Kaman Corp (KAMN) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Kaman Corporation Q3 2023 Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加卡曼公司 2023 年第三季電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to Matthew Petterson, Chief Accounting Officer and Controller. Please go ahead.

現在我想將會議交給首席會計官兼財務總監馬修·佩特森 (Matthew Petterson)。請繼續。

Good morning. Welcome to Kaman's Third Quarter 2023 Earnings Call. Leading the call today are Ian Walsh, Chairman, President and Chief Executive Officer; and Carroll Lane, Senior Vice President and Interim Chief Financial Officer.

早安.歡迎參加 Kaman 2023 年第三季財報電話會議。今天主持會議的是董事長、總裁兼執行長 Ian Walsh；卡羅爾‧萊恩 (Carroll Lane)，資深副總裁兼臨時財務長。

Before we begin, please note that some of the information discussed during today's call will consist of forward-looking statements, setting forth our current expectations with respect to the future of our business, the economy and other events. These include projections of revenue, earnings and other financial items, statements on plans and objectives of the company or its management, statements of future economic performance and assumptions underlying these statements regarding the company and its business.

在我們開始之前，請注意，今天電話會議中討論的一些資訊將包含前瞻性陳述，闡述我們目前對業務、經濟和其他事件的未來的預期。其中包括收入、收益和其他財務項目的預測、公司或其管理層的計劃和目標的報表、未來經濟業績的報表以及這些報表所依據的有關公司及其業務的假設。

The company's actual results could differ materially from those indicated in any forward-looking statements due to many factors, the most important of which are described in the company's latest filings with the Securities and Exchange Commission, including the company's third quarter 2023 results included on Form 10-Q and the current report on Form 8-K filed yesterday evening together with our earnings release.

由於多種因素，該公司的實際業績可能與任何前瞻性陳述中所示的業績存在重大差異，其中最重要的因素在該公司向美國證券交易委員會提交的最新文件中進行了描述，包括該公司表格中包含的2023 年第三季業績10-Q 和 8-K 表格的當前報告於昨天晚上與我們的收益發布一起提交。

We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the earnings release filed with yesterday's Form 8-K. Finally, we posted an earnings call supplement, which provides additional context on our financial performance. You can find this presentation in the Investor Presentation section of our website.

我們也希望討論適用的 SEC 規則和法規中定義的某些非 GAAP 衡量標準的財務衡量標準和資訊。與公司 GAAP 措施的調整包含在與昨天的 8-K 表格一起提交的收益發布中。最後，我們發布了收益電話會議補充資料，為我們的財務表現提供了更多背景資訊。您可以在我們網站的投資者介紹部分找到此簡報。

Now I'll turn the call over to Ian Walsh.

現在我將把電話轉給伊恩·沃爾什。

Good morning, everyone, and thank you for joining our earnings call today. Our strong performance continued into the third quarter as we remain focused on optimizing our cost structure and consistent execution against our objectives, which are to drive overall improved profitability, free cash flow and return on invested capital.

大家早安，感謝您參加我們今天的財報電話會議。我們的強勁表現持續到第三季度，因為我們仍然專注於優化成本結構並持續執行我們的目標，即推動整體提高獲利能力、自由現金流和投資資本回報率。

Our results were led by continued strength in our Engineered Products segment. Based on this performance, we are revising our outlook for the full year and now expect higher adjusted EBITDA in the range of $102.5 million to $110 million, and expected sales in the range of $765 million to $775 million.

我們的業績得益於工程產品領域的持續強勁表現。基於這項業績，我們正在修改全年展望，目前預計調整後 EBITDA 將在 1.025 億美元至 1.1 億美元之間，銷售額預計將在 7.65 億美元至 7.75 億美元之間。

Net sales for the quarter grew 6.4% over the prior year period to $183 million, reflecting the contribution from Aircraft Wheel and Brake and approximately 21% organic growth from our Engineered Products segment. These factors were offset primarily by lower JPF sales during the period, which was anticipated as this program continues to wind down.

該季度的淨銷售額比上年同期增長 6.4%，達到 1.83 億美元，反映了飛機機輪和煞車的貢獻以及工程產品部門約 21% 的有機增長。這些因素主要被該期間 JPF 銷售額下降所抵消，這是隨著該計劃繼續結束而預期的。

Continuing the trend from the second quarter, our end markets continued to perform well in the third quarter. Commercial, business and general aviation in the third quarter saw a better than 30% growth year-over-year. Our specialty bearings business continued to overperform as commercial markets continue to demonstrate robust demand.

延續第二季的趨勢，我們的終端市場在第三季持續表現良好。第三季商業、公務和通用航空年增超過30%。隨著商業市場繼續表現出強勁的需求，我們的特種軸承業務繼續表現出色。

Industrial end markets improved notably in the third quarter, with double-digit organic growth compared to relatively flat sales volume for the first half of the year, driven by growth in miniature bearings volumes for industrial solutions. Our medical and defense end markets continued to grow in the low to mid-single digits.

在工業解決方案微型軸承銷售成長的推動下，第三季工業終端市場顯著改善，與上半年相對持平的銷售量相比，有機成長達到兩位數。我們的醫療和國防終端市場繼續以中低個位數成長。

We remain focused on our transformational strategy, which includes investing in the high-growth, high-margin areas of our business, optimizing our cost structure and eliminating the historic sources of variation within our business. I'm pleased to report that these efforts continue to yield results in the third quarter with adjusted EBITDA dollars and margin improving meaningfully over the prior period.

我們仍然專注於我們的轉型策略，其中包括投資於我們業務的高成長、高利潤領域，優化我們的成本結構以及消除我們業務中歷史上變化的根源。我很高興地報告，這些努力在第三季繼續取得成果，調整後的 EBITDA 美元和利潤率較上一時期顯著改善。

In the third quarter of 2023, we achieved adjusted EBITDA of $25.2 million or 13.8% of sales, compared to $19.5 million or 11.3% of sales in the prior year. As we move into the fourth quarter, we are pleased with the progress we have made so far this year and still have remaining objectives to accomplish as we reposition our company.

2023 年第三季度，我們實現調整後 EBITDA 為 2,520 萬美元，佔銷售額的 13.8%，而前一年為 1,950 萬美元，佔銷售額的 11.3%。隨著我們進入第四季度，我們對今年迄今為止的進展感到滿意，並且在我們重新定位公司時仍有剩餘目標需要完成。

Beginning with Engineered Products segment, we continued to invest in opportunities for organic growth to drive favorable mix and margin performance to our consolidated results. Our investment strategy also focuses on fostering innovation and developing strategic partnerships for the next generation of products.

從工程產品部門開始，我們繼續投資有機成長的機會，以推動有利的組合和利潤表現，從而實現我們的綜合績效。我們的投資策略也著重於促進創新並為下一代產品發展策略合作夥伴關係。

In our Precision Products segment, we have made significant progress to rightsize our operations following the wind down of the JPF and K-MAX production programs and expect to complete the consolidation of our JPF production facilities in the first half of 2024. We remain on track to realize $22 million to $25 million of cost savings in 2024 from a cost reduction program that we previously disclosed.

在我們的精密產品部門，隨著 JPF 和 K-MAX 生產計劃的結束，我們在調整營運規模方面取得了重大進展，並預計在 2024 年上半年完成 JPF 生產設施的整合。我們仍處於正軌通過我們先前揭露的成本削減計劃，到2024 年實現2,200 萬至2,500 萬美元的成本節約。

Turning to our segment performance and beginning with Engineered Products. In the third quarter, we continued to demonstrate strong performance with overall sales growth of 34.3%, of which approximately 21% was organic. Higher sales volumes were broad-based across our business units, led by strength in traditional self-lubricating bearings and PMA aftermarket programs.

轉向我們的細分市場表現，從工程產品開始。第三季度，我們持續展現強勁業績，整體銷售額成長 34.3%，其中約 21% 為有機成長。在傳統自潤滑軸承和 PMA 售後市場計劃的推動下，我們的業務部門的銷售量普遍提高。

Gulfstream continues to be a wonderful customer for us, with our high load capacity, self-lubricating [flat] track rollers. We continue to make progress on our TDH, or Titanium Diffusion Hardening innovation, in both the medical and space propulsion applications. We have over 30 applications being tested, and we're showing promising results of TDH as a replacement in orthopedic surgery, where many patients are allergic to cobalt-chrome plated parts.

灣流憑藉著我們的高負載能力、自潤滑[平]滾輪繼續成為我們的優秀客戶。我們在醫療和太空推進應用領域的 TDH（鈦擴散硬化創新）方面不斷取得進展。我們正在測試 30 多個應用程序，並且我們在骨科手術中展示了 TDH 作為替代品的良好結果，因為許多患者對鍍鈷鉻部件過敏。

Higher segment level sales generated stronger profit, with Engineering Products adjusted EBITDA increasing 76.5% to $38.4 million. This stronger volume also demonstrated the operating leverage in our business as margins expanded by 740 basis points year-over-year to 31.1%.

更高的細分市場銷售額產生了更強勁的利潤，工程產品調整後的 EBITDA 成長了 76.5%，達到 3,840 萬美元。這一強勁的銷售也證明了我們業務的營運槓桿，利潤率同比增長 740 個基點，達到 31.1%。

In our Precision Products segment, sales declined 41.5% to $27.1 million which was attributed to the anticipated decline in JPF volume compared to the prior year. Excluding the effects of JPF, segment level sales increased $9.7 million, driven by higher K-MAX aftermarket sales and higher FireBurst deliveries, offset partially by lower sales in legacy fuzing programs during the period. We recently completed delivery of our first tranche of FireBurst units to our overseas customer.

在我們的精密產品部門，銷售額下降 41.5% 至 2,710 萬美元，這是由於 JPF 銷售量與前一年相比預期下降。排除 JPF 的影響，在 K-MAX 售後市場銷售額增加和 FireBurst 交付量增加的推動下，細分市場銷售額增加了 970 萬美元，但部分被該期間傳統引信項目銷售額的下降所抵消。我們最近完成了向海外客戶交付第一批 FireBurst 設備。

Segment level adjusted EBITDA was negative $2.5 million compared to $6.1 million in the prior year. Lower segment adjusted EBITDA was a result of lost operating leverage as we wind down the JPF program and work to rightsize our facility footprint for our remaining legacy programs. As we have noted, this is a focus area for us and a meaningful portion of our $22 million to $25 million of cost savings identified is generated from the consolidation of our footprint.

部門水準調整後 EBITDA 為負 250 萬美元，而前一年為 610 萬美元。較低的部門調整後 EBITDA 是由於我們逐漸結束 JPF 計劃並努力為剩餘的遺留計劃調整我們的設施足跡而失去營運槓桿的結果。正如我們所指出的，這是我們的重點領域，我們確定的 2200 萬至 2500 萬美元成本節約中，有很大一部分是透過我們的足跡整合產生的。

Turning to our Structures segment. Third quarter sales were $32.3 million compared to $33.7 million in the prior year. The modest decline from the prior year was primarily a result of lower A-10 and UH-60 Black Hawk deliveries, partially offset by higher Rolls-Royce and Sikorsky volume. Our Vermont facility continues to be our benchmark as they grow and win new more profitable programs, such as a new contract with L3Harris for their new ground-based midcourse defense radomes and a Rolls-Royce Trent 7000 fan track liners for the Airbus A330neos.

轉向我們的結構部分。第三季銷售額為 3,230 萬美元，去年同期為 3,370 萬美元。較上年略有下降的主要原因是 A-10 和 UH-60 黑鷹交付量減少，但勞斯萊斯和西科斯基交付量增加部分抵消了這一影響。我們的佛蒙特州工廠繼續成為我們的標桿，因為他們不斷發展並贏得新的更有利可圖的項目，例如與L3Harris 簽訂的新合同，為其新型地面中段防禦天線罩以及為空客A330neos 提供勞斯萊斯遄達7000 風扇軌道襯墊。

Third quarter segment level adjusted EBITDA was negative $2.2 million compared to breakeven results in the prior year period. As we have noted throughout the year and reflected in our guidance, we are working to optimize production of legacy programs that have driven our historical variability in this segment. We continue to anticipate full year segment level profitability at around breakeven for the year.

與去年同期的損益平衡結果相比，第三季部門調整後 EBITDA 為負 220 萬美元。正如我們全年指出並在我們的指導中反映的那樣，我們正在努力優化遺留項目的製作，這些項目推動了我們在該領域的歷史變化。我們持續預期全年部門獲利能力將在損益兩平點左右。

As we enter the final quarter of 2023, we are pleased with the measurable progress we have made across our company. Our positive momentum can be attributed to the ongoing execution of our strategic initiatives, streamlining our operations and investing in our high-performing businesses to enhance the overall quality of our earnings.

進入 2023 年最後一個季度，我們對整個公司的顯著進展感到高興。我們的積極動能可歸因於我們策略性舉措的持續執行、精簡我們的營運以及投資於我們的高績效業務，以提高我們獲利的整體品質。

Looking forward, we maintain our commitment to several key objectives. First, we are disciplined in deploying our capital resources to the most promising growth opportunities within our Engineered Products segment. Our emphasis continues to be on fostering innovation to drive substantial year-over-year organic growth, achieve margin improvement and generate strong cash flows.

展望未來，我們將持續致力於實現幾個關鍵目標。首先，我們嚴格將資本資源部署到工程產品領域最有前景的成長機會。我們的重點仍然是促進創新，以推動同比大幅有機成長，實現利潤率提高並產生強勁的現金流。

In the Precision Products segment, we are committed to transitioning our business by making prudent and targeted investments in next-generation products. Our decisions to consolidate our JPF facilities and conclude K-MAX production are aimed at enhancing operational performance and reducing variability. These actions will reposition Precision Products business units for profitable growth in future years.

在精密產品領域，我們致力於透過對下一代產品進行審慎和有針對性的投資來實現業務轉型。我們決定整合 JPF 設施並結束 K-MAX 生產，旨在提高營運績效並減少波動性。這些行動將重新定位精密產品業務部門，以實現未來幾年的獲利成長。

We also expect to benefit from the continuing investments being made in our KARGO UAV system, a purpose-built autonomous medium lift logistics vehicle, which has targeted military and commercial customer requirements in a large addressable end market. We are excited to recently receive a contract with our partners at Near Earth Autonomy by the U.S. Army Futures Command to demo in 2024 a KARGO UAV capable of moving loads of 800 pounds and flying distances over 100 miles. Our KARGO UAV is being designed to carry 800 pounds and has a max range of 500 miles.

我們還期望受益於對 KARGO 無人機系統的持續投資，這是一種專門製造的自主中型物流車輛，旨在滿足大型可尋址終端市場中的軍事和商業客戶需求。我們很高興最近收到美國陸軍未來司令部與近地自治合作夥伴簽訂的合同，將在 2024 年演示 KARGO 無人機，該無人機能夠移動 800 磅的負載，飛行距離超過 100 英里。我們的 KARGO 無人機設計可承載 800 磅，最大航程為 500 英里。

Within our Structures segment, we continue to diligently implement best practices with the aim of ensuring that all 3 of our Structures businesses operate consistently in a healthy manner.

在我們的結構業務領域，我們繼續努力實施最佳實踐，以確保我們的所有 3 個結構業務始終以健康的方式運作。

Now I'll turn the call over to Carroll for a closer look at the numbers. Carroll?

現在我將把電話轉給卡羅爾，以便仔細查看這些數字。卡羅爾？

All right. Thank you, Ian. Good morning, everyone. I'll walk you through our third quarter results before turning to our outlook for 2023. Third quarter sales were $183 million, up 6.4% from the prior year. Aircraft Wheel and Brake, which we acquired in mid-September 2022, contributed sales of $16.9 million.

好的。謝謝你，伊恩。大家，早安。在展望 2023 年之前，我將向您介紹我們的第三季業績。第三季銷售額為 1.83 億美元，比上一年增長 6.4%。我們於 2022 年 9 月中旬收購的 Aircraft Wheel and Brake 貢獻了 1,690 萬美元的銷售額。

Organic sales were relatively flat with strong organic revenue growth across our Engineered Products segment of approximately 21%, offset by lower sales in our Precision Products segment related to the previously discussed wind-down of the U.S. government JPF program, which was anticipated, and a slight reduction in sales in our Structures segment.

有機銷售額相對持平，我們的工程產品部門的有機收入增長強勁，約為21%，但被我們之前討論的美國政府JPF 計劃的逐步結束（這是預期的）導致的精密產品部門的銷售額下降所抵銷。我們的結構部門的銷售額略有下降。

Operating income in the third quarter was $11.9 million, including $1.9 million from Aircraft Wheel and Brake. That's an increase of $12.6 million compared to a slight operating loss in the prior year. Adjusted EBITDA in the third quarter was $25.2 million, an increase of almost 30% compared to the prior year of $19.5 million. EBITDA margin increased 250 basis points to 13.8%.

第三季營業收入為 1,190 萬美元，其中飛機機輪和煞車收入為 190 萬美元。與上一年的輕微營運虧損相比，增加了 1,260 萬美元。第三季調整後 EBITDA 為 2,520 萬美元，比上年同期的 1,950 萬美元成長近 30%。 EBITDA 利潤率成長 250 個基點，達到 13.8%。

Higher profitability stemmed mostly from the benefits of organic growth, greater operating leverage from higher sales and cost saving measures taken over the past 12 months that are intended to enhance our operating performance. We continue to execute on our previously announced cost savings initiatives, and we expect total savings of $22 million to $25 million in 2024, with over $12 million to be realized in 2023.

更高的獲利能力主要源自於有機成長的好處、更高的銷售額帶來的更大的營運槓桿以及過去 12 個月為提高我們的營運表現而採取的成本節約措施。我們繼續執行先前宣布的成本節約計劃，預計 2024 年節省總額為 2,200 萬至 2,500 萬美元，2023 年將實現超過 1,200 萬美元。

Turning back to our results. Gross margin was 35.3%, which increased 350 basis points compared to the prior year. This was attributable to the addition of Aircraft Wheel and Brake, higher organic volume in our Engineered Products segment and benefits from our cost savings initiatives.

回到我們的結果。毛利率為35.3%，較上年增加350個基點。這歸因於飛機機輪和煞車的增加、工程產品部門有機銷售的增加以及我們的成本節約計劃帶來的好處。

Selling, general and administrative expenses were $42.5 million, a decrease of 13.3% due to the absence of corporate development costs incurred in the prior year, which were associated with the acquisition of Aircraft Wheel and Brake. As a percentage of sales, lower SG&A was due to operating leverage on higher volume, cost control measures and lower corporate development costs.

銷售、一般和管理費用為 4,250 萬美元，下降 13.3%，因為沒有去年發生的與收購 Aircraft Wheel and Brake 相關的企業開發成本。 SG&A 佔銷售額的百分比較低，是由於銷售增加、成本控制措施和較低的企業開發成本所帶來的營運槓桿。

Interest expense in the quarter was $9.4 million compared to $3.6 million in the prior year as a result of higher interest rates and the additional debt from the Aircraft Wheel and Brake acquisition. As we noted last quarter, we refinanced our debt in the second quarter of this year and extended our maturity to 2028, providing us ample flexibility through our deleveraging plans.

由於利率上升以及飛機機輪和煞車收購帶來的額外債務，本季的利息支出為 940 萬美元，而前一年為 360 萬美元。正如我們上季度指出的，我們在今年第二季度對債務進行了再融資，並將期限延長至 2028 年，透過去槓桿計畫為我們提供了充足的靈活性。

Third quarter free cash flow was $3.8 million and year-to-date free cash flow is $9.8 million. We currently expect to settle our convertible notes with available borrowing capacity under our credit agreement. However, we continue to assess other potential options for the refinancing of these instruments prior to their scheduled maturity in May 2024.

第三季自由現金流為 380 萬美元，年初至今自由現金流為 980 萬美元。我們目前預計根據我們的信貸協議以可用借款能力結算我們的可轉換票據。然而，我們將繼續評估這些工具在 2024 年 5 月預定到期之前進行再融資的其他潛在選擇。

With the extension of our credit agreement, we maintain sufficient capacity to use proceeds from this facility to repay the convertible notes and satisfy our working capital requirements. During the third quarter, we reported GAAP net income of $1.5 million or $0.05 per diluted share. That compares to a loss of $280,000 or a $0.01 loss per diluted share in the prior year period.

隨著信貸協議的延期，我們保持了足夠的能力使用該融資的收益來償還可轉換票據並滿足我們的營運資金需求。第三季度，我們公佈的 GAAP 淨利潤為 150 萬美元，即稀釋後每股收益 0.05 美元。相較之下，去年同期虧損 28 萬美元，或攤薄後每股虧損 0.01 美元。

Adjusted net income during the period was $2.7 million or $0.10 per diluted share, and that compares to $8.1 million or $0.29 per diluted share in the prior year period. Lower earnings per diluted share in 2023 was attributable to higher interest expense, partially offset by stronger operating results. For a full reconciliation of our GAAP to non-GAAP earnings, please review our earnings press release.

該期間調整後淨利潤為 270 萬美元，即稀釋後每股收益 0.10 美元，而去年同期調整後淨利潤為 810 萬美元，即稀釋後每股收益 0.29 美元。 2023 年攤薄每股收益下降是由於利息支出增加，但部分被強勁的經營業績所抵銷。有關我們的 GAAP 與非 GAAP 收益的完整調節，請查看我們的收益新聞稿。

Now turning to our outlook. We are revising our full year 2023 outlook to account for the strength we are seeing in our Engineered Products segment. As Ian highlighted, our end markets are demonstrating strong performance, we're successfully increasing our market share in Engineered Products and our overall backlog remains robust. Our primary focus continues to be expanding our highest growth businesses, enabling us to generate more substantial returns. At the same time, we're optimizing our cost structure to align with the size and requirements of our business.

現在轉向我們的展望。我們正在修訂 2023 年全年展望，以考慮到我們在工程產品領域看到的實力。正如 Ian 所強調的那樣，我們的終端市場表現出強勁的表現，我們成功地增加了工程產品的市場份額，並且我們的整體積壓訂單仍然強勁。我們的主要重點仍然是擴大我們成長最快的業務，使我們能夠產生更豐厚的回報。同時，我們正在優化成本結構，以適應我們業務的規模和要求。

Our results in the first 9 months of this year are ahead of expectations, with a portion of our performance attributable to $7.2 million of EBITDA from our JPF program as we delivered against commitments in the first half of 2023. While we do not expect significant JPF volumes in the fourth quarter, we now expect total revenue in the range of $765 million to $775 million, driven by the strength we're seeing in Engineered Products.

我們今年前 9 個月的業績超出了預期，其中我們的 JPF 計劃的 720 萬美元 EBITDA 是我們業績的一部分，因為我們兌現了 2023 年上半年的承諾。雖然我們預計 JPF 不會有大幅增長根據我們在工程產品領域看到的強勁勢頭，我們目前預計第四季的總營收將在7.65 億美元至7.75 億美元之間。

We've increased our expectations for net earnings to $6.5 million to $12.2 million, and diluted EPS of $0.23 per share to $0.43 per share, or $0.40 per share to $0.60 per share on an adjusted basis. This increase is primarily driven by our expectation of drop-through from the Engineered Products segment, coupled with our cost optimization efforts, offset partially by interest expense.

我們將淨利潤預期上調至 650 萬美元至 1,220 萬美元，稀釋後每股收益從 0.23 美元至 0.43 美元，或調整後每股 0.40 美元至 0.60 美元。這一增長主要是由於我們對工程產品部門的下降的預期，加上我們的成本優化努力，部分被利息支出所抵消。

Our expectations of Engineered Products drop-through and cost reduction is also driving our improved adjusted EBITDA outlook, which is now in the range of $102.5 million to $110 million. This updated outlook considers both strength in Engineered Products and some incremental risk related to the Precision Products and Structures segments.

我們對工程產品下降和成本降低的預期也推動了我們調整後 EBITDA 前景的改善，目前該前景在 1.025 億美元至 1.1 億美元之間。這項更新的展望既考慮了工程產品的實力，也考慮了與精密產品和結構領域相關的一些增量風險。

Our expectations for operating cash flow of $60 million to $70 million and free cash flow of $35 million to $45 million remains consistent with our prior outlook, as we continue to make investments that will support future growth in our Engineered Products segment and improvements in our Structures segment.

我們對營運現金流 6,000 萬至 7,000 萬美元和自由現金流 3,500 萬至 4,500 萬美元的預期與我們先前的展望保持一致，因為我們將繼續進行投資，以支持工程產品部門的未來成長和結構的改進部分。

As a reminder, to improve the reliability of our outlook and improve transparency, our previous outlook excluded discrete items, which have historically been sources of variation. Specifically, these included unawarded or uncertain JPF DCS orders and sales of the 2 remaining K-MAX aircraft held in inventory. Our current outlook now considers the sale of an additional K-MAX aircraft in Q4, as well as the delivery of a limited volume of JPF orders currently in backlog.

提醒一下，為了提高我們展望的可靠性並提高透明度，我們先前的展望排除了離散項目，這些項目歷來都是變化的來源。具體來說，其中包括未授予或不確定的 JPF DCS 訂單以及庫存中剩餘 2 架 K-MAX 飛機的銷售。我們目前的展望現在考慮的是在第四季度額外銷售一架 K-MAX 飛機，以及交付目前積壓的有限數量的 JPF 訂單。

With that, I'll turn the call back over to Ian for closing remarks.

接下來，我會將電話轉回 Ian 進行結束語。

Thanks, Carroll. With 1 quarter left to go in 2023, we continue to see that our transformational strategy is producing strong results, better level loading our quarters by reducing our historical sources of variation and aligning with our expectations. Our team remains focused to deliver on our long-term strategy to maximize shareholder value.

謝謝，卡羅爾。 2023 年還剩 1 個季度，我們繼續看到我們的轉型策略正在產生強勁的成果，透過減少歷史變化來源並符合我們的預期，為我們的季度帶來更好的水平。我們的團隊仍然專注於實現我們的長期策略，以實現股東價值最大化。

The third quarter highlights the exceptional performance of our Engineered Products segment, emphasizing its substantial earnings power and growth potential. This segment remains a key focus for our ongoing investment. We are confident that as we make future improvements in our Precision Products and Structures segments, we will be well positioned to achieve significant earnings growth, while steadily reducing our debt burden.

第三季凸顯了我們工程產品部門的卓越表現，並強調了其巨大的獲利能力和成長潛力。該細分市場仍然是我們持續投資的重點。我們相信，隨著我們在精密產品和結構領域的未來改進，我們將處於有利位置，實現顯著的盈利增長，同時穩步減輕我們的債務負擔。

Just as important, I'm thrilled with our progress on the cultural transformation of our company as we strive toward becoming a high-performance team with consistent execution and innovation. We believe that our future success depends on the core capabilities and dedication of our workforce to reflect the values of our founder, Charles Kaman, and their deep desire to solve our customers' most difficult problems.

同樣重要的是，我對公司文化轉型所取得的進展感到興奮，因為我們努力成為一支具有一致執行力和創新的高績效團隊。我們相信，我們未來的成功取決於我們員工的核心能力和奉獻精神，以反映我們創始人查爾斯·卡曼的價值觀，以及他們解決客戶最困難問題的強烈願望。

We are truly appreciative of the many contributions and collaborative teamwork shown by our colleagues through the first 3 quarters of 2023. It's been instrumental in our transformational journey.

我們非常感謝我們的同事在 2023 年前三個季度所做的許多貢獻和團隊協作。這在我們的轉型之旅中發揮了重要作用。

With that, I'd like to open the line for questions. May we have our first question, please.

說到這裡，我想開通提問專線。請提出第一個問題。

(Operator Instructions) Our first question comes from Steve Barger from KeyBanc Capital Markets.

（操作員說明）我們的第一個問題來自 KeyBanc Capital Markets 的 Steve Barger。

Our next question comes from Tony Bancroft from GAMCO Investors, Inc.

我們的下一個問題來自 GAMCO Investors, Inc. 的 Tony Bancroft。

Nice job in the quarter. Just one question. I came in late, so I just missed -- I just heard Carroll at the very end discussing the convertible refinancing. Would you mind just going through maybe just the mechanics, what your -- what the plan is and increase in -- what the interest rate increase is going to be in the term for the refinance debt?

本季工作做得很好。只有一個問題。我來晚了，所以我錯過了——我剛剛聽到卡羅爾在最後討論可轉換再融資。您是否介意只了解一下機制，您的計劃是什麼以及再融資債務期限內的利率上漲幅度是多少？

Look, I think what we said is probably not anything really particularly new. We have enough capacity under our refinance credit agreement to deploy our revolver against those convertible notes. And as we sit here today, there's no reason to believe that's not our prime path.

聽著，我認為我們所說的可能並不是什麼特別新的東西。根據我們的再融資信貸協議，我們有足夠的能力來針對這些可轉換票據部署我們的左輪手槍。當我們今天坐在這裡時，沒有理由相信這不是我們的主要道路。

That said, we're getting economic benefits from our convertible notes today. I think we've got time to evaluate if there's anything different that we would want to do in that area. But as we sit here today, with the credit capacity we have, we feel comfortable that's a good option for us. So I'm probably not going to get into terms and rates here on the call, but feel good about the options that we got in front of us.

也就是說，我們今天從可轉換票據中獲得了經濟利益。我認為我們有時間評估我們是否想在該​​領域做任何不同的事情。但當我們今天坐在這裡時，憑藉我們擁有的信貸能力，我們覺得這對我們來說是一個不錯的選擇。因此，我可能不會在電話會議上討論條款和費率，但對我們面前的選擇感到滿意。

We have Steve Barger from KeyBanc Capital Markets.

我們有來自 KeyBanc Capital Markets 的 Steve Barger。

Can you hear me now?

你聽得到我嗎？

Yes, loud and clear.

是的，響亮而清晰。

This is Jacob Moore on the call for Steve. So first, 2 quick ones here on the guidance change. I think implied 4Q sales have a sequential step-up. Do you expect that to happen in all 3 segments? Or maybe what are the dynamics by segment, if not?

我是雅各摩爾為史蒂夫打電話。首先，有兩個關於指導變更的快速說明。我認為第四季的隱含銷售額會連續上升。您預計所有 3 個細分市場都會發生這種情況嗎？或者如果不是的話，各細分市場的動態是什麼？

Well, yes, we generally don't issue segment-level outlook, but you heard us talk about the strength in Engineered Products and that has really been the economic driver for us year-to-date. We expect that to continue in Q4. We did mention that we've got one of the K-MAX helicopters in our outlook. You know those helicopters sit in our Precision Products segment.

嗯，是的，我們通常不會發布細分市場的前景，但您聽到我們談論工程產品的實力，這確實是我們今年迄今為止的經濟驅動力。我們預計這種情況將在第四季度繼續。我們確實提到過，我們的前景中有一架 K-MAX 直升機。您知道這些直升機屬於我們的精密產品部門。

But really, when you think about all 3 elements of our outlook, the sales EBITDA and the free cash flow, it's our confidence in our Engineered Products segment and the progress we've seen year-to-date that really allows us to elevate our outlook on sales, elevate our outlook on EBITDA and to hold our outlook on free cash flow.

但實際上，當你考慮我們前景的所有 3 個要素時，即銷售 EBITDA 和自由現金流，我們對工程產品部門的信心以及我們今年迄今所取得的進展真正使我們能夠提高我們的銷售前景，上調EBITDA 前景，並維持自由現金流前景。

Yes. Jacob, this is Ian. I'll just add on Structures and Precision Products a little bit more color maybe. Like we continue to focus very heavily on -- to get healthy on our Structures businesses. We feel really confident that all the work that we've done early this year to correct material flow, manpower issues, getting back to takt time, for example, in H-60, A-10 movement and deliveries from Wichita to Jacks, all really start to manifest themselves in the fourth quarter as a result of all the good work we've done earlier this year, just doing a lot of challenges. So that's good.

是的。雅各布，這是伊恩。我可能會在結構和精密產品上添加更多顏色。就像我們繼續非常關注 - 讓我們的結構業務保持健康。我們非常有信心，我們今年年初為糾正物料流、人力問題、恢復節拍時間所做的所有工作，例如 H-60、A-10 運輸以及從威奇托到傑克斯的交付，都由於我們今年早一些時候所做的所有出色工作，我們在第四季度真正開始顯現自己，只是做了很多挑戰。所以這樣很好。

And Precision Products same thing, really transitioning a lot of our work and effort on the quality signature for our fuzing programs and transitioning, like I said, from K-MAX to KARGO, JPF wind down and getting cost out of that business. So I think we're in good shape.

Precision Products 也一樣，確實將我們在引信程序品質簽名上的大量工作和精力進行了轉變，就像我說的那樣，從 K-MAX 過渡到 KARGO，JPF 逐步結束並從該業務中削減成本。所以我認為我們的狀態很好。

Got it. Understood. The answer to that kind of flows into my next question, which was the implied big step-up in 4Q free cash flow. Confidence in there is coming from the K-MAX sale, is that right?

知道了。明白了。這種問題的答案就是我的下一個問題，第四季自由現金流的隱含大幅成長。信心來自於K-MAX的銷售，對嗎？

Well, again, the confidence is really coming from the Engineered Products segment, and we've got good line of sight to our free cash flow outlook. We consider all 3 segments, obviously, the risks and opportunities. Yes, the K-MAX aircraft sale contributes to our outlook. We're also expressing a range, so we've got multiple pathways to get there.

嗯，再說一遍，信心確實來自工程產品部門，我們對自由現金流前景有良好的認識。顯然，我們考慮了所有三個部分的風險和機會。是的，K-MAX 飛機的銷售有助於我們展望未來。我們也表達了一個範圍，因此我們有多種途徑可以到達該範圍。

But Ian is talking just a little bit about Structures. We don't talk a lot about cash flow at the segment level, but I can tell you that Structures has been a drag on cash year-to-date. We don't expect it to be a drag on cash flow in the fourth quarter. And so we expect more of the real strength we're seeing out of Engineered Products to drop through in the form of free cash flow.

但伊恩只是談了一點結構。我們不太談論部門層面的現金流，但我可以告訴你，今年到目前為止，結構一直拖累現金。我們預計這不會拖累第四季的現金流。因此，我們預計工程產品的更多真正實力將以自由現金流的形式體現出來。

Okay. Okay. Got it. Moving to the segments, just starting on Engineered Products, margin looks pretty good this quarter. How sustainable is that? Do you expect something similar in 4Q? Or are there variables that could prevent sustainable growth -- margin growth there?

好的。好的。知道了。轉向細分市場，從工程產品開始，本季的利潤率看起來相當不錯。這有多可持續？您預計第四季會出現類似情況嗎？或者是否存在可能阻礙永續成長（即利潤成長）的變數？

Yes. I mean you can kind of back into your margin expectation based on the sales outlook range and the EBITDA outlook range there. But what I can tell you is the demand environment remains robust in Engineered Products. As strong as the organic sales have been, I think, up 21%. The orders have been very strong. We're running at year-to-date book-to-bill north of 1.0.

是的。我的意思是，你可以根據銷售前景範圍和 EBITDA 前景範圍重新調整你的利潤率預期。但我可以告訴您的是，工程產品的需求環境仍然強勁。我認為有機銷售額成長了 21%，同樣強勁。訂單非常強勁。今年迄今為止，我們的訂單出貨比處於 1.0 以上。

And even with the increased velocity that we've seen through our shops in the Engineered Products side, our largest business unit, Kamatics, has seen it sold overdue actually increase materially over the course of the year. So in other words, there are orders that our customers are waiting for us to fulfill and we just need to get them through the shop. So the challenge for us has really been working with our suppliers and the supply chain to get the support we need to hit the volumes and to get the labor necessary. Coming out of COVID, it's been an industry trend, getting the labor to process these volumes.

即使我們在工程產品方面的商店看到了速度的增加，我們最大的業務部門 Kamatics 也發現逾期銷售在一年中實際上大幅增加。換句話說，我們的客戶正在等待我們履行一些訂單，我們只需要把它們送到商店即可。因此，我們面臨的挑戰實際上是與我們的供應商和供應鏈合作，以獲得我們達到產量所需的支援並獲得必要的勞動力。疫情過後，讓勞動力來處理這些數量已成為產業趨勢。

So as we look ahead in Q4 and beyond, we see, on the back of a commercial aerospace macro story, pretty solid growth ahead of us. And given the fact that we have not just OEM but also aftermarket exposure, we fully intend to get full value for our pricing and to ensure that we're covering the price/cost mix equation adequately. So feel pretty solid.

因此，當我們展望第四季及以後的情況時，我們看到，在商業航空航天宏觀故事的背景下，我們面前的成長相當穩健。考慮到我們不僅擁有 OEM，還擁有售後市場，我們完全打算充分發揮定價的價值，並確保我們充分涵蓋價格/成本組合等式。所以感覺還蠻踏實的。

Got it. That makes sense. Moving to Precision Products. I think margins are being dragged down there by R&D related to the KARGO UAV program. So I mean, first, is that correct? And then if so, how long does that persist?

知道了。這就說得通了。轉向精密產品。我認為與 KARGO 無人機專案相關的研發正在拖累利潤率。所以我的意思是，首先，這是正確的嗎？如果是這樣，這種情況會持續多久？

Yes. It's -- I mean, you got it right that the KARGO sits within our Precision Products segment. Now the big story in our Precision Products segment, as you well know, is the JPF volumes relative to -- we've talked about this a lot, the JPF volumes have come down substantially as the U.S. government program winds down. And so the challenge is really maintaining a solid quality and cost signature in the legacy fuse business. We're putting a lot of effort around that. You are aware of our prior disclosures around the consolidation of JPF and attacking cost there to that site consolidation in our Middletown facility.

是的。我的意思是，您說得對，KARGO 屬於我們的精密產品部門。現在，我們精密產品領域的大事，如您所知，是 JPF 銷售——我們已經討論過很多次了，隨著美國政府計劃的結束，JPF 銷量大幅下降。因此，真正的挑戰是在傳統保險絲業務中保持穩定的品質和成本特徵。我們正在為此付出很多努力。您知道我們之前披露的有關 JPF 合併的信息以及我們米德爾敦工廠的站點合併的攻擊成本。

But you're right, the KARGO R&D program sits within Precision Products. And though we get a significant proportion of our funding from the U.S. government on the contracts, the prototype contracts that we have underway, any company-funded R&D associated with the KARGO does flow through the Precision Products line. I'll let -- I'll hand over to Ian to talk a little bit more about KARGO and sort of the trajectory that we see there, but that's sort of the accounting of it.

但您是對的，KARGO 研發計畫屬於 Precision Products 範圍內。儘管我們從美國政府獲得了很大一部分資金用於合約、我們正在進行的原型合同，但與 KARGO 相關的任何公司資助的研發都會流經精密產品線。我將讓 - 我將交給伊恩（Ian）更多地談論 KARGO 以及我們在那裡看到的軌跡，但這就是對其的解釋。

Yes, exactly. So we obviously have a very important program with KARGO underway. As we said from the beginning, our investment strategy is milestone-based. We just talked about the contract we've got with U.S. Army, we are partners with New Earth Autonomy, which is very exciting. We've also talked about first flight. I know people are interested in that. It is -- we were months away, obviously, as the program ramped up, or weeks away, and now we're days away, which is very exciting.

對，就是這樣。因此，我們顯然正在與 KARGO 合作開展一項非常重要的計劃。正如我們從一開始就說過的，我們的投資策略是基於里程碑的。我們剛剛談到了我們與美國陸軍簽訂的合同，我們是 New Earth Autonomy 的合作夥伴，這非常令人興奮。我們也討論了第一次飛行。我知道人們對此感興趣。顯然，隨著計劃的推進，我們還需要幾個月的時間，或幾週的時間，而現在我們還需要幾天的時間，這非常令人興奮。

But I think from an R&D perspective, we're being very, very thoughtful, very mindful around not only the investment necessary to get KARGO to market and hit certain milestones in our competitive fly-offs and things for next year, and also, obviously, what's going on underneath with the rest of the fuzing program. But really, it's a balance with Engineered Products. Our Engineered Products segment also has a very healthy R&D budget. All those businesses that sit in that segment have a very robust pipeline of innovations and things we're attacking from a share perspective or a customer perspective. So really balancing best we can with KARGO and Engineered Products.

但我認為從研發的角度來看，我們非常、非常深思熟慮、非常注意，不僅是為了將KARGO 推向市場並在我們的競爭性飛行和明年的事情中達到某些里程碑所需的投資，而且，顯然， ，引信程序的其餘部分到底發生了什麼事。但實際上，這是與工程產品的平衡。我們的工程產品部門也擁有非常健康的研發預算。該細分市場中的所有企業都擁有非常強大的創新管道，我們正在從共享角度或客戶角度進行攻擊。因此，我們可以透過 KARGO 和工程產品真正做到最好的平衡。

Okay. Got it. That's helpful. While we're on the KARGO or maybe the MULS-A program, can you just remind us the time line milestones within the MULS-A program that you're planning to hit? And then maybe a follow-up to that, is this Army demonstration basically just a larger scale model of the current design?

好的。知道了。這很有幫助。當我們參與 KARGO 或 MULS-A 計劃時，您能否提醒我們您計劃達到的 MULS-A 計劃中的時間表里程碑？然後也許是後續行動，這次陸軍演示基本上只是目前設計的更大比例模型嗎？

Okay. So 2 things. One is from a milestone perspective, Yes, we are tracking towards with the U.S. Marine Corps on MULS-A, which is a fly-off. No set time yet for next year, but we anticipate it being in the later half of next year. So we're tracking the schedule there. And then from there, as I've expressed before, typically, what happens is the winner, it could be one or it could be others.

好的。所以有兩件事。一個是從里程碑的角度來看，是的，我們正在與美國海軍陸戰隊一起在 MULS-A 上進行跟踪，這是一次起飛。明年的具體時間還沒確定，但我們預計在明年下半年。所以我們正在跟踪那裡的時間表。然後從那裡開始，正如我之前所表達的，通常會發生什麼是勝利者，它可能是一個，也可能是其他人。

We then get follow-on contracts to build multiple variants to be field-tested, right? And that's the next step. That would be over a year, 1.5 years or so. You collect all that data, use these prototypes in different environments, get that customer feedback and then you go to kind of a low-rate production environment, which would be in a '25, '26 time frame, typically.

然後我們獲得後續合約來建造多個變體以進行現場測試，對嗎？這就是下一步。那將需要一年多，1.5年左右。您收集所有這些數據，在不同的環境中使用這些原型，獲取客戶回饋，然後進入低速率的生產環境，通常是在「25」、「26」的時間範圍內。

Army, a little bit same but different. So the demonstration that we've been invited to, which, by the way, is invite-only. You have to submit some proposals. It's not just an open-ended competition or demonstration. So you have to be invited. The same MULS-A that we have, as I mentioned, the capability there, hits the requirements what the Army is looking for, for a medium lift platform, autonomous platform.

軍隊，有點相同但又不同。我們受邀參加的演示，順便說一句，僅限受邀者參加。你必須提交一些建議。這不僅僅是一場開放式的競賽或演示。所以你必須被邀請。正如我所提到的，我們擁有的 MULS-A 能力滿足了陸軍對中型升力平台、自主平台的需求。

So this is ARMY Futures Command. This is a demonstration that they've been hosting to really look at technology because they have the same problem the Marine Corps has, which is how do you move things around in extended battlefield. So extend logistics, contested logistics, things like that.

這是陸軍未來司令部。這是他們一直在舉辦的一次真正關注技術的演示，因為他們面臨著與海軍陸戰隊相同的問題，即如何在廣闊的戰場上移動物體。因此，要擴展物流、有爭議的物流等。

So what we don't know yet is after the Army milestone, where they go from there. It's a little bit different process. But I can tell you that the Army's demand for unmanned KARGO capability is probably the largest in the services just by nature of what they do. So that's kind of our path and milestone with those 2 programs on the service side.

因此，我們還不知道陸軍里程碑之後，他們將何去何從。這是一個有點不同的過程。但我可以告訴你，陸軍對無人駕駛 KARGO 能力的需求可能是各軍種中最大的，就其工作性質而言。這就是我們在服務方面這兩個項目的路徑和里程碑。

(Operator Instructions) I am showing no further questions at this time. I would now like to turn the conference back over to Matthew Petterson for closing remarks.

（操作員說明）我目前沒有提出任何進一步的問題。現在我想將會議轉回給馬修·佩特森 (Matthew Petterson) 致閉幕詞。

Thank you for joining us on today's conference call. We look forward to speaking with you again as we report our fourth quarter results.

感謝您參加今天的電話會議。我們期待在報告第四季度業績時再次與您交談。

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

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。