Methode Electronics Inc (MEI) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Methode Electronics Fourth Quarter and Full Year Fiscal 2023 Results Call. (Operator Instructions) Please note, this conference is being recorded.

您好，歡迎參加 Methode Electronics 2023 財年第四季度和全年業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Mr. Robert Cherry, Vice President of Investor Relations. Sir, you may begin.

現在我將會議交給東道主投資者關係副總裁羅伯特·切裡先生。先生，您可以開始了。

Thank you, operator. Good morning, and welcome to Methode Electronics Fiscal 2023 Fourth Quarter and Full Year Earnings Conference Call. For this call, we have prepared a presentation entitled Fiscal 2023 Fourth Quarter and Full Year Financial Results, which can be viewed on the webcast of this call or found at methode.com on the Investors page.

謝謝你，接線員。早上好，歡迎參加 Methode Electronics 2023 財年第四季度和全年收益電話會議。對於本次電話會議，我們準備了題為《2023 財年第四季度和全年財務業績》的演示文稿，您可以在本次電話會議的網絡廣播中觀看該演示文稿，也可以在 methode.com 的投資者頁面上查看該演示文稿。

This conference call contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Methode undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Methode's expectations on a quarterly basis or otherwise. The forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, such as our 10-K and 10-Q reports.

本次電話會議包含某些前瞻性陳述，這些陳述反映了管理層對未來事件和經營業績的預期，並且僅代表截至本次電話會議之日的情況。這些前瞻性陳述受到證券法規定的安全港保護。 Methode 不承擔按季度或其他方式更新任何前瞻性聲明以使該聲明符合實際結果或 Methode 預期變化的責任。本次電話會議中的前瞻性陳述涉及許多風險和不確定性。 Methode 向美國證券交易委員會提交的文件（例如我們的 10-K 和 10-Q 報告）中詳細介紹了可能導致實際結果與我們的預期存在重大差異的因素。

At this time, I'd like to turn the call over to Mr. Don Duda, President and Chief Executive Officer.

現在，我想將電話轉給總裁兼首席執行官唐·杜達先生。

Thank you, Rob, and good morning, everyone. Thank you for joining us for our fiscal 2023 fourth quarter earnings conference call. I'm joined today by Ron Tsoumas, our Chief Financial Officer, and both Ron and I will have opening comments, and then we will take your questions.

謝謝你，羅布，大家早上好。感謝您參加我們的 2023 財年第四季度收益電話會議。今天我們的首席財務官羅恩·祖瑪斯 (Ron Tsoumas) 也將與我一起發言，我和羅恩將發表開場評論，然後我們將回答你們的問題。

Let's begin with the highlights on Slide 4. Our sales for the quarter were a healthy $301 million. They were up 4% compared to the prior year, but up 9%, excluding a significant headwind from foreign exchange and a drop in material spot buy and premium freight cost recovery. The increase was mainly due to higher sales in the Industrial segment, driven by lighting solutions for commercial vehicles and by power distribution solutions for electric vehicles. The sales growth from Lighting and Power Products is another data point in our strategic pivot to reduce our reliance on user interface solutions.

讓我們從幻燈片 4 上的亮點開始。本季度我們的銷售額為 3.01 億美元。與上年相比增長了 4%，但排除了外彙的重大阻力以及材料現貨購買和溢價運費成本回收的下降，增長了 9%。這一增長主要是由於商用車照明解決方案和電動汽車配電解決方案推動的工業領域銷售額增加。照明和電源產品的銷售增長是我們減少對用戶界面解決方案依賴的戰略重點的另一個數據點。

In the quarter, we continued to face ongoing cost increases due to inflation in material and labor, which continued to be a drag on margins. The ongoing cycle of inflation and subsequent efforts to obtain price increases from customers is a persistent challenge, I cannot stress that enough. We can, however, report a significant reduction in spot buys and expedited shipping as supply chain constraints have improved over last year.

本季度，由於材料和勞動力的通貨膨脹，我們繼續面臨成本持續增加的問題，這繼續拖累利潤率。持續的通貨膨脹週期以及隨後從客戶那裡獲得價格上漲的努力是一個持續的挑戰，我無法充分強調這一點。然而，我們可以報告，由於供應鏈限制比去年有所改善，現貨購買和加急運輸大幅減少。

On the order front, we had a very strong quarter with over $250 million in annual program awards. These programs were once again dominated by electric vehicle programs. The Nordic Lights acquisition, which is an exciting opportunity to grow our lighting franchise and gain more Industrial and non-auto market exposure is nearing completion. While we have secured over 99% of the outstanding shares, we are still working through the squeeze out process for the remaining shares. Once that legal process is complete, we will be able to provide more information.

在訂單方面，我們的季度表現非常強勁，年度項目獎勵超過 2.5 億美元。這些項目再次以電動汽車項目為主。 Nordic Lights 的收購是一個令人興奮的機會，可以擴大我們的照明特許經營權並獲得更多的工業和非汽車市場曝光度，該收購即將完成。雖然我們已經獲得了超過 99% 的流通股，但我們仍在努力完成剩餘股份的擠出過程。一旦法律程序完成，我們將能夠提供更多信息。

Turning back to EV activity. Sales in the quarter were 23% of our consolidated total and were a record on a dollar basis. In regards to awards, we won over $215 million in annual EV awards in the quarter. Looking forward on EV, activity will be strong again in fiscal 2024, but will be very dependent on auto OEM take rates as well as the timing of program roll-offs.

回到電動汽車活動。該季度的銷售額占我們合併總額的 23%，按美元計算創歷史新高。在獎項方面，本季度我們贏得了超過 2.15 億美元的年度電動汽車獎項。展望電動汽車，活動將在 2024 財年再次強勁，但將很大程度上取決於汽車 OEM 的採用率以及計劃延期的時間。

In the quarter, we had an increase in debt, which was driven entirely by the Nordic Lights acquisition. During the quarter, we purchased approximately $8 million of shares. Of the announced $200 million board authorization, we have now purchased $119 million in total. Prior to the Nordic Lights acquisition, this buyback program was a key focus of our capital allocation strategy. With the increased debt level, part of our focus will return to debt reduction.

本季度，我們的債務增加，這完全是由 Nordic Lights 收購造成的。本季度，我們購買了大約 800 萬美元的股票。在宣布的 2 億美元董事會授權中，我們目前已總共購買了 1.19 億美元。在收購 Nordic Lights 之前，該回購計劃是我們資本配置策略的重點。隨著債務水平的增加，我們的部分重點將回歸到債務削減上。

Lastly, but just as important on anything on the slide, we generated $38 million in free cash flow in the quarter, which is an indication of our attention to operational performance and a focus on generating cash in our business model.

最後，但與幻燈片上的任何內容一樣重要的是，我們在本季度產生了 3800 萬美元的自由現金流，這表明我們對運營績效的關注以及對在我們的業務模式中產生現金的關注。

Moving to Slide 5. The awards identified here represent some of the key wins in the quarter and represent $258 million in annual sales at full production. As a reminder, the launch timing of most of these programs could be anywhere in the range of 1 to 3 years from now. The awards were mainly for Power Products associated with the EV skateboard architecture. The awards were also heavily weighted towards the United States, where EV quoting activity has clearly picked up. In other areas, we are awarded programs for lighting, user interface and sensitive solutions for applications in commercial vehicles and e-bike.

轉到幻燈片 5。此處確定的獎項代表了本季度的一些關鍵成果，代表了滿負荷生產時的年銷售額 2.58 億美元。需要提醒的是，大多數這些計劃的啟動時間可能是從現在起 1 到 3 年內的任何時間。該獎項主要頒發給與電動滑板架構相關的電源產品。這些獎項也主要針對美國，因為美國的電動汽車報價活動明顯有所增加。在其他領域，我們獲得了商用車和電動自行車應用的照明、用戶界面和敏感解決方案項目。

I would like to take a step back and reflect on our EV activity over the last 3 years. Since the beginning of fiscal year 2021, we have won approximately $600 million in EV awards. This award stream act like a backlog of potential future business. There is little doubt that EVs will be driving our organic growth in the coming years.

我想退後一步，反思一下我們過去 3 年的電動汽車活動。自 2021 財年年初以來，我們已贏得約 6 億美元的電動汽車獎項。這種獎勵流就像是未來潛在業務的積壓。毫無疑問，電動汽車將在未來幾年推動我們的有機增長。

Turning to Slide 6 and our fiscal 2023 highlights. We delivered sales growth for the sixth year in a row and finished with a record sale of $1,180 million for the full year. Excluding foreign exchange and cost recovery, we had a 7% year-over-year sales growth. Material, labor and overall manufacturing cost inflation challenges during the year to the total on earnings. Clearly, we were disappointed in our cost recovery efforts with our customers. Those efforts continue as well as other initiatives to improve manufacturing efficiencies.

轉向幻燈片 6 和我們 2023 財年的亮點。我們的銷售額連續第六年增長，全年銷售額達到創紀錄的 11.8 億美元。不計外彙和成本回收，我們的銷售額同比增長 7%。材料、勞動力和整體製造成本通脹給年內的總盈利帶來挑戰。顯然，我們對客戶的成​​本回收工作感到失望。這些努力以及其他提高製造效率的舉措仍在繼續。

However, program awards were very strong, reaching over $435 million with over 75% in EV applications. The strength of our bookings gives me confidence that along with the aforementioned initiatives, we will achieve the margin expansion that supports our guidance for fiscal 2025. We had record sales into EV applications, and they reached 21% of our total sales for the full year. Our free cash flow generation was up 50% year-over-year in support of the purchase of $48 million of shares as well as our ongoing dividend program. It was a challenging quarter and a year plagued by ongoing cost inflation headwinds. However, our worldwide team still delivered organic sales growth for the year.

然而，項目獎勵非常豐厚，達到超過 4.35 億美元，其中超過 75% 用於電動汽車應用。我們的預訂量讓我相信，除了上述舉措外，我們還將實現利潤率擴張，從而支持我們對 2025 財年的指導。我們在電動汽車應用領域的銷售額創下了紀錄，達到了我們全年總銷售額的 21%。我們的自由現金流量同比增長 50%，支持購買 4800 萬美元的股票以及我們正在進行的股息計劃。這是一個充滿挑戰的季度，也是受到持續的成本通脹逆風困擾的一年。然而，我們的全球團隊今年仍然實現了有機銷售增長。

Moving to Slide 7. Looking forward, we are expecting a slight slowdown in sales for fiscal 2024 and then a significant ramp-up of sales in fiscal 2025. I want to walk you through the basic drivers of this. As you can see from the slide, the net of program roll-offs and program launches is a sales headwind in fiscal 2024. While Nordic Lights will add to our sales, we expect headwinds in the commercial vehicle, data center and e-bike markets. The net result of all this is a slight sales slowdown in fiscal 2024.

轉向幻燈片 7。展望未來，我們預計 2024 財年的銷售額將略有放緩，然後 2025 財年的銷售額將大幅增長。我想向您介紹這一現象的基本驅動因素。正如您從幻燈片中看到的那樣，項目縮減和項目啟動的淨額是 2024 財年的銷售逆風。雖然 Nordic Lights 將增加我們的銷售額，但我們預計商用車、數據中心和電動自行車市場將面臨逆風。所有這一切的最終結果是 2024 財年銷售略有放緩。

In fiscal 2025, the net of program roll-offs and program launches becomes a tailwind. We also expect a tailwind from strength in commercial vehicles, data centers and e-bank markets. The net result is an 11% organic sales growth rate from fiscal 2024 to fiscal 2025. With the strong award pipeline for the past 3 years and the effort Methode has made to transition its product portfolio further in the lighting and power solutions, this fiscal 2025 guidance demonstrates that our business model is healthy and is positioned to prosper from the strategic steps that we've taken to grow the business.

2025 財年，計劃縮減和計劃啟動的淨值將成為一股順風。我們還預計商用車、數據中心和電子銀行市場的強勁勢頭將帶來推動作用。最終結果是，從 2024 財年到 2025 財年，有機銷售額增長率為 11%。憑藉過去 3 年強大的獎勵渠道以及 Methode 為進一步轉型其照明和電源解決方案產品組合所做的努力，這份 2025 財年指南表明，我們的業務模式是健康的，並且有望通過我們為發展業務而採取的戰略步驟而蓬勃發展。

Turning to Slide 8. In summary, Methode had a number of successes in fiscal 2023. We achieved record sales in our Industrial segment with growth of 29%. We delivered record sales in the EV applications. We generated strong free cash flow. And lastly, we executed the acquisition of Nordic Lights.

轉向幻燈片 8。總而言之，Methode 在 2023 財年取得了許多成功。我們在工業領域實現了創紀錄的銷售額，增長了 29%。我們在電動汽車應用領域創造了創紀錄的銷售額。我們產生了強勁的自由現金流。最後，我們完成了對 Nordic Lights 的收購。

Turning to our outlook. Due to the program roll-offs and the expected weakness in key markets, we expect to have lower organic sales in fiscal 2024. In addition, we will be making significant investments and launching over 20 new programs. These investments include significant touring and increased staffing. This activity, along with multiple years of strong awards, will enable us not only to replace the sunsetting programs, but to organically grow the business 11% from fiscal 2024 to Fiscal 2025.

轉向我們的展望。由於計劃的縮減和主要市場的預期疲軟，我們預計 2024 財年的有機銷售額將會下降。此外，我們將進行大量投資並推出 20 多個新計劃。這些投資包括大量巡演和增加人員配備。這項活動，加上多年來獲得的豐厚獎項，不僅使我們能夠取代即將結束的計劃，而且使我們的業務從 2024 財年到 2025 財年有機增長 11%。

At this point, I'll turn the call over to Ron, who will provide more detail on our fourth quarter and full year financial results as well as more details on our outlook. Ron?

此時，我將把電話轉給羅恩，他將提供有關我們第四季度和全年財務業績的更多詳細信息以及有關我們前景的更多詳細信息。羅恩？

Thank you, Don, and good morning, everyone. Please turn to Slide 10. Fourth quarter net sales were $301.2 million compared to $287.7 million (sic) [$288.7 million] in fiscal '22, an increase of 4.3%. This quarter sales had $7.7 million unfavorable currency impact and $2.5 million favorable spot buy and premium freight cost recovery impact. Also impacting the quarter's prior year comparison was the roll-off of a large automotive program in North America. Excluding the foreign currency and year-over-year cost recovery impacts, sales increased by 8.8%.

謝謝你，唐，大家早上好。請參閱幻燈片 10。第四季度淨銷售額為 3.012 億美元，而 22 財年為 2.877 億美元（原文如此）[2.887 億美元]，增長了 4.3%。本季度銷售額受到 770 萬美元的不利貨幣影響，以及 250 萬美元的有利現貨購買和溢價運費成本回收影響。北美大型汽車項目的推出也影響了本季度與去年同期的比較。排除外彙和同比成本回收影響，銷售額增長 8.8%。

The strength in the quarter was driven by lighting solutions and commercial vehicles and power solutions in EV. EV product applications were 23% of sales in the quarter. Fourth quarter income from operations decreased 41.8% to $8.5 million from $14.6 million in fiscal '22, mainly due to acquisition costs, material cost inflation and unfavorable foreign currency translation. Partially offsetting those factors was the higher sales volume. Adjusting for acquisition costs of $6.8 million and costs related to the reorganization of a foreign subsidiary of $0.5 million, our non-GAAP adjusted income from operations increased 8.2% to $15.8 million from $14.6 million in fiscal '22.

本季度的強勁表現是由照明解決方案、商用車和電動汽車電源解決方案推動的。電動汽車產品應用佔該季度銷售額的 23%。第四季度運營收入從 22 財年的 1,460 萬美元下降 41.8% 至 850 萬美元，主要是由於採購成本、材料成本通脹和不利的外幣換算。銷量的增加部分抵消了這些因素。調整 680 萬美元的收購成本和 50 萬美元的外國子公司重組相關成本後，我們的非 GAAP 調整後運營收入從 22 財年的 1,460 萬美元增長了 8.2%，達到 1,580 萬美元。

Please turn to Slide 11. Fourth quarter diluted earnings per share decreased 48.8% to $0.22 per share -- per diluted share from $0.43 per diluted share in the same period last fiscal year. The EPS was negatively impacted from the acquisition cost, material cost inflation and unfavorable foreign currency translation. Adjusting for the net acquisition cost of $6.6 million and the net benefit related to the reorganization of our foreign subsidiary of $7 million, our non-GAAP adjusted diluted EPS decreased 51.2% to $0.21 per diluted share from $0.43 in fiscal '22.

請參閱幻燈片 11。第四季度攤薄每股收益下降 48.8%，從上一財年同期的每股攤薄收益 0.43 美元降至每股 0.22 美元。每股收益受到收購成本、材料成本上漲和不利的外幣換算的負面影響。調整淨收購成本 660 萬美元和與重組我們的外國子公司相關的淨收益 700 萬美元後，我們的非 GAAP 調整後攤薄每股收益從 22 財年的 0.43 美元下降 51.2% 至攤薄每股 0.21 美元。

Shifting to EBITDA, a non-GAAP financial measure. Fourth quarter EBITDA was $21.9 million versus $30.8 million in the same period last fiscal year, a 28.9% decrease. EBITDA was negatively impacted by acquisition costs, material cost inflation and the unfavorable foreign currency translation. Higher sales volumes helped to partially offset the decrease. Adjusting for acquisition costs of $6.8 million and costs of $2.6 million related to the reorganization of a foreign subsidiary, our adjusted EBITDA increased 1.6% to $31.3 million from $30.8 million in fiscal '22.

轉向 EBITDA，一種非 GAAP 財務指標。第四季度 EBITDA 為 2190 萬美元，而上一財年同期為 3080 萬美元，下降 28.9%。 EBITDA 受到收購成本、材料成本通脹和不利的外幣換算的負面影響。銷量的增加部分抵消了銷量的下降。調整 680 萬美元的收購成本和 260 萬美元的與重組外國子公司相關的成本後，我們調整後的 EBITDA 增長了 1.6%，從 22 財年的 3080 萬美元增至 3130 萬美元。

Please turn to Slide 12. We increased gross debt by $96.3 million for the full year, mainly due to the Nordic Lights acquisition. We ended the year with $157 million in cash, down $15 million for the full year. During the quarter, we bought back shares for $8.5 million, bringing the year-to-date total to $48.1 million. Net debt, a non-GAAP financial measure, increased by $111.3 million to $149.8 million in the full year from $38.5 million at the end of fiscal '22. Again, the main driver of the increase was the Nordic Lights acquisition.

請參閱幻燈片 12。我們全年的總債務增加了 9,630 萬美元，主要是由於收購 Nordic Lights。年底，我們的現金為 1.57 億美元，全年減少了 1500 萬美元。本季度，我們以 850 萬美元回購股票，使年初至今的總額達到 4810 萬美元。全年淨債務（非公認會計原則財務指標）從 22 財年末的 3850 萬美元增加到 1.498 億美元，增加了 1.113 億美元。同樣，增長的主要推動力是對 Nordic Lights 的收購。

Our debt-to-trailing 12-month EBITDA ratio was approximately 2.2. Our net debt-to-trailing 12-month EBITDA ratio was approximately 1. We continue to have solid debt capacity, which offers the company flexibility from a capital allocation perspective, especially for inorganic growth initiatives.

我們的債務與過去 12 個月 EBITDA 比率約為 2.2。我們的淨債務與過去 12 個月 EBITDA 比率約為 1。我們繼續擁有堅實的債務能力，從資本配置的角度來看，這為公司提供了靈活性，特別是對於無機增長計劃而言。

Please turn to Slide 13. Fourth quarter net cash from operating activities was a healthy $49 million as compared to $42 million in fiscal '22. The increase of $7 million was primarily due to working capital improvements in the quarter. Fourth quarter capital expenditure was $11.2 million as compared to $8.4 million in fiscal '22, an increase of $2.8 million. The increase was mainly a function of a lower level of spending in the prior year quarter as the spending level this quarter was in keeping with our guidance.

請參閱幻燈片 13。第四季度經營活動產生的淨現金為 4,900 萬美元，而 22 財年為 4,200 萬美元。增加 700 萬美元主要是由於本季度營運資本的改善。第四季度資本支出為 1120 萬美元，與 22 財年的 840 萬美元相比，增加了 280 萬美元。這一增長主要是由於上一季度支出水平較低，因為本季度的支出水平符合我們的指導。

Fourth quarter free cash flow, a non-GAAP financial measure, was $37.8 million as compared to $33.6 million in fiscal '22, an increase of $4.2 million. This increase, again, was primarily due to working capital improvements. We continue to have a strong balance sheet, and we will continue to utilize it by investing in our businesses to grow organically and by pursuing opportunities for inorganic growth.

第四季度自由現金流（非公認會計原則財務指標）為 3780 萬美元，與 22 財年的 3360 萬美元相比，增加了 420 萬美元。這一增長同樣主要是由於營運資本的改善。我們繼續擁有強大的資產負債表，並將繼續利用它，投資於我們的業務以實現有機增長，並尋求無機增長的機會。

Please turn to Slide 14. Fiscal '23 net sales were a record $1,179.6 million compared to $1,163.6 million in fiscal '22, an increase of 1.4%. The was our sixth year in a row of record sales. This year's sales had $57.3 million unfavorable foreign currency impact and $20.9 million favorable spot buy in premium base -- premium freight cost recovery impact. Excluding the foreign currency and year-over-year cost recovery impacts, sales increased by 6.5%.

請參閱幻燈片 14。23 財年的淨銷售額達到創紀錄的 11.796 億美元，而 22 財年的淨銷售額為 11.636 億美元，增長了 1.4%。這是我們連續第六年創下銷售紀錄。今年的銷售額受到了 5,730 萬美元的不利外匯影響，以及 2,090 萬美元的溢價基礎現貨購買有利因素——溢價運費成本回收影響。排除外彙和同比成本回收影響，銷售額增長 6.5%。

The strength in the year was driven by our Industrial segment. EV product applications were 22% of sales in the year. Negatively impacting the year was the roll-off of a large automotive program in North America. Fiscal '23 income from operations decreased 19.1% to $90.4 million from $111.7 million in fiscal '22, mainly due to acquisition cost and material inflation, which were partially offset by higher sales volumes. Adjusting for the acquisition cost of $6.8 million and costs related to the reorganization of a foreign subsidiary of $0.5 million, our non-GAAP adjusted income from operations decreased 12.5% to $97.7 million from $111.7 million in fiscal '22.

今年的強勁表現是由我們的工業部門推動的。電動汽車產品應用佔當年銷售額的22%。對這一年產生負面影響的是北美大型汽車項目的推出。 23 財年的運營收入從 22 財年的 1.117 億美元下降了 19.1% 至 9040 萬美元，主要是由於購置成本和材料通脹，但銷量增加部分抵消了這一影響。調整 680 萬美元的收購成本和 50 萬美元的外國子公司重組相關成本後，我們的非 GAAP 調整後運營收入從 22 財年的 1.117 億美元下降了 12.5% 至 9770 萬美元。

Please turn to Slide 15. Fiscal '23 diluted earnings per share decreased 22.2% to $2.10 from $2.70 per diluted share last fiscal year. The EPS was negatively impacted from the acquisition costs and material cost inflation, which were partially offset by a net tax benefit related to the reorganization of a foreign subsidiary. Adjusting for the acquisition cost of $6.6 million and net benefit related to the organization of a foreign subsidiary of $7 million, our non-GAAP adjusted diluted EPS decreased 22.6% to $2.09 from $2.70 in fiscal '22.

請參閱幻燈片 15。23 財年攤薄後每股收益下降 22.2%，從上一財年攤薄後每股收益 2.70 美元降至 2.10 美元。每股收益受到收購成本和材料成本上漲的負面影響，但部分影響被與外國子公司重組相關的淨稅收優惠所抵消。調整收購成本 660 萬美元和與組建外國子公司相關的淨收益 700 萬美元後，我們的非 GAAP 調整後攤薄每股收益從 22 財年的 2.70 美元下降 22.6% 至 2.09 美元。

Shifting to EBITDA. The full year EBITDA was $142.3 million versus $174.6 million last fiscal year, an 18.5% decrease. EBITDA was negatively impacted by the acquisition costs and material cost inflation, which were partially offset by higher sales volume. Adjusting for the acquisition cost of $6.8 million and the cost of $2.6 million related to the reorganization of a foreign subsidiary, our adjusted EBITDA decreased 13.1% to $157.1 million (sic) [$151.7 million] from $174.6 million in fiscal '22.

轉向 EBITDA。全年 EBITDA 為 1.423 億美元，較上一財年的 1.746 億美元下降 18.5%。 EBITDA 受到購置成本和材料成本上漲的負面影響，但銷量增加部分抵消了影響。調整 680 萬美元的收購成本和與重組外國子公司相關的 260 萬美元的成本後，我們調整後的 EBITDA 下降了 13.1%，從 22 財年的 1.746 億美元降至 1.571 億美元（原文如此）[1.517 億美元]。

Please turn to Slide 16. Fiscal '23 net cash from operating activities was a healthy $132.8 million as compared to $98.8 million in fiscal '22. The increase of $34 million was primarily due to working capital improvements. Capital expenditure was $42 million as compared to $38 million in fiscal '22, an increase of $4 million. The increase was mainly a function of a low level of spending in the prior year as the spending level this year was within guidance. We expect significant increase in CapEx in fiscal '24 to increase capacity and capability for the increased launches in both fiscal '24 and fiscal '25. Free cash flow was $90.8 million as compared to $60.8 million in fiscal '22, an increase of $30 million. This increase again was primarily due to working capital improvements.

請參閱幻燈片 16。23 財年經營活動產生的淨現金為 1.328 億美元，而 22 財年為 9880 萬美元。增加 3400 萬美元主要是由於營運資本的改善。資本支出為 4200 萬美元，與 22 財年的 3800 萬美元相比，增加了 400 萬美元。這一增長主要是由於上一年的支出水平較低，而今年的支出水平在指導範圍內。我們預計 24 財年的資本支出將大幅增加，以提高 24 財年和 25 財年增加的產品發布的產能和能力。自由現金流為 9,080 萬美元，較 22 財年的 6,080 萬美元增加了 3,000 萬美元。這一增長主要是由於營運資本的改善。

Please turn to Slide 17. Regarding forward-looking guidance and is based on management's best estimate and is subject to a change due to a variety of factors noted on this slide. While we have experienced some success in price increases to offset the ongoing material cost inflation, we expect this headwind will still be with us in fiscal '24. The expected net sales range for fiscal '24 is $1,150 million to $1,200 million. The expected diluted earnings per share range is $1.55 to $1.75. This fiscal year '24 guidance includes the Nordic Lights acquisition, assumes an income tax rate of between 18% and 20% with no discrete tax benefits or expenses. It assumes CapEx in the $65 million to $75 million range and assumes depreciation and amortization in the range of $57 million to $62 million.

請參閱幻燈片 17。關於前瞻性指導，基於管理層的最佳估計，並可能因本幻燈片中指出的各種因素而發生變化。雖然我們在價格上漲方面取得了一些成功，以抵消持續的材料成本通脹，但我們預計這種逆風將在 24 財年繼續存在。 24 財年的預期淨銷售額範圍為 11.5 億美元至 12 億美元。預計稀釋後每股收益範圍為 1.55 美元至 1.75 美元。本財年 '24 指南包括 Nordic Lights 收購，假設所得稅稅率在 18% 至 20% 之間，沒有單獨的稅收優惠或費用。它假設資本支出在 6500 萬美元至 7500 萬美元範圍內，並假設折舊和攤銷在 5700 萬美元至 6200 萬美元範圍內。

The fiscal year '24 EPS cadence will be somewhat uneven with the first quarter being weakest largely due to the anticipated contingent legal fees related to the [Medtronic] lawsuit. We anticipate minimal sequential quarterly EPS growth from the fourth quarter of fiscal '23. Looking further ahead to fiscal '25, the expected net sales range is between $1,250 million to $1,350 million. The midpoint of this range represents 11% organic growth from the midpoint of the fiscal year '24 net sales guidance range. The expected range income from operations as a percentage of net sales in fiscal year '25 is 11% to 12%. The fiscal year '25 income tax rate is expected to be between 20% and 22%, with no discrete tax benefits or expenses.

24 財年每股收益節奏將有些不平衡，第一季度最弱，這主要是由於與[美敦力]訴訟相關的預期或有法律費用。我們預計從 2023 財年第四季度開始，季度每股收益將出現最低限度的環比增長。展望 25 財年，預計淨銷售額範圍在 12.5 億美元至 13.5 億美元之間。該範圍的中點代表較 24 財年淨銷售指導範圍中點有機增長 11%。預計 25 財年運營收入占淨銷售額的百分比為 11% 至 12%。 '25 財年所得稅率預計在 20% 至 22% 之間，沒有單獨的稅收優惠或費用。

Don, that concludes my comments.

唐，我的評論到此結束。

Ron, thank you very much. Operator, we are ready to take questions.

羅恩，非常感謝你。接線員，我們準備好回答問題。

(Operator Instructions) Our first question is coming from John Franzreb with Sidoti & Company.

（操作員說明）我們的第一個問題來自 Sidoti & Company 的 John Franzreb。

I'd like to start with a couple of quick clarifications. First and foremost, it looks like Nordic is part of the balance sheet. I'm curious if it's part of the P&L, too, because I didn't hear any mention of any revenue contribution from Nordic in the fourth quarter. So can you just kind of walk me through that?

我想先做一些簡單的澄清。首先也是最重要的是，北歐似乎是資產負債表的一部分。我很好奇它是否也是損益表的一部分，因為我沒有聽到任何提及 Nordic 在第四季度的任何收入貢獻。那麼你能引導我完成這個過程嗎？

Yes. You're absolutely correct. The -- it's on the opening balance sheet, but we had -- did not have any profit and loss activity in fiscal '23 related to Nordic lights due to its very late closing right prior to the end of the fiscal year. And (inaudible) in fiscal '24. Yes.

是的。你是完全正確的。它在期初資產負債表上，但我們在 23 財年沒有任何與北歐之光相關的損益活動，因為它在本財年結束之前很晚關閉。以及（聽不清）24 財年。是的。

Okay. All right. So you mentioned legal fees that you're going to continue to incur from Nordic. Are there any other cash expenses that we should be worried about or incremental debt that you're going to have to bring on board that will be part of Q1 that was not part of Q4?

好的。好的。所以你提到了你將繼續從 Nordic 承擔的法律費用。我們是否應該擔心任何其他現金支出，或者您必須承擔的增量債務，這些債務將成為第一季度的一部分，而不是第四季度的一部分？

We mentioned from a legal expense perspective, the Supreme Court ruling, if that comes through next week, that we could have the contingent legal fee related to that matter in the first quarter. I think from a -- we would not expect to take on any further debt in the first quarter. And if anything, depending on cash flows and how everything going, we might even delever a little bit.

我們從法律費用的角度提到，最高法院的裁決，如果下週通過，我們可以在第一季度獲得與此事相關的或有法律費用。我認為，我們預計第一季度不會承擔任何進一步的債務。如果有的話，根據現金流和一切進展情況，我們甚至可能會稍微去槓桿化。

Yes, interest rates obviously are something -- cost of borrowing has gone up, and we have some fixed interest -- variable to fixed interest rate swaps that will be expiring. So we do expect and an increase in debt higher interest expense, significantly higher interest expense in fiscal '24 as compared to fiscal '23.

是的，利率顯然是一個問題——借貸成本上升了，而且我們有一些固定利率——即將到期的固定利率互換。因此，我們確實預計債務增加會帶來更高的利息支出，與 23 財年相比，24 財年的利息支出將顯著增加。

Since you brought it up, what is your expected interest expense embedded in your guidance for fiscal 2024?

既然您提出了這個問題，那麼您在 2024 財年指導中包含的預期利息支出是多少？

It's in the about $13 million-ish range, somewhere around there.

大約在 1300 萬美元左右。

Okay. Perfect. And then just switch gears real quick. On the program roll-offs, just to clarify, you mentioned the impact in [2023] of the North American program roll-off that we've been talking about for quite some time. Two questions here. One, how much was that impact in the fourth quarter? And secondly, when you're talking about the fiscal 2024 guidance, it's a (inaudible), it's a program roll off. So in addition to the one that we've been going through, what's the incremental number on top of that from new program roll-offs?

好的。完美的。然後快速切換齒輪。關於計劃滾動，為了澄清一下，您提到了[2023]北美計劃滾動的影響，我們已經討論了相當長一段時間了。這裡有兩個問題。第一，第四季度的影響有多大？其次，當你談論 2024 財年指導時，這是一個（聽不清），這是一個計劃的滾動。那麼，除了我們一直在經歷的一個之外，新計劃的增量是多少？

Yes. So the program roll-offs, in total, we would expect around $150 million.

是的。因此，我們預計該計劃的總支出約為 1.5 億美元。

Yes, I agree.

是的我同意。

And how much of that is the -- left over from the one that we've been incurring in 2023?

其中有多少是 2023 年我們所承受的剩餘的？

So it would be approximately, from that program, another $100 million. And then there's another program in the EV space that would take a lot of the balance of that.

因此，該計劃大約還可以再獲得 1 億美元。然後，電動汽車領域的另一個計劃將佔據其中的大部分平衡。

Perfect. That's what I was looking for. We know what I've been taking a lot of time, guys. I'll get back into queue for follow-ups.

完美的。這就是我一直在尋找的。伙計們，我們知道我花了很多時間在做什麼。我將返​​回隊列進行後續跟進。

Thanks, John.

謝謝，約翰。

Our next question is coming from Gary Prestopino with Barrington Research.

我們的下一個問題來自 Barrington Research 的 Gary Prestopino。

My question kind of revolves around what the last question here was, but -- in terms of this North American program roll-off, is that over in fiscal '24? Or is there some residual going into fiscal '25 with -- again, there's a plural roll-offs there.

我的問題有點圍繞著最後一個問題，但是，就北美計劃的推出而言，這會在 24 財年結束嗎？或者是否有一些剩餘進入 25 財年——再次，那裡有復數滾存。

The -- in Ron's numbers, the roll-off in '25 and then I talked about in '24, headwind in '25, our increased business becomes a tailwind even with about $120 million of roll-offs in fiscal '25.

在羅恩的數據中，25 年的下滑，然後我在 24 年談到，25 年的逆風，我們增加的業務變成了順風，即使在 25 財年有約 1.2 億美元的下滑。

Right. I understand that, but I'm trying to get at is -- I guess, let me just ask you, is the North American roll-off over in fiscal '24? Or is there's still some residual in fiscal '25?

正確的。我理解這一點，但我想了解的是 - 我想，讓我問你，北美的轉滾是否會在 24 財年結束？或者 25 財年還有一些剩餘嗎？

That depends on the customer. There could be some additional business in '25. It depends when they launched their new programs. I really can't get into too much of that. But we have seen programs extend a little longer. So there could be some of that in '25.

這取決於客戶。 25 年可能會有一些額外的業務。這取決於他們何時推出新計劃。我真的不能參與太多。但我們已經看到計劃延長了一些。所以25年可能會有一些這樣的事情。

Gary, I think what I would say, too, about the other program is the one that started rolling off in fiscal '23, that's rolling up in '24, the preponderance of the roll-off will be done by the end of fiscal '24. There will be some and carryover in '25, but the preponderance is in '23 and '24.

加里，我想我還要說的是，關於另一個計劃，該計劃在 23 財年開始滾動，在 24 財年滾動，大部分滾動將在 24 財年末完成。 '25 年會有一些殘留，但大部分是在 '23 和 '24 年。

Yes. And I don't look at is that extending into 25 as a huge upside. It's just the timing of the customer's launch.

是的。我並不認為擴展到 25 是一個巨大的優勢。這只是客戶推出的時機。

Okay. That's kind of what I was getting at. And then in terms of the [D&A] range for fiscal '24, how does that break down between depreciation and amortization? Can you give us some rough numbers there?

好的。這就是我的意思。然後就 24 財年的 [D&A] 範圍而言，折舊和攤銷之間如何分解？您能給我們一些粗略的數字嗎？

I guess, at a high level, $20-ish million in the A part and the rest of the D part.

我猜，在較高的水平上，A 部分和 D 部分的其餘部分大約需要 2000 萬美元。

Okay. And then I also want to just ask in terms of -- it's great you've got all these new product launches. Could you maybe detail, first of all, what are some of the expenses that are upfront, that are associated with these new product launches? And then -- are we -- as we model things out, our -- is the expense front end loaded in Q1, Q2 and then you start generating less level of expenses or less upfront expenses and then revenues start to accelerate from the new programs in the back half of fiscal '24. Could you help us out with that, please?

好的。然後我還想問一下——很高興你們推出了所有這些新產品。首先，您能否詳細說明與這些新產品發布相關的一些前期費用？然後 - 當我們建模時，我們的 - 是第一季度、第二季度的費用前端，然後你開始產生較低水平的費用或較少的前期費用，然後收入開始從 24 財年後半段的新計劃中加速。您能幫我們解決這個問題嗎？

Sure. It is equipment, it is people, it is prototyping costs that we're starting to incur and we'll continue to incur throughout fiscal 2024. As we get into the end of '24, those costs will start to be absorbed into the product launches. So factored into the guidance, and we will -- we are starting -- we've been hiring. We've been procuring equipment. The plant is probably 30% complete from an equipment standpoint. So that will continue throughout the year, and then we will be launching a lower volume at the end of the year. That's not a significant amount, but it will start to absorb the costs.

當然。我們開始承擔設備、人員和原型製作成本，並將在整個 2024 財年繼續承擔。隨著進入 24 年底，這些成本將開始被吸收到產品發布中。因此，考慮到指導意見，我們將——我們正在開始——我們一直在招聘。我們一直在採購設備。從設備角度來看，該工廠可能已完成 30%。因此，這種情況將持續一整年，然後我們將在年底推出較低的銷量。這並不是一個很大的數字，但它將開始吸收成本。

All right. And I know you didn't give this as a point of your guidance, but it looks like you had almost a 13% adjusted EBITDA margin in fiscal '23. Given the range of what you've given us for fiscal '24, where do you see that adjusted EBITDA margin range if you have that calculation handy?

好的。我知道您並沒有將此作為指導要點，但看起來您在 23 財年的調整後 EBITDA 利潤率幾乎達到 13%。鑑於您向我們提供的 24 財年的範圍，如果您有方便的計算方法，您可以在哪裡看到調整後的 EBITDA 利潤率範圍？

Well, in terms of the range, it would be somewhat comparable to this fiscal year, our fiscal '24 from an EBITDA margin percentage as a percentage of sales.

嗯，就範圍而言，它與本財年（我們的 24 財年）的 EBITDA 利潤率佔銷售額的百分比有些可比。

So it'd be comparable to FY '23? Is what you're saying?

那麼它可以與 23 財年相媲美嗎？是你說的嗎？

Yes.

是的。

(Operator Instructions) Our next question is coming from Matt Sheerin with Stifel. Sir, you may proceed.

（操作員說明）我們的下一個問題來自 Stifel 的 Matt Sheerin。先生，您可以繼續了。

I have a couple of quick questions. One, your commentary in terms of your outlook for data centers. It looks like that will continue to be a headwind. Is that due to the inventory build at the hyperscale customers that's yet to work off? And are you having any visibility in terms of that picking up in the back half of year fiscal 2024? And then the second question, in your preliminary earnings release, your pre-announcement a couple of weeks ago, you talked about a sunsetting of an EV program due to a change in technology by that customer. Could you be more specific about what that technology changes and how that may impact you on other programs?

我有幾個簡單的問題。第一，您對數據中心前景的評論。看起來這將繼續成為一個阻力。這是由於超大規模客戶的庫存尚未發揮作用嗎？您是否對 2024 財年下半年的回升有任何了解？然後是第二個問題，在幾週前的初步收益發布中，您談到了由於該客戶的技術變化而取消電動汽車項目。您能否更具體地說明該技術改變了哪些內容以及這可能對您的其他計劃有何影響？

Okay. I probably can't answer that exactly. I can't give you detail on that because of the customer. I can tell you this, it is one customer, one product. We do not sell that product to other customers. I don't -- of course, I don't want to lose the business, but I understand it. but it is not -- that does not impact our strategic thinking in terms of EVs. It is on the top hat, which -- there's more volatility on the top hat as there are on passenger cars as there are on ICE cars as well. So does it concern me long term? No. Does it -- would I like the business to stay? Yes, I understand, but I apologize I can't really go into any more detail than that. I have to be respectful of the contract we have with the customers and the customer we continue to do business with.

好的。我可能無法準確回答這個問題。由於客戶的原因，我無法向您提供詳細信息。我可以告訴你，這是一個客戶，一種產品。我們不將該產品出售給其他客戶。我不——當然，我不想失去生意，但我理解這一點。但這不會影響我們在電動汽車方面的戰略思維。它位於頂帽上，頂帽上的波動性更大，就像乘用車和內燃機汽車上一樣。那麼這對我有長期影響嗎？不。我是否希望繼續保留該業務？是的，我明白，但很抱歉，我無法透露更多細節。我必須尊重我們與客戶簽訂的合同以及我們繼續與之開展業務的客戶。

The other question, more of an inventory over inventory. Do I expect that to maybe improve it towards the tail end of the year? I don't -- we don't think so. We haven't put that into our numbers. Could it, but when I look at commercial vehicles alone, and I know you're asked about data centers, but ACT has the market down 29%. And they're not always -- the market people aren't always spot on. We're not spot on. But that's a definite direction and a headwind we're going to face in '24. And in '25, they have it going back up.

另一個問題，更多的是庫存。我預計這可能會在今年年底有所改善嗎？我不——我們不這麼認為。我們還沒有將其納入我們的數字中。可以嗎，但是當我單獨看商用車時，我知道你被問到數據中心，但 ACT 的市場下降了 29%。而且他們並不總是——市場人士並不總是準確的。我們沒有到位。但這是我們在 24 年將面臨的明確方向和阻力。到了 25 年，他們又恢復了。

Got it. And just so on data center, are you just not getting visibility into that picking up anytime soon?

知道了。就數據中心而言，您是否無法很快看到這種情況的回升？

No. We know -- I mean, we know when we set the customer, we kind of know their usage and they told us they're over inventory. So until they work that down, and we can -- we can model, here's what they've taken in the last 3 quarters. And if they have all that in inventory, you can pretty much expect you're not going to have much business for the next 3 quarters. And that's -- we have visibility to that. And that's why we're guiding that...

不。我們知道——我的意思是，我們知道當我們設置客戶時，我們知道他們的使用情況，他們告訴我們庫存過剩。因此，在他們解決這個問題之前，我們可以——我們可以建模，這是他們在過去三個季度採取的措施。如果他們擁有所有這些庫存，那麼您幾乎可以預期接下來的三個季度不會有太多業務。那就是——我們對此有可見性。這就是為什麼我們要引導...

I want to make just quick clarification on Gary's question, the A part of D&A is -- will be about $25 million instead of $20 million. I think I said $20 million. $25 million is the correct answer.

我想快速澄清加里的問題，D&A 的 A 部分將約為 2500 萬美元，而不是 2000 萬美元。我想我說的是 2000 萬美元。 2500 萬美元是正確答案。

As we have reached the end of our question-and-answer session, I will turn the call back over to Mr. Duda for any closing remarks.

當我們的問答環節結束時，我將把電話轉回給杜達先生，讓他作結束語。

Thank you. We will thank everyone for their questions and for listening and wish everyone a very safe and enjoyable summer. Good day.

謝謝。我們將感謝大家的提問和傾聽，並祝大家度過一個安全、愉快的夏天。再會。

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

謝謝。今天的會議到此結束，此時您可以掛斷電話了，感謝您的參與。