Haynes International Inc (HAYN) 2023 Q4 法說會逐字稿

Greetings. Welcome to the Haynes International, Inc. Fourth Quarter Fiscal 2023 Financial Results Conference Call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Controller and Chief Accounting Officer, David Van Bibber. You may begin.

問候。歡迎參加 Haynes International, Inc. 2023 財年第四季財務績效電話會議。 （操作員說明）請注意，本次會議正在錄製中。我現在將會議交給主持人、財務長兼首席會計官 David Van Bibber。你可以開始了。

Thank you very much for joining us today. With me today are Mike Shor, President and CEO of Haynes International; and Dan Maudlin, Vice President and Chief Financial Officer. Before we get started, I would like to read a brief cautionary note regarding forward-looking statements.

非常感謝您今天加入我們。今天與我在一起的有 Haynes International 總裁兼執行長 Mike Shor；丹‧莫德林 (Dan Maudlin)，副總裁兼財務長。在我們開始之前，我想閱讀有關前瞻性陳述的簡短警告說明。

This conference call contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. The words believe, anticipate, plan and similar expressions are intended to identify forward-looking statements. Although we believe our plans, intentions and expectations regarding or suggested by such forward-looking statements are reasonable, such statements are subject to a number of risks and uncertainties and we can provide no assurances such plans, intentions or expectations will be achieved. Many of these risks are discussed in detail in the company's filings with the Securities and Exchange Commission, in particular Form 10-K for the fiscal year ended September 30, 2023. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

本次電話會議包含1995 年《私人證券訴訟改革法案》和1934 年《證券交易法》第21E 條含義內的前瞻性陳述。「相信」、「預期」、「計畫」和類似表達等詞語旨在辨識前瞻性陳述。尋找陳述。儘管我們相信我們關於此類前瞻性陳述或由此類前瞻性陳述暗示的計劃、意圖和期望是合理的，但此類陳述受到許多風險和不確定性的影響，我們無法保證此類計劃、意圖或期望將會實現。其中許多風險在公司向美國證券交易委員會提交的文件中進行了詳細討論，特別是截至 2023 年 9 月 30 日的財年的 10-K 表格。本公司不承擔公開更新或修改任何前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。

With that, let me turn the call over to Mike.

接下來，讓我把電話轉給麥克。

Thank you, Dave. Good morning, everyone. The highlights of our fiscal '23 performance include 6 consecutive quarters of an adjusted gross margin of approximately 21% or better, a normalized EBITDA of approximately $99 million when adjusting for both the impact of the third quarter cyber issue and the raw material headwinds. Record full year -- full fiscal year revenues in both our aerospace and industrial gas turbine markets and book-to-bill levels consistently at or over 1.0 in both our aero and IGT markets. Based on this performance and our ongoing improvement initiatives, we believe that we have positioned Haynes very well for the future. Our focus through both our operations and our company-owned distribution facilities, is on producing and providing the alloys, products and just-in-time quantities that others in our industry struggle to provide and by providing technical and sales service levels that are difficult to duplicate.

謝謝你，戴夫。大家，早安。我們 23 財年業績的亮點包括連續 6 個季度的調整後毛利率約為 21% 或更高，在調整第三季度網路問題和原物料逆風的影響後，正常化 EBITDA 約為 9,900 萬美元。全年創紀錄——我們的航空航太和工業燃氣渦輪機市場的整個財年收入以及航空和 IGT 市場的訂單出貨比水平始終保持在 1.0 或以上。基於這項表現和我們持續的改進舉措，我們相信我們已經為海恩斯的未來做好了準備。我們透過我們的營運和公司擁有的分銷設施，專注於生產和提供我們行業中其他公司難以提供的合金、產品和準時數量，並提供難以達到的技術和銷售服務水平。複製。

Our formula for success remains the same. We continue to work to at least offset inflation through our relentless focus on variable cost reductions. We combine this cost reduction work with providing the high-value differentiated alloys, products and services that our customers and end users value and are willing to pay for. We anticipate that our ability to continue to reduce costs and provide exceptional value will continue, leading to incremental gains in what is already top-tier gross margins in our slice of the industry. We're just beginning to show what our employees and our company are capable of related to safety performance, revenue growth, gross margin percent, net income and EBITDA. In addition, as we begin fiscal '24, we believe that we have the backlog, people, inventory and lead times in place to begin to generate operating cash flow in fiscal year '24.

我們的成功秘訣保持不變。我們將繼續致力於透過不懈地降低變動成本來至少抵消通貨膨脹。我們將降低成本的工作與提供我們的客戶和最終用戶重視並願意付費的高價值差異化合金、產品和服務結合起來。我們預計，我們繼續降低成本和提供卓越價值的能力將繼續下去，從而使我們已經處於行業領先地位的毛利率不斷增加。我們才剛開始展示我們的員工和公司在安全績效、收入成長、毛利率、淨利潤和 EBITDA 方面的能力。此外，當我們開始 24 財年時，我們相信我們已具備積壓訂單、人員、庫存和交貨時間，可以在 24 財年開始產生營運現金流。

With that as my introduction, I will now provide the highlights of our Q4 performance, provide comments on our full fiscal year '23 and then follow that with some thoughts on what we believe is next for our company. The key points for our fourth quarter are as follows: First, on safety. We had a significant reduction in our OSHA recordable rate in our fourth quarter, including no recordable injuries throughout our company in September. It was great to see our safety improvement initiatives result in improved performance in the quarter. Next, revenue was $160.6 million, the highest of our fiscal year. Our revenue per pound was $33, highlighting our differentiated high-end products and services. We achieved these results despite incurring significant unplanned equipment downtime in September in our cold-finished flat production area.

以此作為我的介紹，我現在將提供我們第四季度業績的亮點，對我們 23 年整個財年的評論，然後對我們認為公司下一步的發展提出一些想法。第四季的重點是：一是安全。第四季度，我們的 OSHA 可記錄率大幅下降，包括 9 月整個公司沒有可記錄的傷害。很高興看到我們的安全改進措施提高了本季的業績。其次，營收為 1.606 億美元，是我們財年的最高收入。我們每磅的收入為 33 美元，凸顯了我們差異化的高端產品和服務。儘管 9 月我們的冷加工板材生產區域發生了嚴重的非計劃設備停機，但我們還是取得了這些成果。

Next, you're all aware of our ongoing focus and emphasis on gross margin. For the quarter, gross margin was 18.5%. Our calculated raw material neutral gross margin was 20.9%. Our fourth quarter is now the sixth consecutive quarter where our calculated raw material neutral gross margin was approximately 21% or better. Our work on margin improvement is not done. We continue to work to raise prices where possible, along with our focus on variable cost reductions, both of which we believe should lead to incremental improvement in this critical business metric. Our net income for the quarter was $13.1 million despite raw material-related headwinds of $3.7 million pretax for the quarter. This resulted in a net income per pound of $2.71, again, despite the impact of declining nickel and cobalt in the quarter.

接下來，你們都知道我們對毛利率的持續關注和重視。該季度毛利率為 18.5%。我們計算出的原料中性毛利率為20.9%。我們的第四季現在是連續第六個季度，我們計算出的原物料中性毛利率約為 21% 或更好。我們在提高利潤率方面的工作尚未完成。我們繼續努力在可能的情況下提高價格，同時專注於降低變動成本，我們相信這兩者都將導致這項關鍵業務指標的逐步改善。儘管本季與原材料相關的不利因素為 370 萬美元，但我們本季的淨利潤為 1,310 萬美元。儘管受到本季鎳和鈷價格下跌的影響，每磅淨利潤再次達到 2.71 美元。

Our fourth quarter EBITDA when adjusting for raw material headwinds was over $25 million. In addition, our normalized fiscal '23 EBITDA when adjusting for the impact of the cyber issue and raw material headwinds was just under $100 million. It's important to note that this was achieved at a shipment level of 18.5 million pounds. As we look to the future, we're projecting higher volumes led by aerospace and IGT, improved absorption, lower variable cost of manufacturing and higher pricing for certain key high-value products. As far as cash, we believe that our fourth quarter represented an inflection point for cash flow. We expect positive cash flow from operations in fiscal year '24. We have the backlog, inventory and manpower position to begin to reduce inventory and therefore, generate cash. With that, we believe our credit facility has peaked and we expect positive operating cash flow in fiscal '24, especially in the second half of the year.

根據原材料不利因素進行調整後，我們第四季的 EBITDA 超過 2,500 萬美元。此外，在針對網路問題和原材料不利因素的影響進行調整後，我們的 23 財年正常化 EBITDA 略低於 1 億美元。值得注意的是，這是在 1850 萬磅的出貨量下實現的。展望未來，我們預計航空航太和 IGT 將帶來更高的銷售、更高的吸收率、更低的可變製造成本以及某些關鍵高價值產品的更高定價。就現金而言，我們認為第四季是現金流的轉捩點。我們預計 24 財年的營運現金流將為正值。我們有積壓訂單、庫存和人力，可以開始減少庫存，從而產生現金。至此，我們相信我們的信貸額度已達到頂峰，我們預計 24 財年將實現正營運現金流，尤其是下半年。

From a market perspective, the news in Q4 continues to be positive. Our largest market, aerospace, was 50.9% of Q4 sales. Our aerospace revenues grew 20.9% versus Q4 of last year, 5.6% sequentially and 26.3% for the full fiscal year. Average selling price increased -- average selling price in Q4 increased 14.7% versus the same period last year. The $290.4 million in aerospace sales in fiscal '23 was the highest level of annual aerospace sales on record. The news for us out of the aerospace market continues to be very good with commercial airplane and engine builds projected to grow through this decade and our proprietary alloys continuing to gain market acceptance. Overall, aerospace demand is still very strong and the supply chain is showing no significant signs of excess inventory.

從市場角度來看，第四季的消息依然利多。我們最大的市場是航空航天，佔第四季銷售額的 50.9%。我們的航空航太收入較去年第四季成長 20.9%，較上季成長 5.6%，整個財年成長 26.3%。平均售價上漲－第四季平均售價比去年同期上漲14.7%。 23 財年航空航太銷售額為 2.904 億美元，是有記錄以來年度航空航太銷售額的最高水準。對我們來說，航空航太市場的消息仍然非常好，商用飛機和發動機的製造預計將在這十年中成長，而且我們的專有合金將繼續獲得市場認可。總體而言，航空航天需求仍然非常強勁，供應鏈沒有明顯的庫存過剩跡象。

As I've mentioned on previous calls, HAYNES 282 and HAYNES 244 alloys have been specced into various aerospace engine programs, while one of our newest alloys, HAYNES 233 is in the final stages of testing by a major aero engine manufacturer for the next generation of engines. Our IGT market grew to 21.3% of Q4 sales. Revenues grew 20% versus Q4 of last year, 21.9% sequentially and 31.4% for the full fiscal year. The Q4 revenues of $34.2 million are the highest quarterly sales on record into the IGT market. Average selling price in Q4 increased 5.6% versus the same period last year. Our IGT story remains consistent with supply of high-value differentiated products and services, leading to share growth along with the continued and increasing application of HAYNES 282 alloy into turbines to improve performance.

正如我在之前的電話會議中提到的，HAYNES 282 和HAYNES 244 合金已被指定用於各種航空航天發動機項目，而我們最新的合金之一HAYNES 233 正處於一家主要航空發動機製造商下一代測試的最後階段引擎。我們的 IGT 市場成長至第四季銷售額的 21.3%。營收較去年第四季成長 20%，季增 21.9%，整個財年成長 31.4%。第四季營收為 3,420 萬美元，是 IGT 市場有史以來最高的季度銷售額。第四季平均售價較去年同期上漲5.6%。我們的 IGT 故事與提供高價值差異化產品和服務保持一致，隨著海恩斯 282 合金在渦輪機中的持續和增加的應用以提高性能，導致份額增長。

Our CPI market was 14.3% of Q4 sales. Within this market, there are 2 important points to make. First, as mentioned in the last quarter's call, we are flexing our constrained capacity away from the more commoditized portion of our CPI business to the more profitable aerospace and IGT business. In addition, over the quarter, we have been successful in reducing our lead times by about 50% for the majority of this business. Because of this lead time reduction, customers can place orders later based on our much shorter quoted delivery dates. With that as background, revenues declined 15.4% versus Q4 of last year, increased 30% sequentially and increased 0.4% for the full fiscal year.

我們的 CPI 市場佔第四季銷售額的 14.3%。在這個市場中，有兩點需要強調。首先，正如上季電話會議中所提到的，我們正在將有限的產能從 CPI 業務中更商品化的部分轉移到利潤更高的航空航太和 IGT 業務。此外，在本季度，我們成功地將大部分業務的交貨時間縮短了約 50%。由於交貨時間縮短，客戶可以根據我們報價的更短的交貨日期稍後下訂單。在此背景下，營收較去年第四季下降 15.4%，較上季成長 30%，整個財年成長 0.4%。

Within CPI, we continue to focus on growing the high-margin alloys and special projects. Based on our mix and value initiatives within CPI, the Q4 average selling price increased $5.71 per pound or 19.3% versus the same period last year. Some examples of our high-value differentiated corrosion resistant alloys include HASTELLOY HYBRID-BC1, HASTELLOY C-2000 and HASTELLOY G-35, all for various types of heat exchangers, reactor vessels, agitators and piping. These alloys are specified due to their unique and superior corrosion resistance to the highly corrosive media used in the production of specialized chemicals. Finally, our other market revenue in Q4 was below last year's Q4 by 2.3% but up 8.8% sequentially and up 12.3% for the full fiscal year. Our other revenue in Q4 increased 26.1% versus Q4 of last year, was down 3.9% sequentially and increased 14.3% for the full fiscal year.

在 CPI 內，我們繼續專注於發展高利潤合金和特殊專案。根據我們在 CPI 中的組合和價值舉措，第四季度平均售價比去年同期上漲了 5.71 美元/磅，即 19.3%。我們的高價值差異化耐腐蝕合金的一些例子包括 HASTELLOY HYBRID-BC1、HASTELLOY C-2000 和 HASTELLOY G-35，全部用於各種類型的熱交換器、反應容器、攪拌器和管道。這些合金因其對專用化學品生產中使用的高腐蝕性介質具有獨特且卓越的耐腐蝕性而被指定。最後，我們第四季的其他市場營收比去年第四季低 2.3%，但比上一季成長 8.8%，整個財年成長 12.3%。我們第四季的其他營收較去年第四季成長 26.1%，季減 3.9%，整個財年成長 14.3%。

Now on the book-to-bill. Based on revenue, our book-to-bill was 0.9 for the quarter, aerospace was 1.0, IGT was 1.1 and CPI because of 2 major reasons already noted, was 0.7. We continue to be encouraged by the level of interest and demand for our alloys, products and services.

現在是從預訂到帳單。根據收入，本季我們的訂單出貨比為 0.9，航空航太為 1.0，IGT 為 1.1，CPI（由於已經提到的 2 個主要原因）為 0.7。人們對我們的合金、產品和服務的興趣和需求繼續令我們感到鼓舞。

Now looking into the future. As far as our major markets, significant investments continue to be made in aerospace and next-generation power systems, including fuel-efficient engines and the use of sustainable aviation fuel, hydrogen fuel cells and hybrid-based systems, with expectations for these to be available for use on a commercial scale around the mid-2030s. These will most likely create even more new opportunities for our unique proprietary alloys. In addition, the future outlook for single-aisle and wide-body aircraft deliveries remains strong. Year-on-year growth rates for single-aisle aircraft are expected to be 25% in 2024, 16% in 2025 and 9% in 2026. Overall, air passenger demand has made a strong recovery over the past year which brought global passenger traffic close to pre-pandemic levels.

現在展望未來。就我們的主要市場而言，我們繼續在航空航太和下一代動力系統方面進行大量投資，包括節能引擎和可持續航空燃料的使用、氫燃料電池和混合動力系統，預計這些投資將在2030 年代中期可實現商業規模使用。這些很可能為我們獨特的專有合金創造更多新的機會。此外，單通道和寬體飛機交付的未來前景依然強勁。預計2024年單通道飛機年增率為25%，2025年為16%，2026年為9%。整體而言，過去一年航空客運需求強勁復甦，為全球客運量帶來了成長接近大流行前的水平。

Next, the industrial gas turbine market is also expected to grow at a steady pace through the 2030s due to the growing worldwide demand for increased energy, higher efficiency and improved reliability. The IGT growth rates are anticipated to exceed 3% compound annual growth rate through 2030. Continuing to look to -- with our look to the future, our ongoing pricing actions based on the alloy, products and service value we provide, along with our continued drive to improve yields and variable cost of our products, are projected to continue to incrementally improve our top tier -- our -- excuse me, our top-tier raw material neutral gross margins.

接下來，由於全球對增加能源、提高效率和提高可靠性的需求不斷增長，預計工業燃氣渦輪機市場也將在 2030 年代穩步成長。預計到 2030 年，IGT 成長率將超過 3% 的複合年增長率。展望未來，我們將繼續專注於基於我們提供的合金、產品和服務價值的持續定價行動，以及我們持續的定價行動。提高我們產品的產量和可變成本的努力，預計將繼續逐步提高我們的頂級——我們的——對不起，我們的頂級原材料中性毛利率。

One concern that we do have for at least the first quarter of fiscal '24, is the continuing drop in nickel prices. As the decline in the price of nickel continues, we project that this will lead to additional and increasing raw material headwinds. We are now projecting the impact of headwinds in our first quarter to be well above the $3.7 million pretax that we saw in Q4 of fiscal '23. As you know, we had very favorable raw material tailwinds in fiscal '22 as nickel and cobalt prices increased, followed by unfavorable headwinds through fiscal '23 as raw material prices decreased. We will continue to highlight on a quarterly basis, both the positive and negative impact of the movement in the price of raw materials.

至少在 24 財年第一季度，我們確實擔心的一個問題是鎳價持續下跌。隨著鎳價持續下跌，我們預計這將導致原物料阻力進一步增加。我們現在預計第一季不利因素的影響將遠高於 23 財年第四季的 370 萬美元稅前水準。如您所知，隨著鎳和鈷價格上漲，我們在 22 財年遇到了非常有利的原材料順風，而隨著原材料價格下降，我們在 23 財年遇到了不利的逆風。我們將繼續按季度強調原物料價格變動的正面和負面影響。

Moving on. As far as EBITDA, as previously noted, we achieved just under $100 million in calculated EBITDA in fiscal '23 when adjusting for the impact of the raw material headwinds and the cyber issue we faced. Our collective focus is on continuing to improve EBITDA via increasing volumes, alloy and application development, supplying high-value differentiated products and services and, of course, our variable cost reductions. Next, we believe we are at an inflection point for cash generation. We have done our homework, a near record backlog, manpower trained, inventory in place. And with that, we expect to generate cash with cash generation momentum growing significantly in the second half of our fiscal year. Given our forecast we expect to significantly pay down our revolver in fiscal year '24. One more point worth noting about the future. Although no market downturn is in sight for us, if a downturn does occur in one or more of our markets at some point in the future, we continue to be very prepared with a breakeven point down by 25% from where it was when our improvement journey began.

繼續。就 EBITDA 而言，如前所述，在調整原物料逆風和我們面臨的網路問題的影響後，我們在 23 財年計算出的 EBITDA 實現了近 1 億美元。我們的共同重點是透過增加銷售量、合金和應用開發、提供高價值的差異化產品和服務，當然還有降低變動成本，繼續提高 EBITDA。接下來，我們相信我們正處於現金產生的轉折點。我們已經做好了功課，積壓訂單接近創紀錄水平，人力經過培訓，庫存到位。這樣，我們預計將在本財年下半年產生現金，現金產生動能將顯著成長。根據我們的預測，我們預計將在 24 財年大幅償還我們的左輪手槍費用。關於未來還有一點值得注意。儘管我們看不到市場衰退的跡象，但如果未來某個時候我們的一個或多個市場確實出現衰退，我們將繼續做好充分準備，盈虧平衡點將比我們改善時的水平下降 25%旅程開始了。

Finally, wrapping up, I want to thank our employees. They collectively are creating a safe work environment, a company that has leading gross margins in our slice of the industry. A calculated EBITDA of approximately $100 million, along with a company that has the alloys, applications, products, processes, near-net shape capabilities, just-in-time shipment capabilities and customer service that customers and end users want and they're willing to pay for. To my coworkers, well done and thank you.

最後，我要感謝我們的員工。他們共同創造了一個安全的工作環境，這家公司在我們的行業中擁有領先的毛利率。計算得出的 EBITDA 約為 1 億美元，公司擁有客戶和最終用戶想要且願意的合金、應用、產品、製程、近淨成形能力、準時出貨能力和客戶服務付錢。我的同事們，幹得好，謝謝你們。

I'll now hand this over to Dan for his comments on our business and our financial results.

現在我將把這個交給丹，請他對我們的業務和財務表現發表評論。

Thank you, Mike. Financially, this was a strong finish to the year. Fourth quarter revenue at $160.9 million, adjusted gross margins neutral of raw material headwinds at 20.9% and net income at $13.2 million. Our average selling price per pound in total, including conversion revenue, was $33 a pound shipped this quarter. This clearly reflects the high-value products we provide and the differentiation of our product mix from others in our peer group. We finished the year with the underlying fundamentals of the business still intact, solid execution of our improvement strategy, a strong customer backlog and a focus on increasing output volume from our operations. This is a strong position going into fiscal 2024.

謝謝你，麥克。從財務角度來看，今年的業績表現強勁。第四季營收為 1.609 億美元，扣除原物料不利影響後的調整後毛利率為 20.9%，淨利為 1,320 萬美元。本季出貨的每磅平均售價（包括轉換收入）為每磅 33 美元。這清楚地反映了我們提供的高價值產品以及我們的產品組合與同行群體中其他產品的差異化。今年結束時，我們的業務基本面仍然完好無損，改進策略得到了紮實執行，客戶積壓量很大，並且專注於增加我們業務的產出量。這是進入 2024 財年的強勢地位。

Looking at the full fiscal year 2023, we achieved revenue of $590 million, with company record revenue shift in the aerospace and industrial gas turbine markets. In addition, we had adjusted gross margins neutral of raw material headwind at 20.7% and net income at $42 million. We talk a lot about this raw material impact, which helped us last year and hurt us this year. Raw material price fluctuations can impact our results more sharply than others in our peer group given our product portfolio being solely high-end nickel and cobalt-based alloys as reflected in that average selling price of $33 a pound.

綜觀 2023 年整個財年，我們實現了 5.9 億美元的收入，公司在航空航太和工業燃氣渦輪機市場的收入轉變創紀錄。此外，我們將毛利率調整為 20.7%，淨利潤為 4,200 萬美元。我們談論了很多關於原材料的影響，它去年幫助了我們，今年傷害了我們。鑑於我們的產品組合僅為高端鎳基和鈷基合金（平均售價為每磅 33 美元），原材料價格波動對我們業績的影響可能比同行中的其他公司更大。

The raw material impact of falling nickel and cobalt unfavorably impacted our results by approximately $3.7 million in the fourth quarter. We estimate that the full fiscal year impact was $12.6 million unfavorable. One thing that is interesting is the headwind is mostly cobalt. The breakdown is a cobalt headwind of $8.1 million of the $12.6 million and nickel was $4.5 million of the $12.6 million. Thankfully, the cobalt headwind is moderating as the cobalt price has stabilized. However, nickel is still falling thus still causing an increasing headwind. As Mike mentioned, this is concerning and we are now projecting the impact of this headwind in our first quarter of fiscal '24 to be well above the $3.7 million pretax we saw in Q4 of FY '23.

鎳和鈷價格下跌的原材料影響對我們第四季度的業績產生了約 370 萬美元的不利影響。我們估計整個財年的不利影響為 1,260 萬美元。有趣的一點是，逆風主要是鈷。具體來看，鈷的逆風為 1,260 萬美元中的 810 萬美元，鎳為 1,260 萬美元中的 450 萬美元。值得慶幸的是，隨著鈷價企穩，鈷的逆風正在減弱。然而，鎳價仍在下跌，因此仍造成越來越大的阻力。正如麥克所提到的，這是令人擔憂的，我們現在預計這種逆風對 24 財年第一季的影響將遠高於我們在 23 財年第四季看到的 370 萬美元稅前。

Looking at the full year FY '23 raw materials and comparing to FY '22, we saw a significant swing. We highlighted last year that we had a positive tailwind for the year of $9.4 million favorable. This year, flipping to a headwind of $12.6 million unfavorable, is a $22 million swing in the raw material impact. When looking at gross margin dollars year-on-year, this is an important factor to consider.

縱觀 23 財年全年原料並與 22 財年相比，我們看到了顯著的波動。我們去年強調，這一年我們獲得了 940 萬美元的正面推動力。今年，原材料影響帶來了 1,260 萬美元的不利影響，帶來了 2,200 萬美元的波動。當考慮同比毛利率時，這是一個需要考慮的重要因素。

Let's walk through the bridge. Last fiscal year, gross margin dollars were $106.3 million. If you remove the favorable tailwind that it is adjusted gross margin dollars neutral of raw materials of $96.9 million. If we do the same math for fiscal '23 with gross margin of $109.8 million and adjust for both the $12.6 million raw material headwind and the third quarter cybersecurity incident of $6.9 million gross margin impact, results in adjusted gross margin dollars of $129.3 million. So $96.9 million in FY '22 to $129.3 million in FY '23 is an increase of $32.4 million, representing an improvement of 33.4%, improving our gross margin dollars by 1/3 is solid. And that is still with volumes that are expected to improve in fiscal '24 and provide additional profitability leverage with our lower breakeven point. This puts us in a favorable position as we look to the future.

我們一起走過橋吧。上一財年，毛利率為 1.063 億美元。如果除去有利的因素，調整後的毛利率中性為 9,690 萬美元。如果我們對23 財年的毛利率為1.098 億美元進行同樣的計算，並調整1260 萬美元的原物料逆風和第三季網路安全事件對毛利率690 萬美元的影響，則調整後的毛利率為1.293億美元。因此，22 財年的 9,690 萬美元到 23 財年的 1.293 億美元增加了 3,240 萬美元，即提高了 33.4%，我們的毛利率提高了 1/3 是可靠的。預計 24 財年銷售量將有所改善，並以較低的損益平衡點提供額外的獲利槓桿。這使我們在展望未來時處於有利的位置。

Our SG&A, including research and technical expense, as a percentage of net revenues continues to favorably decline and was 8.5% of net sales in the fourth quarter as compared sequentially to Q3 of 8.9% and was 8.8% for the full fiscal year as compared to last fiscal year of 10.4%. Gross margin dollars were $13.6 million for Q4 and $52.2 million for the full fiscal year. Operating income was $16.1 million this quarter, which is a sequential 22.1% increase, keeping in mind last quarter's cybersecurity incident. Our effective tax rate for the fourth quarter was 11.5% and 19.1% for the full year, reflecting a favorable qualification for the high-tax exception for some of our foreign-sourced income. We expect our effective tax rate going forward to be 21% to 22%. All of this resulted in fourth quarter net income at $13.1 million and a diluted earnings per share of $1.02 and full year net income of $42 million and $3.26 earnings per share.

我們的 SG&A（包括研究和技術費用）佔淨收入的百分比持續下降，第四季佔淨銷售額的 8.5%，第三季為 8.9%，整個財年為 8.8%。上一財年為10.4% 。第四季的毛利率為 1,360 萬美元，整個財年的毛利率為 5,220 萬美元。考慮到上季度的網路安全事件，本季營業收入為 1,610 萬美元，季增 22.1%。我們第四季的有效稅率為 11.5%，全年的有效稅率為 19.1%，這反映出我們的部分海外收入享有高稅收以外的優惠資格。我們預計未來的有效稅率為 21% 至 22%。所有這些導致第四季度淨利潤為 1,310 萬美元，攤薄後每股收益為 1.02 美元，全年淨利潤為 4,200 萬美元，每股收益為 3.26 美元。

A few additional points regarding our financial position. Our revolver balance was $114.8 million, an increase of $16.2 million during the fourth quarter of fiscal '23. We believe fiscal '24 to be a year that we generate cash and begin to pay down the credit facility, especially in the second half of the year. Our year-end valuation of our U.S. pension plan was favorable and our funding percentage continues to be solid at approximately 94% with a long-term liability on the balance sheet at approximately $14 million and the retiree health care liability at approximately $49 million. We continue to make progress to reduce our U.S. pension and retiree medical net liabilities with an overall reduction over the past 36 months of $133 million, knocking the liability down by 2/3.

關於我們的財務狀況的幾點補充。我們的左輪手槍餘額為 1.148 億美元，比 2023 財年第四季增加了 1,620 萬美元。我們認為 24 財年是我們產生現金並開始償還信貸額度的一年，特別是在今年下半年。我們對美國退休金計畫的年終估值是有利的，我們的資金比例繼續穩定在約 94%，資產負債表上的長期負債約為 1,400 萬美元，退休人員醫療保健負債約為 4,900 萬美元。我們在減少美國退休金和退休人員醫療淨負債方面繼續取得進展，過去 36 個月總體減少了 1.33 億美元，負債減少了 2/3。

Our backlog was $460.4 million as of September 30, '23, an increase of $86.6 million from the same period last year. Our controllable working capital was $449.4 million as of September 30, '23, an increase of $71.1 million since the beginning of the fiscal year. The increase was driven by inventory, representing a $56.5 million increase this fiscal year as we grow production levels and top line revenue. Accounts receivable increased $11.4 million and accounts payable and accrued expenses changed by $3.2 million. Our capital investment in fiscal '23 was $16.4 million. We are still evaluating fiscal year '24 capital expenditures but expect it to be in the range of $25 million to $35 million.

截至2023年9月30日，我們的積壓訂單為4.604億美元，比去年同期增加了8,660萬美元。截至 2023 年 9 月 30 日，我們的可控營運資金為 4.494 億美元，自本財年開始以來增加了 7,110 萬美元。這一成長是由庫存推動的，隨著我們生產水準和營收的提高，本財年庫存增加了 5,650 萬美元。應收帳款增加了 1,140 萬美元，應付帳款和應計費用增加了 320 萬美元。我們 23 財年的資本投資為 1,640 萬美元。我們仍在評估 24 財年的資本支出，但預計其範圍在 2,500 萬美元至 3,500 萬美元之間。

Outlook for the future. Looking at the full fiscal year '24, we expect continued volume and revenue growth, incremental improvements in gross margin and positive cash flow from operations. We expect the revolver balance to decline in fiscal year '24, gaining momentum as we progress through the fiscal year. Revenue and earnings in the first quarter of fiscal '24 are expected to be higher than the first quarter of fiscal '23 but lower compared to the fourth quarter of fiscal '23. First quarter results are typically lower due to the impact of holidays, planned maintenance, equipment maintenance outages and customers managing their calendar year-end balance sheets. In addition, we are planning a 3-week upgrade to the Kokomo anneal and coating line in the quarter, which may impact efficiency and the mix of products sold in the first quarter of fiscal '24.

展望未來。縱觀 24 年整個財年，我們預期銷售和收入將持續成長，毛利率將逐步提高，營運現金流將為正值。我們預計左輪手槍餘額將在 24 財年下降，並隨著本財年的進展而增加。預計 24 財年第一季的營收和收益將高於 23 財年第一季度，但低於 23 財年第四季。由於假期、計劃維護、設備維護中斷以及客戶管理日曆年末資產負債表的影響，第一季業績通常較低。此外，我們計劃在本季對 Kokomo 退火和塗層生產線進行為期 3 週的升級，這可能會影響 24 財年第一季的效率和銷售產品組合。

In conclusion, as we head into fiscal '24, we remain optimistic with our improvement initiatives still in focus, along with a strong backlog, a strong inventory position and improving production momentum. We are positioned well to continue to execute and achieve our goals in fiscal '24 with improving financial results.

總之，隨著我們進入 24 財年，我們仍然保持樂觀態度，我們的改進舉措仍然是重點，同時還有大量的積壓、強勁的庫存狀況和改善的生產動能。我們處於有利位置，可以繼續執行並實現我們 24 財年的目標，並改善財務表現。

Mike, with that, I'll now turn the discussion back over to you.

麥克，現在我將把討論轉回給你。

Thank you, Dan. Our team continues to be encouraged with the progress we've made. I want to again thank all of you for your continued interest in our company.

謝謝你，丹。我們的團隊繼續對我們所取得的進步感到鼓舞。我想再次感謝大家對我們公司的持續關注。

With that, Holly, let's open the call up for questions.

霍莉，讓我們開始提問。

(Operator Instructions) Your first question for today is coming from Mark Reichman with NOBLE Capital Markets.

（操作員說明）今天您的第一個問題來自 NOBLE Capital Markets 的 Mark Reichman。

I am just curious what percent of the orders that were delayed by the cybersecurity event are included in the order backlog of $460.4 million.

我只是好奇 4.604 億美元的積壓訂單包含了多少因網路安全事件而延遲的訂單。

Including the first quarter -- well, as we go forward, including the fourth quarter, we have basically feathered that in through the balance of the year. Our lead times are out there because of the volumes we have. And so that's pretty much further than over the next 12 months.

包括第一季——嗯，隨著我們的前進，包括第四季度，我們基本上已經在今年的剩餘時間實現了這一點。我們的交貨時間是由於我們擁有的數量而定的。因此，這比未來 12 個月的時間要長得多。

Yes. And just for everybody listening, we estimated $18 million to $20 million of revenue shortage in the third quarter. So we do -- that stays in the backlog because it wasn't shipped. And that will be, as Mike mentioned, feathered in the next several quarters.

是的。我們估計第三季的收入短缺為 1800 萬至 2000 萬美元。所以我們這樣做了——因為它沒有發貨，所以仍然處於積壓狀態。正如麥克所提到的，這將在接下來的幾個季度中實現。

Okay. So the addition of production, head count and inventory that has allowed you to increase your shipping levels, so do historical trends of kind of 50% of the backlog shipping within 6 months and 90% within 12 months, will that still hold in 2024?

好的。因此，生產、人員數量和庫存的增加使您能夠提高發貨水平，那麼6 個月內50% 的積壓發貨量和12 個月內90% 的積壓發貨量的歷史趨勢是否會在2024 年保持不變？

Yes, maybe slightly longer. I think we have some disclosures in the 10-K about that. It's slightly longer just because a lot of customers are kind of getting their place in line. And that's included in the backlog as well.

是的，也許稍微長一點。我認為我們在 10-K 中對此進行了一些披露。時間稍微長一些，只是因為很多顧客都在排隊。這也包含在待辦事項中。

Okay. And then just my last question. If you could just maybe explain the delta between 2023 and expected 2024 CapEx.

好的。然後是我的最後一個問題。您能否解釋一下 2023 年資本支出與 2024 年預期資本支出之間的增量。

Sure. First is, we have always found ourselves, well, at least for the past year, a little bit behind on CapEx because of the supply chain and getting the components that we need in. And so part of where we finished the year that's ended now is about delays in getting the equipment we need to be successful in implementing the CapEx. As we look into this current fiscal year, it's increased for some of that makeup. And it's also increased as we continue to look to expand our capacity and address our constraints. And so we want to make sure we're doing that in the key areas and that's why the extra CapEx is in there.

當然。首先，我們總是發現自己，至少在過去的一年裡，由於供應鏈和獲得我們需要的組件而在資本支出上有點落後。所以我們完成了現在結束的一年的部分內容是關於延遲獲得我們成功實施資本支出所需的設備。當我們審視本財年時，其中一些組成有所增加。隨著我們繼續尋求擴大我們的產能並解決我們的限制，它也會增加。因此，我們希望確保我們在關鍵領域做到這一點，這就是額外資本支出的原因。

Your next question is coming from Steve Ferazani with Sidoti & Company.

您的下一個問題來自 Sidoti & Company 的 Steve Ferazani。

A little surprised by the flat year-over-year volume. I think you mentioned (inaudible) Kokomo. Can you give us a little more color on that?

對同比銷量持平感到有點驚訝。我想你提到了（聽不清楚）科科莫。你能為我們提供更多的資訊嗎？

Yes. We've had some processing issues as we hit the fourth quarter, where we continue to look for ways to expand our capacity and bring in more VIM melting from the outside, so working through that. We have great faith as we move forward for continuing to increase our volume as we move into this year.

是的。在進入第四季度時，我們遇到了一些加工問題，我們繼續尋找擴大產能並從外部引入更多 VIM 熔煉的方法，因此需要解決這個問題。我們對今年繼續增加銷量充滿信心。

The impact of the unplanned outage?

非計劃停電的影響？

The impact that we had in -- some issues that we had in our last quarter -- we -- a lot of that was in the cold-finished flat area. We made a lot of that up by other product shipping. So from a volume standpoint, it didn't have a significant impact on us, from a margin impact it had more of an impact than it did related to volume. And sometimes, that will spill into the next quarter production and especially at the end of the quarter, like in September, can spill into the next quarter shipments as well.

我們在上個季度遇到的一些問題所產生的影響，其中許多都發生在冷加工的平坦區域。我們透過其他產品運輸彌補了很多。因此，從銷售的角度來看，它對我們沒有重大影響，從利潤影響來看，它的影響比與銷售相關的影響更大。有時，這會影響到下個季度的生產，特別是在季度末，例如 9 月份，也可能影響到下個季度的出貨量。

Okay. Did some of the upgrades planned in Q1, is that debottlenecking focused, are you outside of using third parties? Is the expectation, some of this is to be able to get volume increases?

好的。第一季是否計劃進行一些升級，重點是消除瓶頸，您是否不使用第三方？是否期望其中一些是為了能夠增加銷售量？

Yes. As we talked about, one of our big initiatives as we are in this quarter now, is a shutdown and rebuild a part of what's called our [A and K] line. And that is a critical piece of equipment between our 4 high hot rolling mill and our finishing operations. That equipment has been around for decades. It is not as reliable as it needs to be, which is why we're undertaking that. So that will allow us to promote more steady flow through our operations. In addition to that, we continue to look at what the future bottlenecks are 6 months, 12 months down the road and understand what makes the most sense as far as what we do in-house versus what we do via conversion.

是的。正如我們所說，我們本季的重大舉措之一是關閉並重建我們的 [A 和 K] 生產線的一部分。這是我們的四高熱軋機和精加工車間之間的關鍵設備。該設備已經存在了幾十年。它並不像需要的那樣可靠，這就是我們這樣做的原因。這將使我們能夠促進我們的營運更加穩定的流動。除此之外，我們繼續關注未來 6 個月、12 個月的瓶頸是什麼，並了解我們內部所做的事情與透過轉換所做的事情相比，什麼是最有意義的。

Okay. When we think about your mix and obviously, continued efforts to push down the lower margin, more commoditized chemicals, is your expectation that your gross margin ex raw materials can trend up towards healthy above 21% given your volume mix in backlog? Obviously, ex raw materials.

好的。當我們考慮你們的組合時，顯然，考慮到你們積壓的數量組合，你們是否期望你們的原材料毛利率能夠健康地上升到 21% 以上？顯然，前原材料。

It's all a matter of how you define certain words. I'll say, incrementally improve, okay? We are proud of where we are. To be 6 quarters in a row with raw material neutral levels at 21% is a number that we're very, very proud of. But we believe there is still more incremental opportunities, both on variable cost reductions throughout all of our operations and through taking advantage of where we can, the value we're providing, therefore, increasing our prices where appropriate. So we would say incremental increases are the best way to describe what we think we can do. But I meant in my script, what I said, we're not done with gross margin. And keep in mind, too, with higher shipment levels, we expect higher shipment levels volume-wise, in FY '24 versus '23 to get back over into the 5 million pounds a month or better. That's going to be helpful for absorption related costs as well. And some of that's production, although we are planning to reduce inventory levels but also just some of those fixed costs that are in the cost of goods sold area, we're going to get better absorption of those fixed costs. That will be helpful.

這完全取決於你如何定義某些單字。我會說，逐步提高，好嗎？我們為我們所處的位置感到自豪。連續 6 個季度原材料保持在 21% 的中性水平，這是我們非常非常自豪的數字。但我們相信，仍然存在更多增量機會，無論是在我們所有營運中降低可變成本，還是透過充分利用我們所提供的價值，因此在適當的情況下提高我們的價格。因此，我們會說增量成長是描述我們認為我們可以做的事情的最佳方式。但我的意思是，在我的劇本中，我所說的，我們的毛利率還沒結束。還要記住，隨著出貨量的增加，我們預計 24 財年的出貨量將比 23 財年恢復到每月 500 萬英鎊或更好。這也將有助於吸收相關成本。其中一些是生產，儘管我們計劃降低庫存水平，但也只是銷售商品成本範圍內的一些固定成本，我們將更好地吸收這些固定成本。這會有幫助的。

And one more thing I want to add, Steve, you talked about the CPI business. We really look at that as 2 separate businesses, okay? We've got some of the more commoditized alloys. That's where we look at, can we positively substitute some of our aero and power gen in for that. But we're full steam ahead on the more unique CPI alloys that go into what we call special projects and continuing to find new applications with our new alloys for that.

我還想補充一件事，史蒂夫，你談到了 CPI 業務。我們確實將其視為兩個獨立的業務，好嗎？我們有一些更商品化的合金。這就是我們所關注的地方，我們能否積極地用我們的一些空氣動力和發電機來取代它。但我們正在全力開發更獨特的 CPI 合金，這些合金將進入我們所謂的特殊項目，並繼續為此新合金尋找新的應用。

When we think about working down the revolver and part of that's working down backlog, I assume, in bringing down working capital a bit, that means either you continue to shift your mix by playing down the commoditized products. Obviously, the tailwind in aerospace does not seem to be slowing. So I'm just sort of trying to put all the pieces together to how you get there and how you're thinking about it versus how I sort of just laid it out.

當我們考慮減少左輪手槍以及減少積壓訂單時，我認為，在稍微減少營運資本方面，這意味著要么繼續透過淡化商品化產品來改變您的產品組合。顯然，航空航太領域的順風似乎沒有放緩。所以我只是想把所有的部分放在一起，看看你是如何到達那裡的，你是如何思考它的，而不是我剛剛提出的。

The most fun I have talking about cash flow is looking at how we increase our earnings in this company, okay? That's certainly is a part of that. The other thing that's happened though, is we have been able now to balance out what we are melting versus what we are shipping. We've been melting, especially in VIM, at capacity but where shipping levels have just didn't come up. So as they come up, that will more even out, which will allow us to do that. In addition, we have a significant amount of inventory, that inventory is positioned right and that we'll be able to ship in the short term since somewhat significant portion of that is finished inventory.

我談論現金流最有趣的是看看我們如何增加這家公司的收入，好嗎？這當然是其中的一部分。不過，發生的另一件事是，我們現在已經能夠平衡我們正在融化的東西和我們正在運輸的東西。我們的運力一直在下降，尤其是在 VIM，但運輸水準卻沒有上升。因此，當它們出現時，情況會更加均勻，這將使我們能夠做到這一點。此外，我們擁有大量庫存，庫存位置正確，我們能夠在短期內發貨，因為其中很大一部分是成品庫存。

Your next question is coming from Michael Leshock with KeyBanc Capital Markets.

您的下一個問題來自 KeyBanc Capital Markets 的 Michael Leshock。

I wanted to start off just following up on the unplanned outage at Kokomo. You had said it's a critical piece of equipment there that was down. Could you give any details on which asset it was? And when did it occur?

我想先跟進科科莫的意外停電事件。你說過這是重要的設備壞了。您能否提供有關該資產的詳細資訊？它是什麼時候發生的？

Sure. We have -- first of all, we have hundreds of pieces of equipment. So we -- reality is, we're dealing with outages on a regular basis and we normally don't talk about those. However, in September, we had a piece of equipment. Mike, you've heard of before. It's called the (inaudible) furnace, okay? It is a key piece of our cold-finished flat business and we had really 2 significant issues with the (inaudible) in September. And it's not only fixing it. It's -- when you have to get in that furnace, you have to take it down very slowly to temperature or to room temperature, address it and then bring it back up. So we had a significant amount of issues with that furnace in September. The good news is it's running very well right now.

當然。首先，我們擁有數百台設備。所以我們 - 現實是，我們正在定期處理中斷問題，但我們通常不會談論這些。然而，到了九月份，我們就有了一台設備。麥克，你以前聽過。它叫做（聽不清楚）熔爐，好嗎？這是我們冷加工平板業務的關鍵部分，我們在 9 月確實遇到了 2 個重大問題（聽不清楚）。而且它不僅僅是修復它。當你必須進入那個熔爐時，你必須非常緩慢地將其降至室溫或室溫，解決這個問題，然後再將其恢復。因此，我們在 9 月的熔爐方面遇到了許多問題。好消息是它現在運行得很好。

Got it. And then following up on that cold-finished flats opportunity. Could you talk about maybe the magnitude of what that could be as it relates to volumes and margins and where do you think you can get from there? And maybe in what time period can you get that business to where you think it could be?

知道了。然後跟進冷加工公寓的機會。您能否談談與銷售和利潤相關的可能的規模以及您認為可以從那裡獲得什麼？也許在什麼時間段內你可以讓該業務達到你認為可能的水平？

Well, as we had those issues in September, it affected absorption. So that will affect what we have in the upcoming quarter as far as absorption and some margin hits. The other side of that is, is we'll be able to ship more cold-finished flats, which is a good thing. Obviously, the first quarter, as Dan pointed out and as I pointed out in my script, nickel continuing to drop is a concern. Obviously, I've already said it once, I'll say it again, the 21% gross margin for 6 quarters in a row, that's raw material neutral. So as raw materials begin to create even additional headwinds, that's going to be off the top as far as margin.

嗯，由於我們在九月遇到了這些問題，它影響了吸收。因此，這將影響我們在下一個季度的吸收和一些利潤率的影響。另一方面是，我們將能夠運送更多的冷加工公寓，這是一件好事。顯然，正如丹所指出的和我在劇本中指出的那樣，第一季鎳價持續下跌令人擔憂。顯然，我已經說過一次了，我還要再說一遍，連續 6 個季度的毛利率為 21%，這是原材料中性的。因此，隨著原料開始帶來更多阻力，利潤率將大幅下降。

And one thing about the upgrade that we're talking about in Q1 to the [A and K] line, now that's part of kind of what feeds into cold-finished flats as well. That's going to provide some better reliability. And that's kind of a key component of when we talk about getting back to that 5 million pound plus shipments per quarter. That's kind of a key component of that.

關於我們在第一季談論的 [A 和 K] 系列升級的一件事，現在這也是冷加工公寓的一部分。這將提供更好的可靠性。當我們談論恢復每季 500 萬英鎊以上的出貨量時，這是一個關鍵組成部分。這是其中的關鍵組成部分。

And on the 777X program, I know there are some proprietary Haynes alloys on there, have you started to see activity there ahead of Boeing starting to produce? And should we expect that to benefit overall A&D pricing next year?

在 777X 項目上，我知道那裡有一些專有的海恩斯合金，您是否在波音開始生產之前就開始看到那裡的活動？我們是否應該預期這將有利於明年的整體 A&D 定價？

It's a slow start. If I depended on what I've heard about that engine and that plane for the last couple of years, I would have told you years ago, it was going to start to benefit us. So it's good news for us. It is 2 proprietary alloys, which we're very proud of. You know there's not going to be that many engines built but it gives us great exposure to the engine manufacturers for a future generation of engines also.

這是一個緩慢的開始。如果我相信過去幾年我所聽到的有關該發動機和那架飛機的信息，我幾年前就會告訴你，它將開始使我們受益。所以這對我們來說是個好消息。它是兩種專有合金，我們對此感到非常自豪。你知道不會製造那麼多發動機，但這也讓我們有機會接觸到下一代發動機的發動機製造商。

Then just lastly for me, I wanted to ask on other markets, pricing momentum that you're seeing there. I know it's a smaller part of the business but it was up meaningfully. Again, I know the pricing can swing quarter-to-quarter but is there any level of sustainability to that strong pricing there?

最後對我來說，我想問其他市場，你在那裡看到的定價動能。我知道這只是業務的一小部分，但它的成長意義重大。再說一遍，我知道定價可能會按季度波動，但這種強勁的定價是否具有可持續性？

Yes. I mean as you look at what goes in there, there's a lot of very different applications. And we are, as Mike mentioned, doing mix management in the CPI market. We're also doing it in the other markets as well. So as we, maybe back away from some of the lower-end commodity type of business, for example, desulfurization, FGD, flue-gas desulfurization that we've talked about in the past. As we back away from that, what's left in there is going to be a higher average selling price. Now this average selling price, we just did this quarter of $54.27, that's pretty rich. Will that vary from that number? Probably. You could see, if you look quarter-to-quarter, it bounces around quite a bit and that's a great number. Will it be sustainable? We'll have to see what we have remaining in that other market category and what that ASP is going to be.

是的。我的意思是，當你看看裡面的內容時，你會發現有很多非常不同的應用程式。正如麥克所提到的，我們正在 CPI 市場進行混合管理。我們也在其他市場這樣做。因此，我們可能會放棄一些低端商品類型的業務，例如我們過去談到的脫硫、FGD、煙氣脫硫。當我們放棄這一點時，剩下的平均售價將會更高。現在這個平均售價，我們本季剛做到的 54.27 美元，相當高了。這個數字會有所不同嗎？大概。你可以看到，如果你按季度查看，它會出現相當大的反彈，這是一個很大的數字。它會可持續嗎？我們必須看看我們在其他市場類別中還剩下什麼，以及平均售價會是多少。

Your next question is coming from Richard Evans at Mara River Capital Management.

您的下一個問題來自馬拉河資本管理公司的理查德·埃文斯。

Just wondering on the mix management within chemical, what kind of pounds roughly at the high value versus the commoditized? Have we got some idea of how much chemical might it shrink it?

只是想知道化學品的混合管理，高價值與商品化的重量大致是多少？我們知道多少化學物質可以使其收縮嗎？

Well, overall, when we look at what is kind of the volume alloys versus proprietary and specialty, maybe it's roughly 60%-40%, maybe a little higher on the volume type alloys. Now if you segregate that down to just CPI, it may even be a bit more. We kind of view it as 2 pieces. Half of it is commodity type alloys, half of it is more specialty alloys and in some cases, proprietary. So we're certainly not getting out of the commodity alloys completely but just some of those very low-end commodity alloys that is highly competitive and really difficult to make much money on. We'll focus our production capacity on the higher end products across the board.

嗯，總的來說，當我們看看體積合金與專有和特種合金的類型時，可能大約是 60%-40%，體積類型合金可能更高一些。現在，如果你將其單獨分解為 CPI，甚至可能會更高一些。我們將其視為兩部分。其中一半是商品型合金，一半是特殊合金，在某些情況下是專有合金。因此，我們當然不會完全放棄商品合金，而只是放棄一些非常低端的商品合金，這些合金具有很強的競爭力，而且很難賺到很多錢。我們將把生產能力全面集中在高端產品上。

Okay. And then just on the inventory sort of headwinds that you're flagging, so sort of bigger than you saw in Q4, given cobalt flattened out, looking at the LME price of nickel, it's clearly still going down but it doesn't seem to be dropping at a particularly higher rate than it has done for all of '23. So I'm just wondering why we're getting incrementally higher and higher headwinds from nickel, given the rate of decline doesn't seem to have massively increased.

好的。然後，就您所指出的庫存逆風而言，考慮到鈷價趨於平緩，比您在第四季度看到的要大一些，看看LME 鎳價，它顯然仍在下跌，但似乎並沒有下降.下降速度比 23 年全年的下降速度都要快。因此，我只是想知道為什麼我們對鎳的阻力越來越大，因為下降的速度似乎並沒有大幅增加。

Yes. It's been interesting. As I mentioned, this past year, because there's a lag impact of this as well, keep in mind. So this past year, the headwind that we had $12.6 million was mostly cobalt. There was a little bit of nickel in there but mostly cobalt. Cobalt's moderated because, as you mentioned, that price has stabilized. But nickel has continued to fall. So there's always a lag impact. So what we're expecting here, Q1 to be worse than Q4, is really the price decreases you saw even last quarter, leading all the way up through this quarter, even this month, nickel has dropped into the [7s]. So for us, it's particularly a sharp impact because we are all high-end nickel and cobalt-based alloys. So we do feel this, in my opinion, much stronger than some of the other companies with lower in nickel or even stainless steel type of metals that they sell. So we really see it very acutely and there's a lag impact. So what you're seeing in Q1 of '24, what we expect to see will be kind of the fall that we have already experienced in nickel. And that could even spill into Q2. We'll see where nickel goes from here.

是的。這很有趣。正如我所提到的，去年，因為這也存在滯後影響，請記住。因此，去年我們面臨的 1,260 萬美元的逆風主要來自鈷。裡面有一點鎳，但主要是鈷。正如您所提到的，鈷價格有所放緩，因為價格已經穩定。但鎳價卻持續下跌。所以總是存在滯後影響。因此，我們在這裡預計，第一季比第四季度更糟糕，實際上是上個季度的價格下跌，一直領先到本季度，甚至本月，鎳價已跌至 [7s]。所以對我們來說，這是一個特別尖銳的影響，因為我們都是高端鎳鈷基合金。因此，在我看來，我們確實感覺到這一點比其他一些銷售鎳甚至不銹鋼類型金屬含量較低的公司要強得多。所以我們確實非常敏銳地看到它並且存在滯後影響。因此，您在 24 年第一季看到的情況，我們預計會看到鎳價已經經歷過的下跌。這甚至可能會蔓延到第二季。我們將看看鎳的去向。

Yes. I mean I sort of get that but I mean, maybe something we have to talk about offline. But if you look at, at the start of '23, nickel was, what, maybe $30,000 a ton, now it's down. And by the end of this -- your reporting year, it already dropped to $18,000 a ton. It's already dropped to $17,000 now. I'm just amused why it's getting so much worse incrementally.

是的。我的意思是我有點明白這一點，但我的意思是，也許我們必須在線下討論一些事情。但如果你看看，23 年初，鎳的價格可能是每噸 3 萬美元，現在卻下跌了。到本報告年度結束時，它已經跌至每噸 18,000 美元。現在已經跌到17,000美元了。我只是覺得好笑，為什麼事情會變得越來越糟。

Yes. It's really just a lag impact. It peaked way back, when, about a year ago, maybe here recently at $12.80 a pound and it's really just continued to fall since then. So we've started feeling that incremental impact. But as that continues to fall, that will continue to build. And that's the flip kind of from the cobalt impact. Now we're feeling it on the nickel impact. So $12, down into the [7s], that's significant.

是的。這實際上只是一個滯後影響。大約一年前，它就達到了頂峰，也許最近是每磅 12.80 美元，從那時起它就一直在持續下跌。所以我們已經開始感受到這種增量影響。但隨著這一數字繼續下降，這一數字將繼續上升。這就是鈷撞擊造成的翻轉。現在我們感受到了鎳的影響。所以 12 美元，降到 [7s]，這是很重要的。

And remember, our 6-month approximate manufacturing lead times on VIM product. And what we're really dealing with here is the value of the scrap stream and what the value is now versus what the input cost was when it went in. So it does have something also to do with the lead times we have on our richest products.

請記住，我們 VIM 產品的大約製造交貨時間為 6 個月。我們在這裡真正處理的是廢料流的價值，以及現在的價值與進入時的投入成本相比。因此，它確實也與我們最富有的交貨時間有關。產品。

Okay. So if we see nickel price flatten out, it would be about 6 months from that flattening out till when we see in theory, no more headwind.

好的。因此，如果我們看到鎳價趨於平穩，那麼從趨於平穩到我們理論上看到不再有阻力，大約需要 6 個月的時間。

Yes, that's fair. Definitely more than one quarter but probably 6 months would be a good estimate. Yes.

是的，這很公平。肯定超過四分之一，但也許 6 個月是一個不錯的估計。是的。

Okay. And just in terms of backlog, I mean, if I look back to 2018, 2019, your backlog as a percentage of annual sales was more like 60%, 65% of annual sales. And now it's into the mid- to high 80s of annual sales. As we move forward and things normalize, should we expect that backlog to trend back down towards sort of more 60% of sales or sales grow, maybe people become more comfortable not needing to order as far in advance?

好的。就積壓而言，我的意思是，如果我回顧 2018 年、2019 年，你們的積壓佔年銷售額的百分比更像是年銷售額的 60%、65%。現在年銷售額已達 80 多歲。隨著我們向前邁進，事情趨於正常化，我們是否應該預期積壓訂單會回落至銷售額的60% 以上，或者銷售額會增長，也許人們會變得更舒服，不需要提前那麼長時間訂購？

I think what's happening here and I'll use aerospace as an example, okay? There is such an increase coming and I'll take the 737, approximately 290 planes in 2023, 660 in 2026. And then I'll just jump to the LEAP, 1,600 LEAP engines built in 2023, projections are 2,400 in 2025. So what we have is, customers continuing to focus on getting in line, in particular in our long lead time items, particular VIM products. So I believe the backlog will be in general terms where it is now because of the desire to make sure that this super cycle in aerospace, everyone's got the metal they need within the supply chain.

我想這裡發生了什麼，我會以航空航天為例，好嗎？會有這樣的成長，我會選擇 737，2023 年大約 290 架飛機，2026 年 660 架。然後我會跳到 LEAP，2023 年建造 1,600 架 LEAP 發動機，預計 2025 年為 2,400 架。那又怎樣？我們的情況是，客戶繼續專注於排隊，特別是在我們的長交貨期產品中，特別是VIM 產品。因此，我相信積壓訂單總體上將與現在一樣，因為我們希望確保在航空航太領域的這個超級週期中，每個人都能在供應鏈中獲得所需的金屬。

Okay. And then are you more exposed to Boeing or Airbus in terms of end market customers?

好的。那麼就終端市場客戶而言，您更接觸波音還是空中巴士？

I'd say on the engines, it's about the same. I would -- in airframe though, which is our titanium tubing, it's more Boeing.

我想說的是，在引擎上，情況大致相同。我會——不過在機身中，也就是我們的鈦管，它更像是波音的。

And your narrow-body versus wide-body, I guess you just have more content on wide-body because the engines are that much bigger?

至於你的窄體飛機與寬體飛機，我想你只是在寬體飛機上有更多的內容，因為引擎更大？

More content per engine but far less engines.

每個引擎的內容更多，但引擎卻少得多。

We have reached the end of the question-and-answer session. And I will now turn the call over to Mike Shor for closing remarks.

我們的問答環節已經結束。現在我將把電話轉給邁克·肖爾（Mike Shor）發表結束語。

Thank you, Holly. Thank you for your time today, everybody and thank you for your interest and your ongoing support of our company. We look forward to talking to you again next quarter.

謝謝你，霍莉。感謝大家今天抽出寶貴的時間，感謝大家對我們公司的關注與持續支持。我們期待下個季度再次與您交談。

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

今天的會議到此結束，您現在可以掛斷電話了。感謝您的參與。