Energy Recovery Inc (ERII) 2023 Q3 法說會逐字稿

Greetings. Welcome to the Energy Recovery 3Q 2023 Earnings Call. (Operator Instructions) Please note, this conference is being recorded.

問候。歡迎參加能源回收 2023 年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Jim Siccardi, Vice President of Investor Relations. You may begin.

現在我將會議交給東道主投資者關係副總裁吉姆·西卡迪 (Jim Siccardi)。你可以開始了。

Hello, everyone, and welcome to Energy Recovery's 2023 Third Quarter Earnings Conference Call. My name is Jim Siccardi, Vice President of Investor Relations at Energy Recovery. And I'm here today with our Chairperson of the Board, Pamela Tondreau; Interim President and Chief Executive Officer, David Moon; and our Chief Financial Officer, Joshua Ballard.

大家好，歡迎參加 Energy Recovery 2023 年第三季財報電話會議。我叫 Jim Siccardi，Energy Recovery 投資人關係副總裁。今天我和我們的董事會主席 Pamela Tondreau 一起來到這裡。臨時總裁兼執行長 David Moon；以及我們的財務長約書亞巴拉德。

During today's call, we may make projections and other forward-looking statements under the Safe Harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the Company. These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy.

在今天的電話會議中，我們可能會根據 1995 年《私人證券訴訟改革法案》中包含的安全港條款，就公司未來事件或未來財務表現做出預測和其他前瞻性陳述。這些陳述可能會討論我們的業務、經濟和市場前景、成長預期、新產品及其績效、成本結構和業務策略。

Forward-looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates or projections. Forward-looking statements are not guarantees of future performance, and are subject to certain risks, uncertainties and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's Form 10-K and Form 10-Q.

前瞻性陳述是基於我們目前可獲得的資訊以及管理層的信念、假設、估計或預測。前瞻性陳述並非對未來績效的保證，並受到某些風險、不確定性和其他因素的影響。我們建議您參考本公司不時向 SEC 提交的文件，特別是本公司的 10-K 表格和 10-Q 表格。

These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. All statements made during this call are made only as of today, November 1, 2023, and the company expressly disclaims any intent or obligation to update any forward-looking statements made during this call to reflect subsequent events or circumstances unless otherwise required by law.

這些文件確定了可能導致實際結果與我們的預測或前瞻性陳述中包含的結果有重大差異的重要因素。本次電話會議期間所發表的所有聲明僅截至今天，即2023 年11 月1 日，除非法律另有要求，否則本公司明確表示不打算或沒有義務更新本次電話會議期間所做的任何前瞻性聲明以反映後續事件或情況。

At this point, I will turn the call over to our Chairperson, Pamela Tondreau.

現在，我將把電話轉給我們的主席 Pamela Tondreau。

Thank you, Jim, and thank you, everyone, for joining us today. Last Tuesday, October 24, my fellow directors and I appointed David Moon as interim Chief Executive Officer of Energy Recovery. Bob Mao will remain a member of the Board, and I want to thank him for his many contributions advancing our business.

謝謝吉姆，也謝謝大家今天加入我們。上週二，也就是 10 月 24 日，我和我的董事任命 David Moon 為 Energy Recovery 的臨時執行長。 Bob Mao 將繼續擔任董事會成員，我要感謝他為推動我們的業務所做的許多貢獻。

Over the last several years, we have introduced our PX G and created a tremendous opportunity in CO2, built an established and growing business in wastewater and launched a family of new products to grow that business. We continued to innovate within the desalinization industry with our Q400, the highest efficiency energy recovery device in the world. The Board and I understand and clearly see the opportunity to not only accelerate growth in our existing 3 markets, but also to expand the PX beyond these markets in the coming years.

在過去的幾年裡，我們推出了 PX G，在二氧化碳領域創造了巨大的機遇，在廢水領域建立了成熟且不斷發展的業務，並推出了一系列新產品來發展這項業務。我們利用世界上效率最高的能量回收設備 Q400 繼續在海水淡化產業進行創新。董事會和我了解並清楚地看到不僅有機會加速我們現有 3 個市場的成長，而且有機會在未來幾年將 PX 擴展到這些市場之外。

We're pleased that David agreed to join management as Interim President and CEO during this time. David is a seasoned leader in both his previous experience as President of Carrier Commercial Refrigeration, a division of Carrier Global Corporation as well as his history of developing and commercializing technological capabilities provide important insight and perspective while in this role.

我們很高興大衛同意在此期間作為臨時總裁兼執行長加入管理層。 David 是一位經驗豐富的領導者，他之前擔任開利商業製冷（開利全球公司的一個部門）總裁的經驗以及他開發和商業化技術能力的歷史為擔任這一職位提供了重要的見解和視角。

Our goal is to ensure that this transition period is not only smooth and without operational disruption, but will also allow us to continue along our growth path. I want to be clear, there are no underlying concerns about the business or its strategy.

我們的目標是確保這個過渡期不僅順利且不會造成營運中斷，而且還能讓我們繼續沿著我們的成長道路前進。我想澄清的是，對於業務或其策略沒有任何潛在的擔憂。

As mentioned in the press release, we have begun the CEO search process and hope to fill the role permanently in the near term. The search committee includes 2 of Energy Recovery's newest members, Colin Sabol and David Moon, who both bring a key operational focus to the business, and we are even now speaking with a number of qualified candidates.

正如新聞稿中所提到的，我們已經開始尋找首席執行官，並希望在短期內永久填補這一職位。遴選委員會包括 Energy Recovery 的兩位最新成員 Colin Sabol 和 David Moon，他們都為公司帶來了關鍵的營運重點，我們現在正在與一些合格的候選人進行交談。

With that, it is my pleasure to turn the call over to David Moon.

至此，我很高興將電話轉給大衛·穆恩。

Thank you, Pam. Before I start, I want to emphasize that Energy Recovery's fundamentals remain strong. Neither I nor the Board are seeking any major changes in our strategy or in our executive team at this time. I'm coming in as interim CEO to do the following: maintain stability, keep us moving towards our long-term goals for our water and CO2 businesses and to ensure that we continue to further build and grow the relationships we have with our shareholders, whom I look forward to meeting.

謝謝你，帕姆。在開始之前，我想強調能源回收的基本面仍然強勁。我和董事會目前都不尋求對我們的策略或執行團隊進行任何重大改變。我作為臨時執行長將執行以下任務：保持穩定，讓我們朝著水和二氧化碳業務的長期目標前進，並確保我們繼續進一步建立和發展與股東的關係，我期待見到誰。

Every quarter, management intentionally speaks with shareholders to ensure not only that our strategy and its execution is well understood but that we are also hearing your questions and concerns. Normally, the majority would speak with either the CEO or CFO as well as our Investor Relations team. However, owing to the recent unique events, I intend to participate in every one of these meetings this quarter. I look forward to speaking with each of you directly.

每個季度，管理層都會有意與股東進行交談，以確保我們的策略及其執行情況得到充分理解，而且我們也能聽到您的問題和擔憂。通常，大多數人會與執行長或財務長以及我們的投資者關係團隊交談。然而，由於最近發生的特殊事件，我打算參加本季的每一次會議。我期待著與你們每個人直接交談。

I spent almost 3 decades in the cooling and heat industry in the U.S., Europe, Asia and Australia, most recently with Carrier. I understand what it takes to commercialize and to introduce a highly engineered product into a mature market and more importantly, how to penetrate that market.

我在美國、歐洲、亞洲和澳洲的冷凍與供熱產業工作了近 30 年，最近在開利工作。我了解如何將高度工程化的產品商業化並將其引入成熟市場，更重要的是，如何滲透該市場。

This is what Energy Recovery did in desal and wastewater, it is now what we will do in refrigeration. I'm excited to contribute to our CO2 journey as well as ensure our water momentum continues. I hope to share my experience with his great team as we aggressively embark on the next chapter for Energy Recovery.

這就是能源回收在海水淡化和廢水處理中所做的事情，也是我們現在將在冷凍領域所做的事情。我很高興能為我們的二氧化碳之旅做出貢獻，並確保我們的水動力繼續下去。我希望與他偉大的團隊分享我的經驗，我們將積極開啟能源回收的新篇章。

Most importantly, I want to reiterate that we remain confident in our long-term strategy, which we are not deviating from and in our financial performance in 2023 and in the coming years. I'm excited to lead this charge and have hit the ground running.

最重要的是，我想重申，我們對我們不會偏離的長期策略以及 2023 年和未來幾年的財務表現仍然充滿信心。我很高興能夠領導這項工作並立即開始採取行動。

Now today, while I'll briefly touch upon water, the focus of my commentary will be with our CO2 strategy and our progress in turning valuable pilot locations and to an improved product offering while continuing to cement our value proposition, thus getting us ever closer to widespread commercialization. Josh will discuss our desal and wastewater businesses, and of course, he will update you on our 2023 and 2024 guidance.

今天，雖然我將簡要談談水，但我評論的重點將是我們的二氧化碳策略以及我們在轉變有價值的試點地點和改進產品供應方面取得的進展，同時繼續鞏固我們的價值主張，從而使我們更加接近到廣泛的商業化。喬許將討論我們的海水淡化和廢水處理業務，當然，他也將向您介紹我們 2023 年和 2024 年指導的最新情況。

So let me start briefly with our water business. As you've likely seen from our press release, despite a few tactical challenges we faced in the third quarter, our team was able to deliver a great quarter. This performance points to the strength of our water and operational teams. Overall, I and the rest of the Board are extremely bullish on our base water markets. The long-term secular story in desal and our broader water strategy remains as strong as ever. Global freshwater use is trending to increase as much as 30% by 2050 while water scarcity remains a growing and critical industry issue in just about every region in the world.

讓我先簡單介紹一下我們的水務業務。正如您可能從我們的新聞稿中看到的那樣，儘管我們在第三季度面臨一些戰術挑戰，但我們的團隊仍然能夠交付出色的季度業績。這一表現顯示了我們水務和營運團隊的實力。總的來說，我和董事會其他成員都非常看好我們的基礎水市場。海水淡化和我們更廣泛的水戰略的長期長期故事仍然一如既往地強勁。到 2050 年，全球淡水使用量將增加 30%，而水資源短缺仍然是世界上幾乎每個地區日益嚴重的關鍵產業問題。

Our advanced solutions help bridge the gap between the divergence of the world's freshwater supply with increasing demand by addressing the energy component of water treatment technologies. Desal and water reuse will remain a critical part of the solution to supporting the world's freshwater needs. Our water business will continue to grow in 2024, and we remain well positioned at the core of a significant secular shift in water demand.

我們先進的解決方案透過解決水處理技術的能源問題，幫助縮小世界淡水供應與日益增長的需求之間的差距。海水淡化和水回用仍將是滿足世界淡水需求解決方案的關鍵部分。我們的水務業務將在 2024 年繼續成長，我們仍然處於水需求重大長期變化的核心位置。

I'll let Josh give you a more in-depth update on our water in a minute, but let's talk about our CO2 business first. The PX G is one of the first truly innovative products that I've seen in quite some time in the commercial and industrial refrigeration market. I believe we have the potential to disrupt this market. I also firmly believe that this market is simply the foundation from which our CO2 business will grow. Again, that's why I'm here and why I'm so pleased to help as interim CEO during this period.

稍後我會讓 Josh 為您提供有關我們水務的更深入的最新信息，但我們首先來談談我們的二氧化碳業務。 PX G 是我一段時間以來在商業和工業冷凍市場上看到的首批真正創新的產品之一。我相信我們有潛力顛覆這個市場。我還堅信，這個市場是我們二氧化碳業務發展的基礎。同樣，這就是我來這裡的原因，也是我很高興在此期間作為臨時執行長提供幫助的原因。

The CO2 strategy road map that Bob and the CO2 team have executed thus far has been highly effective. The team is making tremendous progress in a mature competitive industry and have made a name for ourselves in the market within a very short period.

Bob 和 CO2 團隊迄今為止執行的 CO2 策略路線圖非常有效。該團隊在一個成熟的競爭行業中取得了巨大的進步，並在很短的時間內在市場上贏得了聲譽。

We've done the following: establish strong relationships with major OEMs in Europe and the U.S, executed on installations with great OEM and grocery partners on both continents, and we've won 2 industry awards. The latest being the RAC Innovation of the Year award, together with our good partner, Epta Group in September of this year. One key player in this industry recently said you are everywhere and everyone is talking about you.

我們做了以下工作：與歐洲和美國的主要 OEM 廠商建立了牢固的關係，與兩大洲的優秀 OEM 和雜貨合作夥伴進行了安裝，並且我們贏得了 2 項行業獎項。最新的一次是今年 9 月與我們的好合作夥伴 Epta Group 一起獲得的 RAC 年度創新獎。該行業的一位關鍵參與者最近表示，你無處不在，每個人都在談論你。

Now it's important that we understand this market from different perspectives. The U.S. and European markets are in very different phases of the transition from HFCs. In the U.S., we have a market that's just getting started. The regulatory tailwinds are in place and only growing stronger, evidenced by the EPA's final Technology Transitions ruling that was issued October 6, just a few weeks ago. This new ruling adheres closer to California's own tight HFC restrictions and expands these restrictions to many other refrigeration uses.

現在重要的是我們從不同的角度了解這個市場。美國和歐洲市場正處於氫氟碳化物轉型的不同階段。在美國，我們的市場才剛起步。就在幾週前，美國環保署 (EPA) 於 10 月 6 日發布的最終技術轉型裁決證明了監管的推動力已經到位，而且只會變得更加強勁。這項新裁決更接近加州自身嚴格的 HFC 限制，並將這些限制擴展到許多其他冷凍用途。

In short, while the CO2 refrigeration market is still fairly nascent in the U.S., the regulatory momentum is strong, which means that we should see considerable uptick in the U.S. greenfield market in the coming years.

簡而言之，雖然美國二氧化碳冷凍市場仍處於起步階段，但監管勢頭強勁，這意味著未來幾年我們應該會看到美國新建市場的大幅成長。

Now the U.S. market is also simpler than its European counterpart. It is largely served by only a small number of large OEM and contractors which simplifies our distribution channels. Because we are getting known early in the U.S. evolution into alternative refrigerants, it means that CO2 is further adopted, we should be well placed to be specced into new greenfield projects from the ground up, which is an efficient way for us to enter the market. However, this also means that true volume sales in the U.S. is still a few years away, even as we began to make real progress today.

現在美國市場也比歐洲市場簡單。它主要由少數大型原始設備製造商和承包商提供服務，這簡化了我們的分銷管道。因為我們在美國很早就知道替代冷媒的發展，這意味著二氧化碳將被進一步採用，我們應該處於有利地位，可以從頭開始進入新的綠地項目，這是我們進入市場的有效方式。然而，這也意味著即使我們今天開始取得真正的進展，在美國真正的大量銷售還需要幾年的時間。

According to the North American Sustainable Refrigeration Council, the U.S. is only roughly 1,500 CO2-based refrigeration systems as of 2023 and is expected to increase this number to over 5,000 by 2027. Luckily, the European market provides us with a strong understanding of how the U.S. market is likely to evolve.

根據北美永續冷凍委員會的數據，截至2023 年，美國僅有約1,500 個二氧化碳冷凍系統，預計到2027 年這一數字將增加到5,000 多個。幸運的是，歐洲市場讓我們深入了解如何利用二氧化碳冷凍系統。美國市場可能會發生變化。

Contrary to the U.S., the transition to natural refrigerants in the European market is more advanced. With over 60,000 CO2 installations are already in place throughout the continent and north of 10,000 installations occurring annually in recent years. Thus, we have a large established brownfield market in Europe, and a strong annual base of greenfield installations that we can tackle.

與美國相反，歐洲市場向天然冷媒的過渡更為先進。整個非洲大陸已安裝超過 60,000 個二氧化碳裝置，近年來每年安裝 10,000 個以上的北部地區。因此，我們在歐洲擁有一個龐大的、成熟的棕地市場，以及我們可以應付的強大的年度綠地安裝基地。

However, this is more a complicated market with a variety of regional players, some multinational with a variety of local norms to understand. This means we need to determine the resources necessary to address this market and the most efficient means to attain them, to accelerate our growth in Europe. Ultimately, this should be a low-hanging fruit opportunity if we correctly approach it.

然而，這是一個更複雜的市場，有各種區域參與者，一些跨國公司需要了解各種當地規範。這意味著我們需要確定應對這一市場所需的資源以及實現這些資源的最有效方法，以加速我們在歐洲的成長。最終，如果我們正確對待它，這應該是一個唾手可得的機會。

Underlying both markets is a mature, conservative industry that is typically cautious to adopt new technologies. The most critical element of the refrigeration system is that it must reliably deliver cold within the parameters, it's been built. Any deviation or shutdown in the refrigeration system can generate large losses for end users like supermarkets and cold storage facilities and the rest of the value chain. Therefore, we are doing the necessary upfront work to ensure that when end users press the go button, the PX G will be a seamless introduction into new and existing CO2 refrigeration systems in the U.S. and Europe. This is where we are at in our CO2 strategy.

這兩個市場的基礎是一個成熟、保守的行業，通常對採用新技術持謹慎態度。冷凍系統最關鍵的要素是它必須在設計參數範圍內可靠地提供冷量。冷凍系統的任何偏差或停機都會對超市、冷藏設施等最終用戶以及價值鏈的其他部分造成巨大損失。因此，我們正在做必要的前期工作，以確保當最終用戶按下啟動按鈕時，PX G 將無縫引入美國和歐洲的新的和現有的 CO2 製冷系統。這就是我們二氧化碳策略的現況。

Therefore, to unlock the potential in this market, our strategy is to begin with pilot installations in a given food retail chain or cold storage facility to build confidence in the operational and economic benefits of our PX G. Once that confidence has been built, we can then expand our footprint within that chain by obtaining repeat orders. This is how we confirm our addressable market and move towards the volumetric orders we believe to be ultimately within our range. We are already seeing this play out.

因此，為了釋放這個市場的潛力，我們的策略是首先在特定的食品零售連鎖店或冷藏設施中進行試點安裝，以建立對 PX G 的運營和經濟效益的信心。一旦建立了這種信心，我們然後可以透過獲得重複訂單來擴大我們在該鏈條中的足跡。這就是我們確認我們的目標市場並朝著我們認為最終在我們範圍內的批量訂單邁進的方式。我們已經看到了這種情況的發生。

In North America, we will soon be commissioning our second installation with Vallarta in California, and we are in discussions for multiple deployments with them in 2024. We should commission our initial PX G with our first Canadian supermarket partner, a chain with over 1,000 locations in the fourth quarter of this year. In addition, we are in advanced discussions with several, well-known national chains in the U.S. for potential deployments in 2024. This is the groundwork that is absolutely required for us to be successful.

在北美，我們很快就會在加州的巴亞爾塔(Vallarta) 調試我們的第二個安裝，我們正在與他們討論2024 年的多次部署。我們應該與我們的第一個加拿大超市合作夥伴（一家擁有1,000 多個門市的連鎖店）調試我們最初的PX G今年第四季。此外，我們正在與美國幾家知名的全國性連鎖店就 2024 年的潛在部署進行深入討論。這是我們取得成功所絕對需要的基礎工作。

In Europe, our partner in the Benelux region, Fieuw Koeltechnik is planning 3 more installations in Q4, including 2 at Delhaize, a large European U.S. chain with over 800 locations as well as the pancake factory in Belgium, which we have previously announced. Fieuw is also in discussions with a large European chain, Carrefour, on our first repeat installation with them. And finally, we're working actively on our second deployment with Epta Group for a supermarket chain of over 2,000 locations. And of course, we are in conversations with other large chains throughout the continent.

在歐洲，我們在比荷盧經濟聯盟地區的合作夥伴Fieuw Koeltechnik 計劃在第四季度再安裝3 個設備，其中2 個安裝在Delhaize（一家擁有800 多個門市的大型歐洲美國連鎖店）以及我們之前宣布的位於比利時的煎餅工廠。 Fieuw 也正在與歐洲大型連鎖店家樂福就我們的首次重複安裝進行討論。最後，我們正在積極與 Epta Group 合作，為一家擁有 2,000 多個門市的連鎖超市進行第二次部署。當然，我們正在與整個非洲大陸的其他大型連鎖店進行對話。

From my perspective, this is impressive progress for a new technology in this industry. As these chains continue to see the benefit of PX G in their operations, we can then further expand into greenfield and brownfield installations. The greenfield market will take up to a couple of years to show volume simply due to the fact that it requires a 12- to 24-month lead time in designing and installing new systems. Therefore, the greenfield market is our long-term potential but not our substantial near-term volume opportunity.

在我看來，對於這個行業的新技術來說，這是令人印象深刻的進步。隨著這些連鎖店繼續在其營運中看到 PX G 的優勢，我們可以進一步擴展到新建和棕地安裝。由於設計和安裝新系統需要 12 至 24 個月的準備時間，新建市場需要幾年時間才能顯現出規模。因此，綠地市場是我們的長期潛力，但不是我們近期的大量交易機會。

The key to near-term volume growth is the brownfield market, but it's also the most complicated. While our PX G will likely add only minimal cost to greenfield operation, in the brownfield market, there are extra costs and equipment to build and install. To be successful in this market, we must be able to first deliver the standard product that is plug and play, meaning that the install, commissioning and maintenance costs must be efficient and without risk. And we need to commit limited time to design and deliver. Second, we must deliver PX G with meaningful payback to the end users. And third, of course, our PX G must deliver the performance needed to generate that meaningful payback.

近期銷售成長的關鍵是棕地市場，但它也是最複雜的。雖然我們的 PX G 可能只會為綠地營運增加極少的成本，但在棕地市場中，需要建造和安裝額外的成本和設備。為了在這個市場取得成功，我們必須先能夠提供即插即用的標準產品，這意味著安裝、調試和維護成本必須高效且無風險。我們需要投入有限的時間來設計和交付。其次，我們必須為最終用戶提供有意義的回報的 PX G。第三，當然，我們的 PX G 必須提供產生有意義的回報所需的效能。

These are the focus of our entire CO2 and engineering teams in 2024. In prior quarters, we spoke about our intentions to provide more explicit guidance for 2024. During the short time I've been in the seat, I've gained belief that we can achieve a substantial first step along this path in 2024. We are targeting at least 50 locations for next year. Now I'm still in the early days of doing my deep dive into our CO2 strategy. However, what I can say is 50 PX G locations for next year would create a substantial foundation, while growing a pipeline for future expansion.

這些是 2024 年我們整個二氧化碳和工程團隊的重點。在前幾個季度，我們談到了為 2024 年提供更明確指導的意圖。在我就任的短時間內，我相信我們可以在2024 年沿著這條路邁出實質的第一步。我們的目標是明年至少開設50 個地點。現在我仍處於深入研究我們的二氧化碳策略的早期階段。然而，我可以說的是，明年的 50 個 PX G 地點將為未來的擴張奠定堅實的基礎，同時增加管道。

As our strategy unfolds, and we begin to penetrate the market in a more significant manner, we will provide a clear sense of our CO2 revenue objectives. It's clear that we are growing at a slower pace than originally envisioned. However, we are encouraged by the achievements we've made thus far and our prospects for additional locations in 2024. More to come.

隨著我們策略的展開，以及我們開始以更重要的方式滲透市場，我們將明確我們的二氧化碳收入目標。很明顯，我們的成長速度比最初設想的要慢。然而，我們對迄今為止所取得的成就以及 2024 年新增地點的前景感到鼓舞。未來還會有更多。

Our planned performance in 2024 would create more clarity as to how fast we can grow from our initial installs this year. We will update you on our 2026 targets as I gain comfort operationally on our status, and we'll update you throughout the year on our 2024 forecast as needed.

我們計劃在 2024 年實現的業績將使我們更清楚地了解今年初始安裝量的成長速度。當我對我們的營運狀況感到滿意時，我們將向您通報我們的 2026 年目標的最新情況，並且我們將根據需要全年向您通報我們的 2024 年預測。

Now with that, let me hand over the call to Josh to talk in more detail about our water business and to update you on our financials.

現在，讓我將電話轉交給喬什，更詳細地討論我們的水務業務並向您介紹我們的財務狀況的最新情況。

Thanks, David, and good afternoon, everyone. Before I get started, I want to be clear that, in my opinion, we remain a fundamentally solid company with a clear growth strategy and a base cash-generating water business that remains strong. As David described, we are achieving real progress in CO2. Our secular story has not changed in desalination, and we are seeing tremendous success in our wastewater business. Therefore, I remain as bullish as ever in Energy Recovery's prospects.

謝謝大衛，大家下午好。在開始之前，我想澄清的是，在我看來，我們仍然是一家基本上穩固的公司，擁有明確的成長策略和仍然強勁的基本創收水業務。正如大衛所描述的，我們在二氧化碳排放方面取得了真正的進展。我們在海水淡化領域的長期故事沒有改變，我們在廢水處理業務上看到了巨大的成功。因此，我仍然一如既往地看好能源回收的前景。

We had a great third quarter, beating expectations across the board. We achieved $37 million in revenue, exceeding the upper end of our guidance by almost 6% with a nearly 70% gross margin and over 32% adjusted EBITDA margin.

我們的第三季表現出色，全面超出了預期。我們實現了 3,700 萬美元的收入，比我們的指導上限高出近 6%，毛利率接近 70%，調整後 EBITDA 利潤率超過 32%。

Specifically, in desalination, sales increased over $15 million compared to the previous quarter, while our wastewater sales more than doubled. Moreover, our emphasis on expanding our market presence in CO2 led to $100,000 in third quarter revenue, with the rest of our Emerging Technologies segment revenues attributable to oil and gas sales for aftermarket parts.

具體來說，在海水淡化領域，銷售額比上一季成長了 1,500 萬美元以上，而我們的廢水銷售額則增加了一倍以上。此外，我們對擴大二氧化碳市場份額的重視導致第三季收入達到 10 萬美元，而我們新興技術部門的其餘收入則來自售後零件的石油和天然氣銷售。

We are beginning to see our predicted uptick in revenue after our lighter first 2 quarters as previously communicated. We successfully shipped 1 of the 2 projects that were at risk for the third quarter, and we were able to recognize revenue from our existing pipeline to make up the difference. Our water and operation teams did a tremendous job executing.

正如之前所傳達的，在前兩個季度的收入較輕之後，我們開始看到預期的收入上升。我們成功交付了第三季面臨風險的 2 個項目中的 1 個，並且我們能夠從現有管道中確認收入以彌補差額。我們的水務和營運團隊在執行方面做得非常出色。

For fiscal year 2023, we now expect to land in the mid-range of our $131 million to $138 million overall revenue guidance with roughly $7 million of that coming from wastewater and the balance from desalination. This means that we again anticipate record-breaking desalination revenues and what will be nearly a decade of consecutive growth.

對於 2023 財年，我們現在預計整體營收指引將達到 1.31 億至 1.38 億美元的中間區間，其中約 700 萬美元來自廢水處理，其餘來自海水淡化。這意味著我們預計海水淡化收入將再次破紀錄，並將連續近十年成長。

However, we do have a few specific risks in the fourth quarter, which I would like to address. First, $5 million of our 2023 backlog is shipping to Israel. As of today, we are on track to ship in November, but we are closely monitoring the situation in the region.

然而，我們在第四季確實面臨一些具體風險，我想解決這些風險。首先，我們 2023 年積壓訂​​單中的 500 萬美元將運往以色列。截至今天，我們預計在 11 月發貨，但我們正在密切關注該地區的局勢。

Second, we have significant levels of revenue shipping to emerging markets in North Africa and Southeast Asia. As smaller emerging market countries make up a larger portion of our sales, such as those we have described in recent calls, our short-term execution risk within a given quarter also increases due to the complexity of managing and shipping to these countries.

其次，我們向北非和東南亞新興市場的運輸收入水準很高。由於較小的新興市場國家在我們的銷售額中所佔的比例較大，正如我們在最近的電話會議中所描述的那樣，由於管理和運送到這些國家的複雜性，我們在特定季度內的短期執行風險也會增加。

In the fourth quarter, we have an $8 million shipment scheduled for India in the last few weeks of the year and $11 million to Algeria in November. While we have no reason to believe these will not go out of schedule due to the late timing of the shipments and a history of delays in these regions, we are watching and managing them closely. To be clear, any 2023 delays, if they were to occur, would simply increase our guidance for 2024 revenue, meaning it should have no real effect on our business. Therefore, we will return to revenue guidance at our next call once this year's results are in.

第四季度，我們計劃在今年最後幾週向印度發貨 800 萬美元，並於 11 月向阿爾及利亞發貨 1,100 萬美元。雖然我們沒有理由相信這些貨物不會因發貨時間較晚以及這些地區的延誤歷史而延誤，但我們正在密切關注和管理它們。需要明確的是，如果 2023 年發生任何延遲，只會增加我們對 2024 年收入的指導，這意味著它不會對我們的業務產生真正的影響。因此，一旦今年的業績公佈，我們將在下次電話會議上返回收入指引。

Now let's pivot to gross margin. Year-to-date, we've beaten our guidance of 64% to 66% with the gross margin just shy of 67%. Our focus on cost reduction initiatives in 2023 is showing some success. We are currently expecting to finish the year somewhat higher than our previous guidance of 65% to 67% for the year. It's important to note that our end of year gross margin is contingent upon our final product mix, which is heavily weighted to our PX, and our ability to execute on our remaining sales as planned in Q4.

現在讓我們轉向毛利率。今年迄今為止，我們的毛利率略低於 67%，超出了 64% 至 66% 的指導值。我們對 2023 年成本削減計劃的關注已取得一些成功。我們目前預計今年的業績將略高於我們先前 65% 至 67% 的指導值。值得注意的是，我們年末的毛利率取決於我們的最終產品組合（對 PX 影響很大）以及我們按第四季度計劃執行剩餘銷售的能力。

We now expect OpEx to end the year at roughly $68 million to $69 million. There are no real surprises here year-to-date, and we remain focused on prudently managing our expenses as we grow.

我們現在預計年底營運支出約為 6,800 萬至 6,900 萬美元。今年迄今為止，並沒有什麼真正的意外，我們仍然專注於隨著我們的發展審慎管理我們的開支。

Our current cash and investment balance grew to $106 million, primarily owing to robust customer collections as we concentrate on enhancing our inventory turns and supporting business-critical capital investments. We anticipate concluding the year with a cash and investment balance ranging between $110 million to $120 million. Where we land within this range largely hinges on the timing of customer receipts in the fourth quarter.

我們目前的現金和投資餘額成長至 1.06 億美元，這主要是由於我們專注於提高庫存週轉率和支持關鍵業務資本投資，從而累積了大量客戶。我們預計今年結束時現金和投資餘額將在 1.1 億美元至 1.2 億美元之間。我們在這個範圍內的位置很大程度取決於第四季度客戶收貨的時間。

Now that we've established that 2023 is going well and as planned, let's move to 2024 and beyond in our water business.

既然我們已經確定 2023 年進展順利並按計劃進行，那麼讓我們的水業務邁向 2024 年及以後。

As of today, we already have line of sight to roughly 80% of our $200 million desalination target for 2026. In addition, our wastewater business, owing to our expanded product line and sales team continues to surprise to the upside as our pipeline strengthens and evolves. The interest and participation in our webinars grow and early-stage signs in regions outside of Asia and an industry such as municipal wastewater begin to show promise. This gives us confidence that we can achieve at least the lower end of our $30 million to $70 million target for 2026.

截至今天，我們已經實現了2026 年2 億美元海水淡化目標的約80%。此外，由於我們擴大了產品線和銷售團隊，隨著管道的加強和銷售，我們的廢水業務繼續取得令人驚訝的增長。進化。人們對我們的網路研討會的興趣和參與不斷增長，亞洲以外地區的早期跡像以及城市廢水等行業開始顯示出希望。這讓我們有信心至少達到 2026 年 3,000 萬至 7,000 萬美元目標的下限。

Clearly, a pipeline 3 years out has inherent risks. But as we have discussed in prior earnings calls, our visibility into our mega project space as well as the overall water scarcity story is what drives our long-term confidence in the business. Despite short-term fluctuations due to the day-to-day challenges of operating in emerging markets or the near-term trends in the macroeconomic environment.

顯然，三年後的管道存在固有風險。但正如我們在先前的財報電話會議中所討論的那樣，我們對大型專案空間以及整體水資源短缺情況的了解是我們對業務的長期信心的動力。儘管由於新興市場運營的日常挑戰或宏觀經濟環境的近期趨勢而導致短期波動。

The inflationary pressures of the past couple of years, coupled with the relatively strong dollar and higher interest rates are beginning to increase the cost of producing water. We are seeing cost increases per cubic meter of water as high as 40% and interest rates have increased from 1% to 2% in 2020 to 4% to 6% today for a high-quality developer.

過去幾年的通膨壓力，加上相對堅挺的美元和較高的利率，開始增加生產水的成本。我們看到，對於優質開發商來說，每立方公尺水的成本上漲高達 40%，利率也從 2020 年的 1% 至 2% 升至如今的 4% 至 6%。

If we look back, costs to desalinate water have fallen dramatically in the past decade or so, from a few dollars per cubic meter to under $0.50 in some regions of the world, such as in the Middle East. The mindset of the industry has been to continually drive down costs, construct larger and larger desalination plants, making desal more affordable each year. As you well know, this is one reason why our pressure exchanger solution is so strong in this market.

如果我們回顧過去，在過去十年左右的時間裡，海水淡化成本已大幅下降，在世界某些地區（例如中東），從每立方公尺幾美元降至 0.5 美元以下。該行業的理念是不斷降低成本，建造越來越大的海水淡化廠，使海水淡化每年變得更便宜。如您所知，這就是我們的壓力交換器解決方案在該市場中如此強大的原因之一。

However, this shift in cost has created a new dynamic in the industry. We are now seeing some projects being delayed due to the rising cost to produce water as well as the challenges of end users reaching financial closure in a high interest rate environment.

然而，成本的這種轉變為產業創造了新的動力。我們現在看到一些項目由於生產水成本上升以及最終用戶在高利率環境下實現財務收支面臨的挑戰而被推遲。

In today's macro environment, water tariff expectations between large-scale developers, EPCs, and end users are misaligned. While we do not believe these dynamics will permanently alter the trajectory of the desalination market, they will likely slow our rate of growth in the near term, especially in more susceptible emerging markets.

在當今的宏觀環境下，大型開發商、EPC和最終用戶之間的水價預期存在偏差。雖然我們不認為這些動態會永久改變海水淡化市場的軌跡，但它們可能會在短期內減緩我們的成長率，特別是在更容易受到影響的新興市場。

For 2024, we now expect modest revenue growth for desalination in the range of $128 million to $135 million, implying flat desalination revenue up to about 5% for next year based on this year's expectations. This slowdown is entirely due to our mega project space, which we now expect will flatten next year and possibly even fall by a few percentage points compared to 2023.

目前，我們預計 2024 年海水淡化收入將溫和成長，介於 1.28 億美元至 1.35 億美元之間，這意味著基於今年的預期，明年海水淡化收入將成長約 5%。這種放緩完全是由於我們的大型專案空間造成的，我們現在預計明年該空間將趨於平緩，甚至可能比 2023 年下降幾個百分點。

While we see shifts in every year in projects, we are now seeing significant projects shifting out from 2024 to 2025 or beyond in countries such as Egypt and India, which have been hard hit by inflation, growing interest rates, and weakened currencies. We are also seeing delays in the release of tenders of over $7 million in Saudi Arabia. These shifts alone account for more than 15% of our growth in 2024.

雖然我們每年都會看到項目發生變化，但我們現在看到埃及和印度等國家的重大項目從2024 年轉移到2025 年或更長的時間，這些國家受到通貨膨脹、利率上升和貨幣貶值的嚴重打擊。我們還發現沙烏地阿拉伯超過 700 萬美元的招標出現延遲。光是這些轉變就占我們 2024 年成長的 15% 以上。

One very positive development in desalination comes from our new PX Q400, which is the highest performing energy recovery device available on the market. The Q400 sales could exceed 20% or more in 2024. The Q400's increased efficiency and capacity is resonating with customers, and we believe it could make up the majority of our mega-project desalination sales by 2025, essentially supplanting the PX Q300 and large-scale desalination projects. This adoption further strengthens our position in the market vis-a-vis our competitors.

海水淡化領域的一項非常積極的進展來自我們的新型 PX Q400，它是市場上性能最高的能量回收設備。到2024 年，Q400 的銷量可能會超過20% 或更多。Q400 提高的效率和容量引起了客戶的共鳴，我們相信到2025 年，它可以占我們大型海水淡化項目銷售的大部分，基本上取代PX Q300 和大型海水淡化專案。規模化海水淡化專案。這種採用進一步加強了我們相對於競爭對手的市場地位。

Where we sit today, we believe the market has the potential to regain its double-digit growth trajectory in 2025 and where we could return to growth in the low to mid-teens with further accelerated growth in 2026 to the high teens or even up to 20%. As 2024 progresses, we will get more clarity on where 2025 could head and I will update you accordingly.

我們今天所處的位置，我們相信市場有潛力在2025 年恢復兩位數的成長軌跡，並且我們可能會恢復到15% 左右的成長，並在2026 年進一步加速成長到10% 左右，甚至達到10 % 以上。 20%。隨著 2024 年的進展，我們將更清楚地了解 2025 年的發展方向，我將向您提供相應的最新資訊。

Our wastewater business continues to show real strength and we are guiding $12 million to $15 million in revenue in 2024, which will mean we have the potential to once again roughly double our revenue in this segment from this year.

我們的廢水處理業務繼續展現出真正的實力，我們預計 2024 年的收入將達到 1200 萬至 1500 萬美元，這意味著我們有可能從今年起再次將這一領域的收入翻一番。

Our greatest opportunity and risk next year are 2 mega sized municipal wastewater projects that totaled roughly $4 million. These 2 projects show that our strategy to diversify into the broader water treatment space is working, but any delays could have an outsized effect on next year's wastewater performance. If we can achieve this growth next year, we will be well on our path to achieving our targeted range for 2026.

明年我們最大的機會和風險是 2 個大型市政污水處理項目，總價值約 400 萬美元。這兩個項目表明，我們向更廣泛的水處理領域的多元化策略正在發揮作用，但任何延誤都可能對明年的廢水績效產生巨大影響。如果我們明年能夠實現這一成長，我們將順利實現 2026 年的目標範圍。

So you can see regardless of the short-term headwinds we see in desal, our water business remains robust. Overall, we expect to achieve $140 million to $150 million of water revenue next year. Although we have short-term challenges in our desalination mega-project channel, we believe we remain on path to achieve at least the lower end of our $230 million to $270 million target for our water business by the end of 2026.

因此，您可以看到，儘管我們在海水淡化方面遇到短期阻力，但我們的水務業務仍然強勁。總體而言，我們預計明年的水收入將達到 1.4 億至 1.5 億美元。儘管我們的大型海水淡化專案管道面臨短期挑戰，但我們相信，到 2026 年底，我們仍有望實現水務業務至少 2.3 億至 2.7 億美元目標的下限。

We are looking at how we can invest in wastewater to potentially accelerate areas of the world outside of China and India. In addition, we are examining our desal OEM and aftermarket channels for opportunities to increase sales to reduce our reliance on mega projects to achieve these growth targets.

我們正在研究如何投資廢水處理，以加速中國和印度以外地區的發展。此外，我們正在檢視我們的海水淡化 OEM 和售後管道，尋找增加銷售的機會，以減少我們對大型專案的依賴，以實現這些成長目標。

Where we sit today, we believe our water gross margin for 2024 should fall within the range of 64% to 67%. We'll tighten this up early next year. Our CO2 gross margin will largely depend on how we achieve sales, meaning whether by direct PX G1300 sales or by a skid solution. And we could show losses in 2024 as we grow into the profitability of our brownfield market product. I will have to advise you on this further as our sales mix becomes clear.

目前，我們認為 2024 年水務毛利率應介於 64% 至 67% 之間。我們將在明年初加強這一力度。我們的二氧化碳毛利率將在很大程度上取決於我們如何實現銷售，即是透過直接 PX G1300 銷售還是透過撬裝解決方案。隨著我們棕地市場產品的獲利能力不斷增強，我們可能會在 2024 年出現虧損。隨著我們的銷售組合變得清晰，我將不得不就此進一步向您提供建議。

I'm currently forecasting OpEx to remain at 50% to 54% of revenue in 2024, excluding any onetime effects of the CEO transition. Most investments will occur in sales and marketing and any other growth to G&A and R&D will be largely inflation-related. I'll be in a better position to detail our OpEx at our year-end call in February after David has had a chance to dig in.

我目前預測，到 2024 年，營運支出將保持在收入的 50% 至 54%，不包括執行長換屆的任何一次性影響。大多數投資將發生在銷售和行銷方面，一般管理費用和研發的任何其他成長將主要與通貨膨脹相關。在 David 有機會深入探討之後，我將能夠在二月份的年終電話會議上更好地詳細介紹我們的營運支出。

Note that due to slowing growth in revenue, somewhat weaker water gross margin and growing sales and marketing spend, we could see a softening of operating margin next year. We are currently anticipating an acceleration of growth again in 2025 and therefore, believe this softening will be temporary. Our goal to fall below 40% of revenue by 2026 remains achievable.

請注意，由於收入成長放緩、水務毛利率下降以及銷售和行銷支出不斷增長，我們可能會看到明年的營業利潤率疲軟。我們目前預計 2025 年將再次加速成長，因此相信這種疲軟將是暫時的。我們在 2026 年將收入佔比降至 40% 以下的目標仍然可以實現。

To summarize, I believe despite what our share price might be saying, the sky is not falling at Energy Recovery. We see some headwinds in desal in the short term, but nothing we haven't seen before, and our overall water business remains robust. While our acceleration in CO2 has started slower than we would like, we're making real and tangible progress which should put us on our growth curve by 2025 if we successfully deliver on next year's installation.

總而言之，我相信，無論我們的股價如何，能源回收公司的天都不會塌下來。短期內我們看到海水淡化面臨一些阻力，但這是我們以前從未見過的，而且我們的整體水務業務仍然強勁。雖然我們在二氧化碳排放方面的加速速度一開始比我們希望的要慢，但我們正在取得切實可行的進展，如果我們成功交付明年的安裝，到 2025 年我們將進入成長曲線。

Now with that, let's move to Q&A.

現在，讓我們進入問答環節。

(Operator Instructions) Our first question comes from the Pavel Molchanov with Raymond James.

（操作員說明）我們的第一個問題來自 Pavel Molchanov 和 Raymond James。

You threw out a lot of guidance numbers. So I want to make sure we get them accurately. For total water revenue in 2024, you said between $140 million and $150 million with wastewater being a bit more than $10 million, is that right?

你扔掉了很多指導數字。所以我想確保我們準確地得到它們。對於 2024 年的水總收入，您說在 1.4 億至 1.5 億美元之間，其中廢水收入略高於 1,000 萬美元，對嗎？

Correct. Yes, $140 million to $150 million total water. And Pavel, this is Josh. And wastewater between $12 million and $15 million.

正確的。是的，水總量為 1.4 億至 1.5 億美元。帕維爾，這是喬許。廢水費用在 1200 萬至 1500 萬美元之間。

Got it. And because CO2 is so nascent, you're not giving any explicit target for next year?

知道了。由於二氧化碳排放剛興起，您沒有為明年給出任何明確的目標嗎？

Yes. In 50 locations, while it's a considerable step forward in building that foundation for growth, from an actual revenue perspective, we're not talking about huge dollars, right? So that would certainly be in the single-digit millions. So it's not going to be super weighted in our P&L. We'll have more visibility next quarter. Every quarter, we're going to update you kind of on where we're headed with that because it's going to be changing all year, right, as we progress.

是的。在 50 個地點，雖然在建立成長基礎方面邁出了相當大的一步，但從實際收入的角度來看，我們並不是在談論巨額資金，對嗎？所以這肯定是個位數數百萬。因此，它不會在我們的損益表中佔據超級權重。下個季度我們將有更多的知名度。每個季度，我們都會向您通報我們的最新進展，因為隨著我們的進步，全年都會發生變化，對吧。

Right. And the sequencing of revenue recognition in past years, you sometimes had a barbell shape. Sometimes it's more back-end loaded or even front-end loaded, what should '24 look like?

正確的。過去幾年收入確認的順序有時會呈現槓鈴形狀。有時更多的是後端加載，甚至是前端加載，'24 應該是什麼樣子？

Yes. Thank you for asking because I realized after recorded that I haven't put that in there for you guys. It's going to be very much like this year actually, Pavel. So it's going to be heavily weighted to the second half of the year. And the first half is going to look a lot like this year from an absolute revenue perspective.

是的。謝謝你的詢問，因為我在錄音後意識到我還沒有把它放在那裡給你們聽。實際上，今年會很像，帕維爾。因此，到今年下半年，它的權重將會很大。從絕對收入的角度來看，上半年將與今年非常相似。

So I would roughly add $10 million to $15 million in the first quarter, $20 million to $25 million for the second quarter, and then we'll update you on the second half of the year, but it's going to be heavily weighted. And of course, CO2 will be the wildcard for the year, but that will be also weighted more to the second half of the year, I'm sure.

因此，我會在第一季粗略地增加 1000 萬至 1500 萬美元，在第二季度增加 2000 萬至 2500 萬美元，然後我們將在下半年向您通報最新情況，但它的權重將會很大。當然，二氧化碳將成為今年的通配符，但我確信，今年下半年它的權重也會更大。

Okay. You mentioned over $100 million of cash on the balance sheet. Needless to say, the stock has been cut in half from its highs. How are you thinking about, maybe this is a question for the new CEO. But how is the Board thinking about share buyback at these prices?

好的。您提到資產負債表上有超過 1 億美元的現金。不用說，該股已從高點下跌了一半。你怎麼想，也許這是新任CEO要問的問題。但董事會如何考慮以這些價格回購股票？

Yes, I can start. I mean we certainly talk about this every quarter, and so this is something that we review every time we meet with the Board. So it is at the top of our mind. We need to make some decisions about, first of all, where is CO2 going next year, how fast we're getting on that curve and then how we want to invest before we make any decisions on any major buybacks, but it's certainly something we discuss regularly with the Board.

是的，我可以開始了。我的意思是，我們每季都會討論這個問題，因此我們每次與董事會會面時都會審查這一點。所以它是我們的首要考慮。我們需要做出一些決定，首先，明年二氧化碳的去向，我們在這條曲線上的速度有多快，然後在我們對任何重大回購做出任何決定之前我們想要如何投資，但這肯定是我們的事情定期與董事會討論。

Okay. Last question from my end. Is there a timetable for a permanent CEO to be named?

好的。我的最後一個問題。任命永久執行長是否有時間表？

This is Pam Tondreau. We hope to have the new CEO in place by the first of the year or so, perhaps first quarter, we are interviewing candidates right now.

這是帕姆·湯德羅。我們希望在今年年初左右，也許是第一季度，新任執行長就位，我們現在正在面試候選人。

All right. We will look forward to that.

好的。我們對此充滿期待。

Our next question comes from the line of Ryan Pfingst with B. Riley.

我們的下一個問題來自 Ryan Pfingst 和 B. Riley 的對話。

Josh, you were just talking about how next year you expect revenue to be heavily weighted to the second half, once again. Is that something you expect to continue to be the typical seasonality going forward as it's now going to be a few years where we see the second half comprised most of the revenue here?

喬希，您剛剛談到明年您預計收入將再次在下半年佔據重要地位。您是否預計這將繼續成為未來的典型季節性，因為我們看到下半年將成為未來幾年的大部分收入？

I don't think so. We do tend to have slightly higher Q4, I guess, on average, probably, but these 2 years are a little unique, at least in my 5-plus years here and as I look in past. So I wouldn't call out seasonality yet. If it happens again in 2025, I might change my mind, Ryan. But for now, I would expect this to be just 2024.

我不這麼認為。我想，我們的第四季度確實會稍微高一些，我想，平均而言，可能是這樣，但這兩年有點獨特，至少在我在這裡的五年多里以及我過去的經歷中是這樣。所以我還不會指出季節性。如果 2025 年再次發生這種情況，我可能會改變主意，瑞安。但就目前而言，我預計這只是 2024 年。

Okay. That's helpful. And then for desalination, can you just help us reconcile the 80% line of sight that you have to the 2026 target with the delays you're seeing in the near term, maybe just provide a little bit more color about the delays and how or when you'd expect those to abate to give you confidence in that 80% number for '26?

好的。這很有幫助。然後，對於海水淡化，您能否幫助我們協調 2026 年目標的 80% 視線與您在短期內看到的延誤，也許只是提供更多關於延誤以及如何或當您期望這些減弱時，您會對26年80% 的數字充滿信心？

Yes. Yes. Most of the delays are pushing, and I've got -- I'm staring at a list in front of me, it's over $30 million of delays that we saw for 2024. Now we always see shifts in projects. So I wouldn't say all of these are abnormal by any means.

是的。是的。大多數延遲都是緊迫的，我盯著我面前的一份清單，我們看到 2024 年的延遲超過 3000 萬美元。現在我們總是看到項目發生變化。所以我不會說這一切都是不正常的。

But they are mostly shifting to '25 and '26. We have a couple projects shifting to '27, but the vast bulk of them are moving to '25 and '26. And as you review really in the industry, data is saying the same, they're really expecting these upticks back in '25 and '26, barring any major macroeconomic headwinds.

但他們大多轉向「25」和「26」。我們有幾個項目將轉移到 '27，但其中絕大多數將轉移到 '25 和 '26。當你真正回顧這個行業時，數據也顯示了同樣的情況，他們確實預計 25 年和 26 年會出現這些回升，除非出現任何重大的宏觀經濟阻力。

So if you go from where we're at in desal and assume that teens and high teens up to 20% kind of range, it's going to get you up to that $180 million, $190 million-ish range of revenue by 2020 -- at the end of 2026. And frankly, we can see that 80% I talked about in the script is really based on what we see in our mega project space and within the pipeline, as you know, that we see quite far out with.

因此，如果你從我們在海水淡化中的情況出發，假設青少年和高中生的收入範圍達到 20%，那麼到 2020 年，你的收入將達到 1.8 億美元、1.9 億美元左右的範圍—— 2026 年底。坦白說，我們可以看到我在腳本中談到的80% 實際上是基於我們在大型專案空間和管道中看到的內容，如您所知，我們認為這些內容與我們認為相去甚遠。

So -- and then assumptions on our smaller project space and aftermarket. So we have -- where we sit today, some real comfort in that. Now granted the macro economy can play with us the time like we're seeing next year. But if things revert back to normal and start to normalize, I think we should see that uptick.

那麼——然後是對我們較小的專案空間和售後市場的假設。因此，我們今天所坐的位置確實令人感到安慰。現在假設宏觀經濟可以像我們明年看到的那樣與我們合作。但如果事情恢復正常並開始正常化，我認為我們應該會看到這種上升。

Got it. And then I'll just sneak one more in and stick with water. For the geographical breakdown in Middle East and North Africa, obviously, have comprised the majority of revenue in recent years. Could you just talk about going forward how much of the overall revenue or maybe just how much of the growth is expected to be driven by markets outside the Middle East?

知道了。然後我會再偷偷放進去，然後用水黏住。顯然，中東和北非的地理分佈佔了近年來的大部分收入。您能否談談未來總收入的多少或增長的多少預計將由中東以外的市場推動？

Yes. When you look out to 2024, it's actually not the Middle East. We're seeing a slowdown in the Middle East in 2024, and we're seeing other areas, especially Asia and South America make up that difference. As we look further out, though, the Middle East is going to be -- it's a little lumpy because we have some large projects, for example, like Neom in Saudi that we're going to see fall into these upcoming years, and some other countries as well.

是的。當你展望 2024 年時，你會發現它其實不是中東。我們預計到 2024 年，中東地區的經濟成長將放緩，而其他地區，尤其是亞洲和南美洲，將彌補這一差距。不過，當我們放眼更遠的地方時，中東將會變得有點不穩定，因為我們有一些大型項目，例如，我們將在未來幾年看到沙烏地阿拉伯的 Neom 項目，還有一些項目。其他國家也是如此。

So it's a little lumpy, but we still see some strong demand in the Middle East and also importantly, because we're still going through this transition from thermal desalination plants to reverse osmosis desal plants, and we still have a pretty big pipeline of that to come forward in the coming years, and we expect that to occur as well. So it's going to be a little bit lumpy, but we are seeing a shift to other regions of the world, most certainly next year, although I think the Middle East will still pop back up pretty strong in '25 or '26. Is that helpful?

所以它有點不穩定，但我們仍然看到中東有一些強勁的需求，而且重要的是，因為我們仍在經歷從熱海水淡化廠到反滲透海水淡化廠的轉變，而且我們仍然有相當大的管道在未來幾年挺身而出，我們預計也會發生這種情況。因此，情況會有點不穩定，但我們會看到向世界其他地區的轉變，最肯定的是明年，儘管我認為中東在 25 年或 26 年仍將強勁復甦。有幫助嗎？

Yes. Super helpful.

是的。超有幫助。

(Operator Instructions) Our next question comes from the line of Pavel Oliva, who is a private investor.

（操作員說明）我們的下一個問題來自帕維爾·奧利瓦（Pavel Oliva），他是一位私人投資者。

First of all, thank you very much for a lot more clarity and transparency that you have provided on this call. My question is more on the CO2 market and the other adjacent verticals that you guys have. Can you kind of give us a better sense of what the regulations are and how required is it to -- for the refrigeration and potentially HVAC to switch to CO2? And maybe if you can also comment, given the price increases in energy, how have the economics changed?

首先，非常感謝您在本次電話會議中提供的更清晰和透明的資訊。我的問題更多是關於二氧化碳市場和你們擁有的其他相鄰垂直領域。您能否讓我們更了解法規的內容以及冷凍和可能的暖通空調系統轉換為二氧化碳的要求如何？也許您也可以評論一下，鑑於能源價格上漲，經濟發生了什麼樣的變化？

Just to -- so we can compare how economic it is for the industry to switch into these new technologies given how economical it was for the water to switch into reverse osmosis and using your PX exchangers?

只是為了——考慮到水轉換為逆滲透並使用 PX 交換器的經濟性，我們可以比較該行業轉換為這些新技術的經濟性如何？

And then I have a second question, and that's your cash has increased and you have purchased stock, repurchase stock higher than this. And if there is a specific reason why you wouldn't do it now.

然後我還有第二個問題，就是你的現金增加了，你買了股票，回購的股票比這個更高。如果有具體原因讓您現在不這樣做。

Pavel, I'll start with the easier one, and then I'll hand it over to David for the other question. On the buyback, again, it's something we're certainly discussing. So I'm not saying it's off the table, Pavel, but it's -- we need to make some decisions for next year. There's been a lot of changes here recently. And we'll certainly be returning to those discussions with the Board.

帕維爾，我將從更簡單的問題開始，然後我將把另一個問題交給大衛。關於回購，這也是我們肯定正在討論的事情。所以我並不是說這不可行，帕維爾，但我們需要為明年做一些決定。最近這裡發生了很多變化。我們肯定會回到與董事會的討論。

But clearly, if we have extra cash, we're not going to use, then we ought to give it back, right? So that's something we'll be reviewing regularly. We're always looking for the best returns for investments and for our shareholders, and that's when we look at as well. And for the CO2 question, I'll hand it over to David.

但顯然，如果我們有多餘的現金，我們不會使用，那麼我們應該歸還它，對吧？所以我們會定期審查這一點。我們一直在尋求投資和股東的最佳回報，這也是我們所關注的。對於二氧化碳問題，我將把它交給大衛。

Yes. This is David Moon. Just on the regulatory environment. So as you would know, in Europe, F-gas regulation, which was passed by the EU has been in place now for a number of years. And so the ultimate goal for F-gas is to reduce traditional refrigerant HFCs, reduced them by 80% from their 2014 base levels. And that transition is well underway.

是的。這是大衛·穆恩。就監管環境而言。如您所知，在歐洲，歐盟通過的含氟氣體法規現已實施多年。因此，含氟氣體的最終目標是減少傳統冷媒 HFC，將其比 2014 年的基準水準減少 80%。這種轉變正在順利進行中。

And so in Europe, we've got roughly 60,000 CO2 installations already, adding 10,000 every year. And so as you would know, not only is CO2 a much more ozone-friendly, much more environmentally friendly, refrigerant that's also a much more efficient refrigerant.

因此，在歐洲，我們已經安裝了大約 60,000 個二氧化碳裝置，並且每年增加 10,000 個。如您所知，二氧化碳不僅是一種對臭氧層更友善、更環保的冷媒，也是一種更有效率的冷媒。

And so we're getting help by regulation in the EU. We have been getting help in the EU. And now that it's an established technology, it's -- we're no longer having to push. There's a lot of pull already. And so where we come in as energy prices rise in Europe and as heat continues to get hotter, this is where our PX G comes in because we are best when refrigeration systems are working their hardest. And they work their hardest when it's hot outside. And so what the PX G does is it improves energy efficiency, heat transfer. And so this is a perfect application at the right time for our PX G and it's a minimal cost. And the payback is a very good story.

因此，我們正在透過歐盟的監管獲得幫助。我們一直在歐盟獲得幫助。現在它已經成為一項成熟的技術，我們不再需要推動。已經有很大的吸引力了。因此，隨著歐洲能源價格上漲以及氣溫持續升高，我們的 PX G 就發揮了作用，因為當冷凍系統最努力工作時，我們的表現最好。當外面很熱時，他們會最努力地工作。因此 PX G 的作用是提高能源效率和熱傳遞。因此，對於我們的 PX G 來說，這是一個恰逢其時的完美應用，而且成本最低。回報是一個非常好的故事。

And so the brownfield market in Europe is what we -- that's our near-term opportunity, and that's what we're really working hard on. In the U.S., it's a bit of a different story. So the transition from HFC to CO2 has really just started. And so the EPA just passed some final rulemaking last month. And the target in the U.S. will be a 70% reduction in HFCs by 2029. So the curve is steeper, getting started later, but the curve is steeper.

因此，歐洲的棕地市場就是我們近期的機會，也是我們真正努力的方向。在美國，情況則有所不同。因此，從 HFC 到 CO2 的轉變才剛開始。因此，美國環保署上個月剛通過了一些最終的規則制定。美國的目標是到 2029 年將 HFC 減少 70%。所以曲線更陡，開始得晚一些，但曲線更陡。

And so what -- there's roughly 1,500 CO2 installations in the U.S. today, and that's going to increase dramatically by 2029. And so the opportunity for us is going to be greenfield. And by the way, it continues to get hotter in the U.S., more days that are above a certain ambient temperature where again, PX G is perfectly suited for.

那麼又怎樣——如今美國大約有 1,500 個二氧化碳裝置，到 2029 年這個數字將大幅增加。因此，我們的機會將是新建。順便說一句，美國的天氣繼續變得更熱，超過特定環境溫度的天數越來越多，PX G 再次非常適合。

So the timing of regulatory action, the fact that the planet gets hotter, it plays right into our PX G story and a really, really good payback story. And so more to comment, I get a chance to deep dive into the CO2 story in our strategy, but we've got a very, very good start.

因此，監管行動的時機，地球變得越來越熱的事實，它恰好融入了我們的 PX G 故事和一個非常非常好的回報故事。因此，我有機會深入探討我們策略中的二氧化碳故事，但我們已經有了一個非常非常好的開始。

So to summarize, it sounds like this is not a luxury type of a thing for these companies. This is an absolute necessity because there will be some kind of penalties if they do not decrease their emissions?

總而言之，對這些公司來說，這聽起來並不是一件奢侈的事。這是絕對必要的，因為如果他們不減少排放，就會受到某種懲罰？

Yes. The bottom line is HFCs will just will not be available over the course of the next 6 to 7 years. And where they are available, the price will be astronomical. That's what's happened in the European market. And so it forces large supermarkets, large cold storage facilities, food processors to completely rethink their refrigeration infrastructure. And that's what's already happened in the U.S. -- in Europe. And so it's going to play out the same in Europe. And so for Europe, it's our opportunity that there's a brownfield market already, and it continues to get hotter. In the U.S., it's going to be the greenfield opportunity.

是的。最重要的是，氫氟碳化合物在未來 6 到 7 年內將無法使用。如果有的話，價格將是天文數字。這就是歐洲市場所發生的情況。因此，它迫使大型超市、大型冷藏設施、食品加工商徹底重新考慮他們的冷凍基礎設施。這就是美國和歐洲已經發生的事情。因此，歐洲也會出現同樣的情況。因此，對於歐洲來說，我們的機會是已經存在棕地市場，而且它繼續變得越來越熱。在美國，這將是一個全新的機會。

And by the way, it continues to get hotter. And this plays into the strength of the PX. And we're early days in our emerging into the CO2 refrigeration market. But we are already winning industry awards. We're getting a lot of talk, and we'll have a solid 50 -- at least 50 installations next year with the premier retailers in Europe and U.S. and it's just a jumping off point into 2025 and 2026.

順便說一句，天氣繼續變得更熱。這也體現了 PX 的優勢。我們正處於進入二氧化碳冷凍市場的早期階段。但我們已經贏得了行業獎項。我們收到了很多討論，明年我們將在歐洲和美國的主要零售商那裡安裝 50 台，至少 50 台，這只是 2025 年和 2026 年的一個起點。

Right. So if I may, 1 more. In terms of reliability, that's a huge consideration when you have a freezer full of goods, right? You have been testing these at the PX Exchanger in the CO2 market for a while now. When do you think the industry and the individual players feel comfortable with the data that they can pull the trigger for a sort of a general application across the whole chain and also use it sort of for their competitive advantage in marketing?

正確的。如果可以的話，再多說 1 個。就可靠性而言，當您的冰箱裝滿貨物時，這是一個重要的考慮因素，對吧？您已經在 CO2 市場的 PX 交換器上測試這些產品一段時間了。您認為行業和個體參與者什麼時候會對數據感到滿意，他們可以在整個鏈條上觸發某種通用應用程序，並利用它來獲得營銷方面的競爭優勢？

So that's a good question. So just to be mindful that this is a very conservative industry. It's an industry that had billions of dollars of assets tied up in traditional refrigerants. And so it's a very cautious industry. You have to do your work upfront and testing, which leads to another round of even increased sites before you get to a point where retailers are satisfied and ready to go and feel comfortable moving from one technology to the other. The fact is that we're already -- we've completed Step 1. And so Step 2 is 50 locations across Europe, at least 50 locations across Europe and the U.S. next year.

這是一個好問題。因此請注意，這是一個非常保守的行業。這個行業擁有數十億美元的資產與傳統冷媒相關。所以這是一個非常謹慎的行業。您必須預先做好工作和測試，這會導致另一輪甚至增加的站點，然後才能達到零售商滿意並準備好從一種技術轉向另一種技術的程度。事實上，我們已經完成了第 1 步。因此，第 2 步是在歐洲開設 50 個地點，明年在歐洲和美國開設至少 50 個地點。

And from there, given who we're targeting and who we've got commitments from for new locations for next year, this is a next really good jumping point to get into what will be more rapid commercialization in '25 and '26. And just remember that the, the opportunity in the U.S. is further down the road, it's greenfield, the opportunity in Europe is going to be brownfield or retrofit. So we provided guidance. We provided guidance on CO2 in the range of $100 million to $300 million by 2026.

從那時起，考慮到我們的目標對像以及我們對明年新地點的承諾，這是進入 25 和 26 年更快商業化的下一個非常好的跳躍點。請記住，美國的機會在未來，它是綠地，歐洲的機會將是棕地或改造。所以我們提供了指導。到 2026 年，我們提供了 1 億至 3 億美元的二氧化碳指引。

And so from the work that we've done thus far and detail that I've been able to do, I can see a path for us getting to $100 million by 2026. I think we have the opportunity and the potential to do that as long as we continue to deliver the step-by-step process for this industry. I believe that the $200 million to $300 million sort of top end of the range is going to exist. The question is going to be what is it going to take for us to be able to get there and how fast that we can do it.

因此，從我們迄今為止所做的工作和我能夠做的細節來看，我可以看到我們在 2026 年達到 1 億美元目標的道路。我認為我們有機會和潛力做到這一點，因為只要我們繼續為這個行業提供循序漸進的流程。我相信 2 億至 3 億美元的上限將會存在。問題是我們需要什麼才能實現這一目標以及我們能以多快的速度實現這一目標。

And the answer is at this point is I don't know. I've been in the seat for a couple of weeks. And so I need time to work with this excellent management team to further explore the strategy as it sits and how we work to get from point A to point B by 2026.

目前的答案是我不知道。我已經坐了幾個星期了。因此，我需要時間與這個優秀的管理團隊合作，進一步探索目前的策略，以及我們如何在 2026 年從 A 點到 B 點。

Our next question comes from the line of Larry McCullough, who's a private investor.

我們的下一個問題來自拉里·麥卡洛（Larry McCullough），他是一位私人投資者。

I have 2 questions actually. One in reference to the buybacks, I know it's been discussed already. But Josh, you said something in reference to, you're not sure how much money you're going to be spending on the CO2 next year or thereafter. And just wondering if you can take that much cash flow, you have $106 million in the bank right now or cash equivalents. Do you foresee that you're going to really have to hold on to that much cash, maybe just buying back a few million shares wouldn't make that huge of a debt in the cash holdings.

其實我有兩個問題。關於回購，我知道已經討論過了。但是喬希，你說過，你不確定明年或之後你會在二氧化碳上花多少錢。只是想知道您是否可以承受這麼多現金流，您現在銀行有 1.06 億美元或現金等價物。你是否預見到你真的必須持有那麼多現金，也許僅僅回購幾百萬股並不會讓現金持有中產生那麼大的債務。

Yes. Well, we'll see. I mean we're talking about inventory builds, which takes a lot of cash. We're talking about building new capacity, which takes a lot of cash. And more importantly, as David was describing the European market, and as we kind of vet out what it will take to truly conquer that market, those are the questions that are at least top of my mind in terms of how we use cash.

是的。好吧，我們拭目以待。我的意思是我們正在談論庫存建設，這需要大量現金。我們正在談論建立新產能，這需要大量現金。更重要的是，正如大衛描述歐洲市場一樣，當我們審查如何真正征服該市場時，這些是我在如何使用現金方面至少首先考慮的問題。

I'm not suggesting this will take us a year to figure out, but it's something that, I think, together with the Board, we're in budgeting season. These are things that we need to dive into and make to move on before we start making decisions around our cash for next year.

我並不是說這需要我們花一年的時間才能弄清楚，但我認為，我們與董事會一起正處於預算季節。在我們開始圍繞明年的現金做出決策之前，這些是我們需要深入研究並繼續前進的事情。

Okay. My second question is, as you mentioned, you had great numbers for the quarter. Congratulations on that. So glad to hear that. And you also acknowledged that the stock being down so much. It seems that the stock's reaction was due to a lack of communication by management, especially with the CEO transition. I'm sure maybe that's been brought to your attention. But what do you have to do in the future, what do you plan to do in the future, maybe to communicate on such major events going forward?

好的。我的第二個問題是，正如您所提到的，本季的數據非常好。對此表示祝賀。很高興聽到這個消息。你也承認股價下跌了很多。該股的反應似乎是由於管理層缺乏溝通，特別是在執行長換屆方面。我相信也許這已經引起了您的注意。但是你以後要做什麼呢，你打算將來做什麼，也許以後就這樣的大事進行溝通？

This is Pam Tondreau. So we apologize for any worry that's caused everybody. The topic of CEO succession had been on the Board's mind for a year. We had already engaged the head hunter, but this is not the type of thing that gets discussed until it happens, unfortunately. We feel good about where we are, the company. We feel good about having David Moon able to step in as interim CEO, and we ask you to stick with us. And let us show you that we know what we're doing here.

這是帕姆·湯德羅。因此，對於帶給大家的任何擔憂，我們深表歉意。執行長繼任的話題已經在董事會思考了一年。我們已經聘請了獵頭，但不幸的是，這不是那種在事情發生之前才會討論的事情。我們對我們所處的位置、對公司的感覺很好。我們對 David Moon 能夠擔任臨時執行長感到很高興，並請您繼續支持我們。讓我們向您展示我們知道我們在這裡做什麼。

I appreciate that, but also other companies when they start to go into CEO transitions, they do bring that up on calls or maybe if you could have just brought it up in today's call, but it's just this lack of communication. People were just thinking the worse, obviously, because their stock is down over 50%. So I appreciate your response.

我很欣賞這一點，但其他公司在開始進行執行長換屆時，也會在電話會議上提出這個問題，或者如果你可以在今天的電話會議中提出這個問題，但這就是缺乏溝通。顯然，人們只是往壞處想，因為他們的股票下跌了 50% 以上。所以我很感謝你的回應。

(Operator Instructions) Our next question comes from the line of Wally Walker with Hana Road Capital.

（操作員說明）我們的下一個問題來自 Wally Walker 和 Hana Road Capital 的專線。

First of all, Pam and David, thanks for your expressing your confidence in the underlying business and a follow-up on the previous question or comments. Stating that in last week's release would have gone a long way to ameliorating the uncertainty that was created and evisceration of stock price. So I also appreciate the apology and perhaps lesson learned.

首先，Pam 和 David，感謝你們表達了對基礎業務的信心以及對先前問題或評論的跟進。在上週的發布中表示，這將在很大程度上緩解所造成的不確定性和股價的下跌。所以我也很感謝你的道歉，也許還有教訓。

Josh, a question for you on the guidance more near term, the Q4, so I'm trying to make sure I correctly understand what you said about the deliveries risk and potential for delay, if the ones that you detailed the potential delayed deliveries actually all get delayed, my math still shows a record quarter for the company of all time. And the guidance on the margins you prescribed would be a very profitable quarter also even with that delay and also add to your cash balance. So long question, but am I thinking about that or hearing that correctly?

喬希，有一個關於近期第四季度指導的問題，所以我試圖確保我正確理解您所說的有關交付風險和延遲可能性的內容，如果您詳細說明了潛在延遲交付的內容實際上是這樣的話一切都被推遲了，我的數學仍然顯示該公司有史以來創紀錄的季度業績。即使有這種延遲，您規定的利潤指導也將是一個非常有利可圖的季度，並且還會增加您的現金餘額。這麼長的問題，但我是否正確地思考或聽到了這個問題？

Yes. No, I appreciate that, Wally. You're exactly right, actually, because I cited about $19 million. If you do the math, we're at $60 million plus, that's remaining for Q4. And you're right, we would still -- we should still -- even with that, if those were to move out, have a record quarter, a record quarter, if I remember right, about $42 million last year, we should still beat that regardless. So yes, it would still be an outstanding quarter absolutely from a profit and a revenue perspective, no doubt.

是的。不，我很感激，沃利。事實上，你完全正確，因為我引用了大約 1900 萬美元。如果你算一下，我們還有 6000 萬美元以上，這是第四季的剩餘資金。你是對的，我們仍然會 - 我們應該仍然 - 即使這樣，如果那些要搬出去，有創紀錄的季度，創紀錄的季度，如果我沒記錯的話，去年大約 4200 萬美元，我們仍然應該無論如何都要擊敗它。所以，是的，毫無疑問，從利潤和收入的角度來看，這仍然是一個出色的季度。

And within the scope of your margin profile as well, even with the potential delays?

即使有潛在的延遲，也在您的保證金範圍內嗎？

Yes. But we fall back into -- we wouldn't exceed that guidance, which is what I'm citing now if everything goes out, that 65% to 67%, we'd fall back within that guidance. We still within the guidance, though. We wouldn't exceed it if -- because all -- those shipments were all very pressure exchanger heavy, which are higher margin. So we would naturally see it come down a little bit, but we would still -- we should still be within guidance regardless.

是的。但我們會回到——我們不會超過那個指導，這就是我現在引用的，如果一切順利的話，65%到67%，我們會回到那個指導內。不過，我們仍在指導範圍內。如果——因為所有——這些出貨量都是非常重的壓力交換器，我們就不會超過它，這是更高的利潤。因此，我們自然會看到它有所下降，但無論如何，我們仍然應該在指導範圍內。

And this concludes this -- we've reached the end of the question-and-answer session. I'll now turn the call back over to Jim Siccardi for closing remarks.

問答環節到此結束。現在我將把電話轉回給吉姆·西卡迪（Jim Siccardi）做總結發言。

Thank you, everyone, for joining us this evening. We look forward to talking to you in the near future. Have a great evening.

謝謝大家今晚加入我們。我們期待在不久的將來與您交談。祝您有個美好的夜晚。

Good bye.

再見。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。