ESCO Technologies Inc (ESE) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Third Quarter 2023 ESCO Technologies' Earnings Call. (Operator Instructions) Please be advised that today's conference is recorded.

美好的一天，感謝您的支持。歡迎參加 ESCO Technologies 2023 年第三季度財報電話會議。 （操作員說明）請注意，今天的會議已錄製。

On the call today, we have Bryan Sayler, President and CEO; Chris Tucker, Senior Vice President and CFO. And now I would like to turn the conference over to our first speaker today, Kate Lowrey, Vice President of Investor Relations. Kate, you may now have the floor.

今天的電話會議由總裁兼首席執行官 Bryan Sayler 主持。克里斯·塔克，高級副總裁兼首席財務官。現在我想把會議交給我們今天的第一位發言人，投資者關係副總裁 Kate Lowrey。凱特，現在請發言。

Thank you. Statements made during this call which are not strictly historical are forward-looking statements within the meaning of the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and actual results may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the company's operations and business environment, including but not limited to, the risk factors referenced in the company's press release issued today, which will be included as an exhibit to the company's Form 8-K to be filed. We undertake no duty to update or revise any forward-looking statements, except as may be required by applicable laws or regulations.

謝謝。本次電話會議期間發表的並非嚴格歷史性的陳述，屬於聯邦證券法安全港條款含義內的前瞻性陳述。這些陳述基於當前的預期和假設，由於公司運營和業務環境中存在的風險和不確定性，包括但不限於所引用的風險因素，實際結果可能與前瞻性陳述中的預測存在重大差異在公司今天發布的新聞稿中，該新聞稿將作為公司提交的8-K 表格的附件。我們不承擔更新或修改任何前瞻性陳述的責任，除非適用法律或法規要求。

In addition, during this call, the company may discuss some non-GAAP financial measures in describing the company's operating results. A reconciliation of these measures to the most comparable GAAP measures can be found in the press release issued today and found on the company's website at www.escotechnologies.com under the link Investor Relations.

此外，在這次電話會議中，公司可能會討論一些描述公司經營業績的非公認會計準則財務指標。這些措施與最具可比性的 GAAP 措施的調節可以在今天發布的新聞稿中找到，也可以在公司網站 www.escotechnologies.com 的投資者關係鏈接下找到。

Now I'll turn the call over to Bryan.

現在我將把電話轉給布萊恩。

Thanks, Kate. Thanks, everyone, for joining today's call. We really appreciate you taking some time to get an update from ESCO this afternoon. Our year has gone really well through the first 3 quarters, and I'm excited to talk to all of you about that. But before I do, I'd like to take a moment to thank all of our employees.

謝謝，凱特。感謝大家參加今天的電話會議。我們非常感謝您今天下午抽出時間從 ESCO 獲取最新消息。我們這一年的前三個季度進展順利，我很高興能與大家談論這一點。但在此之前，我想花點時間感謝我們所有的員工。

ESCO has wrapped up a number of strong quarters with impressive top and bottom line growth. Our industries are growing, but it takes a dedicated and capable team to truly deliver on these positive industry trends. It hasn't been easy over the last few years, but our teams continue to show real commitment and dedication.

ESCO 已經結束了多個強勁的季度，營收和利潤增長令人印象深刻。我們的行業正在不斷發展，但需要一支敬業且有能力的團隊才能真正實現這些積極的行業趨勢。過去幾年並不容易，但我們的團隊繼續表現出真正的承諾和奉獻精神。

Chris and I had a chance in July to visit most of our operating locations, and it's always energizing to see the teams in action and to witness firsthand the success that they're achieving. The teams across the world are very engaged and they're winning. So it's fun to be in a strong culture like that. And again, I just want to say thanks to everyone at ESCO for their tremendous effort and support.

克里斯和我在 7 月份有機會參觀了我們的大部分運營地點，看到團隊的行動並親眼目睹他們所取得的成功總是令人振奮。世界各地的團隊都非常投入並且正在取得勝利。因此，身處這樣一個強大的文化中是很有趣的。再次，我想對 ESCO 的每個人表示感謝，感謝他們的巨大努力和支持。

With that, let me pivot over to the quarterly results. We had a really great third quarter with strong sales and earnings growth. Sales increased nearly 14% in the quarter, with positive trends continuing in most parts of our business. On top of that, we had nice margin expansion, which ultimately led to adjusted earnings per share growth of over 20%.

接下來，讓我轉向季度業績。我們的第三季度業績非常出色，銷售和盈利增長強勁。本季度銷售額增長了近 14%，我們大部分業務都延續了積極的趨勢。最重要的是，我們的利潤率增長良好，最終導致調整後每股收益增長超過 20%。

We are very happy with this performance and excited that we have continued to exceed expectations through the first 3 quarters of FY '23. We have over $700 million of backlog now. So the outlook going forward remains positive. We did see orders drop compared to the prior third year -- third quarter of last year. Chris will take us through those details in a few minutes, but that's mostly an issue of timing and due to the lumpy nature of multiyear orders for certain parts of our business. Year-to-date, our book-to-bill ratio is over 100%, and we're optimistic about our growth outlook as we look beyond 2023.

我們對這一業績感到非常滿意，並為我們在 23 財年的前 3 季度繼續超出預期而感到興奮。我們現在有超過 7 億美元的積壓訂單。因此，未來的前景仍然樂觀。與去年第三季度相比，我們確實看到訂單有所下降。克里斯將在幾分鐘內向我們介紹這些細節，但這主要是一個時間問題，並且由於我們業務的某些部分的多年訂單具有不穩定的性質。今年迄今為止，我們的訂單出貨比超過 100%，展望 2023 年以後，我們對增長前景持樂觀態度。

Before Chris gets into the financial details, I did want to offer some top-level commentary about each of our business segments. Starting with A&D, where we had a solid quarter. Sales were up double-digit as we continue to see good momentum in the commercial and defense aerospace businesses. The aircraft components business certainly led the growth this quarter for A&D. The teams executed very well, but this continues to be the part of our business with the most challenges from a supply chain perspective. This continues to constrain the potential growth and contributes to some past-due backlog.

在克里斯討論財務細節之前，我確實想對我們每個業務部門提供一些頂級評論。從 A&D 開始，我們在該季度表現穩定。由於我們繼續看到商業和國防航空航天業務的良好勢頭，銷售額實現了兩位數增長。飛機零部件業務無疑引領了本季度 A&D 的增長。這些團隊執行得非常好，但從供應鏈的角度來看，這仍然是我們業務中面臨最大挑戰的部分。這繼續限制了潛在的增長，並導致一些逾期積壓。

The teams continue to manage this aggressively and we're delivering on the growth, but the challenges industry-wide persists. Orders for Aerospace & Defense were down in the quarter, but again that's mostly a timing issue with some large multiyear orders booked in Q3 of the prior year. The outlook here remains solid with navy, commercial and military aerospace, all expected to drive future growth.

團隊繼續積極管理這一問題，我們正在實現增長，但全行業的挑戰仍然存在。本季度航空航天和國防訂單有所下降，但這主要是上一年第三季度預訂的一些大型多年期訂單的時間問題。海軍、商業和軍用航空航天領域的前景依然穩固，預計將推動未來的增長。

Next up is the Utility Group, which had a really great quarter. Revenue growth was up over 30% in the quarter and adjusted EBIT dollars grew by more than 50%. This business has seen a nice burst of growth in 2023. The core utility customer base continues to invest in their infrastructure, and we're seeing broad growth across all of our product lines with protection testing, condition monitoring and offline testing, all delivering good growth.

接下來是公用事業集團，該集團的季度表現非常出色。本季度收入增長超過 30%，調整後息稅前利潤增長超過 50%。這項業務在2023 年出現了良好的爆發式增長。核心公用事業客戶群繼續投資於他們的基礎設施，我們看到我們所有產品線的廣泛增長，包括保護測試、狀態監測和離線測試，所有這些都帶來了良好的結果生長。

On the renewable side, growth continues to exceed even our expectations. 2023 will be a phenomenal year for NRG. The Inflation Reduction Act has provided long-term visibility for renewable infrastructure build-outs and our USG teams that both Doble and NRG are beginning to see benefits from that activity. On the supply chain side, we've seen a big improvement at USG. And while our backlogs are elevated, very little of that is past-due.

在可再生能源方面，增長繼續超出我們的預期。 2023 年對於 NRG 來說將是非凡的一年。 《降低通貨膨脹法案》為可再生基礎設施建設提供了長期可見性，我們的 USG 團隊認為 Doble 和 NRG 都開始從該活動中看到好處。在供應鏈方面，我們看到USG有了很大的進步。雖然我們的積壓訂單有所增加，但逾期的訂單卻很少。

Finally, I'll touch on the test business, where we saw a sales decline again in the third quarter, which was in line with what we described during our last conference call. We've seen flattish results domestically as growth paused over last year's strength from Power Line Filters and test and measurement projects. Additionally, we've seen continued weakness in China, where business was significantly impacted as the economy opened back up after the pandemic. Unfortunately, we have not seen business pick up much since that time.

最後，我將談談測試業務，我們在第三季度看到銷售額再次下降，這與我們在上次電話會議中所描述的情況一致。我們看到國內業績持平，因為電力線濾波器以及測試和測量項目的增長超過了去年的強勁勢頭。此外，我們看到中國的經濟持續疲軟，隨著疫情后經濟的複蘇，中國的業務受到了重大影響。不幸的是，自那時以來，我們並沒有看到業務有太大起色。

The team here continues to do a great job, and they increased our EBIT dollars in the third quarter despite the lower sales volume. This is good performance and positions us well to capture additional growth as these markets start to recover in the future.

這裡的團隊繼續做得很好，儘管銷量較低，但他們在第三季度提高了我們的息稅前利潤。這是良好的業績，使我們能夠在這些市場未來開始復蘇時獲得額外的增長。

So to summarize, I would say it's been a great 9 months to start 2023. It puts us on a good path overall as we drive to deliver on our targets for the full year, which we are increasing again this quarter.

總而言之，我想說，2023 年伊始的 9 個月非常好。這讓我們總體上走上了一條良好的道路，因為我們正在努力實現全年目標，本季度我們將再次提高目標。

So now I'll turn it over to Chris to give some more financial highlights on the third quarter.

現在我將把它交給克里斯來提供更多第三季度的財務亮點。

Thanks, Bryan. Everyone can follow along with the chart presentation. We'll start on Page 3, where we have the overall financial highlights.

謝謝，布萊恩。大家可以跟著圖表演示進行操作。我們將從第三頁開始，其中有總體財務亮點。

As you can see, we had another great quarter with sales up over 13%, adjusted EBIT up over 24% and adjusted earnings per share up over 22%. We will go through the segment details in a minute, but on the sales side, the Utility Solutions Group delivered exceptional sales growth of over 30% and Aerospace & Defense was also strong at 12% growth. Orders were down in the quarter. You can see they dropped by 16% to $213 million. Again, I will cover this in the segment details, but we had some tough comparisons with large items booked last year. The good news is that backlog still stands at over $700 million as of June 30.

正如您所看到的，我們又度過了一個出色的季度，銷售額增長超過 13%，調整後息稅前利潤增長超過 24%，調整後每股收益增長超過 22%。我們將在一分鐘內詳細介紹細分市場的詳細信息，但在銷售方面，公用事業解決方案集團的銷售增長超過 30%，航空航天與國防也表現強勁，增長了 12%。本季度訂單有所下降。您可以看到它們下降了 16% 至 2.13 億美元。再次，我將在細分詳細信息中介紹這一點，但我們與去年預訂的大件物品進行了一些艱難的比較。好消息是，截至 6 月 30 日，積壓訂單仍超過 7 億美元。

Moving on to Chart 4. We'll start to get into the segment details, beginning with Aerospace & Defense. Starting with orders. You can see the orders in the third quarter were down over 25%. We had some large orders in the space business last year, which are the key driver to the decline.

繼續看圖 4。我們將開始了解細分市場的詳細信息，從航空航天與國防開始。從訂單開始。可以看到第三季度的訂單下降了25%以上。去年我們在航天業務上有一些大訂單，這是下降的關鍵驅動因素。

On the sales side, we are up 12% with organic sales up 8% and the CMT acquisition adding 4 points of growth. The commercial and military aerospace businesses were the key drivers to the overall growth, and we continue to see good momentum there. Adjusted EBIT was up 4.5% in dollar terms and margins were down 150 basis points as improvements from the commercial and military aerospace businesses was offset by margin erosion on some space development contracts.

在銷售方面，我們增長了 12%，其中有機銷售額增長了 8%，收購 CMT 又增加了 4 個百分點。商業和軍用航空航天業務是整體增長的關鍵驅動力，我們繼續看到那裡的良好勢頭。按美元計算，調整後息稅前利潤增長 4.5%，利潤率下降 150 個基點，原因是商業和軍用航空航天業務的改善被一些太空開發合同的利潤率侵蝕所抵消。

Next is Chart 5 and the Utility Solutions Group. Here, the performance was exceptional. Orders were up 15% with the renewables business leading that growth. Sales were up nearly 34%. And as you can see on the chart, the Doble services, offline testing, protection testing and condition monitoring product lines all contributed. On the renewable side, with NRG, we once again saw explosive growth, 45% in the quarter. The top line performance for this group overall converted to a nice margin expansion with adjusted EBIT up 330 basis points. This improvement was driven by leverage on the higher sales growth and favorable impacts from price increases, which more than offset inflationary headwinds.

接下來是圖 5 和實用解決方案組。在這裡，表現非常出色。訂單增長了 15%，其中可再生能源業務引領了這一增長。銷售額增長近 34%。從圖表中可以看出，Doble 服務、離線測試、保護測試和狀態監測產品線都做出了貢獻。在可再生能源方面，NRG 再次實現了爆炸性增長，本季度增長了 45%。該集團的總體業績表現轉化為良好的利潤擴張，調整後的息稅前利潤增長了 330 個基點。這一改善是由較高的銷售增長和價格上漲的有利影響推動的，這足以抵消通脹的不利因素。

Next is Chart 6, where we have the Test business. A bit of a mixed story here. You can see orders were down nearly 35%. A big drop is last year we had a significant order -- we had significant order activity for test and measurement orders, which did not repeat this year. We have also seen continuing weakness in China as the overall pace of business has been slow since the reopening from COVID earlier in the fiscal year.

接下來是圖 6，其中我們有測試業務。這裡的故事有點複雜。您可以看到訂單下降了近 35%。一個很大的下降是去年我們有一個重要的訂單——我們有大量的測試和測量訂單活動，今年沒有重複。我們還看到中國市場持續疲軟，因為自本財年早些時候新冠疫情重新開放以來，整體業務節奏一直緩慢。

Sales were down 7%, but the good news here was that -- was margins as EBIT dollars increased 3.5% even on the lower sales. This is a margin improvement of 150 basis points driven by cost reduction efforts as well as price increases.

銷售額下降了 7%，但好消息是——即使銷售額下降，息稅前利潤仍增長了 3.5%。由於成本削減和價格上漲，利潤率提高了 150 個基點。

Next is Chart 7 and our cash flow highlights. We did see operating cash flow improvement in the third quarter compared to our first 2 quarters, but we are still running behind last year's operating cash flow amount of $42 million. Working capital increases from accounts receivable, inventory and contract assets have been a cash headwind. And we've also seen sizable negative cash impact from higher taxes paid and interest paid.

接下來是圖 7 和我們的現金流重點。與前兩個季度相比，我們確實看到第三季度的運營現金流有所改善，但仍落後於去年 4200 萬美元的運營現金流量。應收賬款、庫存和合同資產帶來的營運資本增加一直是現金的阻力。我們還看到更高的稅收和利息對現金產生了相當大的負面影響。

Capital expenditures are down approximately $9 million year-to-date. You'll recall that last year we had a building purchase at NRG, and that's the main driver of this year's decrease.

今年迄今為止，資本支出減少了約 900 萬美元。您可能還記得，去年我們在 NRG 購買了一棟建築，這是今年下降的主要驅動力。

Acquisition spending is relatively flat with NEco acquired in fiscal '22 and CMT acquired in fiscal '23. And lastly is share repurchase, where we completed just over $12 million in buybacks this year compared to approximately $20 million through the first 9 months last year.

收購支出相對持平，NEco 於 22 財年收購，CMT 於 23 財年收購。最後是股票回購，今年我們完成了略高於 1200 萬美元的回購，而去年前 9 個月的回購額約為 2000 萬美元。

And the last chart is our guidance chart. You can see here that we are projecting adjusted earnings per share growth in the range of 13% to 15%. We put our initial guidance out in November of last year of $3.45 to $3.60 per share and the midpoint of our guidance has gone up each quarter since then. We are now looking at a range of $3.62 to $3.68, good double-digit growth for the year coming after 24% adjusted earnings per share that we delivered in fiscal '22. This represents 2 strong years for ESCO, and we are excited not only about the strong years in '22 and '23, but what comes next in '24 and beyond.

最後一張圖表是我們的指導圖表。您可以在此處看到，我們預計調整後每股收益增長在 13% 至 15% 範圍內。我們在去年 11 月提出了每股 3.45 至 3.60 美元的初步指導，此後每個季度我們指導的中點都在上升。我們目前的預期區間為 3.62 美元至 3.68 美元，在我們 22 財年實現 24% 的調整後每股收益之後，未來一年將實現兩位數的良好增長。這對 ESCO 來說是強勁的 2 年，我們不僅對 22 年和 23 年的強勁增長感到興奮，而且對 24 年及以後的發展感到興奮。

So that concludes the financial update, and now I'll turn it back over to Bryan.

財務更新到此結束，現在我將把它轉回給布萊恩。

Thanks, Chris. Since I touched on a number of my thoughts earlier, I will just offer a few more comments before we go to Q&A. You saw the numbers from Chris. So obviously, a great 2023 with very strong financial performance. The company is operating at a high level, and we continue to have confidence as we look to the future. We serve very strong end markets with well-established customers. We have great teams here at corporate and out of the businesses around the world. This forms a powerful combination, and we're excited about what's next for ESCO.

謝謝，克里斯。由於我之前已經談到了一些我的想法，因此在我們進行問答之前我將再提供一些評論。你看到了克里斯的數字。顯然，2023 年是偉大的一年，財務業績非常強勁。公司目前運營水平較高，展望未來我們依然充滿信心。我們為非常強大的終端市場和成熟的客戶提供服務。我們在世界各地的企業內外都擁有優秀的團隊。這形成了一個強大的組合，我們對 ESCO 的下一步發展感到興奮。

Before Q&A, I did want to mention that we recently published our ESG report covering our 2022 activities. You can find this on the Corporate Citizenship section of our website. I would encourage you to go and take a look at the report. It's got a lot of good information on ESCO's ESG program overall. It also has a nice profile of our NRG business and their capabilities about helping to enable renewable energy. The team here put a lot of work into the report. We hope that you find it useful.

在問答之前，我確實想提一下，我們最近發布了涵蓋 2022 年活動的 ESG 報告。您可以在我們網站的企業公民部分找到此信息。我鼓勵你去看看這份報告。它提供了有關 ESCO ESG 計劃的大量有用信息。它還對我們的 NRG 業務及其幫助實現可再生能源的能力進行了很好的介紹。這裡的團隊為這份報告投入了大量的工作。我們希望您覺得它有用。

So with that, we can start the Q&A.

這樣，我們就可以開始問答了。

Thank you. (Operator Instructions) Our first question comes from Jonathan Tanwanteng at CJS.

謝謝。 （操作員說明）我們的第一個問題來自 CJS 的 Jonathan Tanwanteng。

It's Peter Lucas for Jon. Can you talk a bit more about the Virginia-class timing shift? And does that impact when you expect to generate earnings and revenue from those orders?

這是喬恩的彼得·盧卡斯。您能多談談弗吉尼亞級的時間變化嗎？當您期望從這些訂單中產生收益和收入時，這會產生影響嗎？

Sure. So what's happening right now on Virginia-class is there's a multiyear procurement process that's in place. We do expect that, that's going to take a few more months. We would expect to get some Block 5 expansion orders in the near term, probably within the fourth quarter. And then we expect to see a pretty significant tranche of as many as 12 Virginia-class submarines at some time perhaps early next year.

當然。因此，弗吉尼亞級目前正在實施一個為期多年的採購流程。我們確實預計這還需要幾個月的時間。我們預計在短期內（可能在第四季度內）獲得一些 Block 5 擴建訂單。然後我們預計在明年初的某個時候將看到相當數量的多達 12 艘弗吉尼亞級潛艇。

We are in a really good position on that project, and so we don't think it's going to have any impact on our ability to generate earnings. We might see a modest expansion based upon some additional aspects of the submarines that they're going to be adding going forward.

我們在該項目上處於非常有利的位置，因此我們認為這不會對我們的創收能力產生任何影響。我們可能會看到基於潛艇未來將增加的一些額外方面的適度擴展。

Very helpful. And then jumping to the supply chain issues. Can you give us a little more color on those? Is it your internal throughput, your suppliers or parallel downstream partners? Where are you seeing the biggest issues there?

很有幫助。然後跳到供應鏈問題。你能給我們更多的顏色嗎？是您的內部吞吐量、您的供應商還是平行下游合作夥伴？您認為最大的問題在哪裡？

Well, so we're really talking about the Aerospace & Defense business here at ESCO. The rest of our business seems to have largely recovered. Within the aerospace and defense industry, there's an industry-wide challenge right now with regard to supply chain. The biggest issue is, is that lower tier suppliers are struggling and that has a cascade effect. We're not able to replace suppliers very easily in this industry. And so that kind of puts us in a position where we have to wait for products rather than swapping them out.

嗯，我們真正談論的是 ESCO 的航空航天與國防業務。我們的其餘業務似乎已基本恢復。在航空航天和國防工業中，目前在供應鏈方面面臨著全行業的挑戰。最大的問題是，較低級別的供應商正在苦苦掙扎，這會產生連鎖效應。在這個行業中，我們無法輕易更換供應商。因此，這讓我們不得不等待產品而不是更換它們。

So over in the Utility segment, for example, we were able to redesign circuit boards to be able to swap out components for more available type of memory chip or something like that. We don't have that luxury over at Aerospace & Defense.

例如，在公用事業領域，我們能夠重新設計電路板，以便能夠將組件更換為更可用類型的存儲芯片或類似的東西。我們在航空航天與國防領域沒有這樣的奢侈。

The good news is we are making good progress and we are driving the growth. But this is really an industry-wide challenge that many companies are facing. And this was a big topic of discussion at the Paris Air Show back in June. I would say the industry consensus is it's going to take several more quarters to really unwind the challenge.

好消息是我們正在取得良好進展並且正在推動增長。但這確實是許多企業面臨的全行業挑戰。這是六月巴黎航展上討論的一大話題。我想說，業界的共識是，還需要幾個季度才能真正解決這一挑戰。

And last one for me. Just an update on the M&A environment, what it looks like relatively? Is it more or less attractive compared to the past couple of quarters? And if acquisitions aren't out there, kind of talk about the priority in terms of capital allocation.

最後一張給我。只是介紹一下併購環境的最新情況，相對來說情況如何？與過去幾個季度相比，它的吸引力是增加還是減少了？如果沒有進行收購，那就談談資本配置方面的優先事項。

Sure. Yes. So the good news is it's improving. We're seeing more opportunities presently than we have for the last couple of quarters. And based on our market research and intelligence, we are seeing more opportunities that will be coming to market later this year. We do have a couple of good programs that we're engaged on, but I don't think we're close to getting anything done. We certainly don't want to comment on any details. But we feel pretty good about our opportunity to get some investment done in the near term.

當然。是的。所以好消息是它正在改善。我們目前看到的機會比過去幾個季度要多。根據我們的市場研究和情報，我們看到今年晚些時候將有更多機會進入市場。我們確實有幾個正在進行的好項目，但我認為我們還沒有接近完成任何事情。我們當然不想對任何細節發表評論。但我們對短期內完成一些投資的機會感到非常滿意。

Our next question comes from Tommy Moll at Stephens Inc.

我們的下一個問題來自斯蒂芬斯公司的湯米·莫爾。

Bryan, I want to start on the A&D side of the business. What if any update can you provide from your review of that segment? And then specific to commercial, where the growth rates continue at rather elevated levels, if you look at the build plans and the content that you have spec-ed in, is there any reason to think that the growth momentum in the double-digit range, even if at a moderating rate from this year is unreasonable through your planning horizon?

布萊恩，我想從 A&D 方面的業務開始。如果您可以根據對該細分市場的評論提供任何更新，該怎麼辦？然後具體到商業領域，增長率繼續保持在相當高的水平，如果你看看構建計劃和你指定的內容，是否有任何理由認為增長勢頭在兩位數範圍內，即使從今年開始放緩速度在您的規劃範圍內是不合理的？

So listen, the build rates from Airbus and Boeing, in particular, continue to accelerate, and we're seeing a lot of that benefit in our aircraft businesses. And we feel like we're responding well to that and that we should have growth rates that are in the high single digits over the next year or 2, maybe a touch higher in the shorter term. The biggest challenge for us will be continuing to work through the supply chain piece. And we continue to make progress there. But the orders keep piling up. And so we feel pretty good about where that business is headed.

因此，聽著，特別是空客和波音的建造速度繼續加快，我們在我們的飛機業務中看到了很多好處。我們覺得我們對此反應良好，並且我們應該在未來一兩年內實現高個位數的增長率，也許在短期內會更高一些。我們面臨的最大挑戰將是繼續在供應鏈領域開展工作。我們繼續在那裡取得進展。但訂單卻不斷堆積。因此，我們對該業務的發展方向感到非常滿意。

And then in terms of your review of the A&D portfolio, Bryan, any update you can provide there?

然後，關於您對 A&D 產品組合的審查，Bryan，您可以提供任何更新嗎？

Listen, first of all, we've got some great businesses there. We don't have any strategic announcements to make today. I think all the businesses are performing well. We do think that there are opportunities to expand on our position in some of those spaces, in particular, navy and commercial aerospace. And we're looking at ways to do that.

聽著，首先，我們在那裡有一些很棒的企業。我們今天沒有任何戰略公告要發布。我認為所有企業都表現良好。我們確實認為有機會擴大我們在其中一些領域的地位，特別是海軍和商業航空航天領域。我們正在尋找實現這一目標的方法。

Fair enough. I also wanted to ask about Utility or really Doble specifically. Another quarter with an impressive growth rate in the third quarter. It feels like you've hit a good operating cadence post-pandemic where there were some rough quarters there. What is favorably changing in terms of the underlying demand there?

很公平。我還想具體詢問實用程序或真正的 Doble。第三季度又一個季度增長率令人印象深刻。感覺就像在大流行後，你已經達到了良好的運營節奏，而那裡有一些困難的季度。那裡的潛在需求發生了哪些有利的變化？

And then if you take a step back, pre-pandemic, even a number of years pre-pandemic, Bryan, I think it's fair to say that was probably a high single-digit kind of market opportunity to go after. Then there were some years leading into the pandemic where that dipped a little bit. Does it feel like in terms of the outlook going forward, there's been a reacceleration in terms of the growth rate of that opportunity?

然後，如果你退後一步，在大流行前，甚至在大流行前幾年，布萊恩，我認為可以公平地說，這可能是一個值得追求的高個位數的市場機會。然後在大流行之前的幾年裡，這一數字略有下降。就未來的前景而言，是否感覺該機會的增長率再次加速？

I would say that -- so utilities at large -- I think it's really dawned on people that in order to facilitate this clean energy transition we've got to make enormous investments in grid infrastructure. And I think that, that is a big, big driver in the general build-out that we're seeing. I do think that the Inflation Reduction Act and the Infrastructure Act before that have both had a very positive impact. And what's the most positive about it is not the fact that it's short-term money, its long-term money. We've got a 10-year runway here where -- which is giving folks a lot of confidence to go ahead and make big capital investments. And that's really fundamentally healthy for our business.

我想說的是，對於整個公用事業公司來說，我認為人們確實意識到，為了促進清潔能源轉型，我們必須對電網基礎設施進行大量投資。我認為，這是我們所看到的總體建設的一個非常非常大的驅動力。我確實認為之前的《減少通貨膨脹法案》和《基礎設施法案》都產生了非常積極的影響。最積極的一點並不是它是短期資金，而是長期資金。我們這裡有一個 10 年的跑道，這給了人們很大的信心繼續進行大規模的資本投資。這對我們的業務來說確實是非常健康的。

In addition to that, I think that folks are -- in the utility space are realizing that they really need to get smarter about how they handle these assets. And so the bet that we made a number of years ago on heavy investments in both inorganic and organic development of our condition monitoring capabilities is really helping us there. Some of the new products that we have talked about in the last couple of years are really starting to get some traction. So yes, I'd say we're hitting a pretty sweet spot there.

除此之外，我認為公用事業領域的人們正在意識到他們確實需要更明智地處理這些資產。因此，我們幾年前在狀態監測能力的無機和有機發展方面進行了大量投資的賭注確實對我們有幫助。我們在過去幾年中討論過的一些新產品確實開始受到關注。所以，是的，我想說我們正處於一個非常好的階段。

Overall on the renewable side, we -- I mean that business has been lighter than air this year. It's been very difficult for us to predict exactly what would happen, except for every time we pick up the phone, it's more good news. So that's been a fun story to be a part of.

總體而言，在可再生能源方面，我的意思是，今年的業務比空氣還清淡。我們很難準確預測會發生什麼，除非每次我們拿起電話，都是好消息。所以這是一個有趣的故事的一部分。

I guess the bigger question is: Okay, where do we go from here? The reality is that in order to facilitate this transition, there's a lot more investment that needs to be made, and I mean in terms of trillions of dollars and -- worldwide. And we will certainly benefit as those kinds of investments are made.

我想更大的問題是：好吧，我們該何去何從？現實情況是，為了促進這一轉變，需要進行更多的投資，我的意思是在全球範圍內進行數万億美元的投資。隨著此類投資的進行，我們肯定會受益。

Our next question comes from John Franzreb at Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 John Franzreb。

Congratulations on a great quarter. I'd like to start on the Test side of the business. You've kind of characterized that business as coming out of COVID. China has been an issue just getting in the door. Now China seems to be weakening in and of itself. Can you talk a little bit about what your expectations are in Test in China in the coming quarters? And has the competitive landscape changed in light of that demand environment?

祝賀您度過了一個美好的季度。我想從業務的測試方面開始。您認為該業務是從新冠疫情中脫穎而出的。中國剛剛踏入國門一直是一個問題。現在中國本身似乎正在衰弱。您能談談您對未來幾個季度中國測試的期望嗎？鑑於這種需求環境，競爭格局是否發生了變化？

Yes, I would say that the Test business as a whole -- this was our strongest business through the COVID period. While other parts of our business were softening up, the Test business was really strengthening and growing. And fortunately, they've been able to kind of maintain that higher level of overall revenue.

是的，我想說，測試業務作為一個整體，是我們在新冠疫情期間最強勁的業務。雖然我們業務的其他部分正在疲軟，但測試業務確實在加強和增長。幸運的是，他們能夠保持較高的總體收入水平。

China has been a little bit of a challenge for us this year. We had an exceptional year last year. So on a comparison basis, I think our China business is down very, very significantly year-over-year. The -- we're still making money over there, we're still building product, but the level of demand that we're seeing from customers and our ability to get out on the job sites still is a little bit impaired. We do not believe that, that is a competitive landscape difference. We think that, that's a difference in the fundamentals of the Chinese economy. And I think that's been borne out by what we're seeing in -- as we read about what's going on overall in China. So I mean, the good news is it's a relatively small part of our overall business. It's a reasonably -- a reasonable subset of the Test and Measurement business.

今年中國對我們來說是一個挑戰。去年我們度過了非凡的一年。因此，相比之下，我認為我們的中國業務同比下降非常非常顯著。我們仍然在那裡賺錢，我們仍然在生產產品，但是我們從客戶那裡看到的需求水平以及我們在工作現場的能力仍然受到了一點損害。我們不認為這是競爭格局的差異。我們認為，這是中國經濟基本面的差異。我認為，當我們了解中國總體情況時，我們所看到的情況已經證實了這一點。所以我的意思是，好消息是它只占我們整體業務的一小部分。它是測試和測量業務的一個合理的子集。

Meanwhile, here in North America, the business has kind of been flattish. And what we're seeing there is a little bit of a transition, probably more EMC and that sort of work and a little less of the wireless activity. We continue to see activity with EV and that sort of thing.

與此同時，在北美，業務卻有些平淡。我們看到有一點轉變，可能更多的是 EMC 之類的工作，而無線活動則更少。我們繼續看到電動汽車等方面的活動。

What's been interesting for us this year is our European business has been quite strong, and that's driven probably a little bit by some of the security stuff we're seeing. Yes, we've got a big presence in Finland and they're joining NATO. So it's been a positive. But -- so overall, listen, we still continue to be optimistic about this business, but we're kind of moving along sideways at this kind of upper end of our revenue over the last several years.

今年對我們來說有趣的是我們的歐洲業務相當強勁，這可能在一定程度上是由我們看到的一些安全問題推動的。是的，我們在芬蘭有很大的影響力，而且他們正在加入北約。所以這是積極的。但是，總的來說，聽著，我們仍然對這項業務保持樂觀，但在過去幾年裡，我們的收入在這種高端水平上一直在橫向發展。

Got it. Got it. That actually helped a lot. And going back to your utility comments to be sure. The renewable markets are doing well, but more the traditional utility spend, it sounds like you're enthusiastic about the slope of that business going forward. Can you talk a little bit about what you're seeing as far as traditional utility spending? Is it pent-up demand that's coming back? Would you really see a fundamental long-term shift in the demand cycle on the utility side?

知道了。知道了。這實際上有很大幫助。並回到您的實用程序評論來確定。可再生能源市場表現良好，但傳統公用事業支出更多，聽起來您對該業務的未來發展充滿熱情。您能談談您對傳統公用事業支出的看法嗎？是被壓抑的需求又回來了嗎？您真的會看到公用事業方面的需求週期發生根本性的長期轉變嗎？

Well, I think it would be wrong for me to say there was no pent-up demand, because during the period that Tommy was talking about a couple of years ago during the pandemic, the way the utilities operated is they kind of took a hands-off approach and said, "Hey, listen, we got to maximize uptime and generation and make sure we keep the lights on and not mess around too much". And then as we came out of the pandemic, a lot of that activity had to be made up for.

好吧，我認為我說沒有被壓抑的需求是錯誤的，因為在湯米幾年前談論的大流行期間，公用事業公司的運營方式是他們採取了一些措施關閉方法並說：“嘿，聽著，我們必須最大限度地延長正常運行時間和發電量，並確保我們保持燈亮著，不要搞得太亂”。然後，當我們擺脫大流行時，很多活動都必須得到彌補。

I think we're largely past that now and I do think there has been a shift in the way the utilities think about -- particularly about more advanced techniques. We've got new products that are able to satisfy their requirements for digital testing. We've got products now that are enhanced for this condition monitoring piece. We're seeing a lot of activity in those areas.

我認為我們現在基本上已經過去了，而且我確實認為公用事業公司的思維方式已經發生了轉變——特別是關於更先進的技術。我們的新產品能夠滿足他們的數字測試要求。我們現在已經有了針對該狀態監測部件進行增強的產品。我們看到這些領域有很多活動。

And listen, utilities are -- they're recognizing the fact -- if you do the math on all these net 0 targets and even if you cut them in half and say that they're -- we're not going to achieve them by 2030 or 2040 or 2050 as has been stated, it still points to enormous amounts of growth. The electric vehicle build-out in and of itself is an enormous demand driver for utilities. And what they see there is revenue streams that they can capitalize on, but they've got to be able to deliver the service. And so they're making the necessary investments now.

聽著，公用事業公司 - 他們正在認識到這一事實 - 如果你對所有這些淨 0 目標進行數學計算，即使你將它們減半並說它們 - 我們也不會實現它們正如前面所說，到2030年、2040 年或2050 年，仍將出現巨大的增長。電動汽車的建設本身就是對公用事業的巨大需求驅動力。他們看到的是可以利用的收入流，但他們必須能夠提供服務。因此他們現在正在進行必要的投資。

Fair enough. And just one last question on -- in A&D. My understanding is that some of the lower-tier suppliers -- there's actually a surge by alternative suppliers that might have required some recertification in the process with whatever they're making. Is that not the case? Or is it just going slower than expected? Can you just -- a little clarity there would be helpful.

很公平。最後一個問題是關於 A&D 的。我的理解是，一些較低級別的供應商——實際上替代供應商的數量激增，這些供應商可能需要在他們生產的任何產品的過程中進行一些重新認證。難道不是這樣嗎？或者只是比預期慢？你能不能——稍微澄清一下會有幫助的。

Well, it's going slower than expected. And I think when you think about it as an industry-wide phenomenon, so just think about the people that are actually doing those recertifications, they're being inundated by requests, right? And it's a very conservative industry that is very change averse. So in a lot of cases, we really are put in a position where we don't have many choices. I mean, we have definitely design changes and we've made changes to material certifications and that sort of thing.

嗯，進展比預期要慢。我認為，當你將其視為一種全行業現象時，只要想想那些實際進行這些重新認證的人，他們就會被請求淹沒，對嗎？這是一個非常保守的行業，非常厭惡變革。所以在很多情況下，我們確實處於一個沒有太多選擇的境地。我的意思是，我們確實進行了設計更改，並對材料認證等進行了更改。

I think the other thing I would point out is if we look at our past due backlog, it's a small number of parts and programs that are driving a large piece of this overall past due. The meat and potato stuff that are going into 737, A320, that sort of thing, most of that is running along nicely. But a lot of our other programs are where you're seeing a lot of the past due. And those are programs of smaller quantities. And so the justification for going through a recertification program is less obvious.

我想我要指出的另一件事是，如果我們看看我們逾期的積壓，就會發現是少數零件和程序推動了整個逾期的大部分。 737、A320 等飛機上的肉類和土豆材料，大部分都進​​展順利。但在我們的許多其他計劃中，您會看到大量逾期款項。這些都是較小數量的項目。因此，進行重新認證計劃的理由就不那麼明顯了。

Our next question is from Tommy Moll at Stephens Inc.

我們的下一個問題來自 Stephens Inc. 的湯米·莫爾 (Tommy Moll)。

Yes. I just wanted to make sure we hit on utility margin today. So thanks for letting me back in here. On an adjusted EBIT basis, you just reported a 23%, which is a ZIP code where you've been before, if you go back far enough in history. But more recently, you haven't been there on any sustained basis. So I'm curious if there's anything onetime favorable in this quarter or if some of the recent margin improvement there feels like a more sustainable base that you can operate at?

是的。我只是想確保我們今天達到了效用利潤率。謝謝你讓我回到這裡。在調整後的息稅前利潤基礎上，您剛剛報告了 23%，如果您追溯歷史足夠久的話，這是您以前經歷過的郵政編碼。但最近，你並沒有持續地去過那裡。因此，我很好奇本季度是否有什麼曾經有利的事情，或者最近的一些利潤率改善是否感覺像是您可以運營的更可持續的基礎？

Yes, Tommy, I wouldn't say there was anything particularly onetime in there. Again, we're just kind of obviously driving really nice leverage on the big growth. I think we did see a little bit of favorable mix that was kind of unfavorable earlier in the year, so that helped us slightly. But then, again, it's more just kind of price and cost management and those kind of things.

是的，湯米，我不會說裡面有什麼特別的東西。再說一遍，我們顯然正在推動巨大增長的良好槓桿作用。我認為我們確實看到了一些有利的組合，這在今年早些時候是不利的，所以這對我們略有幫助。但話又說回來，這更多的是價格和成本管理之類的事情。

So listen, we're not going to be there every quarter at that level. But obviously, we're looking to drive back to the historical peaks as we go into '24 and beyond. So that's kind of how I'd answer it. Really nothing special, good leverage and we feel confident about the ability to drive the margins up as we go forward.

所以聽著，我們不會每個季度都達到這個水平。但顯然，我們希望在進入 24 年及以後時回到歷史峰值。這就是我的回答方式。確實沒什麼特別的，良好的槓桿作用，我們對未來提高利潤率的能力充滿信心。

Thank you. I'm showing no further questions at this time. I would now like to turn the conference back to President and CEO, Bryan Sayler, for closing remarks.

謝謝。我目前沒有提出任何進一步的問題。現在我想請總裁兼首席執行官 Bryan Sayler 致閉幕詞。

Well, thanks, everyone -- yes, thanks, everyone. It's been good to talk to you in this quarter, and we'll look forward to talking to you again next quarter.

嗯，謝謝大家——是的，謝謝大家。很高興在本季度與您交談，我們期待下個季度再次與您交談。

Thank you.

謝謝。

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。