Helios Technologies Inc (HLIO) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Helios Technologies fourth-quarter 2023 financial results. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎閱讀 Helios Technologies 2023 年第四季財務表現。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Tania Almond, Vice President of Investor Relations and Corporate Communications. Thank you. You may begin.

現在我很高興向您介紹主持人，投資者關係和企業傳播副總裁 Tania Almond。謝謝。你可以開始了。

Thank you, operator, and good day, everyone. Welcome to the Helios Technologies fourth-quarter 2023 financial results conference call. We issued a press release announcing our results yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that will accompany our conversation today.

謝謝您，接線員，大家好。歡迎參加 Helios Technologies 2023 年第四季財務業績電話會議。我們昨天下午發布了一份新聞稿，宣布了我們的結果。如果您沒有該版本，可以在我們的網站 hlio.com 上取得。您還可以在那裡找到伴隨我們今天談話的幻燈片。

On the line with me are Josef Matosevic, our President and Chief Executive Officer; and Sean Bagan, our Chief Financial Officer. They will review our fourth-quarter results along with our outlook for 2024. We will then open the call to your questions.

和我一起在線的是我們的總裁兼首席執行官約瑟夫·馬托舍維奇 (Josef Matosevic)；以及我們的財務長 Sean Bagan。他們將審查我們第四季度的業績以及我們對 2024 年的展望。然後我們將開始電話詢問您的問題。

If you turn to slide 2, you will find our Safe Harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from those presented today. These risks and uncertainties and other factors will be provided in our upcoming 10-K to be filed with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov.

如果您翻到投影片 2，您會找到我們的安全港聲明。如您所知，我們將在本次演示和問答環節中做出一些前瞻性陳述。這些陳述適用於受風險和不確定性以及其他可能導致實際結果與今天呈現的結果有重大差異的因素影響的未來事件。這些風險和不確定性以及其他因素將在我們即將向美國證券交易委員會提交的 10-K 中提供。您可以在我們的網站或 sec.gov 上找到這些文件。

I'll also point out that during today's call, we will discuss some non-GAAP financial measures, which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides. Please reference slide 3 through 6 now.

我還要指出，在今天的電話會議中，我們將討論一些非公認會計準則財務指標，我們認為這些指標有助於評估我們的績效。您不應孤立地考慮此附加資訊的呈現，也不應將其視為根據 GAAP 準備的結果的替代品。我們在今天的投影片隨附的表格中提供了可比較 GAAP 與非 GAAP 指標的調整表。現在請參考投影片 3 至 6。

With that, it's my pleasure to turn the call over to Josef.

至此，我很高興將電話轉給約瑟夫。

Tania, thank you, and welcome everyone. We delivered as recently committed for the fourth quarter. 2023 is now in our rear-view mirror. As many of you know, we started this journey to transform our business into an integrated operating company several years ago. As I reflect on 2023, it was a year of solid progress along with several macroeconomic challenges and geopolitical events. We kept our focus through it all and emerged as a more united and determined team. We continued to advance our strategy by remaining centered on three key elements.

塔妮亞，謝謝你，歡迎大家。我們兌現了最近承諾的第四季度的承諾。 2023 年已經出現在我們的後視鏡中。正如你們許多人所知，我們幾年前就開始了將業務轉型為綜合營運公司的旅程。回顧 2023 年，這是紮實進展的一年，同時也面臨一些宏觀經濟挑戰和地緣政治事件。我們始終保持專注，成為一支更團結、更堅定的團隊。我們繼續以三個關鍵要素為中心，推進我們的策略。

First, one of our major priorities were the investments we have consciously made in our manufacturing strategy. We expect they will drive operational excellence and position Helios for the growth opportunities we see before us. We invested in our Centers of Excellence by consolidating workflows and expanding capacity to address new business and broaden capabilities. As part of these activities, we relocated various operations and functions. The outcomes will increase efficiencies, provide the back-up capability needed to further manage risk, as well as expand lower cost regional manufacturing in India and Mexico.

首先，我們的主要優先事項之一是我們有意識地對製造策略進行投資。我們預計他們將推動卓越運營，並使 Helios 抓住我們面前的成長機會。我們透過整合工作流程和擴大能力來投資卓越中心，以解決新業務並擴大能力。作為這些活動的一部分，我們重新安置了各種營運和職能。其結果將提高效率，提供進一步管理風險所需的後備能力，並擴大印度和墨西哥的低成本區域製造。

Our two North American Hydraulics Centers of Excellence were fully operational starting in the fourth quarter, and we just opened our new electronics facility in Tijuana. We are finishing up the process to expand our capacity in Italy, where Faster just reached record sales levels for the full-year 2023. All these investments were critical for our future even as it somewhat impacted on our financial results for the year. We believe over the long-term this strategy will maximize shareholder value.

我們的兩個北美液壓卓越中心從第四季度開始全面運營，我們剛剛在蒂華納開設了新的電子工廠。我們正在完成擴大義大利產能的進程，Faster 剛剛在義大利達到了 2023 年全年創紀錄的銷售水準。所有這些投資對我們的未來都至關重要，儘管它在一定程度上影響了我們今年的財務表現。我們相信，從長遠來看，這項策略將實現股東價值最大化。

Second, we executed on our strategy to fill product and solution gaps, diversify revenues, and to build out our talent pool with acquisitions. With the addition of Schultes and i3 to add to our string of flywheels, we have assembled a collection of premium capabilities that make us incredibly tough to follow.

其次，我們執行了填補產品和解決方案差距、實現收入多元化並透過收購建立人才庫的策略。隨著 Schultes 和 i3 添加到我們的飛輪系列中，我們已經組裝了一系列高級功能，使我們難以跟隨。

Third, we continued our efforts to further diversify our markets and deepened our reach into existing ones. Even in the face of significant macro headwinds, we made the necessary investments in innovation and product development. We are solving customers’ most difficult design and production problems increasingly with integrated system solutions. We are well positioned to serve these opportunities which we expect can be significant growth contributors and will help define our future.

第三，我們持續努力進一步實現市場多元化，深化現有市場。即使面臨重大的宏觀阻力，我們仍然在創新和產品開發方面進行了必要的投資。我們越來越多地透過整合系統解決方案解決客戶最困難的設計和生產問題。我們已做好充分準備來抓住這些機會，我們預計這些機會將成為重要的成長貢獻者，並將有助於定義我們的未來。

Our transformation is nearly complete at this point. Now it's all about execution as we continue to elevate into a global integrated operating company. Realizing the market challenges we faced in the second half of the year, we took necessary actions to help protect the business. Lower volume clearly had the largest impact on our margins. We recognize the decision to continue our investments in the business, and the minor disruption from standing up the Centers of Excellence also contributed. Sean will talk more about the results as well as our financial priorities and our outlook for 2024.

至此，我們的轉型已接近完成。現在，隨著我們繼續提升為全球綜合營運公司，一切都取決於執行力。意識到下半年我們面臨的市場挑戰，我們採取了必要的行動來幫助保護業務。銷量下降顯然對我們的利潤率影響最大。我們體認到繼續投資業務的決定，以及建立卓越中心所造成的輕微幹擾也起到了一定作用。Sean 將更多地談論結果以及我們的財務優先事項和 2024 年的展望。

Sean, I will turn it over to you now, please.

肖恩，我現在就把它交給你。

Thank you, Josef and hello, everyone. Before I discuss our financial priorities for 2024, let me start with a review of fourth-quarter results, talking to slides 7 through 13. I believe the slides speak for themselves and provide quite a bit of detail, so I plan on hitting on some key points and providing additional color.

謝謝你，約瑟夫，大家好。在討論 2024 年的財務優先事項之前，讓我先回顧一下第四季度的業績，並討論投影片 7 至 13。我相信這些幻燈片不言而喻，並提供了相當多的細節，因此我計劃抓住一些關鍵點並提供額外的色彩。

Sales came in at the higher end of our most recent expectations for the quarter and the year due to stronger results from Balboa and a quicker catch up on hydraulics backlog. Compared with last year’s fourth quarter, we had a 4% improvement in the Americas, a 10% decline in EMEA, and a 5% decline in APAC which continued to be driven by softness in China.

由於巴爾博亞的業績強勁以及液壓系統積壓訂單的更快趕上，銷售額達到了我們對本季度和本年度最新預期的較高水平。與去年第四季相比，美洲地區成長了 4%，歐洲、中東和非洲地區下降了 10%，亞太地區下降了 5%，這繼續受到中國疲軟的推動。

As we cited on our last earnings call, the swift shifts we saw across several markets persisted, although we did see year-over-year growth in health and wellness in the fourth quarter for the first time since Q1 '22, granted the comp is off the low water mark. As a reminder, that market had a correction from its pandemic highs and contracted year over year during the first three quarters of 2023. Our industrial, marine, and recreational-based markets had some rapid shifts in the third quarter of 2023, also impacting the fourth quarter.

正如我們在上次財報電話會議上所引用的那樣，儘管我們確實看到第四季度的健康和保健業務自22 年第一季以來首次出現同比增長，但我們在幾個市場上看到的快速轉變仍然存在，前提是公司的比較脫離低水位線。需要提醒的是，該市場在 2023 年前三個季度從疫情高點進行了調整，並同比萎縮。我們的工業、船舶和娛樂市場在 2023 年第三季發生了一些快速變化，也影響了第四季。

Sequentially, while hydraulics was modestly improved, electronics declined across several categories. As expected, lower volume in the quarter heavily impacted gross profit and margin year over year and sequentially due to underabsorption. Gross profit declined $7.9 million, and gross margin contracted 360 basis points year over year to 28.6%. A testament to our efforts to contain margin erosion was the $2.5 million, or 7% decline of SEA expenses compared with the trailing third quarter.

隨後，雖然液壓系統略有改善，但電子設備在幾個類別中有所下降。正如預期的那樣，由於吸收不足，本季銷量下降嚴重影響了毛利和利潤率。毛利下降 790 萬美元，毛利率年減 360 個基點至 28.6%。與去年第三季相比，SEA 費用下降了 250 萬美元，即 7%，這證明了我們為遏制利潤率下降所做的努力。

The $35.2 million of quarterly SEA expenses was our lowest level in the year despite the run-rate addition of the two acquisitions in the first half. Our focus was on looking at what I define as flexible expenses or those that can be deferred without impacting our strategic imperatives. Year over year, the SEA expense was only modestly higher despite acquisitions.

儘管上半年兩項收購的運行率有所增加，但 3,520 萬美元的季度 SEA 支出是我們今年的最低水準。我們的重點是研究我所定義的彈性費用或那些可以推遲而不影響我們的策略所需的費用。儘管進行了收購，但與去年同期相比，SEA 費用僅略有增加。

Adjusted EBITDA in the quarter of $32.3 million, or 16.7 percentage of sales reflects the impact of lower volume and investments offset by our cost reduction initiatives. Volume is significant for the business as our decremental margins are being exasperated where we have expanded capacity. As volume starts to return, a positive operating leverage will show up.

本季調整後的 EBITDA 為 3,230 萬美元，佔銷售額的 16.7%，反映了我們的成本削減措施抵銷了銷售和投資減少的影響。銷量對業務來說意義重大，因為我們在產能擴張的情況下利潤下降的情況越來越嚴重。隨著交易量開始恢復，積極的營運槓桿將會顯現。

Our effective tax rate in the fourth quarter was 23.3% and 23.8% for the full year. This is driven by the regional mix of different tax jurisdictions. Diluted non-GAAP EPS of $0.38 in the quarter reflects the impacts I’ve discussed. It also includes an $0.08 impact from increased interest expense from higher interest rates and average debt balances compared with last year.

我們第四季的有效稅率為23.3%，全年的有效稅率為23.8%。這是由不同稅務管轄區的區域組合所推動的。本季稀釋後非 GAAP 每股收益為 0.38 美元，反映了我討論過的影響。與去年相比，還包括利率上升和平均債務餘額增加導致的利息支出增加 0.08 美元的影響。

Briefly by segment, on slide 12, you will find the fourth-quarter review of our hydraulics segment. Sales were down 5% over the prior-year period. Sales were down across several end markets as we cited the swift shifts we saw in the third quarter. We also saw channel inventory data take a small step up from the declines we had been seeing. We estimate about $4.2 million in sales were delayed due to supply chain shortages, improving again sequentially, which has leveled back to a more normalized range.

在投影片 12 上，您將按細分市場簡要了解我們液壓細分市場的第四季度回顧。銷售額較上年同期下降 5%。由於我們提到了第三季的快速變化，幾個終端市場的銷售額都出現下降。我們也看到通路庫存數據比我們之前看到的下降小幅上升。我們估計，由於供應鏈短缺，約 420 萬美元的銷售額被推遲，但隨後再次有所改善，已恢復到更正常的範圍。

We do not plan to continue to breakout this metric going into 2024 unless it becomes more impactful again. We had a $1.6 million favorable foreign exchange impact to the segment compared to the prior-year period. Sequentially, hydraulics modestly improved by $1.7 million. Gross profit declined $7.4 million year over year, resulting in gross margin contraction of 390 basis points as acquisitions and pricing did not fully offset lower volume, restructuring costs, and higher wage and benefit costs. Sequentially, gross profit modestly increased while gross margin contracted 30 basis points.

我們不打算在 2024 年繼續突破這項指標，除非它再次變得更具影響力。與去年同期相比，我們對該部門產生了 160 萬美元的有利外匯影響。隨後，液壓系統略微改善了 170 萬美元。毛利年減 740 萬美元，導致毛利率收縮 390 個基點，原因是收購和定價未能完全抵銷銷售下降、重組成本以及薪資和福利成本上升。隨後，毛利小幅增長，而毛利率則收縮 30 個基點。

SEA expenses declined sequentially $1.5 million or 7% compared with the third quarter. Our cost containment measures helped to overcome the run-rate impacts of acquisitions, as well as inflation with labor and operating costs while maintaining our investments in R&D.

與第三季相比，SEA 支出較上季下降 150 萬美元，即 7%。我們的成本控制措施有助於克服收購對運作率的影響，以及勞動力和營運成本的通貨膨脹，同時維持我們對研發的投資。

Please turn to slide 13, and we’ll discuss the electronics segment. Given its US sales concentration, foreign currency has nominal effects for this segment currently. Year over year, electronics sales improved by $3.9 million or 7%, including $2.3 million in revenue from acquisitions. Approximately $3.2 million in sales were delayed due to the supply chain, which also declined in this segment sequentially.

請翻到投影片 13，我們將討論電子領域。鑑於其銷售集中於美國，外匯目前對該細分市場有名義影響。電子產品銷售額年增 390 萬美元，即 7%，其中包括來自收購的 230 萬美元收入。由於供應鏈的原因，約 320 萬美元的銷售額被延遲，該細分市場的銷售額也連續下降。

As we cited last quarter, several markets had rapid shifts in order timings that impacted fourth quarter with sales down 14% sequentially, though health and wellness was up double digits year over year. We have been encouraged by the trends we have been seeing in health and wellness so far this year. We expect to have now lapped the tougher comps and are planning to deliver growth once again in that end market.

正如我們上季度提到的，一些市場的訂單時間發生了快速變化，影響了第四季度，銷售額環比下降了 14%，儘管健康和保健銷售額同比增長了兩位數。今年迄今為止，我們在健康和保健領域看到的趨勢令我們感到鼓舞。我們預計現在已經超越了更艱難的競爭，並計劃在該終端市場再次實現成長。

Material costs, underabsorption, and sales volume and mix impacted gross profit which was down $500,000 year over year, resulting in gross margin contraction of 260 basis points. SEA expenses were down 6% compared with last year and down 9% compared with the trailing third quarter. As noted with hydraulics, we are executing a disciplined focus on cost containment efforts while maintaining R&D investments.

材料成本、吸收不足以及銷量和組合影響了毛利，年減 50 萬美元，導致毛利率收縮 260 個基點。SEA 費用與去年相比下降了 6%，與去年第三季相比下降了 9%。正如液壓領域所指出的，我們在維持研發投資的同時，嚴格執行成本控制工作。

Please turn to slide 14 for a review of our cash flow. Given the macro challenges we have been managing through, we are pleased with the free cash flow that was generated during the quarter. We will look to build upon this momentum in 2024. We generated cash from operations of $33.7 million, our highest level of the year on the lowest topline quarter. This demonstrates disciplined working capital management and strong cash conversion. We had free cash flow of $25 million in the quarter measurably improved over the prior three quarters of 2023.

請翻到幻燈片 14 回顧我們的現金流。考慮到我們一直在應對的宏觀挑戰，我們對本季產生的自由現金流感到滿意。我們希望在 2024 年繼續保持這一勢頭。我們從營運中產生了 3,370 萬美元的現金，這是我們今年收入最低季度的最高水準。這顯示嚴格的營運資金管理和強勁的現金轉換。本季我們的自由現金流為 2,500 萬美元，較 2023 年前三個季度有了顯著改善。

Capital expenditures of $8.8 million was 4.6% of sales for the quarter. This marks near completion of this round of investments in our footprint realignments, capacity and capability upgrades. For the year, capital expenditures was 4% of sales or $34.3 million. For 2023, adjusted free cash flow was $52.3 million with a conversion rate of 139%, the highest it has been in the last three years.

資本支出為 880 萬美元，佔該季度銷售額的 4.6%。這標誌著我們這一輪足跡調整、產能和能力升級的投資即將完成。今年，資本支出佔銷售額的 4%，即 3,430 萬美元。2023年，調整後自由現金流為5,230萬美元，轉換率為139%，為過去三年來的最高水準。

Turning to slide 15. Our balance sheet was stable in the fourth quarter with continued financial flexibility. At year end, cash and cash equivalents were $32.4 million, and we had $200.1 million available on our revolving lines of credit, providing us ample liquidity as we entered fiscal 2024. While we spent $34.3 million in capital expenditures and $114 million for acquisitions or about $148 million in investments during 2023, our debt at year end was up just $79 million.

轉到投影片 15。我們的資產負債表在第四季度保持穩定，並保持了財務靈活性。截至年底，現金和現金等價物為 3,240 萬美元，我們的循環信貸額度有 2.001 億美元，為我們進入 2024 財年提供了充足的流動性。雖然 2023 年我們花了 3,430 萬美元的資本支出和 1.14 億美元的收購費用或約 1.48 億美元的投資費用，但我們年底的債務僅增加了 7,900 萬美元。

Further, we paid down approximately $20 million of debt during the fourth quarter. At year end, our net debt to adjusted EBITDA leverage ratio was 3.01 times. We are prioritizing debt reduction in 2024 and moving below 2.5 times. Ultimately, as we get closer to the lower end of our 2 to 3 times targeted range, we have the ability to flex up for acquisitions and other investments.

此外，我們在第四季還清了約 2,000 萬美元的債務。截至年底，我們的淨負債與調整後 EBITDA 槓桿率為 3.01 倍。我們優先考慮在 2024 年削減債務並降至 2.5 倍以下。最終，當我們接近 2 到 3 倍目標範圍的下限時，我們有能力靈活地進行收購和其他投資。

Turning to slides 16 to 18, we are providing our initial expectations for 2024. Our estimates do not include the large systems sales projects we have talked about. Once those orders are secured and production schedules are agreed upon, we will update accordingly.

轉向幻燈片 16 至 18，我們提供了 2024 年的初步預期。我們的估計不包括我們談到的大型系統銷售項目。一旦獲得這些訂單並商定生產計劃，我們將進行相應更新。

For 2024, we expect revenue in the range of $840 million to $860 million dollars. This represents moderate growth of just over 2% at the midpoint of the range. We expect adjusted EBITDA for the year of about $163 million to $180 million for low single to double-digit growth. This represents an adjusted EBITDA margin slightly over 20% at the midpoint of the range. As the markets recover and our volumes grow, our newly expanded capacity utilization will improve resulting in our incrementals driving our adjusted EBITDA margins to scale over time.

2024 年，我們預計營收在 8.4 億美元至 8.6 億美元之間。這顯示該區間中點的成長率略高於 2%。我們預計今年調整後的 EBITDA 約為 1.63 億至 1.8 億美元，實現低個位數至兩位數成長。這表示調整後的 EBITDA 利潤率略高於該範圍中點的 20%。隨著市場的復甦和我們的銷售成長，我們新擴大的產能利用率將得到改善，從而導致我們的增量推動我們調整後的 EBITDA 利潤率隨著時間的推移而擴大。

Additionally, as we get specked into new system solutions, including recurring software opportunities, these will be very sticky in nature and enable additional accretive margin growth. With the cost measures we have taken, paired with the non-recurrence of certain items, we expect our net income to improve measurably to a range of $50 million to $63 million, strong double-digit increases on modest low single-digit topline growth.

此外，當我們進入新的系統解決方案（包括重複出現的軟體機會）時，這些解決方案本質上將非常具有黏性，並能實現額外的利潤成長。透過我們採取的成本措施，再加上某些項目不再重複發生，我們預計我們的淨利潤將顯著提高到5000 萬美元至6300 萬美元的範圍，在溫和的低個位數收入增長的基礎上實現強勁的兩位數成長。

We expect the first half of 2024 to be tougher on a comparable basis while the back half of the year to increasingly grow on a year-over-year basis. For the first quarter, we expect sequential top and bottomline improvement with revenues likely in the range of $205 million to $210 million with adjusted EBITDA margins sequentially improving to approximately 17% to 18%.

我們預計 2024 年上半年在可比較基礎上將更加艱難，而下半年將較去年同期成長。對於第一季度，我們預計營收和利潤將連續改善，營收可能在 2.05 億美元至 2.1 億美元之間，調整後的 EBITDA 利潤率將連續改善至約 17% 至 18%。

Looking to slide 19, I want to review with you our financial priorities for 2024 that Josef mentioned. This year is all about execution and driving performance that establishes the underlying financial discipline and structure to deliver returns on our investments.

看投影片 19，我想與您一起回顧約瑟夫提到的 2024 年我們的財務優先事項。今年的重點是執行和推動業績，建立基本的財務紀律和結構，以實現我們的投資回報。

We have clear financial priorities in 2024. One, execute on our profitable sales growth plan by realizing operating leverage inherent in our business while fully instilling investments and cost discipline; Two, shorten our cash conversion cycle through sustainable working capital improvement initiatives; and three, reduce debt utilizing the free cash flow conversion proceeds.

我們有明確的 2024 年財務優先事項。第一，透過實現我們業務固有的營運槓桿，同時充分灌輸投資和成本紀律，執行我們的獲利銷售成長計​​劃；第二，透過永續的營運資本改善措施縮短我們的現金轉換週期；第三，利用自由現金流轉換收益減少債務。

We know execution is critical in delivering our commitments this year as we strive for more predictable results in 2024. We expect this renewed financial focus will in turn elevate Helios to be the scalable, integrated operating company into which we are evolving. With these priorities, we expect to deliver continually improving earnings that will drive returns that exceed our cost of capital on the investments we have made.

我們知道，執行對於兌現我們今年的承諾至關重要，因為我們努力在 2024 年取得更可預測的結果。我們預計，這種新的財務重點將反過來將 Helios 提升為我們正在發展的可擴展的綜合營運公司。透過這些優先事項，我們期望實現持續改善的收益，從而帶來超過我們投資資本成本的回報。

So let me turn it back to Josef for some closing remarks.

讓我把它轉回給約瑟夫做一些結束語。

Thanks so much, Sean. We appreciate the financial structure and discipline you are embedding into the organization. I am very encouraged about 2024 and our future. It is about keeping our focus with tenacity on our goals. We are executing our plan and advancing the organization to an integrated operating company that can deliver top-tier margins, cash flow, and growth.

非常感謝，肖恩。我們讚賞您融入組織的財務結構和紀律。我對 2024 年和我們的未來感到非常鼓舞。這是關於我們堅持不懈地專注於我們的目標。我們正在執行我們的計劃，並將該組織推進為一家能夠提供頂級利潤、現金流和成長的綜合營運公司。

What we have done over the last several years has created the foundation from which we can now elevate. It is thanks to the dedicated, talented people that work for Helios Technologies and its family of companies that we are so well positioned. We are creating sticky, critical, integrated solutions that provide improved productivity and efficiencies with lower life cycle costs for our customers. We are ready, and I believe as markets recover, the next few years look very good for Helios.

我們過去幾年所做的一切為我們現在的提升奠定了基礎。正是由於 Helios Technologies 及其旗下公司的敬業、才華橫溢的員工，我們才處於如此有利的地位。我們正在創建黏性、關鍵、整合的解決方案，為客戶提供更高的生產力和效率，並降低生命週期成本。我們已經準備好了，我相信隨著市場的復甦，未來幾年對 Helios 來說將會非常美好。

With that, let's open up the lines for Q&A, please.

現在，讓我們開始問答環節。

(Operator Instructions) Chris Moore, CJS Securities.

（操作員指令）Chris Moore，CJS 證券。

Start maybe from an end-market perspective, just trying to understand which end markets still have the lowest visibility and how you're looking at any potential improvement throughout the year in those markets?

也許從終端市場的角度開始，只是想了解哪些終端市場的可見度仍然最低，以及您如何看待這些市場全年的潛在改善？

As we got into the fourth quarter, a lot of the same market trends that we cited on the third-quarter call persisted. As we get into the new year, we're seeing pockets of recovery. So it's break it between the hydraulics and electronics segment. Certainly within hydraulics, the construction area and industrial area have been mixed.

當我們進入第四季時，我們在第三季電話會議上引用的許多相同的市場趨勢仍然存在。進入新的一年，我們看到了一些復甦。因此，它打破了液壓和電子領域之間的界限。當然，在水力學領域，建築領域和工業領域是混合在一起的。

And then as you go over to the electronics segment, certainly the rec products, the marine are the ones that persisted most heavily. But really encouragingly has been the health and wellness turnaround and start to see those sequential gains and year-over-year uptick that we saw in the fourth quarter for the first time from the post-pandemic low watermark.

然後當你進入電子領域時，當然是娛樂產品，海洋產品是最持久的產品。但真正令人鼓舞的是健康和保健方面的轉變，並開始看到我們在第四季度首次從大流行後的低水位線中看到的連續增長和同比上升。

Got it. Appreciate that. Maybe switch gears a little bit. Can you talk a little bit about the mix of OEM and distributors in '23 and the expectation in '24? Is that going to -- Do you expect that to change much?

知道了。感謝。也許稍微切換一下。您能談談23年OEM和分銷商的組合以及24年的期望嗎？這會——你預計會有很大改變嗎？

Yeah. So we did continue to trend more towards OEM in 2023. And a part of that is just us getting closer to the customer, being an extension of their existing engineering team to help them with new product development. Then year over year, we saw that go up about 5 points. So in 2022, the OEMs are about 55% of our sales; 2023, just over 60%. And if anything, we think that trend to continue again as we get closer to our customers.

是的。因此，2023 年我們確實繼續傾向 OEM。其中一部分就是我們更貼近客戶，成為他們現有工程團隊的延伸，幫助他們開發新產品。然後，我們看到這一數字逐年上升了約 5 個百分點。所以到2022年，OEM約占我們銷售額的55%； 2023 年，略高於 60%。如果有的話，我們認為隨著我們與客戶的距離越來越近，這種趨勢將再次持續下去。

Awesome. That's very helpful. And maybe just the last one, cash flow. Obviously, very strong quarter despite relatively low revenue. Maybe talk a little bit more about cash flow expectations for '24 and capital allocation thoughts at this point?

驚人的。這非常有幫助。也許只是最後一個，現金流。顯然，儘管收入相對較低，但這個季度非常強勁。或許可以多談談 24 世紀的現金流預期和此時的資本配置想法？

So in terms of the capital allocation here, as previously communicated, our investments were focused in three planned areas. One, the manufacturing operations piece that will allow us to clearly avoid duplication in costs in materials and logistics as we have developed the Centers of Excellence. It will also provide us a better cost structure and the proper leverage, improved efficiencies, a much better customer experience and lead times. And then, as we continue to see the market recover, it will clearly improve our gross margins back to more historical levels. What I call it, it gives us better pricing power and purchasing power, too, as we don't have duplication in supply chain sitting in two, three facilities.

因此，就資本配置而言，如同先前所傳達的，我們的投資主要集中在三個計畫領域。第一，製造營運部分將使我們能夠清楚地避免材料和物流成本的重複，因為我們已經建立了卓越中心。它還將為我們提供更好的成本結構和適當的槓桿、提高的效率、更好的客戶體驗和交貨時間。然後，隨著我們繼續看到市場復甦，我們的毛利率顯然會提高到歷史水平。我所說的，它也為我們提供了更好的定價能力和購買力，因為我們的供應鏈沒有重複分佈在兩三個設施中。

The second investment area was in new product development consistent with our strategy to protect our business and integrate the new acquired company and to gain additional momentum on the sticky solutions we have been communicating. The third piece was investment in additional capacity to support a step level growth with subsystem and system sales and new end markets.

第二個投資領域是新產品開發，這符合我們的策略，以保護我們的業務並整合新收購的公司，並為我們一直在溝通的黏性解決方案獲得額外的動力。第三部分是對額外產能的投資，以支援子系統和系統銷售以及新終端市場的階梯式成長。

So all three combined in terms of capital allocation is pretty much wrapped up besides our first allocation, and our expectation will be that this transformation was really important to position us not only to grow but to grow profitably with stronger margins over time, very sticky solution, and a highly flexible balance sheet. So that's in terms of capital allocation where we stand today.

因此，除了我們的第一次分配之外，這三者在資本配置方面的結合幾乎已經完成，我們的期望是，這種轉型對於我們不僅能夠增長而且能夠隨著時間的推移以更高的利潤率實現獲利成長非常重要，這是非常黏性的解決方案，以及高度靈活的資產負債表。這就是我們今天的資本配置。

Terrific. I will leave it there. I really appreciate it, guys.

了不起。我會把它留在那裡。我真的很感激，夥計們。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc 資本市場。

This is David Tarantino on for Jeff. Maybe could you give us an update on what you're seeing from an underlying demand perspective across the businesses, what was destocking versus real underlying slowing in the quarter? I just wanted to dig into the comment that you saw channel inventory step-up in hydraulics in 4Q, so just wanted to see if we still have some destocking headwinds moving into 2024, or how that's expected to progress?

我是大衛·塔倫提諾為傑夫配音。或許您可以為我們介紹一下您從各個企業的潛在需求角度看到的最新情況，本季去庫存與實際潛在放緩的情況如何？我只是想深入探討一下您在第四季度看到液壓渠道庫存增加的評論，所以只是想看看進入 2024 年我們是否仍然面臨一些去庫存的阻力，或者預計進展如何？

Yeah. So I would characterize a small uptick in the hydraulics distributor inventory, not anything significant movement there. I think from more of an end market and a demand perspective, how that's translating into orders for us, clearly seeing an uptick and partially why we're guiding up for next year. And it's truly across most of our businesses and markets with the exception of that marine rec products, where we continue to see challenges.

是的。因此，我認為液壓經銷商庫存略有上升，但沒有任何重大變化。我認為更多地從終端市場和需求的角度來看，這如何轉化為我們的訂單，清楚地看到了成長，這也是我們明年指導的部分原因。這確實存在於我們的大多數業務和市場中，但海洋休閒產品除外，我們在這方面仍然面臨挑戰。

From an [AG] perspective, it's a little bit more of a push-out or a delay in orders, not so much a -- too much drop in demand there. And then as we highlighted that health and wellness segment continues to grow both sequentially and year over year very nicely. And we expect within that hydraulics segment that distributor inventory to be supportive of growth year over year.

從[AG]的角度來看，這更多的是訂單的推出或延遲，而不是需求的大幅下降。然後，正如我們所強調的那樣，健康和保健領域繼續連續增長和逐年增長，非常好。我們預計在液壓領域，經銷商庫存將支援逐年成長。

And, David, I would just add a little color that sometimes that distributors step up in the fourth quarter can be a little seasonal just building going into the new year. So we've seen that historically as well.

而且，大衛，我想補充一點，有時經銷商在第四季度的加強可能會有點季節性，只是進入新的一年。所以我們在歷史上也看過這一點。

Okay. Great. That makes sense. And then maybe could you give us a better understanding of the moving parts in the margins between the businesses in the quarter, just maybe particularly relative to some of the operational headwinds experienced last quarter. It sounds like maybe those have abated. So maybe this quarter mostly just on lower volume? Maybe just give some color there.

好的。偉大的。這就說得通了。然後，也許您可以讓我們更了解本季各業務之間利潤率的變動部分，尤其是相對於上季經歷的一些營運逆風而言。聽起來這些可能已經減弱了。那麼，也許這個季度主要只是銷量下降？也許只是給那裡一些顏色。

Yeah, David. Clearly, volume was the biggest biggest driver behind the headwinds on the margins, coupled by finishing and tempering off those investments we have made. So that's pretty much the two key reasons, David. I don't know if you wanted something to learn on that one?

是的，大衛。顯然，成交量是利潤率逆風背後的最大推動因素，再加上我們已經進行的投資的完成和調整。所以這幾乎是兩個關鍵原因，大衛。不知道你是否想從這方面學到一些東西呢？

Okay, great, and maybe if I (multiple speakers)

好吧，太好了，也許如果我（多個發言者）

Hey, David. I'm just going to highlight, again -- it is highlighted with that health and wellness segment coming back. It's off a very low base. And so just from a mix perspective, the margins aren't there that support the electronics segment margin or even hydraulics. And so just from an overall company mix perspective, that had a little bit of headwind. And all the capacity we're bringing on certainly added some fixed costs that we historically haven't had but we're going to need as we get into the next year.

嘿，大衛。我只是想再次強調一下——健康和保健部分的回歸凸顯了這一點。它的基礎非常低。因此，僅從混合角度來看，利潤率無法支撐電子部門甚至液壓部門的利潤率。因此，僅從公司整體組合的角度來看，這存在一些阻力。我們帶來的所有產能肯定會增加一些固定成本，這是我們歷史上沒有的，但進入明年我們將需要。

Okay, great. And maybe if I could sneak one more on that just, could you give us some color on the moving parts in the margin guide, just particularly how you balance those longer-term investments we've been making versus controlling causes and markets remain a little bit weaker?

好的，太好了。也許如果我可以再偷偷地談一下這一點，您能給我們一些關於保證金指南中移動部分的說明嗎，特別是您如何平衡我們一直在進行的長期投資與控制原因和市場仍然存在一點點弱一點？

Yeah. So our expectation is, we're going to grow our gross profit margins. We talked a lot about our cost management efforts and measures we took throughout the second half of the year when we saw some topline market weakness materializing. Certainly, we expect to continue to invest in the business. We will expand our R&D expenditures and just be very measured on layering in costs, so we don't get ahead of ourselves.

是的。因此，我們的期望是，我們將提高毛利率。我們談論了很多關於我們下半年的成本管理工作和措施，當時我們看到一些主要市場疲軟的情況出現。當然，我們希望繼續投資該業務。我們將擴大研發支出，並且在成本分層上非常謹慎，這樣我們就不會超前。

Great.

偉大的。

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

I guess, question on the guidance on the -- I'll start with the step-up from 4Q to 1Q. It's a pretty nice sequential step-up, which I don't think is really seasonally typical for you guys. Obviously, there's a lot of disruption at the moment. But maybe you can provide a little more color on on what's driving that sequential step-up from 4Q to 1Q?

我想，關於指導的問題——我將從第四季到第一季的升級開始。這是一個相當不錯的連續升級，我認為這對你們來說並不是真正的季節性典型。顯然，目前存在著許多幹擾。但也許您可以提供更多關於推動從 4Q 到 1Q 連續升級的因素的資訊？

And then if you run rate that through the rest of the year, it doesn't seem like you've got a very heroic ramp-up in revenue to get to the full-year guidance like 4 x $205 million would get you that $820 million and 4 x $210 million would get you to $840 million, which is only just below where the full-year guidance is. So any commentary you can give us on on what kind of underlying market demand improvement you're baking into that full-year guidance?

然後，如果你在今年剩下的時間裡進行評級，你似乎並沒有實現收入的大幅增長來達到全年指導，比如 4 x 2.05 億美元會讓你得到 820 美元100 萬加4 x 2.1 億美元將使您達到8.4 億美元，僅略低於全年指引值。那麼您可以就您將哪些潛在市場需求改善納入全年指導中向我們發表評論嗎？

Yeah, Nathan. So let me maybe start with your second question here. When we built out the budget here and having received significant feedback from pretty much all of you guys, we felt, as it stands right now and what we see right now, we wanted to take a very realistic approach to our guidance. And so we feel comfortable with what we have guided the Street to. That's number one.

是的，內森。那麼就讓我從你的第二個問題開始吧。當我們在這裡制定預算並收到幾乎所有人的重要回饋時，我們覺得，就目前情況和我們現在所看到的情況而言，我們希望對我們的指導採取非常現實的方法。因此，我們對華爾街的引導感到滿意。這是第一名。

And number two, in terms of your first question, I think our Q4 step-up to Q1 with the low watermark and some improved visibility in the health and wellness drives that growth.

第二，就你的第一個問題而言，我認為我們第四季度向第一季度的提升，水位線較低，並且健康和保健方面的知名度有所提高，推動了這一增長。

The only other color I'd add there, Nathan, is just in reference to the low watermark. I would suggest that our fourth quarter was way lower than what you would previously have seen in other fourth quarters, and so the step-up to Q1 looks greater. But obviously, we're almost two months into the quarter, so we have pretty good line of sight into that first quarter number. So we feel pretty good, and that's why we tried to be pretty specific on that range for the first quarter with our prepared remarks.

我要添加的唯一其他顏色，Nathan，只是參考低水印。我建議我們第四季度的業績比您之前在其他第四季度看到的要低得多，因此第一季的提升看起來更大。但顯然，我們已經進入本季近兩個月了，所以我們對第一季的數字有很好的了解。所以我們感覺很好，這就是為什麼我們試圖透過準備好的評論來明確第一季的範圍。

But it's not isolated to one segment. Both segments expected to grow, stepping up from Q4 to Q1. And as you highlight, as we get into the other quarters, doing that kind of $210 million run rate math, that's $840 million, so not levels that the company hasn't delivered in the past. And so we've got some confidence there that we can deliver those.

但它並不是孤立於某個細分市場的。這兩個細分市場預計都會成長，從第四季上升到第一季。正如您所強調的，當我們進入其他季度時，進行 2.1 億美元的運行率計算，即 8.4 億美元，所以不是該公司過去未交付的水平。因此，我們有信心能夠實現這些目標。

And then the EBITDA margin guidance, you've got 17% to 18% for the first quarter and the full year at slightly over 20%. So we should be expecting to exit the year at something more like 22%, 23% EBITDA margins. And that's the jumping off point as we go into 2025. And if there's not a huge ramp-up in volume as we go through 2024, what drives that margin expansion up 400, 500 basis points as we go through the year?

然後是 EBITDA 利潤率指導，第一季為 17% 至 18%，全年略高於 20%。因此，我們應該預期今年的 EBITDA 利潤率約為 22%、23%。這就是我們進入 2025 年的起點。如果到 2024 年銷售量沒有大幅增加，那麼是什麼推動利潤率在這一年成長 400、500 個基點？

Yes. So directionally, yes, I think we can exit in that 22%-ish range as we get into 2025 by the end of 2024, I think, what steps it up over time. So a couple of things, first is our pricing effect that we typically do in the fourth quarter. A lot of that doesn't materialize until later in the first quarter and then into the second quarter. So that will help us.

是的。所以從方向上來說，是的，我認為我們可以在 2024 年底進入 2025 年時退出 22% 左右的範圍，我認為，隨著時間的推移，這一比例會逐步上升。因此，有幾件事，首先是我們通常在第四季度進行的定價效應。其中許多直到第一季晚些時候和第二季才會實現。這對我們有幫助。

And then secondly, as we highlighted, the volume in all the efforts we've done this year on the backend investments that Josef referenced on our Centers of Excellence, as we continue to push more volume through that, leveraging that fixed cost base, will help.

其次，正如我們所強調的，我們今年在約瑟夫在我們的卓越中心提到的後端投資方面所做的所有努力的數量，隨著我們繼續利用固定成本基礎推動更多的數量，將幫助。

And then finally, that Balboa recovery cannot be underestimated how quickly that dropped. If you think about the cost structure that we have for that operation with our Tijuana facility, it's lower cost than other places. And so as the volume increases, you get a bigger incremental drop than our other businesses.

最後，巴爾博亞的復甦速度下降的速度不容小覷。如果您考慮我們蒂華納工廠的營運成本結構，您會發現它的成本比其他地方要低。因此，隨著銷售量的增加，您會比我們的其他業務出現更大的增量下降。

And I will just make one more on the ag machinery system sales expectation. Is it still your expectation that that's going to go out on the 2025 model year? And if so, when would those orders need to be placed in order for you to supply the customer?

我將再談一談農業機械系統的銷售預期。您是否仍期望這款車會在 2025 年車型上推出？如果是這樣，您需要什麼時候下這些訂單才能向客戶供貨？

Nathan, I think you know this is another area that we've gotten a lot of feedback from everyone on the call. And I think we want to be cautious about trying to set a very specific expectation around any one customer and the deal, right? But I think what we'll add just at a high level is, we've been very encouraged by the number of end markets that we're seeing increasing interest from related to system sales and potential conversations.

內森，我想你知道這是我們從通話中的每個人那裡得到大量回饋的另一個領域。我認為我們要謹慎對待針對任何一位客戶和交易設定非常具體的期望，對吧？但我認為我們要補充的是，我們對終端市場的數量感到非常鼓舞，我們看到與系統銷售和潛在對話相關的興趣越來越大。

And even -- I know we've talked about kind of commercial food service. We've talked about ag. We've talked about construction, industrial. There's even some expanded areas like white goods. Think about things like laundry, dishwashing, things like that. So there's just more and more opportunities that seem to be popping up on the radar.

甚至 - 我知道我們已經討論過商業食品服務。我們已經討論過ag。我們談到了建築業、工業業。甚至還有一些擴展領域，例如白色家電。想想洗衣服、洗碗之類的事情。因此，雷達上似乎出現了越來越多的機會。

I think there's a lot of opportunities for 2025 and beyond product cycles. And I think we want to stay focused on just keeping our nose to the grindstone executing. And then as soon as we get any of these across the finish line, we'll obviously let everybody know.

我認為 2025 年及以後的產品週期有很多機會。我認為我們希望繼續專注於緊鑼密鼓地執行。一旦我們完成其中任何一個任務，我們顯然會讓每個人都知道。

Fair enough.

很公平。

Mig Dobre, Baird.

米格·多布雷，貝爾德。

Just to follow up on the conversation with Nathan on the system sales point. You left it out of guidance for '24, but since you're calling it out specifically as being left out of guidance, are we to understand that there is a better-than-zero chance that you could actually have some benefit in 2024 from these system sales, or is this more of a 2025 or 2026 potential benefit? I guess, we're all asking the same question, trying to understand what the sales cycle would look like for these system sales.

只是為了跟進與 Nathan 關於系統銷售點的對話。您將其排除在 24 年的指導之外，但既然您明確指出將其排除在指導之外，我們是否可以理解，您在 2024 年實際上可以從以下方面受益的可能性大於零：這些系統銷售，或者這更多是2025 年或2026 年的潛在收益？我想，我們都在問同樣的問題，試圖了解這些系統銷售的銷售週期是什麼樣的。

I think you opening with better-than-zero chance, you are pretty accurate. Like Tania said, and I want to reiterate this is, it continues to be very heavy lifting on the subsystem and on the recurring revenue model that we have been communicating. We want to be good stewards here and get the feedback from our investors and analysts and the path continues. And we will communicate it as we get it through the finish line and have our production schedules fully identified and are actually able and capable to communicate the exact timing and value.

我認為你開局的機會大於零，你非常準確。正如塔妮亞所說，我想重申這一點，這對我們一直在溝通的子系統和經常性收入模型來說仍然是非常沉重的負擔。我們希望成為這裡的好管家，並從我們的投資者和分析師那裡獲得回饋，並繼續前進。我們將在產品通過終點線時進行溝通，並完全確定我們的生產計劃，並且實際上能夠傳達確切的時間和價值。

Hey, it's Sean. I just wanted to give you a different lens, too, from my finance accounting perspective that ultimately we're not in control when a OEM is going to place an order with us. But my leading indicator as to when and how soon we will get a system sale is ultimately driven by the conversations and discussions we have and ultimately engineering service agreements we have. And so those commitments that OEMs are making to us and we're co-developing features products with them would tell me they're not going to commit to those dollars in services agreements that we have in place and we've been working on.

嘿，這是肖恩。我也只是想從我的財務會計角度給您一個不同的視角，即當 OEM 向我們下訂單時，最終我們無法控制。但我關於何時以及多快獲得系統銷售的領先指標最終是由我們進行的對話和討論以及我們最終達成的工程服務協議所驅動的。因此，原始設備製造商向我們所做的承諾以及我們與他們共同開發功能產品的承諾告訴我，他們不會在我們已經制定和一直在努力的服務協議中承諾這些資金。

So it's not a matter of if these are going to come, it's when and it's just we're ultimately not a control question that purchase order and getting it over the finish line. But there is a lot of activity and a lot of efforts throughout the entire Helios family of companies working on these, and so very confident they will come through.

因此，這不是這些是否會出現的問題，而是何時出現的問題，只是我們最終不是採購訂單並使其越過終點線的控制問題。但整個 Helios 公司家族都在進行大量活動並付出大量努力來致力於這些工作，因此我們非常有信心他們能夠成功。

Sure. I guess, at least my challenge in thinking through this opportunity is that, if I'm thinking of white goods or commercial food service versus agriculture equipment, just the product cycles are different, and how you would end up being specked in as a solution provider would look different. So that's what I think we're all trying to think through and figure out in terms of what the timeline might look like. But I appreciate your comment on.

當然。我想，至少我在思考這個機會時面臨的挑戰是，如果我考慮白色家電或商業食品服務與農業設備，只是產品週期不同，以及最終將如何作為解決方案提供者看起來會有所不同。所以我認為我們都在努力思考並弄清楚時間表可能會是什麼樣子。但我很欣賞你的評論。

I guess, one follow-up on Balboa or health and wellness as an end market. Can you maybe frame for us what 2023 look like from a revenue standpoint in this vertical? My recollection is that Balboa prior to COVID was a business that was running right around $90 million or thereabout of revenue. Is this where this business reverted back in 2023? And what sort of visibility do you have here in terms of the recovery? Does this recovery have legs, and do you have visibility into that in '24?

我想，這是巴爾博亞或健康和保健作為終端市場的後續行動。您能否從這個垂直領域的收入角度為我們描述一下 2023 年的情況？我的記憶是，在新冠疫情爆發之前，巴爾博亞的業務收入約為 9,000 萬美元左右。這是 2023 年這項業務恢復的地方嗎？您對復甦有何看法？這種復甦是否有效？您對 24 年的復甦有預見性嗎？

Yeah, so 2023, Mig, was around $100 million watermark. 2024, we are seeing encouraging signs. Obviously, as Sean mentioned, we have a couple of months now in the bag in Q1, and the trend continues to be positive at this point. So Sean, I don't know if you want to count anymore in one 2024?

是的，所以 2023 年，米格，大約是 1 億美元的水位線。 2024 年，我們看到了令人鼓舞的跡象。顯然，正如 Sean 所提到的，我們在第一季還有幾個月的時間，而且目前的趨勢仍然是積極的。那麼肖恩，我不知道你是否還想再數2024年？

Yeah. Well, I'd say the only other data point I'd highlight is, we're not recovering back to the pre-pandemic levels within our guidance. So we expect there's still more than one year of market recovery, not to mention some of the new products that we're bringing to market that we think will continue to drive the incremental growth of what we've announced and what we have coming this year. So certainly, as we look at our implied guidance within the segments, more of the electronics growth will come from Balboa than it will be on innovation in 2024.

是的。好吧，我想說，我要強調的唯一其他數據點是，我們沒有在我們的指導範圍內恢復到疫情前的水平。因此，我們預計市場復甦仍需要一年多的時間，更不用說我們向市場推出的一些新產品，我們認為這些新產品將繼續推動我們已宣布的產品和即將推出的產品的增量增長年。因此，當我們審視各個細分市場的隱含指導時，可以肯定的是，到 2024 年，更多的電子產品成長將來自巴爾博亞，而不是創新。

And maybe any other thing I'd add, just from a total electronics segment perspective, the piece that doesn't really get disclosed externally is, we've been moving a lot of operations, different product lines, wire harnessing, things like that from Tulsa to the Mexico location. And so it's really starting to run internally operationally more and more as a total segment. And that's how we really think about it internally versus breaking it out at a separate company level.

也許我還想補充一點，從整個電子行業的角度來看，沒有真正向外部披露的部分是，我們已經轉移了很多業務、不同的產品線、線束等等。從塔爾薩到墨西哥地點。因此，它確實開始越來越多地作為一個整體部門在內部運作。這就是我們在內部真正思考的方式，而不是在單獨的公司層面上打破它。

So that's part of when we talk about the Center of Excellence and operational efficiencies and improvements in different areas, it's the lever that we're going to see in 2024 and beyond.

因此，當我們談論卓越中心以及不同領域的營運效率和改進時，這就是我們將在 2024 年及以後看到的槓桿。

Okay. Final question for me on hydraulics. And I know some of my peers already asked about end-market trends. But when I think about your OE exposure, and I'm thinking about construction and agriculture specifically, I'm curious what you're hearing from your OE customers in terms of their production plans and how that jells with your revenue outlook. It would seem to me, based on what I've heard from them, that they're contemplating some pretty steep production cuts in 2024.

好的。我的最後一個問題是關於液壓的。我知道我的一些同行已經詢問了終端市場趨勢。但是，當我考慮您的 OE 業務，特別是建築和農業時，我很好奇您從 OE 客戶那裡聽到的生產計劃以及這對您的收入前景有何影響。在我看來，根據我從他們那裡聽到的消息，他們正在考慮在 2024 年大幅削減產量。

So yeah, maybe talk us through that and how we get to your revenue guidance in an environment in which maybe these production cuts are accelerating through 2024?

那麼，是的，也許可以跟我們談談這個問題，以及在 2024 年減產可能加速的環境下，我們如何獲得您的收入指導？

Yeah, Mig. Looking at the end-market chart here sitting right in front all of us and going by geography and, everything that you are seeing and everything we have seen and heard from our customers has been baked into our guidance here for 2024. In particular, going to the product lines here, construction North America, ag North America looks pretty balanced. We don't see that steep decline in our product offering.

是的，米格。看看擺在我們所有人面前的終端市場圖表，按地理位置劃分，您所看到的一切以及我們從客戶那裡看到和聽到的一切都已納入我們 2024 年的指導中。特別是，看看這裡的產品線，北美建築業和北美農業看起來相當平衡。我們沒有看到我們的產品供應急劇下降。

Europe in the ag market, that's where we see steeper declines. But again, we've baked this into our guidance. European construction is -- we have it color-coded here in the yellowish, so very balanced. So overall, the industrial market, North America, is kind of flattish to low growth, a steeper decline in Europe. And we really don't see any strong recovery coming out of the Asian market yet.

在歐洲農業市場，我們看到了更嚴重的下滑。但我們再次將其納入我們的指導中。歐洲的建築是——我們在這裡用淡黃色進行顏色編碼，所以非常平衡。整體而言，北美的工業市場成長平緩至低速，歐洲的下滑幅度更大。我們確實還沒有看到亞洲市場出現任何強勁復甦。

So this just confirms what Sean said earlier as we bake in all of our investments that we have made in 2023 and improve our cost structure and reposition everything for growth as those markets recover, Mig. And not just the product lines, but also as Asia comes back, we should see those decremental margins go in our favor. Sean?

因此，這證實了肖恩之前所說的，我們將在 2023 年進行所有投資，改善我們的成本結構，並隨著這些市場的複蘇重新定位一切以實現增長，Mig。不僅是產品線，隨著亞洲的回歸，我們應該會看到這些下降的利潤對我們有利。肖恩？

Yeah, and I think of things just highlighted from that perspective just speaks to the overall diversification of our hydraulics business. No one customer are we overly reliant upon. And from that perspective, within our guidance, we've been more aggressive in our CVT, Sun Hydraulics business, than our faster QRC business. So we would expect more of the growth to come from CVT, and that goes back to some of the inventory levels we're seeing in that distributor levels where that Sun Hydraulics business is more distribution-based than OEM-based.

是的，我認為從這個角度強調的事情正好說明了我們液壓業務的整體多元化。我們不會過度依賴任何一位客戶。從這個角度來看，在我們的指導下，我們在 CVT、Sun 液壓業務方面比我們更快的 QRC 業務更加積極。因此，我們預計更多的成長將來自 CVT，這可以追溯到我們在經銷商層面看到的一些庫存水平，在該層面上，SunHydraulics 業務更多的是基於分銷而非 OEM。

So more of that OEM direct weakness would come through that European faster business. But overall, we feel good because of that overall diversification, not overly reliant on ag market. Construction and industrial are very important as well for us.

因此，更多的 OEM 直接弱點將透過歐洲更快的業務來體現。但總的來說，我們感覺良好，因為整體多元化，而不是過度依賴農業市場。建築和工業對我們來說也非常重要。

Okay.

好的。

(Operator Instructions) There are no further questions at this time. I would like to turn the floor back over to Tania Almond for closing comments.

（操作員說明） 目前沒有其他問題。我想將發言權交還給塔尼亞·阿爾蒙德以徵求結束意見。

Great. Thank you so much, operator, and thanks to everybody on the line for joining us. Feel free to follow up with me in the following days and weeks. So if you have any questions, we look forward to connecting with you, and we'll talk with you next quarter. Take care.

偉大的。非常感謝您，接線員，也感謝線上的每個人加入我們。請隨時在接下來的幾天和幾週內與我聯繫。因此，如果您有任何疑問，我們期待與您聯繫，我們將在下個季度與您交談。小心。

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

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。