Exponent Inc (EXPO) 2023 Q3 法說會逐字稿

Good day, and welcome to the Exponent Third Quarter Fiscal Year 2023 Earnings Conference Call.

美好的一天，歡迎參加 Exponent 2023 財年第三季財報電話會議。

(Operator Instructions) After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Joni Konstantelos of Investor Relations. Please go ahead.

（操作員說明）今天的演示結束後，將有機會提問。請注意此事件正在被記錄。我現在想將會議交給投資者關係部的喬尼康斯坦特洛斯 (Joni Konstantelos)。請繼續。

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's Third Quarter 2023 Financial Results Conference Call. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website at www.exponent.com/investors.

謝謝。女士們、先生們，午安。感謝您參加 Exponent 2023 年第三季財務業績電話會議。請注意，本次電話會議將在公司網站 www.exponent.com/investors 的投資者關係部分同時進行網路直播。

This conference call is the property of Exponent and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, President and Chief Executive Officer; and Rich Schlenker, Executive Vice President and Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements, including, but not limited to, Exponent's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

本次電話會議屬於 Exponent 的財產，未經事先書面同意，明確禁止任何錄音或其他複製。今天與我一起參加電話會議的還有總裁兼執行長凱瑟琳·科里根 (Catherine Corrigan) 博士；以及執行副總裁兼財務長 Rich Schlenker。在我們開始之前，我想提醒您，以下討論包含前瞻性陳述，包括但不限於 Exponent 的市場機會和未來財務業績，其中涉及風險和不確定性，可能導致實際結果與所討論的結果存在重大差異這裡。

Additional information that could cause actual results to differ from forward-looking statements can be found in Exponent's periodic SEC filings, including those factors discussed under the caption Risk Factor in Exponent's most recent Form 10-Q. The forward-looking statements and risks in this conference call are based on current expectations as of today, and -- Exponent assumes no obligation to update or revise them, whether as a result of new developments or otherwise. And now I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine?

可能導致實際結果與前瞻性陳述不同的其他資訊可以在 Exponent 定期向 SEC 提交的文件中找到，包括 Exponent 最新 10-Q 表格中「風險因素」標題下討論的那些因素。本次電話會議中的前瞻性陳述和風險是基於截至今天的當前預期，並且—Exponent 不承擔更新或修改這些陳述的義務，無論是由於新的發展還是其他原因。現在我將把電話轉給執行長凱瑟琳·科里根博士。凱瑟琳？

Thank you, Joni, and thank you, everyone, for joining us today. I will start off by reviewing our third quarter 2023 business performance. Rich will then provide a more detailed review of our financial results and outlook, and we will now open the call for questions. During the third quarter, we once again delivered broad-based revenue growth and earnings with our diversified portfolio of services supporting growth across nearly all industries we serve. The deliberate investments we've made to expand capabilities and stay ahead of the pace of innovation, continue to pay off.

謝謝喬尼，也謝謝大家今天加入我們。我先回顧我們 2023 年第三季的業務表現。然後，里奇將對我們的財務業績和前景進行更詳細的審查，現在我們將開始提問。在第三季度，我們再次實現了廣泛的收入成長和獲利，我們多元化的服務組合支持了我們所服務的幾乎所有行業的成長。我們為擴展能力和保持創新步伐而進行的刻意投資將繼續獲得回報。

Our ability to anticipate client needs throughout the product or assets or technology life cycle is and will continue to be a significant differentiator for Exponent. Of course, uncertainty exists in the broader markets we serve, but our exceptional team of integrated experts and our expansive capabilities provide us the ability to remain nimble and adapt our business to align with these dynamic market trends. Turning to our third quarter in a bit more detail. Growth in the quarter was driven by continued strong demand for our reactive services.

我們在整個產品、資產或技術生命週期中預測客戶需求的能力現在並將繼續成為 Exponent 的顯著差異化因素。當然，我們服務的更廣泛的市場存在不確定性，但我們卓越的綜合專家團隊和廣泛的能力使我們能夠保持靈活性並調整我們的業務以適應這些動態的市場趨勢。更詳細地談談我們的第三季。本季的成長是由對我們反應性服務的持續強勁需求所推動的。

Our proactive engagements were driven by increased demand in the chemicals and life sciences sectors, offset by continued moderation in the consumer electronics sector. Overall, I am pleased with the strength we are seeing across the majority of the business. Within our reactive services, we continue to see robust demand for domestic and international dispute-related offerings involving large capital projects in the energy, utilities and transportation sectors spanning various geographic regions.

我們的積極參與是由化學品和生命科學產業需求的成長所推動的，但卻被消費性電子產業的持續放緩所抵消。總的來說，我對我們在大多數業務中看到的實力感到滿意。在我們的反應性服務中，我們繼續看到對國內和國際爭議相關產品的強勁需求，這些產品涉及跨越不同地理區域的能源、公用事業和運輸領域的大型資本項目。

Additionally, consumer and automotive product liability and recall-related work increased in the quarter. Our proactive engagements were driven by increased demand for regulatory consulting work in the chemicals industry and engagements in the life sciences sector. This was offset by ongoing moderation in the consumer electronics industry due in part to the timing of product life cycles as well as ongoing macroeconomic headwinds. As a result, we saw declines in data collection and human subject research engagements as well as product development consulting.

此外，本季消費者和汽車產品責任以及召回相關的工作增加。我們積極主動的參與是由於化學品行業監管諮詢工作和生命科學領域的參與需求不斷增加而推動的。這被消費性電子產業持續放緩所抵消，部分原因是產品生命週期的時間安排以及持續的宏觀經濟逆風。結果，我們看到資料收集、人類課題研究活動以及產品開發諮詢的減少。

While we do expect this moderation to continue, we are optimistic about the long-term market drivers in this sector, and we remain well positioned to support our clients as these challenges begin to abate in 2024. With regard to our segments, Exponent's engineering and other scientific segment represented 83% of our net revenues in the third quarter, increasing 8% in the third quarter and 10% for the first 3 quarters compared to the prior year.

雖然我們確實預計這種放緩將持續下去，但我們對該行業的長期市場驅動因素持樂觀態度，並且隨著這些挑戰在2024 年開始減弱，我們仍然有能力為客戶提供支持。就我們的細分市場而言，Exponent 的工程和其他科學部門佔第三季淨收入的 83%，與去年同期相比，第三季成長了 8%，前三季成長了 10%。

Growth in the quarter was driven by strong demand for Exponent services across the transportation, energy and construction sectors. Exponent's Environmental & Health segment represented 17% of our net revenues in the third quarter, increasing 13% in the third quarter and 7% for the first 3 quarters compared to the prior year. Evolving regulatory requirements drove increased safety-related engagements, evaluating the impacts of chemicals on human health and the environment, and we also saw increased activity in the life sciences sector.

本季的成長是由交通、能源和建築業對 Exponent 服務的強勁需求所推動的。 Exponent 的環境與健康部門占我們第三季淨收入的 17%，與去年同期相比，第三季成長了 13%，前三個季度成長了 7%。不斷變化的監管要求推動了安全相關活動的增加，評估化學物質對人類健康和環境的影響，我們也看到生命科學領域的活動增加。

As we close out the year, we remain focused on excellence and execution and expanding our differentiated capabilities to meet the dynamic needs of our clients. The investments I mentioned earlier will continue to be a priority to drive organic growth and development within Exponent and to foster the essential trust our clients place and our team of experts to address their most complex needs.

在這一年即將結束之際，我們仍然專注於卓越和執行力，並擴大我們的差異化能力，以滿足客戶的動態需求。我之前提到的投資將繼續成為推動 Exponent 內部有機成長和發展的優先事項，並培養我們的客戶和我們的專家團隊的基本信任，以滿足他們最複雜的需求。

Further, managing resources in line with the growth of the business remains top of mind. To that end, as we expected, full-time equivalent employees in the third quarter decreased 2.5% compared to the second quarter as we continue to strategically realign our resources with demand across the business. We are taking a two-pronged approach to ensuring our headcount is aligned with not only current demand but also with the longer-term demand and opportunities we are seeing.

此外，根據業務成長管理資源仍是首要考慮因素。為此，正如我們預期的那樣，隨著我們繼續根據整個業務的需求對資源進行策略性調整，第三季的全職員工數量較第二季減少了 2.5%。我們正在採取雙管齊下的方法，以確保我們的員工數量不僅符合當前需求，而且符合我們所看到的長期需求和機會。

First, we are focused on recruiting in areas of the business where resources are constrained, but where we see opportunity to meet current and future market demand. Second, we continue to focus on performance management to ensure that our retained consultants are on a strong development path that will contribute to the future growth of the firm.

首先，我們專注於在資源有限但有機會滿足當前和未來市場需求的業務領域進行招募。其次，我們持續專注於績效管理，以確保我們保留的顧問走上強而有力的發展道路，為公司未來的發展做出貢獻。

In summary, Exponent continues to position itself at the forefront of innovation as a trusted adviser to our clients across the product life cycle. Market drivers, including the increasing complexities around safety, health and the environment remain strong and continue to drive opportunity across our business. We remain focused on expanding our capabilities, strengthening our relationships and driving profitable growth and value for our shareholders. I'll now turn the call over to Rich to provide more detail on our third quarter results as well as discuss our outlook for the fourth quarter and the full year 2023.

總而言之，Exponent 繼續將自己定位在創新的前沿，作為客戶在整個產品生命週期中值得信賴的顧問。市場驅動因素，包括安全、健康和環境方面日益複雜的因素仍然強勁，並繼續為我們的業務帶來機會。我們仍然專注於擴展我們的能力、加強我們的關係並推動股東的獲利成長和價值。我現在將把電話轉給 Rich，提供有關我們第三季度業績的更多詳細信息，並討論我們對第四季度和 2023 年全年的展望。

Thank you, Catherine, and good afternoon, everyone. Let me start by saying all comparisons will be on a year-over-year basis unless otherwise noted. For the third quarter of 2023, total revenues increased 4.8% to $133.3 million and revenues before reimbursements or net revenues, as I will refer to them from year on increased 8.5% to $125 million as compared to the same period of 2022.

謝謝凱瑟琳，大家下午好。首先我要說的是，除非另有說明，所有比較都將按年進行。 2023 年第三季度，總收入成長 4.8%，達到 1.333 億美元，與 2022 年同期相比，報銷前收入或淨收入（我將提到它們）同比增長 8.5%，達到 1.25 億美元。

This includes a decline of approximately $8 million in our consumer electronics business, which created a 6% to 7% headwind as compared to the third quarter of 2022. Net income for the third quarter was $24.5 million, or $0.48 per diluted share as compared to $24.4 million or $0.47 per diluted share in the prior year period. Exponent's consolidated tax rate was 27.9% in the third quarter as compared to 27.0% for the same period in 2022.

其中包括我們的消費電子業務減少了約800 萬美元，與2022 年第三季相比造成了6% 至7% 的阻力。第三季淨利為2,450 萬美元，或稀釋後每股收益0.48 美元。上年同期攤薄後每股 2,440 萬美元或 0.47 美元。 Exponent 第三季的綜合稅率為 27.9%，而 2022 年同期為 27.0%。

EBITDA for the quarter was $34.5 million, producing a margin of 27.6% and of net revenues as compared to $34.6 million or 30% of net revenues in the same period of 2022. This year-over-year decline in margins was anticipated as expenses normalize post-pandemic, and utilization was lower due to the growth in headcount.

本季 EBITDA 為 3,450 萬美元，利潤率為 27.6%，佔淨收入的 2022 年同期為 3,460 萬美元，佔淨收入的 30%。隨著費用正常化，利潤率同比下降是預料之中的大流行後，由於員工人數增加，利用率較低。

Billable hours in the third quarter were approximately $380,000, an increase of 4.1% year-over-year, which is significant considering the headwinds in electronics. The average technical full-time equivalent employees in the third quarter were 1,050, which is an increase of 9.6% as compared to 1 year ago.

第三季的計費工時約為 38 萬美元，年成長 4.1%，考慮到電子產業的不利因素，這一數字相當顯著。第三季平均技術全職當量員工為1,050人，比一年前成長9.6%。

This was the result of successful recruiting efforts in the second half of 2022, coupled with improved retention in 2023. As Catherine mentioned, full-time equivalent employees decreased 2.5% compared to the second quarter of 2023, reflecting our progress on strategically aligning our resources with the current and long-term demand opportunities.

這是2022 年下半年成功招募工作以及2023 年留任率提高的結果。正如Catherine 所提到的，與2023 年第二季相比，全職員工數量減少了2.5%，反映出我們在策略性調整資源方面所取得的進展結合當前和長期的需求機會。

Utilization in the third quarter was 70%, down from 73% in the same period of 2022. The realized rate increase was approximately 4.4% and for the third quarter as compared to the same period a year ago. In the third quarter, after adjusting for gains and losses and deferred compensation expense, compensation expense increased 13.4%.

第三季的利用率為 70%，低於 2022 年同期的 73%。與去年同期相比，第三季的實現成長率約為 4.4%。第三季度，在調整損益和遞延補償費用後，補償費用增加了13.4%。

Included in total compensation expense is a loss in deferred compensation of $2.8 million as compared to a loss of $4.9 million in the third quarter of 2022. As a reminder, gains and losses in deferred compensation are offset to miscellaneous income and have no impact on the bottom line.

薪酬總額包括 280 萬美元的遞延薪酬損失，而 2022 年第三季的損失為 490 萬美元。需要提醒的是，遞延薪酬的損益已抵銷為雜項收入，對底線。

Stock-based compensation expense in the third quarter was $4.9 million as compared to $4.6 million in the prior year period. Other operating expenses in the third quarter were up 24.7% to $11 million driven primarily by increased employee engagement at our offices. Included in other operating expenses is depreciation and amortization expense of $2.4 million for the third quarter. G&A expenses declined 10.6% to $6 million for the third quarter.

第三季的股票薪酬支出為 490 萬美元，而上年同期為 460 萬美元。第三季的其他營運支出成長了 24.7%，達到 1,100 萬美元，這主要是由於我們辦公室員工敬業度的提高。第三季的其他營運費用包括 240 萬美元的折舊和攤提費用。第三季一般管理費用下降 10.6% 至 600 萬美元。

This decrease was due to a reduction in the use of outsourced personnel and a smaller annual company meeting. Interest income increased to $1.9 million for the third quarter, driven by an increase in interest rates. Miscellaneous expenses, excluding deferred compensation loss was approximately $1 million. During the quarter, capital expenditures were $3.3 million, we distributed $13.2 million to shareholders through dividend payments and repurchased $17 million in common stock.

這一減少是由於外包人員使用的減少和公司年度會議規模的縮小。在利率上升的推動下，第三季利息收入增加至 190 萬美元。不包括遞延補償損失的雜項費用約為 100 萬美元。本季度，資本支出為 330 萬美元，我們透過股息支付向股東分配了 1,320 萬美元，並回購了 1,700 萬美元的普通股。

We ended the third quarter with $137.1 million in cash and cash equivalents. Turning to our outlook. For the fourth quarter of 2023 as compared to 1 year prior, we expect revenues before reimbursements to grow in the middle single digits and EBITDA margin to be 26% to 27% of revenue before reimbursements. For the full year 2023 as compared to 1 year prior, we expect revenue before reimbursements to grow in the high single digits and EBITDA margin to be 27.4% to 27.8% of revenues before reimbursements.

第三季末，我們擁有 1.371 億美元的現金和現金等價物。轉向我們的展望。與一年前相比，2023 年第四季度，我們預計報銷前收入將實現中個位數成長，EBITDA 利潤率為報銷前收入的 26% 至 27%。與一年前相比，2023 年全年，我們預計報銷前收入將以高個位數成長，EBITDA 利潤率為報銷前收入的 27.4% 至 27.8%。

This assumes approximately the same headwinds of 6% to 7% from consumer electronics business in the fourth quarter as we experienced in the third quarter. The full year margins remain at or above pre-pandemic levels. As Catherine mentioned, we are taking actionable steps to strategically align our resources with the current and long-term demand trends within our business through targeted recruiting and ongoing performance management. As a result, we expect our average technical full-time equivalent employees to decline sequentially 2% in the fourth quarter.

假設第四季消費性電子業務面臨的阻力與第三季大致相同，為 6% 至 7%。全年利潤率保持在或高於大流行前的水平。正如凱瑟琳所提到的，我們正在採取切實可行的措施，透過有針對性的招募和持續的績效管理，策略性地將我們的資源與我們業務中當前和長期的需求趨勢相結合。因此，我們預計第四季度全職技術員工平均數量將環比下降 2%。

We expect utilization in the fourth quarter to be 66% to 68% as compared to 69% in the same quarter last year. As a reminder, utilization is seasonally lower in the fourth quarter due to more holidays and vacations compared to other quarters. Our expectations for full year utilization is in the range of 69% to 69.5% as compared to 73.8% in 2022.

我們預計第四季度的利用率將為 66% 至 68%，而去年同期為 69%。提醒一下，由於與其他季度相比，第四季度的假日和休假較多，因此利用率季節性較低。我們預計全年利用率在 69% 至 69.5% 之間，而 2022 年為 73.8%。

We still believe our long-term target of sustained mid-70s utilization is achievable as we continue to strategically manage headcount and balance utilization based on market demands. We expect the 2023 year-over-year realized rate increase to be 4.75% to 5.25%. For the fourth quarter, we expect stock-based compensation to be $4.5 million to $5 million. For the full year, we expect stock-based compensation to be $21.5 million to $22 million.

我們仍然相信，隨著我們繼續根據市場需求策略性地管理員工人數和平衡利用率，我們持續 70 年代中期利用率的長期目標是可以實現的。我們預計 2023 年將實現年成長率為 4.75% 至 5.25%。我們預計第四季的股票薪酬將為 450 萬至 500 萬美元。我們預計全年股票薪酬為 2,150 萬美元至 2,200 萬美元。

For the fourth quarter, we expect other operating expenses to be $11.2 million to $11.7 million. For the full year, we expect other operating expenses to be $42 million to $42.5 million as we -- as in office activities continue to pick up. For the fourth quarter of 2023, we expect G&A expenses to be $6.6 million to $7 million. For the full year, we expect G&A expenses to be $25.1 million to $25.5 million. We expect interest income to be approximately $1.8 million for the fourth quarter. In addition, we expect miscellaneous income to be approximately $750,000 in the fourth quarter.

對於第四季度，我們預計其他營運費用為 1,120 萬美元至 1,170 萬美元。我們預計全年其他營運費用將為 4,200 萬至 4,250 萬美元，因為辦公室活動持續增加。我們預計 2023 年第四季的一般管理費用為 660 萬美元至 700 萬美元。我們預計全年一般管理費用為 2,510 萬美元至 2,550 萬美元。我們預計第四季的利息收入約為 180 萬美元。此外，我們預計第四季雜項收入約為 75 萬美元。

For the remainder of 2023, we do not anticipate any additional tax benefit from share-based awards. So the year-over-year tax benefit associated with share-based awards are expected to be $2.4 million lower than they were in 2022, which is a $0.05 per diluted share impact to EPS.

在 2023 年剩餘時間內，我們預期股票獎勵不會帶來任何額外的稅收優惠。因此，與股票獎勵相關的年度稅收優惠預計將比 2022 年減少 240 萬美元，這對每股稀釋後每股收益產生 0.05 美元的影響。

For the fourth quarter 2023, we expect our tax rate to be approximately 28.2% as compared to 26.2% in the same quarter a year ago. For the full year 2023, the tax rate, inclusive of the tax benefit from share-based awards is expected to be 25.7% as compared to 22.6% in 2022. In closing, we continue to be confident in the strength of the business and our ability to drive further profitable growth. I will now turn the call back to Catherine for closing remarks.

對於 2023 年第四季度，我們預計稅率約為 28.2%，而去年同期為 26.2%。 2023 年全年，稅率（包括股票獎勵的稅收優惠）預計為 25.7%，而 2022 年為 22.6%。最後，我們繼續對業務實力和我們的業務充滿信心。推動盈利進一步增長的能力。現在我將把電話轉回給凱瑟琳，讓她發表結束語。

Thank you, Rich. For many years, Exponent has been a trusted adviser in supporting our clients throughout the product life cycle. As the complexities of innovation create new challenges, Exponent will leverage our world-class team of experts and diversified services portfolio to guide our clients through the dynamic changes in their industries. We remain confident in our ability to drive long-term profitability and value for our shareholders. Operator, we are now ready for questions.

謝謝你，里奇。多年來，Exponent 一直是值得信賴的顧問，在整個產品生命週期為客戶提供支援。隨著創新的複雜性帶來新的挑戰，Exponent 將利用我們世界一流的專家團隊和多元化的服務組合來指導我們的客戶應對產業的動態變化。我們對為股東帶來長期獲利和價值的能力仍然充滿信心。接線員，我們現在準備好提問了。

We will now begin the question-answer session. (Operator Instructions) First question comes from Tobey Sommer from Truist.

我們現在開始問答環節。 （操作員說明）第一個問題來自 Truist 的 Tobey Sommer。

Thank you. What sort of run rate do you think that the company may be on in terms of billable headcount growth as you exit the fourth quarter into next year?

謝謝。當你從第四季退出到明年時，你認為公司在可計費員工數量成長方面可能處於什麼樣的運作率？

Yes. I anticipate that we will end the year with a headcount that puts us right around, give or take, around 1,025 is where we'll end the year at. And then we will continue to -- I would expect that, hopefully, that puts us in a good position to be able to grow throughout 2024. We are still in our planning phase. We're sort of in the middle of that part where our business units are working on their 2024 plans.

是的。我預計我們年底的員工人數將在 1,025 人左右。然後我們將繼續——我希望這能讓我們處於有利地位，並能夠在 2024 年實現成長。我們仍處於規劃階段。我們正處於業務部門制定 2024 年計畫的中間階段。

And the executive team will be meeting with each of those business units later on this quarter. And -- but our expectations is based on the demand environment that we have across a number of our industries that, that will set us up in a good position to be able to really grow in those areas where the demand is increasing.

執行團隊將在本季度稍後與每個業務部門舉行會議。而且，我們的期望是基於我們多個行業的需求環境，這將使我們處於有利地位，能夠在需求不斷增長的領域中真正成長。

And Catherine, the company doesn't often miss expectations. And I was wondering if you could describe changes in demand throughout the quarter, whether it was just sort of a bit at a time in each of the months and into perhaps October as well? Or was there sort of an episode or a month at which many things changed and then sort of leveled off from there.

凱瑟琳，該公司並不常辜負期望。我想知道您是否可以描述整個季度的需求變化，是否每個月一次一點點，甚至可能到十月？或者是否有某個事件或一個月，許多事情發生了變化，然後趨於平穩。

Yes. Thanks, Tobey. It's important to sort of look at this from a portfolio perspective. And when I do that, we're very much focused in terms of the headwinds in the consumer electronics sector, as Rich described, and even more granularly around some of that human subject type of work that we've been doing around data collection, machine learning and things like that. It's very much related to the product life cycle timing that we've been seeing and also by some of those macroeconomic headwinds.

是的。謝謝，托比。從投資組合的角度來看這一點很重要。當我這樣做時，我們非常關註消費電子行業的逆風，正如里奇所描述的那樣，甚至更細緻地關注我們圍繞數據收集所做的一些人類主題類型的工作，機器學習之類的東西。這與我們所看到的產品生命週期時間以及一些宏觀經濟不利因素密切相關。

But I think the -- as I look across the business, what I'm seeing is a portfolio that is performing well and as designed because what we've done is really design a portfolio that is diverse across industries, right? And so we're seeing growth in just about every one of those other industries, whether that's transportation, which is very strong, whether that's the life sciences side, whether that's the energy side or the construction side, and being up 8.5% despite the headwinds, I think really exemplifies the strength of that portfolio and being able to deliver profitability that's at or above where we were prepandemic without -- with all of those expenses layered back in.

但我認為，當我縱觀整個業務時，我看到的是一個表現良好且符合設計的投資組合，因為我們所做的實際上是設計一個跨行業多樣化的投資組合，對嗎？因此，我們看到幾乎所有其他行業都在成長，無論是非常強勁的交通運輸業，無論是生命科學方面，無論是能源方面還是建築方面，儘管存在困難，但仍增長了 8.5％逆風，我認為確實體現了該投資組合的實力，並且能夠提供等於或高於我們在大流行前沒有的盈利能力- 所有這些費用都重新計入。

So it is a focused area where there is some moderation. And we expect that to continue in Q4, but we also are seeing some nice activity in the pipeline. We've got requests coming in for scopes of work and proposals. And so that pipeline is filling and that's why we feel like these headwinds are going to start to abate once we hit Q1 of 2024 and then progress even further into 2024.

因此，這是一個有一定節制的重點領域。我們預計這種情況將在第四季度繼續下去，但我們也看到一些不錯的活動正在進行中。我們收到了有關工作範圍和建議的請求。因此，管道正在填滿，這就是為什麼我們覺得一旦進入 2024 年第一季度，這些不利因素就會開始減弱，然後進一步進入 2024 年。

Yes. And Tobey, I'd just add a little bit of granularity on to those numbers. As I mentioned there, we had about $8 million headwind. I think we thought that, that would probably be closer to $6 million in July when we put together the quarter. And in addition to that, we thought that would be slightly less, again, in the fourth quarter instead of holding at that level, we -- based on what we understood, of timing of some projects coming in.

是的。托比，我只是在這些數字上添加一點細節。正如我在那裡提到的，我們面臨著大約 800 萬美元的阻力。我想我們認為，當我們將這個季度匯總到 7 月時，這可能會接近 600 萬美元。除此之外，我們認為第四季度的情況會稍微減少，而不是保持在這個水平，根據我們的了解，我們對一些專案的進入時間進行了調整。

We expected those projects to start in Q4 that are now going to come in the first quarter, at least that's what we expect now. So those -- that provided that additional sort of headwind in the fourth quarter.

我們預計這些項目將在第四季度啟動，而現在將在第一季啟動，至少我們現在是這樣預期的。因此，這些在第四季度帶來了額外的阻力。

And if I could follow up on what you said about sort of visibility into new projects as you go into '24. How -- if you could describe how much visibility and much insight you have into customer planning and sort of looking out over the horizon to the extent your customers involve you in that to just kind of give us a sense for how you can construct a view for 2024 in that consumer electronics area that did demonstrate a little bit softness.

如果我能跟進你所說的關於進入 24 年後新項目的可見性的話。如何——如果你能描述一下你對客戶規劃有多少可見性和洞察力，以及在你的客戶讓你參與其中的程度上放眼未來，讓我們了解如何構建一個視圖2024 年消費電子領域確實表現出了一點疲軟。

Yes. And look, I mean, across the business, Tobey, the -- there's quite a bit of variability in that. I mean you can imagine the reactive work that we do has a lot less visibility. But even on the proactive side, that sort of product development consulting can often be driven by things like early field failures, for example. And so there's a piece of that, that the client is not necessarily able to foresee as they're moving into their product launch, let's say.

是的。我的意思是，托比，你看，整個產業存在著很大的差異。我的意思是你可以想像我們所做的被動工作的可見度要低得多。但即使在積極主動的方面，這類產品開發諮詢也常常是由早期現場故障等因素所驅動的。因此，有一部分是客戶在進入產品發布階段時不一定能夠預見的。

So that can limit ability to sort of see what that pipeline looks like, that even on the machine learning and the human data collection side, again, they are often -- they're iterating in that product life cycle based on aspects of that, that they may or may not be able to visualize themselves, right? So I think what I'm really trying to say is that there we do the best we can to sort of understand where the client is heading. And of course, we're in dialogue with them, but there is an element of the type of work that we do, that is driven through some level of uncertainty.

因此，這可能會限制查看管道是什麼樣子的能力，即使在機器學習和人類數據收集方面，他們也經常——他們基於各個方面在產品生命週期中進行迭代，他們可能能夠也可能無法想像自己，對吧？所以我想我真正想說的是，我們盡我們所能了解客戶的發展方向。當然，我們正在與他們進行對話，但我們所做的工作類型中有一個要素是由某種程度的不確定性所驅動的。

Understood. Switching gears. I just have 2 more questions, and I'll get back in the queue. In the -- in your business, could you talk to the PFAS opportunity and what you see there? And then I'm curious what the composition of your project book looks like relative to large projects, a question that I often ask about on these calls to assess whether there's sort of upside large project risk or represents neutral or downside risk.

明白了。切換齒輪。我還有 2 個問題，我會回到隊列中。在您的企業中，您能談談 PFAS 機會以及您在那裡看到的情況嗎？然後我很好奇你的專案手冊的構成相對於大型專案是什麼樣的，我經常在這些電話會議上問這個問題，以評估是否存在某種上行的大型專案風險或代表中性或下行風險。

Yes. Thanks, Tobey. And maybe I'll cover the PFAS and then I can let Rich cover the large project piece. So we absolutely are continuing to see increased activity around forever chemicals. I talked about PFAS perfluorooctanoic substances. And it kind of starts at the original chemical manufacturers. But then what we're seeing is that the issues are cascading down into the supply chain.

是的。謝謝，托比。也許我會報道 PFAS，然後我可以讓 Rich 報道大型專案。因此，我們絕對會繼續看到圍繞永久化學品的活動不斷增加。我談到了PFAS全氟辛酸物質。這有點從最初的化學品製造商開始。但我們看到的是，問題正在蔓延到供應鏈。

So these chemicals are used in consumer products -- in clothing in food packaging in various other applications in carpeting and teflon pans and you name it, it's there. And so what we're seeing is really that cascade down into that supply chain, and we're seeing it in the reactive sense, around the litigation environment. So what is the impact on the environment. We're seeing it in the regulatory arena when we talk about that type of work in the chemicals industry.

因此，這些化學物質被用於消費品——服裝、食品包裝、地毯和聚四氟乙烯平底鍋等各種其他應用中，只要你能想到的，它就在那裡。因此，我們所看到的實際上是級聯到供應鏈中，並且我們是在訴訟環境周圍的反應意義上看到它的。那麼對環境有什麼影響呢。當我們談論化學品行業的此類工作時，我們在監管領域看到了這一點。

And we're also seeing it more proactively, even earlier in the product life cycle. When you think about product stewardship, clients who need to evaluate potential substitutions for PFAS in their products, and they're looking at those sorts of things, and we are seeing those engagements. So definitely a great opportunity to bring that interdisciplinary team together of our health scientists, our environmental scientists, our exposure chemists and our material scientists to really help clients in that area.

我們也更主動地看到它，甚至在產品生命週期的早期。當您考慮產品管理時，需要評估其產品中 PFAS 潛在替代品的客戶，他們正在考慮此類事情，我們也看到了這些參與。因此，這絕對是一個絕佳的機會，可以將我們的健康科學家、環境科學家、暴露化學家和材料科學家組成的跨學科團隊聚集在一起，並真正幫助該領域的客戶。

Yes. Tobey, in relation to the large projects, we don't have any projects today that historically, we've talked about large projects when they've been in that 4% to 5% range. And really, our portfolio in this past quarter has been made up of projects that are 2% or less in what we're doing. That fits into the normal portfolio. Some of those will -- they're part of a litigation matter, and they'll end in the quarter and something else will grow up to that level. Our couple of projects will replace that, but it's more of a -- much more of a normal portfolio projects at this point in time.

是的。 Tobey，就大型專案而言，我們今天沒有任何項目，從歷史上看，我們談論大型專案時，它們一直在 4% 到 5% 的範圍內。事實上，我們上個季度的投資組合由占我們正在做的項目的 2% 或更少的項目組成。這符合正常的投資組合。其中一些會——它們是訴訟問題的一部分，它們將在本季度結束，其他事情也會發展到這個水平。我們的幾個項目將取代它，但目前它更像是一個正常的投資組合項目。

The next question comes from Josh Chan from UBS.

下一個問題來自瑞銀集團的 Josh Chan。

Thanks for giving the color on the consumer electronics impact I guess, conceptually, if you did 8.5% growth in Q3 with $8 million headwind. And then I guess with the same amount of headwind, you're now expecting mid-single-digit growth in Q4. So is something else outside of consumer electronics slowing? Maybe could you talk about the demand outside of that sector, I guess?

感謝您對消費性電子產品的影響進行了闡述，我想，從概念上講，如果您在第三季度在 800 萬美元的逆風下實現了 8.5% 的增長。然後我想，在同樣的逆風下，您現在預計第四季將出現中等個位數的成長。那麼消費性電子產品以外的其他因素是否也在放緩？我想，也許您能談談該行業以外的需求嗎？

Yes. Maybe I'll start off and Catherine can fill in. really, the difference, let's say, there, pick your midpoint on that of a 3-point difference is really a combination of where the business was last year in the fourth quarter as what that level of hurdle was, which was pretty strong that the business was flowing out at that time.

是的。也許我會開始，凱瑟琳可以填補。真的，差異，讓我們說，在那裡，選擇 3 分差異的中點實際上是去年第四季度業務狀況的組合這個水平的障礙是，當時業務正在流出，這是相當強大的。

And just in the mix. I mean, last year, that headcount was very much ramping in the fourth quarter that utilization was holding together an extremely strong. So overall, I'd say we're not seeing any material difference in other parts of the business. But Catherine, maybe you want to double-click on that.

就在混合中。我的意思是，去年第四季的員工人數大幅增加，使用率非常高。總的來說，我想說我們在業務的其他部分沒有看到任何實質差異。但是凱瑟琳，也許你想雙擊它。

Yes. No, thanks, Rich, and thanks, Josh, for that question. Look, there's -- again, I'll refer to the portfolio. We have ebbs and flows in that when we go out and we ask our folks about what they're seeing, what's the dispute landscape and what are the kinds of projects either flowing off or coming on. And when we do that and we compare to the fourth quarter of last year, we sort of come out where we are. But -- when we look broadly just in terms of the business and what's strong, I mean, transportation is a great example of an area that is very robust.

是的。不，謝謝里奇，也謝謝喬許提出這個問題。聽著，我將再次提及投資組合。當我們出去時，我們會詢問我們的員工所看到的情況、爭議情況以及正在進行或正在進行的專案類型，我們的情況有起有落。當我們這樣做時，我們與去年第四季進行比較，我們就知道我們所處的位置了。但是，當我們從業務和強勁方面進行廣泛考察時，我的意思是，交通運輸是一個非常強大的領域的一個很好的例子。

When we think about the litigation around advanced driver assistance, we're looking at inquiries we're getting around electric vehicles. We look at what's going on in Life Sciences. We look at our risk work in utilities we're generally -- I'm feeling good about where the portfolio is over the long term. We have to go with the ebbs and flows sort of on that quarter-to-quarter basis.

當我們考慮有關高級駕駛輔助的訴訟時，我們會關注有關電動車的詢問。我們專注於生命科學領域正在發生的事情。我們總體上審視了公用事業領域的風險工作——我對投資組合的長期狀況感覺良好。我們必須在每季的基礎上順應潮起潮落。

That's helpful. And then on the staffing levels, given the little bit slower demand than expected, do you still expect to achieve this back to normal or desired utilization levels around the start of the year next year? Or does that time line get pushed out a little bit?

這很有幫助。然後在人員配置水準上，考慮到需求比預期稍慢，您是否仍希望在明年年初左右恢復到正常或期望的利用率水準？或者這個時間線會被延後一點嗎？

Look, I think that we are -- as we've made points here today, our objective is to bring our headcount in line with the demand in the environment. And as such, definitely begin to see an improvement in the utilization, we're not complete with our plan and exact and ready to sort of give guidance around that level of granularity as it relates to the first quarter or next year, but are very much our focus is to see our utilization improve in 2024.

聽著，我認為我們——正如我們今天在這裡指出的那樣，我們的目標是使我們的員工數量符合環境的需求。因此，肯定會開始看到利用率的改善，我們的計劃尚未完成，也尚未準備好就與第一季或明年相關的粒度水平提供指導，但非常我們的重點是看到2024 年利用率有所提高。

Next question comes from Andrew Nicholas from William Blair.

下一個問題來自威廉布萊爾的安德魯尼古拉斯。

I want to take another shot at the consumer products commentary and maybe more so try to quantify which piece of that business. I think in your K you disclose how much of revenue is tied to consumer or consumer products. Is this relatively widespread within what I think was kind of the 31% of mix number? Or is there a slice of this that's down pretty drastically -- just trying to kind of piece together all the moving parts here, if you could help me there.

我想再次嘗試消費產品評論，也許更嘗試量化該業務的哪一部分。我認為您在 K 中披露了有多少收入與消費者或消費品相關。在我認為的 31% 的混合數字中，這種情況是否相對普遍？或者是否有一個部分大幅下降——只是試圖將這裡的所有活動部件拼湊在一起，如果你能在那裡幫助我的話。

Yes. So it is focused primarily, it's focused on the consumer electronics side. We're not seeing a decline in the more general consumer products area. So it's focused there. It's predominantly in -- or almost solely in the data collection human subject study area. So it's very much around that, which are -- and it is primarily focused around where the clients are in that product life cycle.

是的。所以它主要關注的是消費性電子產品方面。我們沒有看到更一般的消費品領域出現下降。所以它集中在那裡。它主要或幾乎完全在數據收集人類受試者研究領域。所以它很大程度上圍繞著這一點，它主要關注客戶在產品生命週期中的位置。

But clearly, there's been some impact from what clients have been going through organizationally in deciding which projects to continue and how to staff things and manage costs in the market turn. But this is consumer electronics, -- the majority of it is in the data collection user study area and primarily about where they are in the product life cycle.

但顯然，客戶在決定繼續哪些專案以及如何在市場轉變中配備人員和管理成本時所經歷的組織方面的經歷產生了一些影響。但這是消費性電子產品——其中大部分是在資料收集用戶研究領域，主要是關於它們在產品生命週期中的位置。

And then maybe for my follow-up on margin. Can you help me bridge the gap in terms of kind of the revenue guide down versus the margin guide down? It looks like you're still kind of high single-digit expectation for full year in '23 on the top line, which I realize that's below what you were at before at the midpoint, but still within that full year range and yet guidance for margins is below the prior range, if I'm not mistaken.

然後也許是我對保證金的後續行動。您能幫我彌合收入指導下降與利潤指導下降之間的差距嗎？看來您對 23 年全年的頂線仍抱有很高的個位數預期，我意識到這低於您之前的中點預期，但仍處於全年範圍內，但仍對如果我沒記錯的話，利潤率低於之前的範圍。

Is there any other kind of outsized expenses that have come through since you last spoke with us? Or -- anything else to call out? Or is it just a function of the fact that you're kind of hanging in there with fixed costs and people in the consumer products business, the expectation that, that comes back around at some point next year?

自從您上次與我們交談以來，是否還發生過其他巨額開支？或者──還有什麼需要注意的嗎？或者這只是因為你堅持固定成本和消費產品業務人員，期望明年某個時候會出現這種情況？

Yes. So look, it is -- it's all driven by that being a few million dollars less in the revenue line. We are we're hitting on about where we expected the level of staffing to be. So we had indicated where we thought we would make some adjustments in that and did it.

是的。所以看，這一切都是因為收入減少了幾百萬美元。我們正在討論我們預期的人員配備水準。因此，我們已經指出了我們認為需要做出一些調整的地方，並做到了。

The fact that we have a slightly lower revenues has led to slightly lower utilization and the leverage you get out of that is quite high. So it -- this is really just about, as I indicated, if you take a look at this at the last quarter, if that $8 million was only $6 million to $6.5 million, which is sort of what I would have expected in the third quarter. Probably $1 million of that would fall to the margin line. And you would have been on the upper half of our EBITDA margin.

事實上，我們的收入略低，導致利用率略低，而您從中獲得的槓桿相當高。 So it -- this is really just about, as I indicated, if you take a look at this at the last quarter, if that $8 million was only $6 million to $6.5 million, which is sort of what I would have expected in the third四分之一.其中可能有 100 萬美元會落入利潤線。您的 EBITDA 利潤率將達到上半部。

And the same goes for the fourth quarter. We are expecting probably about more of revenues in that quarter would have ended up with us $3 million or $4 million. That would have put us up in the high single digits, let's say, had us hitting that range. And as such, you would have ended up seeing a couple of million dollars more in EBITDA and in return got yourself another 50 to 80 basis points.

第四季也是如此。我們預計該季度的收入可能會增加到 300 萬美元或 400 萬美元。如果我們達到這個範圍，那麼我們的得分就會達到高個位數。因此，您最終會看到 EBITDA 增加了幾百萬美元，作為回報，您又獲得了 50 到 80 個基點。

This concludes our question-and-answer session, and the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

我們的問答環節到此結束，會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。