ESCO Technologies Inc (ESE) 2024 Q3 法說會逐字稿

Good day and thank you for standing by. Welcome to the third quarter 2024 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 2024 年第三季財報電話會議。（操作員說明）請注意，今天的會議已錄製。

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

今天的電話會議由總裁兼執行長 Bryan Saler 主持。克里斯·塔克，資深副總裁兼財務長。現在我想把會議交給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.

謝謝。本次電話會議期間所發表的聲明並非嚴格意義上的歷史聲明，而是聯邦證券法安全港條款意義內的前瞻性聲明。這些陳述基於當前的預期和假設，由於公司營運和業務環境中存在的風險和不確定性，包括但不限於風險因素，實際結果可能與前瞻性陳述中的預測存在重大差異該公司今天發布的新聞稿中提到了這一點，該新聞稿將作為公司提交的8-K 表格的附件。

We undertake no duty to update or revise any forward-looking statements, except as may be required by applicable laws and regulations. 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.

我們不承擔更新或修改任何前瞻性陳述的責任，除非適用法律和法規可能要求。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績效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 的投資者關係連結下找到。

Now I'll turn the call over to Bryan.

現在我將把電話轉給布萊恩。

Thanks, Kate, and thanks to everyone, for joining today's call. We are happy to provide an update on a lot of the exciting things that are happening here at ESCO. We are pleased with the third-quarter results and are particularly excited about the continued momentum across all of our business platforms.

謝謝凱特，也謝謝大家參加今天的電話會議。我們很高興向您介紹 ESCO 正在發生的許多令人興奮的事情的最新情況。我們對第三季的業績感到滿意，並對我們所有業務平台的持續成長勢頭感到特別興奮。

Order growth in the quarter was substantial, and we have record backlog of nearly $890 million as of June 30. This is an important indicator of the continuing strength of our end markets and our formidable competitive positions. By talking about the -- before talking about the businesses, I want to briefly highlight some additions to our Board of Directors.

本季訂單成長顯著，截至 6 月 30 日，我們的積壓訂單達到創紀錄的近 8.9 億美元。這是我們終端市場持續實力和強大競爭地位的重要指標。在談論業務之前，我想先簡單強調一下我們董事會的一些新增成員。

We are fortunate to bring two highly capable individuals with deep backgrounds in the utility industry onto our Board. These additions to the Board will become effective upon approval of the Federal Energy Regulatory Commission.

我們很幸運地聘請了兩位在公用事業行業擁有深厚背景的高素質人士加入我們的董事會。董事會的這些新增成員將在聯邦能源管理委員會批准後生效。

First is Penni McLean-Conner. Penni is an operating executive with Eversource Energy, a utility holding company based in New England, where she currently serves as Executive Vice President of Customer Experience and Energy Strategy. Penni is a registered licensed professional engineer and has held several positions with increasing responsibility in the utility industry since 1986. In that time, she has worked for Tampa Electric, Duke Energy Corporation, and Eversource.

第一個是佩妮·麥克萊恩-康納。Penni 是 Eversource Energy 的營運主管，這是一家位於新英格蘭的公用事業控股公司，目前擔任客戶體驗和能源策略執行副總裁。Penni 是一名註冊專業工程師，自 1986 年以來在公用事業行業擔任過多個職位並承擔越來越大的責任。在此期間，她曾在坦帕電力公司、杜克能源公司和 Eversource 工作。

We are also adding David Campbell to the Board. David is currently President, CEO and Chair of Evergy Inc., a public utility holding company headquartered in Kansas City, Missouri. David has held several executive positions at a number of electric and integrated energy companies in Texas as well as in independent energy resource and investment company. Prior to that, David worked for nine years at McKinsey & Company, the last four of which he served as a partner.

我們也將大衛坎貝爾 (David Campbell) 加入董事會。David 目前擔任 Evergy Inc. 的總裁、執行長兼董事長，這是一家總部位於密蘇裡州堪薩斯城的公用事業控股公司。David 曾在德州多家電力和綜合能源公司以及獨立能源和投資公司擔任多個高階主管職位。在此之前，David 在麥肯錫公司工作了九年，最後四年擔任合夥人。

We are thrilled to bring Penni and David on to the Board, both have deep utility industry insight, and it goes without saying how important that will be for us at ESCO as we continue to grow our Utility Solutions group. Penni and David attended our Board meetings last week, and it's clear that they will be great contributors. We have a diverse set of industry and business experiences in our Board and their guidance, insight, and governance are key to ESCO's success. On behalf of the entire Board, I'm happy to extend a warm welcome to Penni and David.

我們很高興讓 Penni 和 David 加入董事會，他們都具有深厚的公用事業行業洞察力，不言而喻，隨著我們不斷發展公用事業解決方案團隊，這對 ESCO 來說是多麼重要。Penni 和 David 上週參加了我們的董事會會議，很明顯他們將做出巨大的貢獻。我們的董事會擁有豐富的產業和業務經驗，他們的指導、洞察力和治理是 ESCO 成功的關鍵。我很高興代表整個董事會向 Penni 和 David 表示熱烈歡迎。

Chris will run you through all of the financial details for the third quarter, but before that, I want to give you a few comments on each segment. Starting with aerospace and defense. We continue to have a strong outlook here. As you saw on the release, we finished the quarter with record backlog driven by significant order increases. The order growth was driven by continued strength from commercial and military aerospace as well as the continued strength of our navy orders at VACCO and Globe.

克里斯將向您介紹第三季的所有財務細節，但在此之前，我想對每個部分發表一些評論。從航空航天和國防開始。我們仍然對這裡抱持著強勁的前景。正如您在新聞稿中看到的那樣，由於訂單大幅增加，我們在本季結束時積壓了創紀錄的訂單。訂單成長的推動因素是商業和軍用航空航太領域的持續強勁，以及 VACCO 和 Globe 海軍訂單的持續強勁。

The underpinnings for the market strength here are well documented, and we remain very positive on the long-term outlook for these markets. The key for us going forward will be to focus on execution and meeting customer requirements as we work to support ongoing production increases.

這裡市場走強的基礎有據可查，我們對這些市場的長期前景仍然非常樂觀。我們前進的關鍵是在我們努力支持持續產量成長的同時，專注於執行和滿足客戶要求。

Before moving on, I do want to address the space business at VACCO. As you saw in the release, we will be reviewing strategic alternatives for this business. Just to frame it up for you a bit, our VACCO subsidiary is comprised of two key businesses, space and navy.

在繼續之前，我確實想談談 VACCO 的太空業務。正如您在新聞稿中看到的，我們將審查該業務的策略替代方案。簡單介紹一下，我們的 VACCO 子公司由兩個關鍵業務組成：太空業務和海軍業務。

The space business has a 70-year legacy in this market and continues to be a key supplier on many manned space flight and government satellite missions. The business has a great legacy, a tremendous group of committed employees and a great set of technologies. The space business will continue to have a bright future in these NASA centric missions.

航太業務在這個市場上擁有 70 年的歷史，並且仍然是許多載人航太飛行和政府衛星任務的主要供應商。該企業擁有偉大的遺產、大量忠誠的員工和一整套出色的技術。在這些以 NASA 為中心的任務中，太空業務將繼續擁有光明的未來。

For ESCO, this business has sales of approximately $55 million. And we first need to decide how a carve-out from the Navy business would work. And second, we need to decide if it has enough scale as part of ESCO or whether it would fit -- it would be better suited as part of a different enterprise that's more broadly focused on space. We are undertaking this review process now and we'll make further comments when the review is completed or when we have determined that a disclosure is required or deemed appropriate.

對於 ESCO 來說，該業務的銷售額約為 5500 萬美元。我們首先需要決定如何從海軍業務中剝離。其次，我們需要決定它是否有足夠的規模作為 ESCO 的一部分，或者它是否適合——它更適合作為更廣泛關注太空的不同企業的一部分。我們現在正在進行此審查過程，當審查完成或我們確定需要披露或認為披露適當時，我們將發表進一步的評論。

Next up is our utility group, where the outlook continues to be bullish. The sales growth here was a bit more modest in the third quarter, but order growth was significant, and backlogs are at healthy levels. You'll recall that the third quarter of June last year was an all-time record orders level for our renewables business.

接下來是我們的公用事業集團，前景仍然看好。第三季的銷售成長較為溫和，但訂單成長顯著，積壓訂單處於健康水準。您可能還記得，去年六月第三季我們的再生能源業務訂單水準創下歷史新高。

So that business did see an orders reduction compared to last year's third quarter, but the absolute level of orders at NRG in the third quarter 2024 was still the second highest on record. We still feel great about the renewables business and our core utility market business from Doble delivered significant orders growth in the quarter and continues to see lots of opportunities for future growth.

因此，與去年第三季相比，該業務確實出現了訂單減少，但 2024 年第三季 NRG 的訂單絕對水準仍然是有記錄以來的第二高。我們仍然對再生能源業務感到滿意，我們來自 Doble 的核心公用事業市場業務在本季度實現了顯著的訂單成長，並繼續看到未來成長的大量機會。

Finally, I'll touch on the Test business. As we discussed last quarter, we got off to a tough start this year for the business with significant revenue and profitability declines in Q1. It's never fun to go through these kinds of business cycles, but the test team has responded and continues to manage well through this business cycle.

最後，我要談談測試業務。正如我們上季度討論的那樣，今年我們的業務開局艱難，第一季收入和盈利能力大幅下降。經歷這些類型的業務週期從來都不是一件有趣的事，但測試團隊已經做出了反應，並繼續在這個業務週期中進行良好的管理。

Importantly, we continue to see nice sequential improvements here in both sales and margins. The business delivered adjusted EBIT margins of 16.6% in the quarter, which on a historical basis is very good. It's a real testament to the hard work by the team and shows that the margin benefits anticipated from the MPE acquisition are coming through.

重要的是，我們繼續看到銷售額和利潤率都取得了良好的連續改善。該業務本季的調整後息稅前利潤率為 16.6%，從歷史角度來看，這是非常好的。這是對團隊辛勤工作的真實證明，並表明收購 MPE 帶來的預期利潤效益正在實現。

As we have stated before, this business has broad test and measurement capabilities that will apply to a number of end markets, and we certainly expect growth to return in 2025 and beyond.

正如我們之前所說，該業務擁有廣泛的測試和測量能力，將適用於許多終端市場，我們當然預計 2025 年及以後將恢復成長。

With that, I'll turn it over to Chris to run you through the financial details of the quarter.

接下來，我將把它交給克里斯，讓他向您介紹本季的財務細節。

Thanks, Bryan. Everyone can follow along on the chart presentation. We will start on page 3, where we'll have overall financial highlights of the quarter. The top of the chart looks good here with all the bars moving in the right direction. Starting on the upper left side of the chart, you can see that order growth in the quarter was tremendous at 46% as all three segments had book-to-bill ratios of over 1.1, which resulted in a record backlog of $889 million.

謝謝，布萊恩。每個人都可以按照圖表演示進行操作。我們將從第 3 頁開始，介紹本季的整體財務亮點。圖表頂部看起來不錯，所有長條都朝著正確的方向移動。從圖表的左上角開始，您可以看到本季的訂單成長驚人，達到 46%，因為所有三個細分市場的訂單出貨比都超過 1.1，這導致積壓訂單達到創紀錄的 8.89 億美元。

Next is sales, which were up 5%, comprised of a 4% organic growth and a 1 point contribution from the MPE acquisition. Adjusted EBIT was up 50 basis points in the quarter and adjusted EPS improved by over 6%.

接下來是銷售額，成長了 5%，其中包括 4% 的有機成長和 MPE 收購帶來的 1 個百分點的貢獻。本季調整後息稅前利潤成長 50 個基點，調整後每股盈餘提高 6% 以上。

Moving to the next chart, we will cover the A&D segment. You can see this segment was a key driver of overall order growth with an increase of 79%. We were up against a lower comp from last year's third quarter, but still saw excellent order intake on the Navy side with VACCO bringing in over $40 million of Navy orders during the third quarter.

轉到下一張圖表，我們將介紹 A&D 部分。您可以看到，該細分市場是整體訂單成長的關鍵驅動力，成長了 79%。我們面臨去年第三季較低的競爭，但仍看到海軍方面的訂單量非常出色，VACCO 在第三季帶來了超過 4,000 萬美元的海軍訂單。

Additionally, the commercial and defense aerospace orders continued to deliver strong growth at both PTI and Crissair.

此外，PTI 和 Crissair 的商業和國防航空航太訂單持續強勁成長。

On the sales side, there was an increase of nearly 11% with growth led by Navy and Aerospace. Adjusted EBIT margins for the quarter came in at 18.7%, which was a decline of 220 basis points. We saw additional margin declines in the quarter from the VACCO space business with additional profitability challenges on developmental contracts. This cost us approximately $2 million against the guidance that was provided last quarter.

在銷售方面，成長了近 11%，其中海軍和航空航太領域的成長最為強勁。本季調整後息稅前利潤率為 18.7%，下降 220 個基點。我們看到 VACCO 航太業務本季的利潤率進一步下降，開發合約帶來了額外的獲利挑戰。與上季提供的指導相比，這花費了我們約 200 萬美元。

Additionally, we had unfavorable mix in the quarter at PTI driven by timing of sales on different OEM and aftermarket platforms.

此外，由於不同 OEM 和售後市場平台的銷售時間表，PTI 本季的業績組合也出現了不利的情況。

Moving on to chart 5. We will cover the Utility Solutions Group, where orders increased by 17% during the quarter. The growth was driven by Doble, which delivered a 30% increase as customers continue to request significant service work and do more testing as they maximize uptime of existing assets while continuing to struggle with lead times on new equipment like transformers.

繼續看圖 5。我們將涵蓋公用事業解決方案集團，該集團的訂單在本季度增長了 17%。這一增長是由Doble 推動的，Doble 實現了30% 的增長，因為客戶不斷要求大量服務工作並進行更多測試，以最大限度地提高現有資產的正常運行時間，同時繼續努力應對變壓器等新設備的交貨時間。

Orders for NRG decreased by $4 million. But as mentioned by Bryan, we were up against a very tough comparison to last year's record third-quarter amount. Sales for the quarter were essentially flat as growth rates moderated after many quarters of double-digit growth. Adjusted EBIT margins for the segment increased by 180 basis points, with favorable mix from the service business and favorable price impacts more than offsetting inflationary pressures.

NRG 的訂單減少了 400 萬美元。但正如布萊恩所提到的，我們面臨著與去年創紀錄的第三季金額的非常艱難的比較。在經歷了多個季度的兩位數成長後，成長率有所放緩，該季度的銷售額基本上持平。該部門調整後的息稅前利潤率成長了 180 個基點，服務業務的有利組合和有利的價格影響足以抵消通膨壓力。

Next is chart 6, where we will cover the Test business. Orders increased by more than 40% in the quarter for Test. This was great to see after weakness through the first six months of the year. Strong US bookings drove the growth. Sales in the quarter were down 5% on an organic basis with MPE adding 6 points of growth.

接下來是圖 6，我們將介紹測試業務。本季測試訂單成長超過 40%。在經歷了今年前六個月的疲軟之後，看到這一點真是太好了。美國的強勁預訂推動了成長。本季銷售額有機下降 5%，MPE 成長 6 個百分點。

Sales grew sequentially compared to the second quarter, which is an important trend as the business works towards recovery. Margins in the quarter were up by 100 basis points as we saw a favorable margin impact from the MPE acquisition and cost reduction savings offsetting volume deleverage and unfavorable mix.

與第二季相比，銷售額環比成長，這是業務走向復甦的重要趨勢。本季的利潤率成長了 100 個基點，因為我們看到 MPE 收購和成本削減帶來的有利利潤影響抵消了銷售去槓桿化和不利的組合。

Moving on from the segment details to the next chart. We have our year-to-date order and P&L highlights on chart number 7. Really strong performance year-to-date with orders up nearly 22%. The growth has been led by sizable orders in the Navy businesses as well as continued strength from commercial and defense/aerospace markets.

從細分詳細資訊轉到下一個圖表。我們在第 7 號圖表上列出了今年迄今的訂單和損益要點。今年迄今為止，業績確實強勁，訂單成長了近 22%。這一增長是由海軍業務的大量訂單以及商業和國防/航空航天市場的持續強勁帶動的。

Sales year-to-date are up 6.6%, with A&D up 13.5% and Utility Solutions up 8.5%, which were slightly offset by an 8.9% drop at Test. Margins have improved nicely with increases from both aerospace and defense and the Utility Solutions group, while we have seen test margins drop on lower volume through the first nine months of the year.

今年迄今的銷售額成長了 6.6%，其中 A&D 成長了 13.5%，公用事業解決方案成長了 8.5%，但 Test 銷售額下降了 8.9%，略有抵銷。隨著航空航太和國防以及公用事業解決方案集團的成長，利潤率有了很大改善，而我們看到今年前九個月的測試利潤率因銷量下降而下降。

Next is chart 8, where we have the cash flow highlights. You see here an increase of $26.3 million of increased operating cash flow compared to the first nine months of last year. We also have increased capital spending so far year-to-date, mostly related to capacity increases across the A&D businesses.

接下來是圖 8，其中我們重點介紹了現金流量。您可以看到，與去年前 9 個月相比，營運現金流增加了 2,630 萬美元。今年迄今為止，我們也增加了資本支出，主要與航空航太與國防業務的產能增加有關。

You can also see on the chart that we have increased acquisition spend this year driven by the MPE transaction. We had a small number of share repurchases during the third quarter, and year-to-date, we have spent $8 million compared to $12.4 million in the prior year.

您也可以在圖表中看到，在 MPE 交易的推動下，我們今年增加了收購支出。我們在第三季進行了少量股票回購，今年迄今為止，我們已花費 800 萬美元，而上一年為 1,240 萬美元。

Last is chart 9, where we have the updated guidance for 2024. Our sales outlook for growth is 7% to 8% for the year and adjusted earnings per share of $4.10 to $4.20. The adjusted EPS outlook excludes any impact of further profitability erosion at the VACCO space business.

最後是圖 9，其中我們提供了 2024 年的更新指南。我們今年的銷售成長預期為 7% 至 8%，調整後每股收益為 4.10 美元至 4.20 美元。調整後的每股盈餘前景排除了 VACCO 航太業務獲利能力進一步下降的任何影響。

As mentioned in the press release, we currently estimate these additional profitability challenges could be worth $5 million to $7 million at the EBIT line, but we have excluded them from the current outlook, and we'll plan to quantify these impacts at year-end.

正如新聞稿中所提到的，我們目前估計這些額外的盈利挑戰按息稅前利潤計算可能價值500 萬至700 萬美元，但我們已將其排除在當前展望之外，我們將計劃在年底量化這些影響。

The midpoint of the $4.10 to $4.20 adjusted EPS range represents 12% growth compared to prior year and would also represent a three-year compound annual growth rate of 17%. A strong record of growth as ESCO looks to close out another record year.

調整後每股收益 4.10 美元至 4.20 美元範圍的中點代表與前一年相比增長 12%，也代表 17% 的三年複合年增長率。強勁的成長記錄，愛斯科希望結束另一個創紀錄的一年。

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. As you heard, we've had another good quarter, and we're looking at another year of double-digit earnings growth with record backlogs. We continue to feel great about the long-term prospects for ESCO. Before going into the Q&A, I want to give a quick update on the Signature Management & Power acquisition that we announced back in July.

謝謝，克里斯。正如您所聽到的，我們又經歷了一個良好的季度，並且我們預計明年將實現兩位數的盈利增長以及創紀錄的積壓訂單。我們仍然對 ESCO 的長期前景感到樂觀。在進入問答之前，我想快速介紹一下我們在 7 月宣布的簽名管理和電源收購的最新情況。

We have completed all of the required regulatory filings in both the United States and the United Kingdom. The timing on those processes can be uncertain. So we'll have to wait and see what happens. But we've been through this before and continue to believe that we can close the deal in the first quarter of fiscal 2025. This is a very exciting deal for ESCO as we bring on a talented group of employees, a key set of technologies and the ability to expand the way that we serve the navy market in both the US and the UK

我們已完成美國和英國所需的所有監管備案。這些過程的時間安排可能不確定。所以我們必須等待，看看會發生什麼。但我們之前已經經歷過這種情況，並且仍然相信我們可以在 2025 財年第一季完成交易。對於 ESCO 來說，這是一項非常令人興奮的交易，因為我們帶來了一群才華橫溢的員工、一套關鍵技術以及擴展我們服務美國和英國海軍市場的方式的能力

So that concludes the opening remarks, and we can start the Q&A now.

開場白就到此結束，我們現在可以開始問答環節了。

(Operator Instructions) Tommy Moll, Stephens Incorporated.

（操作員說明）Tommy Moll，Stephens Incorporated。

Good afternoon and thank you for taking my questions.

下午好，感謝您回答我的問題。

Hi, Tommy

嗨，湯米

Hi, Tommy

嗨，湯米

Bryan, a strong quarter on navy orders once again. And my question is, does this show the realization of the upsized shipset content you discussed early in this calendar year, $45 million is right around where I had it pegged. Are there additional shipset awards here? Any context you can give us on what you just reported would be helpful. Thank you.

布萊恩，海軍訂單再次強勁。我的問題是，這是否表明您在今年早些時候討論過的大型船舶組內容已經實現，4500 萬美元正好是我所預測的水平。這裡還有額外的船艦獎勵嗎？您能為我們提供有關您剛剛報告的任何背景資訊都會有所幫助。謝謝。

Tommy, no, the orders we got in the prior quarter are mostly navy spares and other pieces. We are still anticipating the larger orders that we've been talking about. Unfortunately, I can't make any news on that, but I'd say we're getting close.

湯米，不，我們上一季收到的訂單主要是海軍備件和其他零件。我們仍在期待我們一直在談論的更大訂單。不幸的是，我無法就此發布任何消息，但我想說我們已經很接近了。

Okay. And then that leads me to my follow-up here, Bryan. Fully aware that this is not the quarter to give formal guidance for 2025, but I'm just doing some simple math here. Your cumulative orders year-to-date across A&D, I'm getting to something like a 50% increase year over year. Now the timing of that record backlog unlocking, we obviously can't see from our side. But is there any reasonable scenario where that segment doesn't grow revenue double-digits next year?

好的。然後這引出了我的後續行動，布萊恩。充分意識到現在不是為 2025 年提供正式指導的季度，但我只是在這裡做一些簡單的數學計算。今年迄今為止，你們在 A&D 的累積訂單量年增了 50%。現在，我們顯然無法看到該記錄積壓解鎖的時間。但是否有任何合理的情況表明該細分市場明年的收入不會實現兩位數成長？

Just to be clear, you're talking specifically about the navy piece?

澄清一下，你是在專門談海軍作品嗎？

I was -- well, yeah, I shifted there. That was at the A&D segment level is what I was describing.

我——嗯，是的，我搬到了那裡。我所描述的就是 A&D 部門層面的情況。

You're right. It's too early to give guidance. But I don't think your math is off in any significant way.

你說得對。現在給予指導還為時過早。但我不認為你的數學有任何重大問題。

Sure. Any context or insight on big pieces of that backlog that may have a more extended timeline to unlock even if qualitative, not quantitative. Just anything you would highlight for us. It's a pretty big number at this point.

當然。任何關於積壓的大塊內容的背景或見解可能需要更長的時間來解鎖，即使是定性的，而不是定量的。只是您要向我們強調的任何內容。在這一點上這是一個相當大的數字。

Yes, I would say that the way you want to think about that is on the commercial and military aircraft side, you generally we're quoting something like a little bit less than a year of lead time out of those factories. And so generally speaking, the aircraft backlogs will convert in about a year.

是的，我想說的是，您想要考慮的方式是在商用和軍用飛機方面，您通常會引用這些工廠的不到一年的交貨時間。一般來說，飛機積壓訂單將在大約一年內轉換。

The navy backlogs do go out a little bit further. I would say, what we have in place right now is probably looking out 18 months to two years. These larger orders that I've been describing will – the award will go out for multiple additional years. So what we're seeing is a steady ramp rate of production for the navy. And I think that, that's certainly on that double-digit path.

海軍的訂單積壓確實有點多。我想說的是，我們現在所採取的措施可能是 18 個月到兩年。我一直在描述的這些較大的訂單將 — 該獎項將持續多年。所以我們看到的是海軍的產量穩定上升。我認為，這肯定是在兩位數的道路上。

Thank you, Bryan. I will turn it back.

謝謝你，布萊恩。我會把它轉回來。

(Operator Instructions) Jon Tanwanteng with CJS Securities.

（操作員指示）Jon Tanwanteng，CJS 證券。

Hi, thank you for taking my questions. My first one is just on the VACCO Space business. You gave a revenue number for it, but I was wondering, on average, what the profitability of that business looks like on a normalized basis?

你好，謝謝你回答我的問題。我的第一個目標是關於 VACCO Space 業務。你給了它的收入數字，但我想知道，平均而言，該業務的盈利能力在正常化的基礎上是什麼樣的？

Yeah, John. I would say, we're probably not going to disclose that specifically. And honestly, we're still working on some of the carve out around that. But I would tell you, it's certainly below segment averages overall.

是的，約翰。我想說，我們可能不會具體透露這一點。老實說，我們仍在圍繞這個問題進行一些探索。但我想告訴你，它的整體水平肯定低於細分市場的平均水平。

Okay. Great. And the number that you're excluding from Q4 just in terms of the profitability erosion, is that the expected EBIT in the segment for Q4?

好的。偉大的。您從第四季度排除的獲利能力侵蝕數字是第四季度該細分市場的預期息稅前利潤嗎？

It's -- it would be a potential delta of negative EBIT beyond kind of what's in that guidance of $410 million to $420 million.

這將是一個潛在的負息稅前利潤增量，超出指導的 4.1 億至 4.2 億美元。

And that's a risk item. It's -- we don't know that that's going to happen. We just wanted to make sure we clearly identified the kind of downside there.

這是一個風險項目。我們不知道這會發生。我們只是想確保我們清楚地識別出那裡的缺點。

Okay. Can you tell us a little bit more about what's going on in the program that is having this additional cost and the nature of it?

好的。您能否告訴我們更多關於該計劃中發生的情況以及產生額外費用的情況及其性質？

Yes. So I think that we're still on the same path that we've been talking about for the last few quarters. We have a small number of firm fixed price development programs that we are working through. And so first of all, we're not taking new programs like that. So it's a finite number of programs and what's happening is that we've accepted some requirements that are a little more challenging than normal.

是的。因此，我認為我們仍然走在過去幾季我們一直在討論的道路上。我們正在實施少數固定價格開發計劃。首先，我們不會採取這樣的新計劃。因此，程序的數量是有限的，而我們已經接受了一些比正常情況更具挑戰性的要求。

And so as we go into the Test and if the products are when they perform as expected, we're going to be fine. But if we do have additional go backs, it could cost additional money in terms of both engineering time and fabrication and test time. And so that's – what we're trying to do is put a kind of a bottom end on what that would look like.

因此，當我們進入測試時，如果產品的性能符合預期，我們就會沒事。但如果我們確實需要額外的返工，則可能會在工程時間以及製造和測試時間方面花費額外的資金。所以這就是——我們正在嘗試做的是為它的外觀設定一個底端。

Got it. Okay. That's helpful. Thank you. And then you brought on two new directors from the energy space or the utility space. So I'm just wondering, is that prelude to just a bigger focus on that segment, just given the power demands that we're seeing and growth that we're seeing in the next couple of years from all these EVs and data centers and everything that's going on?

知道了。好的。這很有幫助。謝謝。然後你從能源領域或公用事業領域聘請了兩位新董事。所以我只是想知道，考慮到我們所看到的電力需求以及未來幾年我們從所有這些電動車和資料中心看到的成長，這是否是更加關注該細分市場的前奏發生的一切？

Yes. So listen, our Board has a really wide range of experiences. And we've had a couple of Board members that have retired over the last year or two. So as the nominating governance committee was kind of going through and determining where do we have strengths and where do we have gaps.

是的。聽著，我們的董事會擁有非常廣泛的經驗。我們有幾位董事會成員在過去一兩年退休了。因此，提名治理委員會正在經歷並確定我們在哪裡有優勢，在哪裡有差距。

One of the things that we identified is the big area of focus for us is going to be aerospace and defense. We've got really good coverage there. We've got three directors that have worked all sides of that, both at the big primes in the government side and at Tier 1 suppliers.

我們確定的一件事是我們重點關注的領域將是航空航天和國防。我們在那裡有很好的報道。我們有三名董事，他們在各方面都工作過，無論是在政府方面的大型機構還是在一級供應商。

So we feel really good about our coverage on the A&D side, but we've only got one independent director on the utility side. And he's done a great job. He's kind of been instrumental in helping us build that segment out over the last seven or eight years.

因此，我們對 A&D 方面的報告感到非常滿意，但我們在公用事業方面只有一名獨立董事。他做得很好。在過去的七、八年裡，他在幫助我們建立這個細分市場方面發揮了重要作用。

But we felt like that bringing on two new Board members from that segment would be appropriate. And one of the things -- one of the characteristics of that is that folks out of that segment come with a broader set of cybersecurity skills and things like that, that we also found to be quite valuable.

但我們認為從該部門引進兩位新的董事會成員是合適的。其中一個特點是，該領域的人們擁有更廣泛的網路安全技能和類似的技能，我們也發現這些技能非常有價值。

Understood, thank you. I’ll jump back in the queue.

明白了，謝謝。我會插回隊列。

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

謝謝。我目前沒有提出任何進一步的問題。現在我想將電話轉回給布萊恩·塞勒（Bryan Sayler），讓其致閉幕詞。

Did Jon Tanwanteng jump back in for questions?

喬恩·坦萬騰（Jon Tanwanteng）回來提問了嗎？

Oh, I see he did.

哦，我看到他做到了。

Yes, we're seeing one on the screen, yes.

是的，我們在螢幕上看到了一個，是的。

Yes. Jon, your line is now open again.

是的。喬恩，您的線路現在又開通了。

Great, thanks. I was just wondering if you could talk about the test business and the incremental improvement you're expecting to see next quarter. I mean, you had some pretty good jumps from Q1 to Q2 and Q2 to Q3, but what kind of --what degree of recoveries do we think you can see that in those markets as we go forward?

太好了，謝謝。我只是想知道您是否可以談論測試業務以及您期望在下個季度看到的增量改進。我的意思是，從第一季度到第二季度、從第二季度到第三季度，您有一些相當好的跳躍，但是我們認為隨著我們的前進，您可以在這些市場中看到什麼樣的復甦程度？

Yeah. Listen, I think that as we've communicated a couple of times, the big downstrokes here were in China. And on the wireless side, we've kind of absorbed that now. The good news is we're seeing good growth out of the balance of the business, particularly in the US, particularly in our medical, in our EMP businesses. And the team has done a really good job of kind of taking cost out of the business and really refocusing on marginal returns. So in terms of expectations, what you should see is continued sequential growth for both revenue and margin. So I would kind of use that 16.5% is kind of your starting point and move up from there.

是的。聽著，我認為正如我們已經溝通過幾次一樣，這裡最大的下滑是在中國。在無線方面，我們現在已經吸收了這一點。好消息是，我們看到業務平衡取得了良好的成長，特別是在美國，特別是在我們的醫療、EMP 業務方面。該團隊在降低業務成本並真正重新專注於邊際回報方面做得非常好。因此，就預期而言，您應該看到收入和利潤率持續連續成長。所以我會用 16.5% 作為你的起點，然後從那裡往上移動。

Got it, thanks guys.

明白了，謝謝大家。

Thanks Jon.

謝謝喬恩。

Tommy Moll, Stephens.

湯米·莫爾，史蒂芬斯。

Hi, I figured out I want to follow up on your guidance for the full year EPS, you took a little bit out. And I'm just curious, was all of that delta explained by the VACCO space trends? Or were there any other factors driving that, Bryan?

你好，我想我想跟進你對全年每股收益的指導，你拿走了一點。我只是很好奇，所有這些增量是否都可以用 VACCO 空間趨勢來解釋？或者有其他因素導致這情況嗎，布萊恩？

Yes. Tommy, this is Chris. That was the majority of it was kind of what was embedded in that third quarter. I mentioned in my comments, we took about a $2 million hit there in the third quarter versus what we had expected when we gave that guidance at kind of the beginning of the quarter. So that flows through the year. That's the bigger part of it.

是的。湯米，這是克里斯。其中大部分內容都包含在第三季。我在評論中提到，我們在第三季度遭受了大約 200 萬美元的打擊，而我們在本季度初給出指導時的預期是這樣的。這樣就貫穿這一年了。這是其中更重要的部分。

And then I would say that the test business is a little bit weaker than whenever we laid out the guidance over the last quarter or so, not a big shift, but we've seen the fourth quarter come down slightly. We still expect some nice sequential improvement there, but just not as quite as much as we had baked in before.

然後我想說，測試業務比我們在上個季度左右制定指導時要弱一些，這不是一個大的轉變，但我們看到第四季度略有下降。我們仍然期望那裡會有一些不錯的連續改進，但只是沒有我們之前預測的那麼多。

Okay. Thank you, Chris. And while we're at it, I might as well throw one in on Doble, hopefully not overstaying my welcome here. But it looks like you were up a little bit year-over-year and there were some puts and takes within the Doble umbrella.

好的。謝謝你，克里斯。當我們討論這個問題時，我不妨向 Doble 扔一個，希望不會超過我在這裡的歡迎程度。但看起來你的股價比去年同期上漲了一點，在 Doble 保護傘內也出現了一些波動。

So whatever insight you can provide for us there would be helpful. And at a higher level, I'm curious if we look across the utility end market this quarter, it does seem like there are more puts and takes this time around versus a quarter ago. And I don't know if you feel like that may be calendar/election uncertainty or if the end market may be slowing a bit. Just any kind of insight you have would be helpful.

因此，您能為我們提供的任何見解都會有所幫助。在更高的層面上，我很好奇，如果我們縱觀本季的公用事業終端市場，與一個季度前相比，這次的看跌期權和認購期權似乎確實有所增加。我不知道您是否覺得這可能是日曆/選舉的不確定性，或者最終市場是否可能會放緩一點。您擁有的任何見解都會有所幫助。

Well, yes, yes, I don't think there's been more or different puts and takes here. I think that within the Utility Solutions Group, you have seen some softening on the renewable side compared to the prior year. I want to restate the prior year was an incredibly explosive comp to comparison quarter for both orders and revenue. So on the renewable side, that came down a little bit.

嗯，是的，是的，我認為這裡沒有更多或不同的看跌期權和拿取期權。我認為，在公用事業解決方案集團內，與前一年相比，再生能源方面出現了一些疲軟。我想重申一下，去年的訂單和收入與比較季度相比都呈現出令人難以置信的爆炸性增長。因此，在再生能源方面，這一數字有所下降。

Doble was up by a lot. And we're seeing just continued uptake on our services and our hardware as utilities are really pushing hard to maintain their current assets. They're facing big growth in demand and they're somewhat restrained on their ability to add capacity to their system. So what they're really focused on across the board is maintaining their current assets, and that really plays right into the wheelhouse for Doble.

多布爾上漲了很多。我們看到我們的服務和硬體不斷被採用，因為公用事業公司確實在努力維護其現有資產。他們面臨著需求的大幅增長，並且他們增加系統容量的能力受到一定限制。因此，他們真正關注的是維持現有資產，這對 Doble 來說確實是有利的。

So we've had really good growth at Doble. USG is up 8.5% over the prior year. Doble was up 7% and NRG was up 13.7%. So our perspective is that, that's going to continue. You mentioned the election. We get that question from time to time.

所以我們在 Doble 取得了非常好的成長。USG 比上年增長 8.5%。Doble 上漲 7%，NRG 上漲 13.7%。所以我們的觀點是，這將繼續下去。你提到了選舉。我們時不時會收到這樣的問題。

We -- it's one of many factors that we think about that could have an impact on our business, technical, regulatory, economic issues. And we've assessed it, and we frankly don't see a significant benefit or a significant threat to any of ESCO's businesses based on the outcome of the election. So bottom line is we're not rooting for anybody here, and we don't feel vulnerable either way it goes.

我們——這是我們認為可能對我們的業務、技術、監管和經濟問題產生影響的眾多因素之一。我們已經對其進行了評估，坦白說，根據選舉結果，我們沒有看到 ESCO 的任何業務受到重大利益或重大威脅。所以底線是我們不支持任何人，而且無論怎樣我們都不感到脆弱。

Thank you, Bryan. I'll turn it back and appreciate the time.

謝謝你，布萊恩。我會把它轉回來並珍惜時間。

Thank you. At this time, I'm showing no further questions, and we'll turn it back to Bryan Sayler for closing remarks.

謝謝。目前，我不會再提出任何問題，我們會將其轉回給 Bryan Sayler 進行結束語。

All right. Thanks, everyone. I really appreciate you taking some time. We're excited about what's happening at ESCO, and we'll talk to you next quarter.

好的。謝謝大家。我真的很感謝您抽出時間。我們對 ESCO 發生的事情感到興奮，我們將在下個季度與您交談。

Okay. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

好的。感謝您參加今天的會議。這確實結束了程序，您現在可以斷開連接。