Mayville Engineering Company Inc (MEC) 2023 Q3 法說會逐字稿

Thank you all for joining. I'd like to welcome you all to the Mayville Engineering Company Third Quarter 2023 Earnings Call. My name is Brica, and I will be the moderator for today's call. (Operator Instructions) I would now like to pass the conference over to your host, Stefan Neely, to begin. So, Stefan, please go ahead.

感謝大家的加入。歡迎大家參加 Mayville Engineering Company 2023 年第三季財報電話會議。我叫布里卡，我將擔任今天電話會議的主持人。 （操作員指示）我現在想將會議交給主持人 Stefan Neely 開始。那麼，斯特凡，請繼續。

Thank you, operator. On behalf of our entire team, I'd like to welcome you to our third quarter 2023 results conference call. Leading the call today is MEC's President and CEO, Jag Reddy; and Todd Butz, Chief Financial Officer.

謝謝你，接線生。我謹代表我們整個團隊歡迎您參加我們的 2023 年第三季業績電話會議。今天主持電話會議的是 MEC 總裁兼執行長 Jag Reddy；和財務長 Todd Butz。

Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission.

今天的討論包含有關未來業務和財務預期的前瞻性陳述。由於各種風險和不確定性，包括我們向美國證券交易委員會提交的定期報告中所述的風險，實際結果可能與今天的前瞻性聲明中預測的結果有顯著差異。

Except as required by law, we undertake no obligation to update our forward-looking statements. Further, this call will include the discussion of certain non-GAAP financial measures. Reconciliation of these measures to the closest GAAP financial measure is included in our quarterly earnings press release, which is available at mecinc.com. Following our prepared remarks, we will open the line for questions.

除法律要求外，我們不承擔更新前瞻性聲明的義務。此外，本次電話會議也將討論某些非公認會計準則財務指標。這些指標與最接近的 GAAP 財務指標的調整包含在我們的季度收益新聞稿中，該新聞稿可在 mecinc.com 上取得。在我們準備好的發言之後，我們將開通提問熱線。

With that, I would like to turn the call over to Jag.

有了這個，我想把電話轉給賈格。

Thank you, Stefan, and welcome to those joining us on the call and webcast. As anticipated, our third quarter results demonstrated significant year-over-year growth in revenues, adjusted EBITDA and free cash flow. These strong results were the product of continued steady end market demand and targeted market share gains, particularly in our commercial vehicle, military and powersports markets.

謝謝你，Stefan，歡迎加入我們的電話會議和網路廣播。正如預期的那樣，我們第三季的業績顯示收入、調整後 EBITDA 和自由現金流同比顯著增長。這些強勁的業績是持續穩定的終端市場需求和目標市場份額成長的結果，特別是在我們的商用車、軍事和動力運動市場。

Early in the third quarter, we closed on the acquisition of Mid-States Aluminum or MSA, which was also a contributor to our revenue and earnings growth in the third quarter. In addition to the cross-selling opportunities afforded by MSA's aluminum fabrication and extrusion capabilities, our core business continues to enjoy a robust sales pipeline entering 2024.

第三季初，我們完成了對 Mid-States Aluminium 或 MSA 的收購，這也是我們第三季營收和獲利成長的貢獻者。除了 MSA 的鋁製造和擠壓能力提供的交叉銷售機會外，進入 2024 年，我們的核心業務將繼續享有強勁的銷售管道。

Even as we look forward into a potentially more muted environment for end market growth, we are optimistic about our ability to deliver above market growth through the cycle by expanding our share of wallet with our current customers and improving the utilization of our existing assets.

儘管我們預計終端市場成長可能會更加溫和，但我們對透過擴大現有客戶的錢包份額和提高現有資產的利用率在整個週期內實現高於市場成長的能力感到樂觀。

Importantly, our operational and commercial self-help initiatives are continuing to deliver improved profitability and cash generation through improved cost absorption, value-based pricing and enhanced working capital efficiency.

重要的是，我們的營運和商業自助計畫透過改善成本吸收、基於價值的定價和提高營運資金效率，持續提高獲利能力和現金產生能力。

During the third quarter, we generated a record $16.1 million of free cash flow, representing cash conversion in excess of 80%, a new record for our business. Consistent with our capital allocation priorities, we reduced our outstanding borrowings by more than $17 million in the third quarter, while repurchasing $1 million worth of common equity, leaving $17 million under our existing $25 million authorization as of September 30.

第三季度，我們創造了創紀錄的 1,610 萬美元自由現金流，現金轉換率超過 80%，創下了我們業務的新紀錄。根據我們的資本配置優先事項，我們在第三季將未償還借款減少了超過1700 萬美元，同時回購了價值100 萬美元的普通股，截至9 月30 日，我們現有的2500 萬美元授權中還剩下1700 萬美元。

This year alone, we have repurchased $2 million worth of shares under our existing authorization. In September, we hosted our inaugural Investor Day event at our Hazel Park facility outside of Metro Detroit. At the event, we introduced a 3-year road map for MEC, one that leverages the key pillars of our MBX framework to drive long-term value creation for our shareholders.

光是今年，我們就根據現有授權回購了價值 200 萬美元的股票。九月，我們在底特律大都會郊外的 Hazel Park 工廠舉辦了第一屆投資者日活動。在此次活動中，我們介紹了 MEC 的 3 年路線圖，該路線圖利用 MBX 框架的關鍵支柱來推動為股東創造長期價值。

At the event, we underscored how we intend to drive organic sales growth, adjusted EBITDA margin and improve free cash flow generation while continuing to develop a leading manufacturing platform of scale within key growth markets such as energy transition. As a team, we are committed to excellence through accountability and introduced new 3-year financial targets at the event, which our entire team is focused on achieving.

在此次活動中，我們強調了我們打算如何推動有機銷售成長、調整後的 EBITDA 利潤率和改善自由現金流的產生，同時繼續在能源轉型等關鍵成長市場中開發領先的規模製造平台。作為一個團隊，我們致力於透過問責制實現卓越，並在活動中提出了新的 3 年財務目標，我們整個團隊都致力於實現這一目標。

By the year-end 2026, we expect to deliver between $105 million and $135 million of annual adjusted EBITDA, along with annual net sales between $750 million and $850 million, adjusted EBITDA margins between 14% to 16% and annual free cash flow generation of $65 million to $75 million. While these are ambitious targets, they are entirely achievable.

到2026 年底，我們預計將實現1.05 億至1.35 億美元的年度調整後EBITDA、7.5 億至8.5 億美元的年度淨銷售額、14% 至16% 的調整後EBITDA 利潤率以及14% 至16% 的年度自由現金流產生6500萬至7500萬美元。雖然這些都是雄心勃勃的目標，但它們是完全可以實現的。

Our third quarter results demonstrate early progress towards this plan. We remain focused on delivering ratable, consistent growth into 2024, building upon our track record of execution. While we are very pleased with our third quarter performance, it is important to highlight that these results include continued cost under absorption associated with planned ramp-ups at our Hazel Park and Atkins facilities.

我們第三季的業績顯示該計劃取得了初步進展。我們仍然專注於在我們的執行記錄的基礎上，在 2024 年實現可觀的、持續的成長。雖然我們對第三季的業績感到非常滿意，但必須強調的是，這些結果包括與我們的 Hazel Park 和阿特金斯工廠的計畫產能提升相關的持續吸收成本。

Fixed costs under absorption at Hazel Park alone impacted the third quarter adjusted EBITDA and adjusted EBITDA margin by $1.7 million and 110 basis points, respectively. Excluding the impact of the Hazel Park ramp-up, our normalized adjusted EBITDA was 13.2%.

光是 Hazel Park 吸收的固定成本就對第三季調整後 EBITDA 和調整後 EBITDA 利潤率分別造成了 170 萬美元和 110 個基點的影響。排除 Hazel Park 產能擴張的影響，我們的標準化調整後 EBITDA 為 13.2%。

We continue to expect that Hazel Park will ramp up fully by the end of 2024, contributing $100 million in annual revenues with adjusted EBITDA margins of approximately 15% in 2025. As of September 30, we currently had commitment for all but approximately $25 million of the projected $100 million in annual revenue contribution of that facility.

我們仍預期Hazel Park 將在2024 年底全面崛起，到2025 年貢獻1 億美元的年收入，調整後的EBITDA 利潤率約為15%。截至9 月30 日，我們目前已承諾除約2,500 萬美元外的所有項目該設施預計每年貢獻 1 億美元的收入。

Turning now to a view of market conditions across our 5 primary end markets. Let's begin with commercial vehicle market, which represents approximately 40% of our trailing 12-month revenues.

現在來看看我們 5 個主要終端市場的市場狀況。讓我們從商用車市場開始，該市場約占我們過去 12 個月收入的 40%。

During the third quarter, commercial vehicle revenue increased 6.6% on a year-over-year basis driven by strong demand and elevated build rates. Customer demand requirements continue to indicate slowing demand going into the end of the year and into 2024, as the industry navigates regulatory changes as well as a general slowing in economic activity.

第三季度，在需求強勁和建造率提高的推動下，商用車收入年增 6.6%。隨著行業應對監管變化以及經濟活動普遍放緩，客戶需求持續表明需求將在年底和 2024 年放緩。

Currently, ACT Research forecasts the Class 8 vehicle production to increase 6.6% year-over-year in 2023 to 336,000 units. The current projection indicates that build rates will slow during the fourth quarter and decline by nearly 4% on a year-over-year basis.

目前，ACT Research 預測 2023 年 8 級汽車產量將年增 6.6%，達到 336,000 輛。目前的預測表明，第四季度建設速度將放緩，年減近 4%。

For 2024, ACT projections reflect a deeper softening in demand to the middle of the year with current production estimates reflecting an 18.5% decline for the full year 2024. Furthermore, we are currently experiencing volume disruptions associated with the United Auto Workers strike with one of our customers. This has impacted our volumes for their products so far during the fourth quarter, and will continue to do so until an agreement is reached.

對於2024 年，ACT 預測反映到年中需求將進一步疲軟，目前的產量估計反映2024 年全年將下降18.5%。此外，我們目前正經歷與美國汽車工人聯合會罷工相關的產量中斷，其中之一是我們的顧客。這已經影響了我們第四季度迄今為止的產品銷量，並將繼續影響到達成協議為止。

Next is the construction and access market, which represented approximately 18% of our trailing 12-month revenues. Construction and access revenue declined 2.3% on a year-over-year basis in the third quarter, given weaker fundamentals within the residential housing market, which continues to be impacted by the elevated interest rate environment. While residential construction trends appear to have troughed and infrastructure and energy market demand remained stable, we still expect to see demand softness year-over-year through the remainder of 2023 and into 2024 with the potential for modest improvement later in 2024.

其次是建築和接入市場，約占我們過去 12 個月收入的 18%。由於住宅市場基本面疲軟，且持續受到利率上升環境的影響，第三季建築和接入收入較去年同期下降 2.3%。儘管住宅建設趨勢似乎已經觸底，基礎設施和能源市場需求保持穩定，但我們仍預計 2023 年剩餘時間和 2024 年需求將同比疲軟，並有可能在 2024 年稍後出現小幅改善。

The powersports market represented approximately 16% of our trailing 12-month revenues and increased by 7.7% on a year-over-year basis in the third quarter. We continue to benefit from market share gains, which include new customer programs, which were partially offset by cooling in consumer discretionary spending.

動力運動市場約占我們過去 12 個月營收的 16%，第三季年增 7.7%。我們繼續受益於市場份額的成長，其中包括新客戶計劃，但消費者可自由支配支出的降溫部分抵消了這一增長。

Given current market conditions, we anticipate customers will seek to bolster demand through rebates and incentives going into the holiday season. As we look forward into 2024, indications are that continued slowing in demand would result in growth deceleration as dealer inventory levels have normalized. Our agriculture market represented approximately 10% of trailing 12-month revenues and increased 4.6% on a year-over-year basis during the third quarter. The increase during the quarter was primarily driven by growth in large ag demand, along with the contribution of MSA's ag-related sales, which offset continued overall softness in our legacy small ag market. This trend is in line with our expectations as global food stocks remain tight and crop prices remain elevated.

鑑於當前的市場狀況，我們預計客戶將在假期期間透過回扣和激勵措施來刺激需求。展望 2024 年，有跡象表明，隨著經銷商庫存水準已經正常化，需求持續放緩將導致成長減速。我們的農業市場約佔過去 12 個月營收的 10%，第三季年增 4.6%。本季的成長主要是由大型農業需求的成長以及 MSA 農業相關銷售的貢獻所推動的，這抵消了我們傳統小型農業市場持續的整體疲軟。這一趨勢符合我們的預期，因為全球糧食庫存仍然緊張，農作物價格仍然高漲。

Given elevated crop prices, we believe producer demand will increase through the end of the year and into 2024 with some deceleration going into the middle of 2024. The demand tailwinds in large ag going into 2024 should mostly offset softness in small ag demand.

鑑於農作物價格上漲，我們認為生產者需求將在今年年底和 2024 年之前增加，並在 2024 年中期有所減速。進入 2024 年大型農業的需求順風應該大部分抵消小型農業需求的疲軟。

Our military market represented approximately 6% of trailing 12-month revenues and increased 70% on a year-over-year basis in the third quarter, driven by new program wins and bill rate increases. Our customers have solid contractual backlogs with the U.S. government, and we continue to see good volumes based on new vehicle introductions and related programs.

我們的軍事市場約佔過去 12 個月收入的 6%，在新項目獲勝和帳單費率上漲的推動下，第三季年增 70%。我們的客戶與美國政府有大量的合約積壓，並且基於新車的推出和相關計劃，我們繼續看到大量的合約。

However, we foresee volume growth moderating during the fourth quarter and into 2024 due to the expected expiration of some legacy projects. I would also point out that with the completion of MSA acquisition during the quarter, the majority of MSA revenues are represented within our other end market category, which grew by over $12 million year-over-year in the third quarter.

然而，由於一些遺留項目預計到期，我們預計第四季和 2024 年銷售成長將放緩。我還想指出，隨著本季 MSA 收購的完成，MSA 的大部分收入都來自我們的其他終端市場類別，該類別在第三季同比增長超過 1,200 萬美元。

The MSA acquisition closed on July 1. And since then, our teams have been hard at work with integration and cross-selling activities. Overall, the MSA integration is going well and we are on track to have them fully integrated by the end of the year, as expected.

MSA 收購於 7 月 1 日結束。從那時起，我們的團隊一直致力於整合和交叉銷售活動。總體而言，MSA 整合進展順利，我們預計將在今年年底前將它們完全整合。

Importantly, as we highlighted at our Investor Day, we see MSA generating over $100 million of sales by 2026 with at least $25 million coming from revenue synergies with legacy MEC customers. As of end of September, we are progressing as expected towards the target, as well as the expected cost synergies that we are targeting through the implementation of our MBX lean manufacturing framework at MSA.

重要的是，正如我們在投資者日所強調的那樣，我們預計到 2026 年 MSA 的銷售額將超過 1 億美元，其中至少 2500 萬美元來自與傳統 MEC 客戶的收入協同效應。截至 9 月底，我們正在按預期取得進展，實現目標以及透過在 MSA 實施 MBX 精益製造框架實現的預期成本協同效應。

Shifting now to an update on our MBX initiative. During the third quarter, we continued to progress in the implementation of our MBX value creation framework. I am pleased to report that we are on track to achieve the objectives we laid out last fall when we first announced the MBX framework.

現在轉向我們 MBX 計劃的更新。第三季度，我們在 MBX 價值創造框架的實施方面繼續取得進展。我很高興地向大家報告，我們正在實現去年秋天首次宣布 MBX 框架時所設定的目標。

As we highlighted at our Investor Day, MBX is rooted in organic commercial growth, improved cost absorption through lean manufacturing practices, value-based pricing and working capital efficiency. These key areas of self-help initiatives will allow us to create sustainable value and deliver above-market growth through the cycle.

正如我們在投資者日強調的那樣，MBX 植根於有機商業成長，透過精益製造實踐、基於價值的定價和營運資金效率來改善成本吸收。這些自助舉措的關鍵領域將使我們能夠創造可持續的價值，並在整個週期中實現高於市場的成長。

Commercially, we are targeting growth in higher value, high-growth adjacent markets, including clean technologies and energy transition in addition to expanding our share of wallet among our current customer base. Achieving this goal is dependent on improved utilization of our equipment through better labor productivity as well as utilizing existing capacity at MSA and Hazel Park. Allow me to share some of the commercial milestones we achieved during the third quarter.

在商業上，我們的目標是在更高價值、高成長的鄰近市場實現成長，包括清潔技術和能源轉型，以及擴大我們在現有客戶群中的份額。實現這一目標取決於透過提高勞動生產力以及利用 MSA 和 Hazel Park 的現有產能來提高設備利用率。請容許我分享我們在第三季取得的一些商業里程碑。

Starting out, we are pleased to report that we have been awarded purchase orders for our first cross-selling win after the acquisition of MSA. Our first award was in the commercial vehicle space, which was the largest market opportunity within our cross-selling targets. We have continued to build momentum in our core activity, and we expect to continue to win awards for the coming quarters.

首先，我們很高興地報告，我們在收購 MSA 後首次獲得交叉銷售勝利，並獲得了採購訂單。我們的第一個獎項是在商用車領域，這是我們交叉銷售目標中最大的市場機會。我們繼續在核心活動中建立動力，並期望在未來幾季繼續贏得獎項。

During the third quarter, we continued the expansion of our customer relationship to supply battery thermal management products to multiple end customers as the EV transition continues to progress. This relationship will continue to expand as our customer grows their electric vehicle battery systems while we also are starting to work on significant outsourcing programs with this customer.

第三季度，隨著電動車轉型的不斷進展，我們繼續擴大客戶關係，向多個最終客戶提供電池熱管理產品。隨著我們的客戶發展其電動車電池系統，這種關係將繼續擴大，同時我們也開始與該客戶合作進行重要的外包專案。

In the quarter, we further expanded a new customer relationship in the powersports market with new program wins on new products. We expect to see continued significant growth with this new customer relationship as we look ahead into 2024.

本季度，我們在新產品上贏得了新項目，進一步擴大了動力運動市場的新客戶關係。展望 2024 年，我們預期這種新的客戶關係將持續顯著成長。

We also made progress on securing additional market share within our large ag and construction customer. These new parts were related to next-generation products and continue to build momentum on winning new business with the capacity we have installed in Hazel Park. We have continued to gain additional market share as our commercial vehicle customers plan for their vehicle updates, both on next-generation products and battery electric vehicle platforms.

我們還在大型農業和建築客戶中確保額外的市場份額方面取得了進展。這些新零件與下一代產品相關，並繼續利用我們在 Hazel Park 的產能贏得新業務。隨著我們的商用車客戶計劃在下一代產品和電池電動車平台上進行車輛更新，我們不斷獲得額外的市場份額。

We expect to continue to grow share over the next 2 years with the amount of change that will occur in this industry. As we highlighted during our Investor Day, our 2026 net sales targets are dependent on capturing incremental customer commitments of $65 million to $125 million, including MSA cross-selling synergies.

隨著該行業發生的變化，我們預計未來兩年份額將繼續增長。正如我們在投資者日期間所強調的那樣，我們 2026 年的淨銷售目標取決於獲得 6,500 萬至 1.25 億美元的增量客戶承諾，包括 MSA 交叉銷售協同效應。

Based on our current level of sales activity and recent wins, we remain confident that this is achievable. The other pillar of MBX is commercial excellence, where our focus is to implement strategic and value-based pricing models across our customer programs. Year-to-date, the teams have been working tirelessly to implement a programmatic pricing model.

根據我們目前的銷售活動水平和最近的勝利，我們仍然相信這是可以實現的。 MBX 的另一個支柱是商業卓越，我們的重點是在我們的客戶計劃中實施策略和基於價值的定價模式。今年迄今為止，團隊一直在不懈地努力實施程序化定價模型。

On the operational excellence front, we have continued our rigorous implementation approach centered around our quarterly President’s Kaizen, supplemented by monthly operational and commercial excellence Kaizens.

在卓越營運方面，我們繼續以季度總裁 Kaizen 為中心的嚴格實施方法，並以每月營運和商業卓越 Kaizen 為補充。

During the third quarter, we completed 25 Kaizens with a focus on sustainability of cost savings measures identified. Overall, our team has performed over 100 MBX lean events through the end of the third quarter. These savings put us on track to achieve the 40 to 70 basis points of margin improvement reflected in our 2023 guidance, as well as the 100 to 150 basis points of margin improvement we expect to achieve by 2026.

第三季度，我們完成了 25 項改善，重點關注已確定的成本節約措施的可持續性。總體而言，截至第三季末，我們的團隊已開展了 100 多次 MBX 精實活動。這些節省使我們預計將實現 2023 年指導中反映的利潤率改善 40 至 70 個基點，以及我們預計在 2026 年實現的利潤率改善 100 至 150 個基點。

Given the current demand environment, the execution we have achieved with our MBX initiatives and the ongoing ramp-up of new program launches, we continue to expect consistent margin performance and free cash flow conversion to close off the year.

考慮到當前的需求環境、我們透過 MBX 計劃實現的執行以及新計劃推出的持續增加，我們繼續預計今年將保持一致的利潤率表現和自由現金流轉換。

Looking ahead to 2024, we anticipate some modest softening across our end markets given broader expectations for a general slowing in the U.S. economic growth next year. However, we anticipate ongoing operational and commercial growth initiatives will position us to deliver above-market growth.

展望 2024 年，鑑於人們普遍預期明年美國經濟成長將普遍放緩，我們預期終端市場將出現溫和疲軟。然而，我們預計持續的營運和商業成長舉措將使我們能夠實現高於市場的成長。

Our ability to deliver above-market growth into 2024 depends in part on driving improved asset optimization across our system, continued price discipline and sustained cost management, all of which were on pace to deliver. 2024 will be a year of ratable progress for us, one where we expect to begin to fully realize the benefits of MBX initiatives, which are expected to support sustained organic growth, margin expansion and improved working capital efficiency.

我們能否在 2024 年實現高於市場的成長，部分取決於推動整個系統的資產優化改進、持續的價格紀律和持續的成本管理，所有這些都在穩步實現。 2024 年對我們來說將是取得重大進展的一年，我們預計將開始充分實現 MBX 計畫的好處，這些計畫預計將支持持續的有機成長、利潤率擴張和提高營運資金效率。

As before, we intend to prioritize cash generation towards the aggressive reduction in outstanding borrowings, putting us on pace to achieve a net leverage ratio between 1.5x and 2.0x by the end of 2024. Since the announcement of the MSA acquisition, we have received numerous indications of interest from potential acquisition candidates, many of which fit nicely within our acquisition criteria for lightweight materials and high-growth end market exposure.

和以前一樣，我們打算優先考慮現金生成，以大幅減少未償還借款，從而使我們能夠在 2024 年底前實現 1.5 倍至 2.0 倍的淨槓桿率。自宣布收購 MSA 以來，我們已收到潛在收購候選者表現出大量興趣，其中許多非常符合我們對輕質材料和高成長終端市場的收購標準。

While we will continue to build a solid funnel of high-quality acquisition candidates, our chief focus over the near term will be on using net leverage to ensure continued balance sheet optionality through the cycle.

雖然我們將繼續建立一個堅實的高品質收購候選管道，但我們近期的主要重點將是利用淨槓桿率來確保整個週期內資產負債表的持續選擇性。

In summary, as I have highlighted today, we delivered on several important strategic growth milestones during the third quarter, all of which play a role in building a leading integrated solutions platform equipped to take share in higher-value, underserved growth markets.

總而言之，正如我今天所強調的那樣，我們在第三季度實現了幾個重要的戰略成長里程碑，所有這些都在建立領先的整合解決方案平台方面發揮了作用，該平台能夠在價值更高、服務不足的成長市場中佔據份額。

As a team, we remain highly focused on delivering a high say/do ratio, one where a continued focus on program execution is at the center of all we do. Collectively, we remain focused on delivering a superior return on invested capital, whether through organic investments, acquisitions or the repurchase of our own common equity.

作為一個團隊，我們仍然高度專注於提供高的說/做比率，持續關注專案執行是我們所有工作的核心。總的來說，我們仍然致力於提供卓越的投資資本回報，無論是透過有機投資、收購或回購我們自己的普通股。

As we look to the coming year, we will continue to hone and refine our approach to capital allocation as we seek to maximize value for all of our shareholders. With that, I will now turn the call over to Todd to review our financial results.

展望來年，我們將繼續磨練和完善我們的資本配置方法，力求為所有股東實現價值最大化。現在，我將把電話轉給托德，以審查我們的財務表現。

Thank you, Jag. I'll begin my prepared remarks with an overview of our third quarter financial performance, followed by an update on our balance sheet and liquidity.

謝謝你，賈格。我將首先概述我們第三季的財務業績，然後介紹我們的資產負債表和流動性的最新情況。

Total sales for the third quarter increased 16.1% and a year-over-year basis to $158.2 million, driven by a combination of the MSA acquisition and improved organic sales volumes, partially offset by softening demand in our construction and agricultural end markets.

第三季的總銷售額年增 16.1%，達到 1.582 億美元，這得益於 MSA 收購和有機銷售的提高，但部分被建築和農業終端市場需求疲軟所抵消。

When excluding the MSA acquisition, organic net sales growth was 6.2% on a year-over-year basis. Our manufacturing margin was $19 million in the third quarter as compared to $15.5 million in the same prior year period. The increase was primarily driven by increased organic volumes, MBX initiatives and the acquisition of MSA, offset by unabsorbed fixed costs associated with new project launches and an $891,000 negative impact from the inventory valuation step-up associated with MSA.

排除 MSA 收購後，有機淨銷售額年增 6.2%。第三季我們的製造利潤為 1,900 萬美元，去年同期為 1,550 萬美元。這一增長主要是由於有機銷售的增加、MBX 計劃和MSA 的收購所推動，但被與新項目啟動相關的未吸收固定成本以及與MSA 相關的庫存估值上升帶來的891,000 美元的負面影響所抵消。

Our manufacturing margin rate was 12% for the third quarter of 2023 as compared to 11.3% from the prior year period or an increase of 70 basis points. When excluding the impact of the unabsorbed fixed costs and the inventory adjustment, our manufacturing margin would have been 13.7% or an increase of 240 basis points as compared to the prior year period.

2023 年第三季我們的製造業利潤率為 12%，比去年同期的 11.3% 增加了 70 個基點。如果排除未吸收的固定成本和庫存調整的影響，我們的製造利潤率為13.7%，比去年同期增加240個基點。

Profit sharing, bonus and deferred compensation expenses increased by $2.2 million to $2.3 million for the third quarter of 2023, which was driven by the lower stock-based compensation expense in the prior year period due to forfeitures of unvested awards.

2023 年第三季的利潤分享、獎金和遞延薪酬費用增加了 220 萬美元，達到 230 萬美元，這是由於上一年期間因未歸屬獎勵被沒收而導致的股票薪酬費用較低所致。

Other selling, general and administrative expenses were $8.6 million for the third quarter of 2023 as compared to $6.5 million for the same prior year period. The increase was driven by $1 million of legal expenses relating to our former fitness customer, $500,000 of transaction costs associated with the MSA acquisition and increased salaries, wages and benefits.

2023 年第三季的其他銷售、一般和管理費用為 860 萬美元，而去年同期為 650 萬美元。這一增長是由與我們前健身客戶相關的 100 萬美元法律費用、與 MSA 收購相關的 50 萬美元交易成本以及薪水、工資和福利的增加所推動的。

As we highlighted at our Investor Day in September, we believe that SG&A expenses in the near term will be between 4.5% to 5.5% of net sales as our public company costs increased as we work through meeting SOC compliance requirements. In the longer term, we expect operating leverage will drive our SG&A down to between 4.5% and 5% of net sales by 2026.

正如我們在9 月的投資者日所強調的那樣，我們認為，隨著我們努力滿足SOC 合規要求，我們的上市公司成本會增加，因此短期內的SG&A 費用將佔淨銷售額的4.5% 至5.5%。從長遠來看，我們預計到 2026 年，營運槓桿將推動我們的 SG&A 佔淨銷售額的 4.5% 至 5% 之間。

Interest expense was $3.9 million for the third quarter of 2023 as compared to $830,000 in the prior year period due to higher interest rates and higher borrowings under our credit facility. The increases in borrowings is due to the acquisition of MSA, which closed on July 1, 2023.

由於利率上升和信貸安排下的借款增加，2023 年第三季的利息支出為 390 萬美元，而去年同期為 83 萬美元。借款增加是由於收購 MSA，該收購於 2023 年 7 月 1 日完成。

Given our current net leverage, we are subject to a higher spread on our floating rate debt, combined with higher sulfur rates resulted in the elevated interest rate during the quarter. As we continue to pay down our debt, we expect that interest expense will continue to decline, not only due to lower borrowings, but also because of the step-down in our spread as a result of declining net leverage.

鑑於我們目前的淨槓桿率，我們的浮動利率債務利差較高，加上硫磺費率較高，導致本季利率上升。隨著我們繼續償還債務，我們預計利息支出將繼續下降，這不僅是因為借款減少，還因為淨槓桿率下降導致利差縮小。

Adjusted EBITDA increased to $19.2 million versus $16.1 million for the same prior year period. Adjusted EBITDA margin percent increased by 30 basis points to 12.1% in the current quarter as compared to 11.8% for the same prior year period. The increase in our adjusted EBITDA margin was primarily due to increased organic volumes, MBX initiatives and the MSA acquisition, partially offset by $0.5 million of higher underabsorbed fixed costs at Hazel Park.

調整後 EBITDA 增至 1,920 萬美元，而去年同期為 1,610 萬美元。本季調整後 EBITDA 利潤率成長 30 個基點，達到 12.1%，而去年同期為 11.8%。調整後 EBITDA 利潤率的增加主要是由於有機銷售的增加、MBX 計劃和 MSA 收購，但部分被 Hazel Park 未吸收的固定成本增加 50 萬美元所抵消。

Adjusted EBITDA margin progression is evident and demonstrates early advancement towards our 2026 goal of 14% to 16%. Turning now to our statement of cash flows and balance sheet.

調整後的 EBITDA 利潤率進展明顯，顯示我們已提前實現 2026 年 14% 至 16% 的目標。現在轉向我們的現金流量表和資產負債表。

Free cash flow during the third quarter of 2023 was $16.1 million as compared to $5.2 million in the prior year period. As Jag mentioned, free cash flow generation for the quarter was the highest in any quarter since the IPO and represented a conversion rate of 84% of adjusted EBITDA. The improvement in free cash flow year-over-year was primarily due to the $8.9 million decrease in capital expenditures resulting from the completion of the Hazel Park facility and improved inventory turns as we continue to implement lean inventory management processes.

2023 年第三季的自由現金流為 1,610 萬美元，去年同期為 520 萬美元。正如 Jag 所提到的，該季度的自由現金流量是自 IPO 以來任何季度中最高的，調整後 EBITDA 的轉換率為 84%。自由現金流的同比改善主要是由於 Hazel Park 設施的竣工以及我們繼續實施精益庫存管理流程而改善的庫存週轉導致資本支出減少了 890 萬美元。

With the heavy capital investment cycle in 2022 behind us, we are focused on improving working capital, and we were able to generate strong free cash flow results that put us on pace to meet our second half of the year free cash flow goal of $25 million to $35 million and show a significant progress towards our 2026 free cash flow target of $65 million to $75 million.

隨著 2022 年大量資本投資週期的結束，我們專注於改善營運資本，我們能夠產生強勁的自由現金流結果，使我們有望實現下半年 2500 萬美元的自由現金流目標至3500 萬美元，表明我們在在實現2026 年6,500 萬至7,500 萬美元自由現金流目標方面取得了重大進展。

As of the end of the third quarter of 2023, our net debt, which includes bank debt, financing agreements, finance lease obligations and cash and cash equivalents, was $169.6 million as compared to $74 million at the end of the third quarter of 2022, and resulted in a net leverage ratio of 2.46x as of September 30.

截至 2023 年第三季末，我們的淨債務（包括銀行債務、融資協議、融資租賃義務以及現金和現金等價物）為 1.696 億美元，而 2022 年第三季末為 7,400 萬美元。截至9 月30日，淨槓桿率為2.46 倍。

As we have stated previously, it's our intention to use free cash flow generation to reduce our net leverage ratio to between 1.5 and 2x by the end of 2024. And during the third quarter alone, we repaid approximately $17 million of borrowings using available free cash flow.

正如我們之前所說，我們打算利用自由現金流生成，到 2024 年底將淨槓桿率降低至 1.5 至 2 倍之間。僅在第三季度，我們就使用可用自由現金償還了約 1700 萬美元的借款流動。

In light of our third quarter results and the outlook for the rest of the year, we are reiterating our financial guidance for the full year 2023. For the full year 2023, we continue to expect the following: net sales of between $580 million and $610 million, adjusted EBITDA of between $66 million and $71 million, capital expenditures of between $15 million and $20 million. Our current full year 2023 guidance does not include any impact from the ongoing strikes within the CV and auto industries.

鑑於我們第三季的業績和今年剩餘時間的前景，我們重申 2023 年全年的財務指引。對於 2023 年全年，我們繼續預計：淨銷售額在 5.8 億美元至 610 美元之間百萬美元，調整後的EBITDA 在6,600 萬美元至7,100 萬美元之間，資本支出在1,500 萬美元至2,000 萬美元之間。我們目前的 2023 年全年指引不包括商用車和汽車產業持續罷工的任何影響。

Beginning in November, we estimate these strikes could negatively impact net sales by approximately $6 million to $7 million per month and adjusted EBITDA by $1 million to $2 million per month.

從 11 月開始，我們估計這些罷工可能會對每月淨銷售額產生約 600 萬至 700 萬美元的負面影響，並對每月調整後的 EBITDA 產生 100 萬至 200 萬美元的負面影響。

With that, operator, that concludes our prepared remarks. Please open the line for questions as we begin our question-and-answer session.

操作員，我們準備好的發言到此結束。當我們開始問答環節時，請打開提問專線。

(Operator Instructions) We have the first question from Vlad Bystricky from Citigroup.

（操作員說明）我們有來自花旗集團的 Vlad Bystricky 提出的第一個問題。

So thanks for all the information and the update today. Maybe just since you've given some initial thoughts on '24 here, any color on how we should be thinking about raw material pass-throughs impacting '24 just given where raws are today?

感謝您今天提供的所有資訊和更新。也許就在您在這裡對“24”給出了一些初步想法之後，考慮到今天的原材料狀況，我們應該如何考慮原材料傳遞對“24”的影響？

Sure. I think a week ago, if Vlad walked into this call, I think on Friday, I would have said, hey, no change. We have stable steel prices, and we're expecting some price stability given that almost in the past year, right, now steel prices have stayed relatively calm.

當然。我想一周前，如果弗拉德參加這個電話會議，我想週五，我會說，嘿，沒有變化。我們的鋼材價格穩定，我們預計價格會保持一定程度的穩定，因為幾乎在過去的一年裡，現在鋼材價格一直保持相對平靜。

But as markets have shown in the last few days, as steelmakers continue to curtail supply, we are seeing a bit of a spike in our steel prices. We don't expect that to last through 2024, but we are seeing a bit of a spike in the last -- in a week or so. We're expecting things to stabilize in 2024.

但正如過去幾天市場所顯示的那樣，隨著鋼鐵製造商繼續削減供應，我們看到鋼材價格略有上漲。我們預計這種情況不會持續到 2024 年，但我們看到在過去一周左右的時間裡出現了一些高峰。我們預計 2024 年情況將趨於穩定。

And Vlad, I would just comment that we wouldn't expect it to have the impact that it did in '21 and '22. Certainly, there's been a little bit of an uptick, but the fluctuation isn't as steep as in previously. So again, as we look into '24, we don't see that as a real large impact. But again, it's a pass-through, and we'll disclose it going forward each quarter.

Vlad，我只想評論說，我們預計它不會產生像 21 和 22 年那樣的影響。當然，有一點上升，但波動並不像以前那麼劇烈。因此，當我們回顧 24 年時，我們並不認為這會產生真正的巨大影響。但同樣，這是一個傳遞，我們將在每個季度披露它。

And then just on the quarter and into year-end here. You talked about supply chain constraints still impacting some customers. So can you just talk about sort of how you'd characterize visibility from your OEM customers in the current environment? And if you're seeing changes in their order patterns or any increasing stability that could be helpful to your own manufacturing operations?

然後就到了季度和年底。您談到供應鏈限制仍然影響一些客戶。那麼您能否談談在當前環境下您如何描述 OEM 客戶的可見性？如果您發現他們的訂單模式發生變化或穩定性提高，這可能對您自己的製造業務有所幫助？

Sure. I would say that in Q3, we did not see any significant customer supply chain disruption. So for us, it feels like things have calmed down. And we saw relatively normal order flow.

當然。我想說，在第三季度，我們沒有看到任何重大的客戶供應鏈中斷。所以對我們來說，感覺事情已經平靜下來了。我們看到訂單流相對正常。

Coming into Q4, we are not expecting any significant changes on that front either. Having said that, probably the last sentence on Todd's -- in Todd's remarks, right, if you caught it, we have, obviously, exposure to some customers who are experiencing some UAW strike disruptions.

進入第四季度，我們預計這方面也不會發生任何重大變化。話雖如此，這可能是托德的最後一句話——在托德的言論中，對吧，如果你明白的話，我們顯然接觸到了一些正在經歷一些 UAW 罷工中斷的客戶。

I would say that by -- through the end of October, our impact has been minimal. And auto exposure we have now, we can say that in rest of Q4, will be again minimal, given that the strikes have been -- at least looks like they're going to be settled.

我想說的是，到十月底為止，我們的影響力已經很小了。我們現在可以說，在第四季的剩餘時間內，我們所面臨的汽車風險將再次降至最低，因為罷工已經——至少看起來將得到解決。

Other CV customer that continues to be down because of the UAW strike, we're optimistic that given the conclusion of the other big 3 contract negotiations, that our CV customer could also wrap up their negotiations in the short term. But if that continues on, we expect some impact, as Todd mentioned in his prepared remarks, in Q4.

其他 CV 客戶因 UAW 罷工而繼續下滑，我們樂觀地認為，鑑於其他三大合約談判的結束，我們的 CV 客戶也可以在短期內完成談判。但如果這種情況持續下去，我們預計會產生一些影響，正如托德在第四季度準備好的演講中提到的那樣。

Outside of those events, we do not expect any disruptions from any supply chain issues or otherwise going into 2024. We have not seen any indications of softness per se in orders or purchase orders or any of EDI feeds we normally see.

除了這些事件之外，我們預計 2024 年不會因任何供應鏈問題或其他原因造成任何中斷。我們在訂單、採購訂單或我們通常看到的任何 EDI 來源中沒有看到任何本身疲軟的跡象。

But the conversations have been a little muted from some of our customers, even though the order flows haven't changed, the demand picture hasn't changed. So given the discussions about macroeconomic conditions, high interest rates, consumer demands slowing with all of these, we're walking into 2024 on a cautious mode. As we mentioned, we continue to expect to perform our revenue growth to be above market growth next year, given our market share gains and new program wins and start up of multiple long-term programs in both Hazel Park, Atkins and other locations within the company.

但我們的一些客戶的談話有點平靜，儘管訂單流沒有改變，需求情況也沒有改變。因此，考慮到有關宏觀經濟狀況、高利率、消費者需求放緩等所有這些的討論，我們將以謹慎的方式步入 2024 年。正如我們所提到的，鑑於我們的市場份額增長和新項目的勝利，以及在Hazel Park、阿特金斯和該地區其他地點啟動的多個長期項目，我們繼續預計明年的收入增長將高於市場成長。公司。

We now have the next question comes from Mig Dobre of Baird.

現在我們有來自貝爾德 (Baird) 的米格·多布雷 (Mig Dobre) 的下一個問題。

I want to talk on the last point that you made there, Jag, about '24 and about your specific outgrowth drivers. Is there a way to update us or kind of quantify knowing what you know today in terms of business that you guys have booked or programs, incremental programs that you have booked as to what the revenue benefit in '24 relative to '23 would be from the business that you already kind of have visibility on?

Jag，我想談談您在 24 世紀提出的最後一點以及您的具體成長驅動因素。有沒有一種方法可以讓我們了解最新情況，或者量化一下您今天所了解的業務、您已預訂的計劃、您已預訂的增量計劃，以及 24 年相對於 23 年的收入收益將來自哪些方面您已經了解的業務？

Yes, Mig, we were not in a position to provide any guidance on 2024 at this point. Having said that, we remain committed to the 3-year revenue, EBITDA and cash flow targets we laid out recently at our Investor Day.

是的，Mig，我們目前無法就 2024 年提供任何指導。話雖如此，我們仍然致力於最近在投資者日制定的 3 年收入、EBITDA 和現金流目標。

We continue to expect progress towards the goals even with a perhaps muted 2024 growth picture. So we expect 2024 to be a growth year for MEC. We expect to grow above market next year, both top line and margin expansion and cash flow generation as well. So we're pretty optimistic about 2024, but we're not in a position to provide any particular guidance at this point.

即使 2024 年成長前景可能黯淡，我們仍預計在實現這些目標方面取得進展。因此，我們預計 2024 年將是 MEC 的成長年。我們預計明年的成長將高於市場水平，無論是營收、利潤率擴張還是現金流生成。因此，我們對 2024 年非常樂觀，但目前我們無法提供任何具體指導。

Yes. Well -- and I appreciate that. And I wasn't necessarily wanting to pin you down on guidance for '24. It was more trying to understand, it's November, right? So you probably have a pretty decent idea in terms of the incremental programs that you have that you know will start flowing into '24 because your macro commentary is obviously more cautious than it was before. So I think we're all trying to figure out what MEC specifically can do to sort of offset this more difficult macro setup, if you would.

是的。嗯——我很欣賞這一點。我不一定想讓你對 24 世紀的指導感到困惑。更想理解的是，現在是十一月，對吧？因此，您可能對增量計劃有一個相當不錯的想法，您知道這些計劃將開始流入'24，因為您的宏觀評論顯然比以前更加謹慎。所以我認為我們都在試圖弄清楚 MEC 具體可以做什麼來抵消這個更困難的巨集設定（如果你願意的話）。

Yes. No. Okay. So on Slide 5 in our deck that we put out this morning or last night, you can see that we're projecting most of our end markets to be either down or slightly flat. And we're projecting our powersports market to be up even though the market is going to be down, up significantly given our new program starts that we discussed multiple times in the last couple of quarters on our Investor Day.

是的。不，好吧。因此，在我們今天早上或昨晚發布的幻燈片 5 中，您可以看到我們預計大部分終端市場要么下跌，要么略有持平。儘管市場將會下跌，但我們預計我們的動力運動市場將會上漲，考慮到我們在過去幾季的投資者日多次討論的新計劃的啟動，該市場將大幅上漲。

Similarly, our commercial vehicles also, even the market may be down 18%, 18.5% is what ACT is projecting. That market is going to be down next year. We're expecting at least to be flat in 2024. Similarly, construction and access, we're 60-40, construction and access. That's how we break out our revenues. We expect access market to be pretty good going into 2024, given the customer comments that we heard in their public comments recently.

同樣的，我們的商用車也是，甚至市場可能會下降18%，ACT預計是18.5%。該市場明年將會下跌。我們預計 2024 年至少會持平。同樣，建築和通行，我們是 60-40，建築和通行。這就是我們劃分收入的方式。鑑於我們最近在公開評論中聽到的客戶評論，我們預計進入 2024 年接入市場將相當不錯。

Construction, residential construction obviously is down. But we have other programs that we're on, that gives us confidence that we will at least be -- as a second segment, we will at least be flat next year.

建築業、住宅建設明顯下降。但我們還有其他計劃正在進行，這讓我們有信心至少會——作為第二部分，我們明年至少會持平。

Similarly, ag, residential small ag is down. But large ag and then addition from MSA, ag demand -- sorry, revenues as well will continue to give us at least a flattish picture next year in our ag markets as well. And military is a small segment. We expect to be up, given some new program wins. So overall, that's why it gives us confidence that even though the end markets might be down next year, right, we will perform above our end market averages.

同樣，ag、住宅小ag也下跌了。但是大型農業，然後來自 MSA 的增加，農業需求——抱歉，明年的農業市場收入也將繼續給我們帶來至少一個平淡的景象。軍事只是一小部分。鑑於一些新計劃的成功，我們預計會有所上升。總的來說，這就是為什麼它讓我們有信心，即使明年終端市場可能會下跌，對吧，我們的表現將高於終端市場平均值。

And sort of sticking with the Slide 5 and the way the mix -- the revenue mix is going to be evolving between these verticals. Is there any insight to be gained in terms of what that looks like from a margin standpoint? I mean like military, for instance, if it's growing quite a bit. Is that positive for margin or mix or not?

堅持 Slide 5 和混合方式——收入組合將在這些垂直領域之間不斷演變。從利潤的角度來看，是否可以獲得任何見解？我的意思是，例如軍事，如果它增長了不少。這對利潤率或組合是否有利？

It's, I would say, generally speaking, maybe slightly accretive when the mix change for next year, Mig.

我想說，一般來說，當明年的組合發生變化時，這可能會略有增加，米格。

And I would just add that generally speaking, our margin performance in each segment is very similar. Maybe within 1 or 2 points, it isn't like we're getting 35% margin in 1 market, 15% in another. So it's very similar across the board.

我想補充一點，一般來說，我們在每個細分市場的利潤率表現非常相似。也許在 1 或 2 個點之內，我們並不是在一個市場獲得 35% 的利潤，在另一個市場獲得 15% 的利潤。所以它在整體上非常相似。

Okay. Understood. And last question, just a clarification around the UAW strike. So your guidance for the fourth quarter, does that assume any drag from the strike, like for instance, in the month of November or not, you're just sort of quantifying it, but it's not factored into the numbers yet?

好的。明白了。最後一個問題是關於 UAW 罷工的澄清。那麼，您對第四季度的指導是否假設罷工會造成任何拖累，例如是否在 11 月份，您只是對其進行了量化，但尚未將其計入數字中？

It has not been factored into the guidance. In a normal course, we would expect to be within our original guidance. Now the strike, which we're optimistic and hopefully, they get settled here in the near term. If that is prolonged, that would most likely result in about $6 million to $7 million per month of lost sales and about $1 million to $2 million of EBITDA impact. Which again, has not been factored into our guidance.

它尚未被納入指南中。在正常情況下，我們預計會在最初的指導範圍內。現在，我們對罷工持樂觀態度，希望他們能在短期內解決。如果這種情況持續下去，很可能會導致每月約 600 萬至 700 萬美元的銷售額損失，以及約 100 萬至 200 萬美元的 EBITDA 影響。這同樣沒有被納入我們的指導中。

And just to reinforce the point that in October, even though most of the month of October, the customer was not taking -- or not running rather their production lines, we were able to offset our October volumes with aftermarket production, et cetera, that helped us continue to run our production lines in the month of October.

只是為了強調一點，在 10 月份，即使 10 月份的大部分時間，客戶都沒有使用——或者沒有運行他們的生產線，我們仍然能夠通過售後生產等來抵消 10 月份的銷量，幫助我們在十月份繼續運行我們的生產線。

So if it gets settled in the next week or so, right, I think we'll be okay. But if it continues to drag on in the second and third weeks of November, then we will expect the impact as outlined by Todd.

因此，如果在下週左右解決問題，我想我們會沒事的。但如果它在 11 月的第二周和第三週繼續拖延，那麼我們預計會產生托德概述的影響。

Your next question comes from Ted Jackson of Northland Securities.

你的下一個問題來自北國證券的泰德傑克森。

So just a couple of questions. The UAW one you just answered was one of them, but I got 2 more. When you -- first of all, when you talk about growth in 2024 that you're expecting to grow as a business, are you -- I'm a little confused, is that organic? Or is that growth -- are you talking about this growth, MSA, the whole combined thing, vis-a-vis, 2023?

所以只有幾個問題。你剛剛回答的 UAW 就是其中之一，但我還有另外 2 個。當你——首先，當你談論 2024 年的成長時，你期望作為一家企業實現成長，你——我有點困惑，這是有機的嗎？或者是這種成長——你是在談論這種成長、MSA，還是 2023 年的整體綜合情況？

I mean are we talking organic growth kind of ex-MSA acquisition or normalized for it? Is that what you're -- or are you saying -- you're just talking about the raw number?

我的意思是，我們談論的是前 MSA 收購的有機成長還是標準化？這就是你所說的——或者你是說——你只是在談論原始數字嗎？

Yes. So it's a really good question, Ted. We're expecting organic growth in addition to the lapping of MSA first half revenues.

是的。所以這是一個非常好的問題，泰德。除了 MSA 上半年營收的成長外，我們預計還會出現有機成長。

I didn't want to assume that, but I did want to assume that. Then just a little more color, if you would, on the commercial vehicle market itself. I know the macro outlook you provided previously was '23, and now we're looking at '24. And I understand the dynamics with regards to the pull forward of demand as a result of all the regulatory changes for emissions.

我不想這樣假設，但我確實想這樣假設。然後，如果你願意的話，可以在商用車市場本身再多一點色彩。我知道您之前提供的宏觀前景是 23 年，現在我們關注的是 24 年。我了解所有排放監管變化導致需求拉動的動態。

You also have some new product wins within the commercial market itself. Can you provide some, I guess, some color with regards to what -- where you see that business going for you as you roll through '24? I mean you're saying you think you can keep it flat. I mean, so if I was to just take your commercial vehicle revenue for '23 and as a baseline worst case scenario, given what you know today, you'd see no growth in that. Would that -- is that kind of what you're saying with it?

您還在商業市場本身中贏得了一些新產品。我想，您能否提供一些關於您在 24 年後認為該業務對您有利的方面的一些資訊？我的意思是你是說你認為你可以保持平穩。我的意思是，如果我只將 23 年的商用車收入作為最壞情況的基線，根據您今天所了解的情況，您將看不到任何增長。這就是你所說的嗎？

And if you were to see growth on top of '23, is there something that would happen that would drive that? Is there something in your backlog or kind of your dialogue with customers and stuff that would make that a growth business for you? I mean it's your biggest vertical, so a little more maybe discussion around it might be worthwhile.

如果你看到 23 年後的成長，是否會發生一些事情來推動這一成長？您的積壓訂單或與客戶的對話中是否有某些內容可以使其成為您的成長業務？我的意思是，這是你最大的垂直領域，所以圍繞它進行更多討論可能是值得的。

Yes, that's a good question as well, Ted. As we said, or ACT said, the commercial vehicle volumes will be down 18.5% in 2024. That's our current expectations. Given our new program wins, including new tank production volume that's going to come online in Q1 of next year and the outsourcing win we talked about. And then other program wins, we expect to be flat in our commercial vehicle revenues next year. That's our current expectation.

是的，這也是一個好問題，泰德。正如我們所說，或 ACT 所說，2024 年商用車銷量將下降 18.5%。這是我們目前的預期。鑑於我們的新計劃獲勝，包括將於明年第一季上線的新坦克產量以及我們談到的外包勝利。然後其他計劃獲勝，我們預計明年商用車收入將持平。這是我們目前的期望。

And then remind me, I mean, I've seen this before, but a long time ago. It's not like this is the first time that we've had this kind of scenario within commercial vehicles where regulations change and you get a lot of forward buying. It happens every time that this kind of -- every time the rates change. How long does it usually take for the market to kind of go back to normalized? I mean is it like a phenomenon then all else being equal, let's ignore the macro, the economy and whatever, and that we get through '24 and then we get back to kind of like a base market growth rate. How much for -- how much demand gets pulled forward when the government makes those changes typically?

然後提醒我，我的意思是，我以前見過這個，但是是很久以前的事了。這並不是我們第一次在商用車中遇到這種情況，法規發生變化並且您會獲得大量的提前購買。每當利率改變時，這種情況就會發生。市場通常需要多長時間才能恢復正常？我的意思是，在其他條件相同的情況下，這是否像一種現象，讓我們忽略宏觀、經濟等因素，我們度過了 24 年，然後我們又回到了基本市場成長率。當政府通常會做出這些改變時，會提前多少需求？

Yes. I would say that typically, it's about a year when the markets sort of go down and then curve back to normal levels. We're expecting, obviously, right, 2024 to be the down year. Even looking at quarter-by-quarter, we expect the softness to sort of hit mid-year and second half to be a little lower than first half of next year. And then 2025, the volumes are expected to come back up to normalized levels. So I don't think we have a number from ACT yet. But our expectation is going to be somewhere north of 300,000 in 2025.

是的。我想說，通常情況下，大約有一年市場會下跌，然後又回到正常水平。顯然，我們預期 2024 年將是經濟下滑的一年。即使按季度來看，我們預計年中和下半年的疲軟程度將略低於明年上半年。到 2025 年，銷售量預計將恢復到正常水準。所以我認為我們還沒有 ACT 的數據。但我們預計 2025 年這數字將超過 30 萬。

Actually, I do have a number from ACT. The numbers are in 2025 are expected to be around 316,000 units. 2022 was 316,000. 2023 is the 336,000, and 2024 is the 274,000, right? So you can see that dip. So there was a pull-in 2023, pulled back in 2024 and then back to a normalized level of 316,000 in 2025.

事實上，我確實有 ACT 的電話號碼。到 2025 年，這一數字預計將達到 316,000 輛左右。 2022 年為 316,000。 2023年是336,000，2024年是274,000，對嗎？所以你可以看到這個下降。因此，2023 年出現拉動，2024 年回落，然後在 2025 年回到 316,000 的正常水平。

(Operator Instructions) We now have Tim Moore of EF Hutton.

（操作員說明）我們現在有 EF Hutton 的 Tim Moore。

Thanks for the Investor Day goals and those incredible bridges for your road map for EBITDA margin expansion and free cash flow. I just had a hypothetical question to start out here. Regarding the Auto Worker strikes, and if something like this occurs next year for a different end market or even a large customer disruption, then maybe there's a mild recession in the spring or something, how much flexibility do you have to maybe shift some of the capacity or installed work to other end markets to backfill that in and cut overtime costs? Because I think you might have said on Investor Day about 20% overtime mix, but maybe you could flex it to 10%?

感謝投資者日的目標以及為 EBITDA 利潤率擴張和自由現金流的路線圖提供的那些令人難以置信的橋樑。我只是有一個假設性的問題要從這裡開始。關於汽車工人罷工，如果明年在不同的終端市場發生類似的情況，甚至是大規模的客戶中斷，那麼春季可能會出現輕微的衰退或其他什麼情況，你有多少靈活性可能會改變一些產能或已安裝的工作到其他終端市場來回補並削減加班成本？因為我認為你可能在投資者日說過 20% 的加班比例，但也許你可以將其調整到 10%？

Yes. Great question, Tim. Yes, we were averaging approximately 20%-ish of overtime in many of our plants. Our long-term goal, our target is to be around 15% or so flex time or overtime rather, right? So immediately, we can shut off overtime. And also, we have the flexibility to freeze hiring.

是的。很好的問題，提姆。是的，我們許多工廠的加班時間平均約為 20% 左右。我們的長期目標是大約 15% 左右的彈性工作時間或加班時間，對吧？所以我們可以立即停止加班。而且，我們可以靈活地凍結招募。

We still have about 100 job openings across the company as we speak today, and we can quickly freeze some of those hiring plans. But also, we have the flexibility to switch our operations from producing from one end market to another end market, given that majority of our plants, in fact, outside of 2 plants or a majority of our plant, 18-plus plants, we can make parts for any end market. So that gives us the flexibility to quickly switch our customer focus or end market utilization of those assets. So those are the levers we have.

截至今天，我們公司仍有大約 100 個職缺，我們可以迅速凍結其中一些招聘計劃。而且，我們還可以靈活地將業務從一個終端市場的生產轉移到另一個終端市場，因為我們的大多數工廠（事實上，除了2 家工廠或我們的大部分工廠（超過18 家工廠）），我們可以為任何終端市場製造零件。因此，這使我們能夠靈活地快速切換我們的客戶焦點或這些資產的終端市場利用率。這些就是我們擁有的槓桿。

And we -- no one expects any black swan events or anything like that in the near term, at least we don't know. But if something like that happens, we have the ability to quickly switch gears and shift our focus.

我們——沒有人預期短期內會發生任何黑天鵝事件或類似的事情，至少我們不知道。但如果發生類似的事情，我們有能力快速切換策略並轉移注意力。

Great, Jag. That's good contingency planning. And nice to hear, a lot of companies actually can't do that, but --or as easily. What about Jag, now that you mentioned your Kaizen, and spend time on all your plants to implement MBX, how would you kind of quantify maybe what inning your value base and strategic pricing is? Is it mostly implemented for contract pricing, fresh start in January? Or do you feel like you won't really fully achieve that maybe till next summer?

太棒了，賈格。這是很好的應急計劃。很高興聽到，很多公司實際上無法做到這一點，但是——或者說同樣容易。那麼 Jag 呢，既然您提到了 Kaizen，並花時間在所有工廠實施 MBX，那麼您將如何量化您的價值基礎和策略定價？是否主要以合約定價方式實施，一月重新開始？或者你覺得你可能要等到明年夏天才能真正完全實現這個目標？

So a couple of things, we're just getting started on our MBX implementation and our Kaizens are ongoing every quarter, every month in every plant, right? So it, that's a journey. So now we're done with that. So I'm excited. In a couple of weeks, we'll have our -- in a few weeks, we'll have our Q4 President’s Kaizen. We're going to do somewhere between 4 and 6 Kaizens across the company in Q4. So pretty exciting events coming up for us.

有幾件事，我們剛開始實施 MBX，每個工廠每季、每個月都會改善，對嗎？所以，這就是一段旅程。現在我們已經完成了。所以我很興奮。幾週後，我們將實現第四季總裁的改善。我們將在第四季度在整個公司範圍內進行 4 到 6 項改善。我們即將迎來非常令人興奮的活動。

In terms of pricing, Tim, we implemented through our commercial excellence activities and TPI Kaizens a programmatic approach to value-based pricing. What that means is, we have a new framework on how we think about pricing. It's everything including cost to serve, right? Customers payment terms to complexity of their products and manufacturing processes. Two, not ease of doing business with some of our customers. Some need heavy handholding. Some are very easy to do business with, right? So there's a lot of criteria that we have used to develop this matrix, a complex matrix and a model that we're going to use to price, all future work, right?

在定價方面，Tim，我們透過商業卓越活動和 TPI Kaizens 實施了基於價值的定價的程序化方法。這意味著，我們對於如何思考定價有了一個新的框架。這一切都包含服務成本，對吧？客戶的付款條件取決於其產品和製造流程的複雜性。第二，與我們的一些客戶做生意並不容易。有些需要大力握住。有些很容易做生意，對吧？因此，我們使用了許多標準來發展這個矩陣，一個複雜的矩陣和一個我們將用來對所有未來工作進行定價的模型，對吧？

So that doesn't include all the existing work. For the existing business that we currently have, we're continuing to do our quarterly account reviews and looking at almost SKU by SKU and then say what our profitability is and what should our profitability be for each of these accounts and each of these bodies of work that we currently perform for our customers. That's a long-term process, as you can imagine.

所以這並不包括所有現有的工作。對於我們目前擁有的現有業務，我們將繼續進行季度客戶審查，並逐一查看幾乎每個 SKU，然後說明我們的盈利能力是多少，以及每個帳戶和每個機構的盈利能力應該是多少。我們目前為客戶執行的工作。正如你可以想像的那樣，這是一個長期的過程。

So eventually, everything will lap over the next couple of years. But all the new business that we're beginning to coat in the second half of this year are based on the new pricing framework going forward.

所以最終，一切都會在接下來的幾年消失。但我們今年下半年開始進行的所有新業務都是基於未來的新定價框架。

Great, Jag. That's helpful to hear. The rolling basis plus for the existing in the future being implemented already. At Investor Day, I believe you might have stated that there's about $115 million of new sales opportunities, I guess, signed or won the last 18 months, maybe averaging about $20 million per quarter.

太棒了，賈格。聽到這很有幫助。未來現有的滾動基礎加號已經實施。在投資者日，我相信您可能已經說過，我猜在過去 18 個月中籤署或贏得了大約 1.15 億美元的新銷售機會，平均每季可能約為 2000 萬美元。

Everyone is familiar with your battery thermal management win, and it sounds like there might be another customer there for Hazel Park. But if you kind of look at your wins and maybe that $20 million a quarter the last few quarters, would you say that a lot of that's in EV-related charging? Or is it more also beyond that battery thermal management into wind, solar, energy grid infrastructure. What are the kind of recent conversations you've been having in potential customers for emerging technologies revenues?

每個人都熟悉您的電池熱管理勝利，聽起來 Hazel Park 可能還有另一個客戶。但如果你看看你的勝利，也許過去幾季每季的 2000 萬美元，你會說其中很多都來自與電動車相關的充電嗎？或者說，它也超出了電池熱管理的範圍，擴展到風能、太陽能、能源網格基礎設施。您最近與潛在客戶就新興技術收入進行了哪些對話？

Yes, it's a good question as well, Tim. We continue to focus on energy transition as a secular theme within the company. And then we're continuing to look for opportunities where we can go win additional business, whether it's in charging infrastructure, whether it's solar or other renewables.

是的，這也是一個好問題，提姆。我們繼續將能源轉型作為公司內部的長期主題。然後，我們將繼續尋找可以贏得更多業務的機會，無論是充電基礎設施、太陽能或其他再生能源。

But I can say so far, majority of the wins have been in battery electric vehicle management applications, whether it is through that one customer we talked about or through our existing customers in CV and powersports and others where they're electrifying their platform. So majority of the wins have been in BEVs, whereas we continue to pursue opportunities in both charging infrastructure and also solar and other renewables.

但我可以說，到目前為止，大部分勝利都在電池電動車管理應用程式中，無論是透過我們談到的一位客戶，還是透過我們在CV 和powersports 以及其他正在為其平台實現電氣化的現有客戶。因此，大部分勝利都來自純電動車，而我們繼續在充電基礎設施以及太陽能和其他再生能源領域尋求機會。

Great. So one last question, and this is more so maybe for Todd. So if this year has $5 million to $7 million maybe of underabsorbed costs, turning on EBITDA from the Hazel Park ramp-up, is it fair to assume that next year might be only $1 million to $2 million with none in the second half as you kind of reach that $100 million sales run rate in the fourth quarter possibly next year as utilization plans?

偉大的。最後一個問題，對托德來說可能更是如此。因此，如果今年有500 萬至700 萬美元的成本可能未被充分吸收，那麼從Hazel Park 的提升中啟用EBITDA，是否可以公平地假設明年可能只有100 萬至200 萬美元，而下半年則沒有任何成本。作為利用率計劃，明年第四季可能達到 1 億美元的銷售運行率嗎？

As Jag mentioned earlier, we will not -- at a point yet to provide specific guidance on '24. But certainly, a lot of the projects that we have won really don't watch to mid even in the back half of next year. So there will continue to be a drag in the first half, I would say.

正如 Jag 之前提到的，我們目前不會就 24 小時提供具體指引。但可以肯定的是，我們贏得的許多項目即使在明年下半年也不會等到中期。所以我想說，上半場將繼續被拖累。

But as you really -- we exit the year, we're confident we're going to exit at that $100 million run rate. And at that point, I wouldn't expect to see any sort of negative impact on that facility. But at this point, again, we're not in a position to really give more specific guidance as to the cadence of that. But I think your comments are fair.

但正如你所說，我們今年將退出，我們有信心將以 1 億美元的運行速度退出。到那時，我預計不會對該設施產生任何負面影響。但此時此刻，我們無法真正就其節奏提供更具體的指導。但我認為你的評論是公平的。

Generally speaking, I do expect it to be better next year from an underabsorbed position. But at what point, is still we have to go through the details.

總的來說，我確實希望明年的情況會比吸收不足的情況更好。但具體到什麼時候，我們還得詳細了解。

Do you think, Todd, just given maybe the macro slowdown, that you won't move as much stuff over to Hazel Park from some of your other facilities in the first half of the year besides the contract wins, but just existing business you might move?

陶德，你是否認為，考慮到宏觀經濟放緩，除了贏得合約之外，你不會在今年上半年將太多的東西從其他一些設施轉移到黑茲爾公園，而只是現有業務，你可能會這樣做移動？

No, I wouldn't characterize it in that frame. A lot of the new business won again that was specifically quoted and estimated to be at Hazel Park doesn't really launch until midyear and even to the back half. And some of those volumes really don't hit their maturity until even the beginning of 2025. The work that we slated internally to move is still on pace. It's moving in the right cadence. And so we wouldn't make any changes on that front.

不，我不會在那個框架中描述它。許多被特別引用和估計在 Hazel Park 再次獲勝的新業務直到年中甚至下半年才真正推出。其中一些卷甚至要到 2025 年初才真正成熟。我們內部計劃推進的工作仍在進行中。它正在以正確的節奏前進。所以我們不會在這方面做任何改變。

We now have Larry De Maria, William Blair.

現在我們有拉里·德·瑪麗亞、威廉·布萊爾。

A few questions. First, maybe you've addressed this, I don't think so, but $5 million to $7 million underabsorbed overhead costs, that's up from, I think, $3 million to $5 million previously. What is driving that delta?

幾個問題。首先，也許你已經解決了這個問題，我不這麼認為，但是 500 萬到 700 萬美元的管理費用未被充分吸收，我認為這比之前的 300 萬到 500 萬美元有所增加。是什麼驅動了這個三角洲？

Yes, it did change lately. Certainly, there's been some timing changes from a customer launch perspective. A few of them we thought were going to start sooner rather than later. And so some of that's moved a little further into 2024.

是的，最近確實發生了變化。當然，從客戶發布的角度來看，時間安排發生了一些變化。我們認為其中一些應該儘早開始。因此，其中一些工作已推遲到 2024 年。

And we have a couple of large ones that are really set to launch in the back half of '24. But even some of the smaller ones, unfortunately, the timing from the customer has in the line, and that's why we've seen a little more drag on the P&L here in the coming quarter or two.

我們有幾個大型專案確實將於 24 年下半年推出。但不幸的是，即使是一些規模較小的公司，客戶的時間表也很重要，這就是為什麼我們在未來一兩個季度看到損益表受到更多拖累的原因。

So does that present any kind of risk next year that we see continued push-out, especially if the macro is soft? Or how good do we feel about executing on, a, the run rate, and b, remind us what the full year number should be, that we should be modeling?

那麼，明年我們會看到持續的退出是否會帶來任何風險，特別是在宏觀經濟疲軟的情況下？或者我們對執行a、運行率和b感覺有多好，提醒我們全年數字應該是多少，我們應該建模？

We feel very good, yes. I mean I think some of the things are just timing of some of it is outsourcing and some of it's moving from other suppliers. It's just the timing of how they're managing their supply chain. It's really been an impetus. And then some design things. Certainly, when they move product, they'd like to improve it and make other changes. I think a lot of that is behind us.

我們感覺很好，是的。我的意思是，我認為有些事情只是時機，有些是外包，有些是從其他供應商轉移的。這只是他們管理供應鏈的時機。這確實是一種推動。然後是一些設計的東西。當然，當他們轉移產品時，他們希望改進它並做出其他改變。我認為很多事情都已經過去了。

So I feel confident that the launches now, as we see them, will come to fruition. We have said at the Investor Day that next year's sales, we think, are between $50 million and $60 million. And for the full year -- and really, that's going to be more back half loaded. Again, we think we're going to -- we do believe we're going to exit 2024, we do think that fourth quarter, with a run rate of $100 million annually.

因此，我相信，正如我們所看到的，現在的發布將會取得成果。我們在投資者日說過，我們認為明年的銷售額在 5,000 萬美元到 6,000 萬美元之間。對於全年來說——實際上，這將是更多的後半負荷。再次強調，我們確實相信我們將在 2024 年結束，我們確實認為第四季將實現每年 1 億美元的運行率。

Great. So believe me this, Jag talked about growing in '24, right, and getting that -- the big negative, obviously, is CV down 18%, but you can get that to flat. I believe you said flat CV revenue with the outsourcing, new tank production, other wins, et cetera. So you can offset the negative with CV.

偉大的。所以相信我，賈格談到了 24 年的成長，對吧，並得到了這一點——顯然，最大的負面影響是 CV 下降了 18%，但你可以讓它持平。我相信你說的是外包、新坦克生產、其他勝利等等帶來的CV收入持平。所以你可以用 CV 來抵銷負數。

But then so are we taking CV flat, from high level, next year CV is flat and then we're layering on the $50 million to $60 million Hazel Park on top of that? Or just help us tie these numbers together so we can -- I know you don't have guidance, but there's a lot of numbers and a lot of deltas, and we want to make sure things aren't overlapping.

但是，我們是否會從高水準上看，明年 CV 持平，然後我們再在上面疊加 5000 萬至 6000 萬美元的 Hazel Park 項目？或者只是幫助我們將這些數字聯繫在一起，這樣我們就可以 - 我知道你沒有指導，但有很多數字和很多增量，我們希望確保事情不會重疊。

Yes. The $50 million to $60 million is in that number, Larry. That's not on top. The only thing I would say on top is really the lapping of the first half revenues of MSA.

是的。拉里，5000 萬到 6000 萬美元就在這個數字中。那不是在上面。我唯一要說的是 MSA 上半年收入的成長。

Okay. So CV and as this Hazel Park, the $50 million to $60 million Hazel Park that we're using to offset the CV, some portion of that is non-CV also, right? So how much of the $50 million to $60 million is offsetting the CV declines? And how much of the $50 million to $60 million is non-CV?

好的。因此，CV 以及 Hazel Park，我們用來抵消 CV 的 5,000 萬至 6,000 萬美元 Hazel Park，其中一部分也不是 CV，對吧？那麼，5,000 萬至 6,000 萬美元中有多少可以抵銷 CV 的下降呢？ 5,000 萬至 6,000 萬美元中有多少是非履歷？

We're not providing that level of detail at this point in the cycle, Larry. But we're happy to talk about our 2024 guidance ,when it is appropriate.

拉里，我們目前還沒有提供該週期的詳細資訊。但我們很樂意在適當的時候談論我們的 2024 年指導。

Okay. Yes. It's just obviously -- I think we're mixing some apples and oranges and we're all trying to get to it some kind of a fair number. But we're committing to growth in '24, including MSA, including Hazel Park. CV is down 18%, maybe according to 1 forecast, but it's offset by Hazel Park and some other things. But either way, we're committing to some growth next year, assuming obviously that macro doesn't blow up.

好的。是的。很明顯——我認為我們正在混合一些蘋果和橘子，我們都在努力得到某種公平的數字。但我們致力於在 24 年實現成長，包括 MSA，包括 Hazel Park。 CV 下降了 18%，也許根據 1 的預測，但它被 Hazel Park 和其他一些東西所抵消。但無論如何，我們都承諾明年會實現一些成長，前提是宏觀經濟不會崩潰。

Larry, let me clarify. We're expecting to grow overall MEC revenues next year outside of MSA addition.

拉里，讓我澄清一下。我們預計明年除了 MSA 之外，MEC 的整體收入也會成長。

Outside of MSA what? Sorry.

MSA 之外還有什麼？對不起。

Yes, outside of MSA lapping, right, the happier MSA revenues coming into next year. In addition to that, we expect to grow MEC revenues overall.

是的，除了 MSA 研磨之外，明年 MSA 的收入會更令人滿意。除此之外，我們預期 MEC 收入整體上會成長。

Okay. Fair enough. And then we'll start with less clarification. The $6 million to $7 million and $1 million to $2 million EBITDA from the potential UAW issue. Is that number specific to the one customer? Or that was a gross number prior to all these things through getting sorted out?

好的。很公平。然後我們將從較少的澄清開始。潛在的 UAW 問題將帶來 600 萬至 700 萬美元和 100 萬至 200 萬美元的 EBITDA。該數字是否特定於一位客戶？或者說這是所有這些事情經過整理之前的總數？

It's specific to one customer. Because in October -- and just to clarify, right? In October, we were able to manage most of our challenges with overall UAW strike. As you know, we have some exposure to auto in MSA. And rest of today solves the one CV customer. So October, I think we're able to manage quite well. In November and December, it's just specific to one customer in the CV sector.

它特定於一位客戶。因為在十月——只是為了澄清，對吧？ 10 月份，我們透過 UAW 的整體罷工應對了大部分挑戰。如您所知，我們在 MSA 有一些汽車業務。今天剩下的時間解決了一位 CV 客戶的問題。所以十月份，我認為我們能夠處理得很好。 11 月和 12 月，它僅針對 CV 領域的一位客戶。

As we have no further questions, I'd like to hand it back to Jag Reddy, President and CEO, for any closing remarks. We do have a further question. We have a follow-up from Ted Jackson.

由於我們沒有其他問題，我想將其交還給總裁兼執行長賈格·雷迪 (Jag Reddy)，讓其發表結束語。我們還有一個進一步的問題。我們有特德傑克森的後續報導。

I just jumped in at the last minute with a couple of nitpicky questions for Todd because he's my favorite person to pick on. So one thing just on SG&A, Todd. The quarter, the number was higher than was in my model. Not a big deal. You got MSA, and there's clearly a lot of things, moving parts inside the business.

我只是在最後一刻向托德提出了幾個挑剔的問題，因為他是我最喜歡挑剔的人。托德，關於 SG&A 的一件事。該季度的數字高於我的模型中的數字。沒什麼大不了的。你得到了 MSA，顯然有很多事情，業務內部的移動部分。

What would be, on the other SG&A expense line, how should I think about that for the fourth quarter? Just simply kind of a reset, if you would, as I kind of think through the model. I mean do you -- is there some onetime stuff in there that we would see it go down? Or is that 86 kind of the new baseline and we should be building off of that?

在其他 SG&A 支出項目上，我該如何考慮第四季的支出？如果你願意的話，只是簡單的重置，就像我透過模型思考的那樣。我的意思是，那裡有一些我們會看到它消失的一次性東西嗎？或者說 86 是一種新的基線，我們應該以此為基礎？

Keep in mind, the 86 includes $1 million of legal fees related to our former fitness customer, and that continues to evolve. So I expect that to continue into the fourth quarter. And then $0.5 million of transaction costs, which I don't expect to continue, right? That's kind of behind us. We incurred those costs in Q3.

請記住，86 包括與我們前健身客戶相關的 100 萬美元法律費用，而且這筆費用還在不斷變化。因此，我預計這種情況將持續到第四季。然後是 50 萬美元的交易成本，我預計這種情況不會持續下去，對吧？這有點落後於我們。我們在第三季產生了這些成本。

But I do expect to have ongoing legal fees, unfortunately, in the near term until there's an ultimate resolution on our claims. So we've said 4.5% to 5.5% in the near term. Next year, as we've talked about, we do have the SOC compliance requirements now that we'll no longer be considered an emerging growth company. I feel like we're in a great position to do that. But certainly, unfortunately, I'd rather -- audit fees and other related things go up. And from there, we'll continue to delever. Delever, I would say, as our sales continue to grow.

但不幸的是，我確實希望在短期內持續支付法律費用，直到我們的索賠得到最終解決為止。所以我們說近期會成長 4.5% 到 5.5%。明年，正如我們所討論的，我們確實有 SOC 合規性要求，因為我們將不再被視為新興成長型公司。我覺得我們處於一個很好的位置來做到這一點。但不幸的是，我當然寧願——審計費用和其他相關費用上漲。從那時起，我們將繼續去槓桿化。我想說，隨著我們的銷售額不斷成長，Delever 也隨之而來。

So in the fourth quarter, I would say similar without the transaction cost of the $0.5 million.

因此，在第四季度，我會說類似，但沒有 50 萬美元的交易成本。

And then on my second question on the nitpick for you is on amortization of intangibles. I mean will you have an updated table for amortization in your Q, I assume? Because clearly, with MSA and everything and now that's in your balance sheet, that's all going to change. But in the interim, can you give me some kind of color with what you think amortization of intangibles would be in the fourth quarter and then maybe in the aggregate for 2024?

然後，我對您提出的第二個問題是無形資產攤銷。我的意思是，我想您的問題中會有更新的攤銷表嗎？因為顯然，有了 MSA 和所有內容，現在都在您的資產負債表中，這一切都將改變。但在此期間，您能否告訴我一些您認為第四季度無形資產攤銷以及 2024 年總計的情況？

We're not at a point really to score that. You will see in our Q, which certainly will be filed here in the short term. You'll see the step-up. There's footnotes related directly to the acquisition. And I would just take that number and then continue it, right, and use that by quarter into next year.

我們還沒有真正達到這個目標。您將在我們的問題中看到，該問題肯定會在短期內提交至此處。你會看到進步。有與收購直接相關的註腳。我會採取這個數字，然後繼續它，對，並在明年的季度使用它。

I don't see -- most of those items that we are amortizing are 5% to 7% in some cases, a little longer to live. So it will be the same, very consistent for the near future.

我不明白——我們攤銷的大多數項目在某些情況下是 5% 到 7%，壽命更長一些。所以在不久的將來它會是一樣的，非常一致。

And will you file your Q at the end of today? Or when do you plan to put that in?

您會在今天結束時提交您的問題嗎？或者你打算什麼時候把它放進去？

The expectation is that we'll file it by the end of the day today.

我們預計在今天結束之前將其提交。

Once again, thank you for joining our call. We appreciate your continued support of MEC, and we look forward to updating you on our progress next quarter. Should you have any questions, please contact Noel Ryan or Stefan Neely at Vallum, our Investor Relations Council. This concludes our call today. You may now disconnect.

再次感謝您加入我們的通話。我們感謝您對 MEC 的持續支持，並期待在下個季度向您通報我們的最新進展。如果您有任何疑問，請聯絡我們投資者關係委員會 Vallum 的 Noel Ryan 或 Stefan Neely。我們今天的電話會議到此結束。您現在可以斷開連線。

Thank you. I can confirm today's conference call has now just -- has concluded. You may now disconnect your line.

謝謝。我可以確認今天的電話會議剛結束。現在您可以斷開線路。