長期潛力保持樂觀，因為我們看到持續的更換需求和潛在的長期趨勢將推動這些市場在 2026 年及以後的復甦。

Turning to slide 11. I'd like to reiterate the key actions we have underway to improve cash flow as well as mitigate the impact of tariffs and broader macroeconomic headwinds. First, we remain focused on driving improved cash generation and $30 million in working capital reduction focused primarily on inventory and accounts receivable as well as a 50% reduction in planned capital expenditures this year. Through the first half of the year, we realized $12 million in inventory reductions and $11 million in accounts receivable reductions. We also continue to expect $15 million to $20 million in cost savings this year with a renewed focus on SG&A, which should drive incremental margin expansion as our top line returns to future growth.

翻到第 11 張投影片。我想重申我們正在採取的關鍵行動，以改善現金流以及減輕關稅和更廣泛的宏觀經濟逆風的影響。首先，我們仍然致力於提高現金產生率，減少 3,000 萬美元的營運資本（主要集中在庫存和應收帳款），並將今年的計畫資本支出減少 50%。今年上半年，我們實現了庫存減少 1,200 萬美元，應收帳款減少 1,100 萬美元。我們也繼續預計今年將節省 1,500 萬至 2,000 萬美元的成本，並重新專注於銷售、一般和行政費用，這將推動利潤率的逐步擴大，因為我們的營收將恢復到未來的成長。

Second, we expect the strategic portfolio actions taken in 2024 to lower our cost structure to continue lowering decremental margins, positioning us well to grow our earnings power as end market demand recovers.

其次，我們預期 2024 年採取的策略組合行動將降低我們的成本結構，持續降低遞減的利潤率，使我們能夠在終端市場需求復甦時提高獲利能力。

Third, we remain in constant communication with our customers, improving our line of sight to production schedule changes and allowing us to implement necessary cost actions in the event of future changes. In addition, our teams took immediate action in response to tariffs to mitigate potential impacts, and we've made solid progress in that regard. We continue to have successful negotiations on price recovery terms with our customers while building contingency plans to create flexibility across multiple scenarios, all with the goal of securing our business competitiveness and meeting our customers' needs. We also continue to assess our relationship with suppliers, including the evaluation of reshoring and near-shoring opportunities to further mitigate the potential impact of tariffs.

第三，我們與客戶保持持續溝通，以便更好地了解生產計劃的變化，並使我們能夠在未來發生變化時採取必要的成本措施。此外，我們的團隊立即採取行動應對關稅，以減輕潛在影響，並在這方面取得了堅實的進展。我們繼續與客戶就價格恢復條款進行成功的談判，同時制定應急計劃以在多種情況下創造靈活性，所有這些都是為了確保我們的業務競爭力並滿足客戶的需求。我們也繼續評估與供應商的關係，包括評估回流和近岸外包機會，以進一步減輕關稅的潛在影響。

Turning to slide 12. I'll share several thoughts on our updated outlook for 2025, which reflects the current estimated impact of tariffs, trade policies and economic uncertainty as well as the aforementioned actions that we are proactively taking in this current uncertain environment. Reflecting current macroeconomic trends, prevailing truck build forecast and continued weakness in construction and agriculture markets, we are lowering our quantitative annual guidance for revenue and adjusted EBITDA and tightening the range on both. The good news is we are increasing our free cash flow guidance to reflect robust performance year-to-date as well as our ongoing focus on cash generation.

翻到第 12 張投影片。我將分享我們對 2025 年最新展望的一些想法，這反映了關稅、貿易政策和經濟不確定性的當前估計影響，以及我們在當前不確定的環境中積極採取的上述行動。考慮到當前的宏觀經濟趨勢、普遍的卡車製造預測以及建築和農業市場的持續疲軟，我們下調了收入和調整後 EBITDA 的定量年度指導，並縮窄了兩者的範圍。好消息是，我們正在提高自由現金流指導，以反映今年迄今為止的強勁表現以及我們對現金創造的持續關注。

Given current demand pressures, we are adjusting our full year 2025 revenue guidance range to $650 million to $670 million, which is down from $660 million to $690 million from prior guidance. We are also revising our adjusted EBITDA guidance expectations to the range of $21 million to $25 million for 2025, down from $22 million to $27 million in the prior guidance. Based on this updated outlook, we still expect EBITDA margin expansion compared to full year '24 at the midpoint of the ranges, supported by our continued focus on reducing manufacturing and SG&A costs.

鑑於目前的需求壓力，我們將 2025 年全年營收預期範圍調整為 6.5 億美元至 6.7 億美元，低於先前預期的 6.6 億美元至 6.9 億美元。我們也將 2025 年的調整後 EBITDA 指引預期從先前的 2,200 萬美元至 2,700 萬美元下調至 2,100 萬美元至 2,500 萬美元。根據這項更新後的展望，我們仍預期 EBITDA 利潤率將較 24 年全年擴大至區間中點，這得益於我們持續致力於降低製造和銷售、一般及行政費用 (SG&A) 成本。

We expect to build on our free cash generation progress in the back half of the year, generating at least $30 million of free cash flow in 2025, which we expect to use to pay down debt. Our continued focus on reducing working capital and lowering capital expenditures underpin this outlook. Net leverage is expected to decline throughout 2025 and 2026 as we work toward returning to our targeted 2x level.

我們預計在下半年繼續推進自由現金產生進程，到 2025 年產生至少 3,000 萬美元的自由現金流，我們預計將用這筆錢來償還債務。我們持續致力於減少營運資本和降低資本支出，以支撐這一前景。隨著我們努力恢復到目標 2 倍水平，淨槓桿率預計將在 2025 年和 2026 年下降。

With that, I will now turn the call back over to the operator and open up the line for questions. Operator?

這樣，我現在將把電話轉回給接線員，並開放熱線來回答問題。操作員？

(Operator Instructions)

（操作員指示）

Joe Gomes, company, NOBLE Capital.

喬·戈麥斯（Joe Gomes），NOBLE Capital 公司。

So I know you guys have gotten away from giving a new business wins number. But given the environment, maybe you could kind of, from a 10,000-foot perspective, give us, are you seeing new business being bid? Are you winning new business? Is it within where you guys are hoping to be, maybe above, hopefully? And also kind of related from past new business wins, how is the implementation of those going?

所以我知道你們已經不再提供新業務成功數字了。但考慮到當前的環境，也許您可以從 10,000 英尺的高度告訴我們，您是否看到有新業務被競標？您是否贏得了新業務？它是否在你們希望的範圍內，或者可能高於這個範圍，希望如此？這與過去贏得的新業務有關，這些業務的實施進度如何？

Are we seeing any of those push to the right, so to speak? Anything you could give us on that would be great also.

可以這麼說，我們是否看到了任何向右翼的推動？如果您能為我們提供任何相關資訊那就太好了。

Joe, this is James. Responding to your question, we do continue to win new business. We have wins in Q1 and Q2, and we have a pretty robust funnel going through the balance of the year. Part of the difficulty in quantifying the new business is the uncertainty with schedules, launch timing, et cetera. And as you mentioned, there are some that have been delayed, some that are with OEMs that have struggled financially, which has disrupted production, especially in the EV space, but we continue to see growth in that area.

喬，這是詹姆斯。回答您的問題，我們確實正在繼續贏得新業務。我們在第一季和第二季都取得了勝利，並且在今年餘下的時間裡，我們擁有一個相當強勁的漏斗。量化新業務的困難部分在於時間表、發佈時間等的不確定性。正如您所說，有些項目被推遲了，有些項目是由於原始設備製造商陷入財務困境而導致生產中斷，尤其是在電動車領域，但我們仍然看到該領域的成長。

It's a secular trend that's going to continue. So we're still focused on growing our electrical. And as an example, this year, about 15% of our revenue forecast for the Electrical Systems business segment is from new wins. So the flat revenue that you're seeing year-over-year is the new wins offsetting continued softness in the ConAg markets. So we haven't shied away from pursuing business in any end market.

這是一個將會持續下去的長期趨勢。因此我們仍然專注於發展我們的電氣業務。舉例來說，今年，我們預測電氣系統業務部門約 15% 的收入來自新訂單。因此，您看到的收入與去年同期持平，這是新的勝利，抵消了 ConAg 市場持續疲軟的影響。因此，我們並不迴避在任何終端市場開展業務。

We still continue to have very good relations with our ConAg customers, and there are opportunities for share of wallet gain in those customers as well due to our new low-cost manufacturing capacity that's online. So -- and that's on a global basis, both in North America and Europe. So I feel really good about that. And as markets stabilize and we have a better quantification on launch timing and volumes, we may revisit reporting new business wins when that happens and occurs. The new business wins implementation timing, it varies depending on the platform and the customer.

我們仍然與 ConAg 客戶保持著良好的關係，而且由於我們新的低成本線上製造能力，這些客戶的錢包份額也有機會增加。所以 — — 這是從全球範圍來看的，包括北美和歐洲。所以我對此感覺非常好。隨著市場穩定，我們對發佈時間和數量有了更好的量化，我們可能會在這種情況發生時重新報告新業務的成功。新業務贏得實施時機，取決於平台和客戶。

We have seen some shifting, especially with the economic conditions with launches being a little slower. There are some customers that still need regulatory approval, especially in the autonomous vehicle space. So we have seen some shifting there as well but they are sizable wins, and we'll be ready to bring those on with accretive margins based on our cost structure alignment and our new capacity in place.

我們已經看到了一些變化，特別是在經濟條件下，發布速度有所放緩。有些客戶仍然需要監管部門的批准，尤其是在自動駕駛汽車領域。因此，我們也看到了一些轉變，但這些轉變是相當大的勝利，我們將準備根據我們的成本結構調整和新的產能，透過增加利潤來實現這些勝利。

John Franzreb, Sidoti.

約翰‧弗朗茨雷布、西多蒂。

I guess I want to start with the cost savings aspect. You mentioned $15 million to $20 million of expected savings in 2021 -- I'm sorry, 2025. I'm curious how much of those savings are permanent and how much will come back as volumes return? And how much is still left to be done as far as in the SG&A side of the cost savings program?

我想從節省成本方面開始。您提到 2021 年預計節省 1500 萬至 2000 萬美元——抱歉，應該是 2025 年。我很好奇這些節省有多少是永久性的，有多少會隨著交易量的恢復而恢復？就節約計畫的銷售、一般及行政費用 (SG&A) 方面而言，還有多少工作要做？

Yes, John, on the cost savings, that's an interesting dynamic because these are both material -- direct material cost savings, indirect expense cost savings as well as manufacturing cost outs with improved productivity. So we don't see these as being onetime. And actually, as volume returns, we'll generate more savings on higher volume. This year, with the reduced volume, the savings that we had anticipated aren't coming in to the level of a year ago that we thought they would because of the lower volume. But there are permanent savings in place with purchase price contracts, our logistics providers, et cetera.

是的，約翰，關於成本節約，這是一個有趣的動態，因為這些都是材料——直接材料成本節約、間接費用成本節約以及生產率提高帶來的製造成本節約。所以我們並不認為這些是一次性的。實際上，隨著銷量的回升，我們將在更高的銷量上實現更多的節省。今年，由於銷售量減少，我們預期的節省金額並沒有達到一年前預期的水平，因為銷售量較低。但是，透過採購價格合約、我們的物流供應商等可以實現永久性的節省。

So we feel pretty good about the momentum that we're building from a cost reduction standpoint.

因此，從降低成本的角度來看，我們對所建立的動力感到非常滿意。

On SG&A and manufacturing overhead, those are 2 areas that we will continue to take actions on. And with the current outlook from ACT, the manufacturing overhead piece is going to be front and center with us. We've engaged an outside consulting firm to help us look at our supply chain optimization as well as our manufacturing overhead expense, and those projects are in flight now. So we expect, as we go through the balance of the back half, to implement more actions to take cost out. So hopefully, we'll see that come through, and we continue to see the volume come through as forecasted by ACT.

關於銷售、一般及行政費用和製造費用，我們將繼續採取行動的兩個領域。根據 ACT 目前的前景，製造費用部分將成為我們關注的焦點。我們聘請了一家外部顧問公司來幫助我們研究供應鏈優化以及製造間接費用，這些項目目前正在進行中。因此，我們期望在完成後半部分的平衡工作時採取更多行動來降低成本。因此，希望我們能夠看到這一目標實現，並且繼續看到交易量達到 ACT 所預測的水平。

Got it. And how far along are you in the tariff renegotiation process? Do you expect all the guys -- all your customers to have renegotiated by the end of the year?

知道了。關稅重新談判進程進行到哪一步了？您是否希望所有客戶在年底前重新進行談判？

Yes, we'd expect that to be the case. And the tariffs is -- they've been changing a lot, as you know. The trade policy has been changing a lot. So we have a team of people and we meet every day to see what the latest changes are, try to assess the impact. And as you can imagine, both customers and suppliers, we're going through a lot of detailed information, port of entry, country of origin, all those elements that go into factor in the tariff impact.

是的，我們預計情況會如此。正如你所知，關稅一直在發生很大變化。貿易政策正在發生很大變化。因此，我們有一個團隊，我們每天開會了解最新的變化，並嘗試評估其影響。你可以想像，無論是客戶還是供應商，我們都要查看大量詳細信息，入境口岸、原產國，所有這些因素都會影響關稅的影響。

And then that information has to be submitted and discussed with our customers as well as mitigating actions, whether it's supply changes or validating different materials to offset where the material is coming from. Those are a little longer from a timeline standpoint. Price is the most immediate one. And there is a lagging effect because we have to submit the tariff impact post the actual impact that we have to the customers, and then there's a payment timeline from the customers to us.

然後，必須提交這些資訊並與我們的客戶討論，並採取緩解措施，無論是供應變化還是驗證不同的材料以抵消材料來源。從時間軸的角度來看，這些時間稍微長一些。價格是最直接的因素。並且存在滯後效應，因為我們必須在對客戶產生實際影響之後提交關稅影響，然後客戶才會向我們提供付款時間表。

On the supplier side, we have the same stance with our suppliers that our customers have with us. We expect initial mitigation with price being secondary or tertiary element to help them recover and stay viable. And then that gets translated back to our customers for relief. So it's a very dynamic process, a lot of negotiations, a lot of discussions, and it's top of mind for the entire supply chain actually from our suppliers to us, to our customers and our customers' end markets.

在供應商方面，我們與供應商的關係與客戶與我們的關係是相同的。我們預計最初的緩解措施將以價格作為次要或第三要素，以幫助它們恢復並保持生存能力。然後將其翻譯回給我們的客戶，以減輕他們的負擔。所以這是一個非常動態的過程，需要進行大量的談判和討論，而且它是整個供應鏈（實際上從我們的供應商到我們，到我們的客戶以及我們客戶的終端市場）最關注的問題。

Certainly very dynamic right now. And one last question, I guess, I'll get back into queue. Can you talk a little bit about how July looked relative to maybe the progression of the second quarter? Did it continue to weaken, stabilize? Any kind of color what the current climate is like?

現在確實非常活躍。我想，還有最後一個問題，我會回到隊列。您能否稍微談談七月相對於第二季的進展？它是否繼續減弱、穩定下來？任何顏色現在的氣候怎麼樣？

Sure. No problem. On the Class 8 side, and even in ConAg to a certain degree, typically, from June until August, early September, many of the OEMs on a global basis schedule downtime for model changeover or vacation periods, et cetera. So we are seeing increased downtime in the back half of Q2 and also this quarter, which is causing us to quickly make adjustments with flexing our manufacturing plants down, ordering material, so our inventories stay at a competitive level as well as coordinating with our supply base to ensure we maintain on-time delivery and supply viability as these schedules change. So it's -- we're seeing more from June through August, more downtime than what was originally anticipated at the beginning of the year from our OEM customers.

當然。沒問題。在 8 級方面，甚至在 ConAg 方面也存在一定程度的停工，通常從 6 月到 8 月、9 月初，全球許多原始設備製造商都會安排停工以進行車型轉換或休假等。因此，我們發現第二季後半段以及本季的停工時間有所增加，這促使我們迅速做出調整，減少製造工廠的產能，訂購材料，以便我們的庫存保持在有競爭力的水平，並與我們的供應基地進行協調，以確保我們在這些時間表發生變化時保持準時交貨和供應可行性。因此，我們看到從 6 月到 8 月的停機時間比我們的 OEM 客戶在年初最初預期的要多。

So if you look at what we see right now is tracking towards ACT's projection in this quarter. So overall, if you look at what the market is forecasting, is what we are seeing. But as James mentioned, we are doing all the actions that it takes to adjust for the volume.

因此，如果你看一下我們現在看到的情況，你會發現本季的情況與 ACT 的預測相符。所以總的來說，如果你看看市場預測，你會發現我們看到的就是這些。但正如詹姆斯所提到的，我們正在採取一切必要措施來調整音量。

I'll just sneak this in since you brought up ACT a couple of times in the responses. It seems to me like the new forecast from ACT looks more like the historical cyclical trends that we used to see in the Class 8 market. Is that your assessment? Or do you see anything different than that?

由於您在回覆中多次提到 ACT，所以我會偷偷地提出這一點。在我看來，ACT 的新預測更像是我們過去在 8 級市場看到的歷史週期趨勢。這是你的評價嗎？或者您看到什麼不同的東西嗎？

Well, what we see is that ACT has not included any type of prebuy dynamic for emissions regulations. that were initially intended for 2027. So the expectation was that we would see a pickup in prebuy in the second half of '25 and for the balance of '26. They've now taken that dynamic out of the forecast and forecasting flat build rates into '26 and then a double-digit -- low teens, double-digit increase in 2027. So if volumes do come back sooner, obviously, we'll be well prepared from an operating leverage standpoint.

嗯，我們看到的是，ACT 沒有包括任何類型的排放法規預購動態。這些法規最初是為 2027 年制定的。因此，我們預計 2025 年下半年和 2026 年餘下時間預購量將有所回升。現在，他們已經將這種動態從預測中剔除，並預測 2026 年的建築率將保持平穩，到 2027 年將實現兩位數——低十幾個百分點，兩位數的增長。因此，如果銷售量確實提前回升，顯然，從經營槓桿的角度來看，我們將做好充分的準備。

But if volumes stay flat like forecasted, we're going to be positioned to ride through that down market until we see an uptick similar to what we're doing in the past 2 quarters and going into the back half of this year.

但如果銷售量像預測的那樣保持平穩，我們將能夠度過低迷的市場，直到看到與過去兩個季度以及今年下半年類似的上漲。

Gary Prestopino, Barrington Research.

巴林頓研究公司的加里‧普雷斯托皮諾 (Gary Prestopino)

James, Andy, last conference call, you had mentioned something about the Trump administration maybe rolling back some of these admission standards for trucks. Where do you -- where does that stand right now? Is that still in the state of flux here?

詹姆斯、安迪，上次電話會議中，你們提到川普政府可能會取消一些卡車的准入標準。您現在的處境如何？這裡是否仍處於不斷變化的狀態？

Yes. As far as we know, there hasn't been a definitive position on that yet. But as ACT is comprehended in their forecast, there's an anticipation that they will either be pushed out or changed. So we're planning for the worst which is no prebuy.

是的。據我們所知，目前尚未有明確的表態。但由於 ACT 被納入其預測之中，因此人們預計它們要么會被淘汰，要么會被改變。因此，我們正在為最壞的情況做準備，那就是不進行預購。

Gary, as James mentioned, so ACT doesn't predict the '26 prebuy and then as a result, there's no major drop in '27 as well. So right now, the projection is a year-over-year pretty flat from '25 to '26, and then there will be a gradual low double-digit increase in the next few years. So longer-term horizon is actually a more stable environment, but you don't see the big up and down in the next couple of years.

加里，正如詹姆斯所提到的，ACT 不會預測 26 年的預購情況，因此 27 年也不會大幅下降。因此，目前預測是，從 25 年到 26 年，年成長率將相當平穩，而未來幾年將出現緩慢的兩位數成長。因此，長期來看，環境實際上是更加穩定的，但未來幾年不會出現大的起伏。

Okay. Then maybe you could help me out because I'm not that altogether familiar with the Class 8 truck market, maybe some others are. Is there a natural replacement cycle here that somewhere along the line has to start kicking in to more units produced? I mean is that why the '27 numbers are going up?

好的。那麼也許你可以幫助我，因為我對 8 級卡車市場並不是那麼熟悉，也許其他人比較熟悉。這裡是否存在一個自然的替代週期，即在某個時候開始產生更多的生產單位？我的意思是這就是 27 個數字上升的原因嗎？

Yes. So these are nondiscretionary end markets in Class 8, CA and vehicle production in general, there is a replacement cycle. Given the economic uncertainty, some of the feedback that we've gotten from our OEM customers is that the fleets that order large quantities of Class 8 trucks are holding off on making purchases and pushing them out based on the uncertainty. Some of the indicators like freight rates, the impact of tariffs with goods moving in have come down. So the need for replacement may not be as high as it was originally planned to be.

是的。因此，這些是 8 級、CA 和一般車輛生產中的非自由支配終端市場，存在更換週期。鑑於經濟的不確定性，我們從 OEM 客戶那裡得到的一些反饋是，訂購大量 8 級卡車的車隊由於不確定性而推遲購買並推遲交貨。一些指標，如運費、關稅對貨物進港的影響等，都已經下降。因此更換的需求可能沒有最初計劃的那麼高。

So that's one piece.

這就是其中一件事。

The other piece is we have an aftermarket business and seats and other products. So as purchases are being held off, we may see a positive impact on some of our aftermarket sales for replacement components, which typically they don't -- they last 7 years or so, 5 to 7 years, and then they're into replacements depending on the duty cycle of the vocational application but we see an opportunity there. So that's one good thing that comes out of this. The other piece is the ConAg market and as economic challenges, potential recession and those factors weigh into purchases, some of the dealer inventories in the ConAg segment have increased because of the slowness of the economy and capital purchases being made. So they do need to be replaced at some point.

另一部分是我們有售後業務、座椅和其他產品。因此，隨著購買被推遲，我們可能會看到替換零件的部分售後市場銷售受到積極影響，這些零件通常使用壽命為 7 年左右，5 到 7 年，然後根據職業應用的工作週期進行更換，但我們在那裡看到了機會。這是由此產生的一件好事。另一個部分是 ConAg 市場，由於經濟挑戰、潛在衰退等因素影響採購，ConAg 部門的一些經銷商庫存因經濟放緩和資本採購而增加。所以它們確實需要在某個時候被替換。

And interestingly enough with those customers, they're doing R&D work and coming out with autonomous variants of some of their models, which drive a much higher electrical content. So we're engaged with customers now to try to best position ourselves as they roll out those new models with higher electrical content, we have a share of those platforms. So yes, it's uncertain, and we're making sure we have the right balance of countermeasures and alternatives in place so that we can either flex up or flex down and still be profitable and generate cash.

有趣的是，他們針對這些客戶進行研發工作，並推出了部分車型的自主變體，推動了更高的電氣化程度。因此，我們現在正與客戶合作，試圖在他們推出具有更高電氣含量的新車型時佔據最佳地位，我們在這些平台中佔有一定份額。所以是的，這是不確定的，我們正在確保我們有適當的對策和替代方案，以便我們可以靈活地增加或減少，同時仍然盈利並產生現金。

Okay. Let me kind of ask the question another way then. How many annually of these Class 8 trucks are taken off the road and scrapped on an annual basis? Again, I'm just trying to get an idea of what the replacement volume looks like kind of on an annual basis.

好的。那麼讓我換個方式來問這個問題。每年有多少輛 8 級卡車停駛並報廢？再說一次，我只是想了解每年的替換量是什麼樣的。

I don't have specific information around that, and we could do some follow-up and get back to you.

我沒有這方面的具體訊息，我們可以進行一些跟進，然後再回覆您。

Gary, if you look at the long-term North America Class 8 production volume, look at the long horizon, it's somewhere just shy of 300,000 units per year, right? Look at the up and down but if you look at the long-term average that I would call it -- you can call it both the replacement rate as well as just growing in the overall market.

蓋瑞，如果您看一下北美 8 級柴油引擎的長期產量，從長遠來看，每年的產量大概在 30 萬輛左右，對嗎？看看漲跌，但如果你看看我所說的長期平均值——你可以稱之為替代率，也可以稱之為整體市場的成長。

Okay. That's helpful. And then it's good to see you extended the debt maturities, and I did read through the document somewhat, but your leverage ratio is 4.8x. Can you give us some idea of how that leverage ratio steps down over time with the new agreement?

好的。這很有幫助。很高興看到你們延長了債務期限，我確實仔細閱讀了相關文件，但你們的槓桿率是4.8倍。能否介紹一下，在新協議下，槓桿率是如何逐步下降的？

Yes. So 2 things. We talked about our long-term target leverage ratio is around 2x. So between now and sometime in 2026, we continue to work towards that target, right? So you can see that we're making progress there.

是的。所以有兩件事。我們談到我們的長期目標槓桿率是2倍左右。那麼從現在到 2026 年的某個時候，我們會繼續努力實現這個目標，對嗎？所以你可以看到我們正在取得進展。

So you also can see that from our filing back at the end of June. So our new financing agreement allow us to have a little bit more wiggle room here in the next few quarters. So starting with over 7x of our leverage is in the covenants inside the agreement. So we believe that we'll continue to focus on generating cash. As you can see, in the first half, we made very, very significant progress there.

因此，您也可以從我們六月底的文件中看到這一點。因此，我們的新融資協議使我們在接下來的幾個季度中擁有更多的迴旋餘地。因此，我們的槓桿率超過 7 倍，這包含在協議內的契約中。因此我們相信我們將繼續專注於創造現金。正如你所看到的，在上半年，我們取得了非常非常顯著的進展。

And right now, that's our #1 priority on our capital allocation is keep generating cash and continue to pay down debt and allow us more flexibilities.

目前，我們資本配置的首要任務是繼續產生現金、繼續償還債務並讓我們擁有更多的靈活性。

(Operator Instructions)

（操作員指示）

There are no further questions at this time. I will now turn the call over to James Ray. Please continue.

目前沒有其他問題。現在我將電話轉給詹姆斯雷。請繼續。

Thank you all for joining today's call. We continue to take the necessary steps to support our customers in this dynamic environment, drive operational improvements and execute on our goal of delivering better results. We look forward to updating CVG's progress next quarter. Thank you again.

感謝大家參加今天的電話會議。我們將繼續採取必要措施，在這種動態環境中支援我們的客戶，推動營運改進，並實現我們提供更好結果的目標。我們期待下個季度更新 CVG 的進展。再次感謝您。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。