NN Inc (NNBR) 2022 Q4 法說會逐字稿

Good morning, everyone, and welcome to the NN, Inc. Fourth Quarter and Full Year '22 Earnings Conference Call. (Operator Instructions) Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Jeff Tryka, Investor Relations with NN. Please go ahead.

大家早上好，歡迎參加 NN, Inc. 22 年第四季度和全年收益電話會議。 （操作員說明）另請注意今天的活動正在錄製中。現在，我想將電話會議轉給 NN 投資者關係部的 Jeff Tryka。請繼續。

Thank you, Jamie. Good morning, everyone, and thanks for joining us. I'm Jeff Tryka, Investor Relations contact for NN, Inc., and I'd like to thank you for attending today's business update. Yesterday afternoon, we issued a press release announcing our financial results for the fourth quarter and full year ended December 31, 2022, as well as a supplemental presentation, which have been posted to the Investor Relations section of our website.

謝謝你，傑米。大家早上好，感謝您加入我們。我是 NN, Inc. 投資者關係聯繫人 Jeff Tryka，感謝您參加今天的業務更新。昨天下午，我們發布了新聞稿，宣布截至 2022 年 12 月 31 日的第四季度和全年財務業績以及補充演示文稿，這些內容已發佈在我們網站的投資者關係部分。

If anyone needs a copy of the press release or the supplemental presentation, you may contact Lambert & Company at (315) 529-2348. Our presenters on the call this morning will be Warren Veltman, President and Chief Executive Officer; Mike Felcher, Senior Vice President and Chief Financial Officer; and Andrew Wall, Senior Vice President and Chief Commercial Officer.

如果有人需要新聞稿或補充演示文稿的副本，您可以致電 (315) 529-2348 聯繫 Lambert & Company。今天早上電話會議的主持人是總裁兼首席執行官 Warren Veltman；邁克·費爾徹 (Mike Felcher)，高級副總裁兼首席財務官；高級副總裁兼首席商務官安德魯·沃爾 (Andrew Wall)。

Before we begin, I'd like to ask you to take note of the cautionary language regarding forward-looking statements contained in today's press release, supplemental presentation and in the Risk Factors section of the company's annual report on Form 10-K for the fiscal year ended December 31, 2021, the company's quarterly report on Form 10-Q for the 3 months ended September 30, 2022, and when filed, the company's annual report on Form 10-K for the fiscal year ended December 31, 2022.

在我們開始之前，我想請您注意今天的新聞稿、補充演示文稿以及公司財務報表 10-K 年度報告的風險因素部分中包含的有關前瞻性陳述的警示性語言。截至2021年12月31日的年度，公司截至2022年9月30日止三個月的10-Q表格季度報告，以及提交時公司截至2022年12月31日的財政年度10-K表格年度報告。

The same language applies to comments made on today's conference call, including the Q&A session as well as the live webcast. Our presentation today will contain forward-looking statements regarding sales, margins, inflation, supply chain constraints, including semiconductor chips, foreign exchange rates, cash flow, tax rate, acquisitions, synergies, cash and cost savings, future operating results, performance of our worldwide markets, the impact of the coronavirus pandemic and the Russia-Ukraine -- Ukranian conflict on the company's financial condition and other topics.

同樣的語言也適用於今天的電話會議上的評論，包括問答環節以及網絡直播。我們今天的演講將包含有關銷售、利潤、通貨膨脹、供應鏈限制的前瞻性陳述，包括半導體芯片、外匯匯率、現金流、稅率、收購、協同效應、現金和成本節約、未來經營業績、我們的業績全球市場、冠狀病毒大流行以及俄羅斯-烏克蘭-烏克蘭衝突對公司財務狀況的影響以及其他話題。

These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the company's control. The presentation also includes certain non-GAAP measures as defined by SEC rules. A reconciliation of such non-GAAP measures is contained in the tables in the final section of the press release and in the supplemental presentation.

這些陳述應謹慎使用，並受到各種風險和不確定性的影響，其中許多風險和不確定性超出了公司的控制範圍。該演示文稿還包括 SEC 規則定義的某些非 GAAP 衡量標準。此類非公認會計原則措施的調節包含在新聞稿最後部分的表格和補充說明中。

Reviewing the agenda for today's call, Warren will open with an update on the actions the company is taking to position NN for success. Andrew will then provide a market update and discussion of new business opportunities. Finally, Mike will provide a detailed update of financial results for the fourth quarter and full year before turning the call back over to Warren to discuss our outlook for 2023. There will be a Q&A session following the conclusion of the prepared remarks. At this time, I will turn the call over to Warren Veltman, President and CEO. Warren?

回顧今天的電話會議議程，Warren 將首先介紹公司為使 NN 取得成功而採取的最新行動。然後安德魯將提供市場最新動態並討論新的商機。最後，Mike 將提供第四季度和全年財務業績的詳細更新，然後將電話轉回給 Warren，討論我們對 2023 年的展望。在準備好的講話結束後，將舉行問答環節。此時，我將把電話轉給總裁兼首席執行官沃倫·維爾特曼 (Warren Veltman)。沃倫？

Thank you, Jeff, and good morning, everyone, and thank you for joining us this morning. Let me start my comments by indicating that our teams have continued to adapt to a very challenging environment characterized by supplier interruptions, inflationary cost pressures, labor constraints and fluctuating customer volumes. NN possesses an action-oriented culture predicated on improving every day and responding swiftly to customer requirements. So I have strong faith that our teams will continue to rise to meet the challenge presented by this current environment.

謝謝杰夫，大家早上好，感謝您今天早上加入我們。首先我要指出的是，我們的團隊一直在適應一個非常具有挑戰性的環境，其特點是供應商中斷、通脹成本壓力、勞動力限制和客戶量波動。 NN 擁有以行動為導向的文化，致力於每天改進并快速響應客戶要求。因此，我堅信我們的團隊將繼續奮起應對當前環境帶來的挑戰。

If you turn to Page 4 of the presentation, we have summarized some of the results from our fourth quarter. Let me start my comments by saying that despite the fact that we made significant progress on our key initiatives, our fourth quarter results did not meet our expectations. Reported sales were lower than expected in our prior outlook due to lower production volumes, partially driven by COVID-19 interruptions in China due to the government's reversal of its zero-tolerance policy during the fourth quarter. Additionally, our results reflect unrecovered inflation and operating performance below our expectations, particularly at 2 operating facilities.

如果您翻到演示文稿的第 4 頁，我們總結了第四季度的一些結果。首先我要說的是，儘管我們在關鍵舉措上取得了重大進展，但我們第四季度的業績並未達到我們的預期。報告的銷售額低於我們之前展望中的預期，原因是產量下降，部分原因是中國政府在第四季度逆轉了零容忍政策，造成了 COVID-19 的中斷。此外，我們的業績反映出未恢復的通貨膨脹和運營業績低於我們的預期，特別是在 2 個運營設施中。

Sales for the quarter were $118 million, up 6.9% from the fourth quarter of 2021. Power Solutions sales were up 11.7%, driven by electric component volume and pricing. Mobile Solutions sales were up 3.6% from the prior year, driven by pricing. The impact of inflation on our cost structure continues to adversely impact our profit. Cost increases due to inflation that were not recovered by higher customer pricing adversely impacted Mobile Solutions by approximately $1 million during the quarter. We responded by aggressively negotiating nonmaterial-related price increases with our Mobile Solutions customers with most becoming effective January 1, 2023.

該季度銷售額為 1.18 億美元，較 2021 年第四季度增長 6.9%。在電氣元件銷量和定價的推動下，電源解決方案銷售額增長 11.7%。在定價的推動下，移動解決方案銷售額較上年增長 3.6%。通貨膨脹對我們成本結構的影響繼續對我們的利潤產生不利影響。由於通貨膨脹導致的成本增加未能通過更高的客戶定價來彌補，該季度對移動解決方案產生了約 100 萬美元的不利影響。我們的應對措施是與我們的移動解決方案客戶積極協商非材料相關的價格上漲，大部分將於 2023 年 1 月 1 日生效。

On the Power Solutions side, we have proactively addressed expected 2023 inflation by implementing a 5% or higher price increase on incoming purchase orders not tied to a long-term supply agreement. These factors contributed to a net loss for the fourth quarter of $11 million and a non-GAAP adjusted loss of $3.3 million.

在電源解決方案方面，我們通過對與長期供應協議無關的傳入採購訂單實施 5% 或更高的價格上漲，積極應對 2023 年預期的通貨膨脹。這些因素導致第四季度淨虧損 1100 萬美元，非 GAAP 調整後虧損 330 萬美元。

Non-GAAP adjusted EBITDA was $7.8 million or 6.6% of sales for the fourth quarter of 2022. We continue to maintain strong liquidity at $48.1 million, an increase of $3.4 million from Q3 of 2022 as we generated $6.4 million of free cash flow in the fourth quarter, which was in line with our outlook despite profitability being lower than expected. If you turn to Page 5 of the presentation, I will provide an update on several key initiatives.

非GAAP 調整後EBITDA 為780 萬美元，佔2022 年第四季度銷售額的6.6%。我們繼續保持強勁的流動性，達到4,810 萬美元，比2022 年第三季度增加340 萬美元，因為我們在2022年第四季度產生了640 萬美元的自由現金流。儘管盈利能力低於預期，但第四季度的業績符合我們的預期。如果您翻到演示文稿的第 5 頁，我將提供幾個關鍵舉措的最新信息。

During 2022 and 2023, we were able to increase pricing to address inflationary costs, which I will address in more detail on a subsequent slide. We are focused on continuously improving our cost structure. As we have previously discussed, a major initiative has been to optimize the efficiency of our operating footprint with the closure of 5 facilities. We expect that all these facilities will be closed by the end of the second quarter of 2023. These closures are expected to generate $11 million to $12 million improvement in adjusted EBITDA versus our 2022 results.

在 2022 年和 2023 年期間，我們能夠提高定價以應對通貨膨脹成本，我將在後續幻燈片中更詳細地討論這一問題。我們致力於不斷改善我們的成本結構。正如我們之前討論的，一項重大舉措是通過關閉 5 個設施來優化我們的運營效率。我們預計所有這些設施將在 2023 年第二季度末關閉。與我們 2022 年的業績相比，這些關閉預計將為調整後 EBITDA 帶來 1100 萬至 1200 萬美元的改善。

This week, we announced the amendments to our ABL and term loan agreements to provide an increase in the leverage ratio requirement for the remaining duration of the term loan. This change will provide us with a reduction in compliance risk given the continued uncertainty surrounding the broader economy, inflation and supply chain stability and also will allow our new leadership, the ability to focus on executing our growth strategy and driving improved financial performance.

本週，我們宣布了對 ABL 和定期貸款協議的修訂，以提高定期貸款剩餘期限的槓桿率要求。鑑於整體經濟、通脹和供應鏈穩定性的持續不確定性，這一變化將降低我們的合規風險，同時也將使我們的新領導層能夠專注於執行我們的增長戰略並推動改善財務業績。

Speaking of new leadership, let me provide an update on the status of the current CEO search. The Board has worked with Korn Ferry to identify and interview qualified candidates with a focus of finding the right person to lead NN. A person with a relevant industry experience, drive, values and commitment to our company's long-term vision. Selecting the right candidate takes time, particularly in the current environment, but our Board is committed to investing the appropriate time to ensure success in this effort. We will share more as the CEO search process concludes.

說到新的領導層，讓我介紹一下當前首席執行官搜尋的最新情況。董事會與光輝國際 (Korn Ferry) 合作，物色並面試合格的候選人，重點是尋找領導 NN 的合適人選。具有相關行業經驗、動力、價值觀和對我們公司長期願景的承諾的人。選擇合適的候選人需要時間，特別是在當前環境下，但我們的董事會致力於投入適當的時間以確保這項工作取得成功。隨著首席執行官搜尋過程的結束，我們將分享更多信息。

We currently expect that John Buchan, the EVP of our operating groups will retire on March 31. We are fortunate to have built a strong bench of talent within our management team with Gunars Vinkels and Douglas Campos stepping up to lead Power Solutions and Mobile Solutions teams, respectively. Gunars and Douglas have been working closely with John since early November to affect the successful transfer of leadership.

目前，我們預計運營團隊的執行副總裁約翰·巴肯(John Buchan) 將於3 月31 日退休。我們很幸運，在管理團隊中建立了一支強大的人才隊伍，由Gunars Vinkels 和Douglas Campos 領導電源解決方案和移動解決方案團隊， 分別。自 11 月初以來，古納爾斯和道格拉斯一直與約翰密切合作，以影響領導層的成功交接。

If you turn to Page 6 of the presentation, we will review some of the pricing actions we have pursued to address the current inflationary environment. Since the onset of significant inflation in 2021 and through February of 2023, we have secured $66 million in annualized price increases to offset material and nonmaterial inflation. The majority of the price increases secured prior to 2022 were for the recovery of material inflation.

如果您翻到演示文稿的第 6 頁，我們將回顧我們為應對當前通脹環境而採取的一些定價行動。自 2021 年出現大幅通脹以來，到 2023 年 2 月，我們已確保年化價格上漲 6600 萬美元，以抵消物質和非物質通脹。 2022 年之前實現的大部分價格上漲都是為了物質通脹的複蘇。

However, during 2023, we have increased our prices within Mobile Solutions to recover nonmaterial inflation from 2022, and we enacted a 5% plus price increase in Power Solutions to recover expected 2023 inflation on incoming purchase orders not tied to a long-term supply agreement. These price increases are expected to generate $12 million of incremental revenue over 2022 and will have an annualized impact of $14 million.

然而，在2023 年期間，我們提高了移動解決方案的價格，以恢復自2022 年起的非實質性通脹，並且我們對電源解決方案實施了5% 以上的提價，以恢復與長期供應協議無關的傳入採購訂單的2023 年預期通脹。這些價格上漲預計將在 2022 年帶來 1200 萬美元的增量收入，年化影響將達到 1400 萬美元。

The cumulative price increases of 2022 and 2023 are split roughly 50-50 between our Mobile and Power groups. We are in negotiations with customers for additional price increases over those already secured in 2023, primarily within Mobile Solutions. And our teams will remain diligent and proactive in taking steps necessary to recover the unusually high inflation in the current environment.

2022 年和 2023 年的累計價格漲幅在我們的移動組和電源組之間大約各佔 50-50。我們正在與客戶就 2023 年已確定價格的進一步提價進行談判，主要是在移動解決方案領域。我們的團隊將繼續勤勉、積極主動地採取必要措施，以恢復當前環境下異常高的通脹。

Turning to Page 7. I will now provide additional detail on our facility closures. We are confident regarding the savings we have estimated to come from these facilities' closures. The vast majority of the benefit is from the elimination of negative EBITDA from our Taunton and Irvine facilities, and a reduction in facility costs such as rent, property tax, maintenance and utilities associated with other facility closures.

轉到第 7 頁。我現在將提供有關我們設施關閉的更多詳細信息。我們對關閉這些設施所節省的成本充滿信心。絕大多數收益來自我們湯頓和歐文工廠的負 EBITDA 的消除，以及與其他工廠關閉相關的租金、財產稅、維護和公用事業等設施成本的降低。

Within Power Solutions, the Taunton and Irvine facilities are on track for closure by April 2023. We have agreed in principle to terms on subleases for both facilities and are in the process of finalizing the respective sublease agreements. The subleases will encompass the remaining full term of our leases and will provide full recovery of our remaining lease obligation for both facilities on a combined basis.

在 Power Solutions 內部，湯頓和歐文工廠預計將於 2023 年 4 月關閉。我們已原則上同意這兩個工廠的轉租條款，並正在敲定各自的轉租協議。轉租將涵蓋我們剩餘的完整租賃期限，並將在合併的基礎上全面收回我們對這兩個設施的剩餘租賃義務。

These closures will provide a sequential improvement of approximately $9 million in adjusted EBITDA in 2023 compared to 2022. The 3 Mobile Solutions facility closures are also expected to be completed by the second quarter of 2023 and will provide a sequential improvement of $2 million to $3 million in adjusted EBITDA in 2023 versus 2022. This improvement includes the benefit of relocating certain production in the United States to our manufacturing location in Mexico, which is subject to some execution risk associated with the relocation.

與2022 年相比，這些關閉將使2023 年調整後EBITDA 連續改善約900 萬美元。3 個移動解決方案設施的關閉預計也將在2023 年第二季度完成，並將連續改善200 萬至300 萬美元與 2022 年相比，2023 年調整後的 EBITDA 有所提高。這一改進包括將美國的某些生產搬遷到墨西哥的製造地點的好處，但該地點可能會面臨與搬遷相關的一些執行風險。

I will now turn it over to Andrew, who will provide a market update. Andrew?

我現在將其交給安德魯，他將提供市場最新情況。安德魯？

Thanks, Warren, and good morning, everyone. I'm happy to be joining you on today's call to review our new business wins in 2022 and updates on market conditions as we move into 2023. Now if you turn to Page 9, I will review some of the new business growth we achieved in 2022. Year-to-date through the fourth quarter, we have secured new business wins with total estimated sales of $131 million through 2026 as the efforts of our revitalized team have continued to generate results.

謝謝沃倫，大家早上好。我很高興能參加今天的電話會議，回顧我們在2022 年取得的新業務成果，以及進入2023 年時市場狀況的最新情況。現在，如果您翻到第9 頁，我將回顧我們在2022 年實現的一些新業務增長2022 年。從年初至今到第四季度，我們已經贏得了新的業務，預計到 2026 年總銷售額將達到 1.31 億美元，因為我們振興的團隊的努力不斷取得成果。

I would note that we have seen delays in award timing for several large strategic pursuits. However, we are strongly positioned and remain confident in securing this business. We continue our focused and disciplined approach. And I would like to note that approximately 60% of the new business wins achieved through the fourth quarter were in the electrical, electric vehicle and universal auto segments, highlighting our team's alignment with our long-term strategy.

我要指出的是，我們發現一些大型戰略項目的授予時間出現了延遲。然而，我們處於有利地位，並且對獲得這項業務仍然充滿信心。我們將繼續採取專注且嚴格的方法。我想指出的是，第四季度取得的新業務中約 60% 是在電動、電動汽車和通用汽車領域，這突顯了我們團隊與我們長期戰略的一致性。

The term universal auto may be new to some of you. For clarity, we define universal auto as a market subsegment where the solutions supplied by NN are agnostic to the powertrain of the vehicle. For example, our solutions in electric power steering, electric braking systems, seat and door assemblies and airbag safety systems are all characterized as universal auto as they can be found on EVs hybrid and legacy ICE vehicles.

通用汽車這個詞對你們中的一些人來說可能很陌生。為了清楚起見，我們將通用汽車定義為一個細分市場，其中 NN 提供的解決方案與車輛的動力系統無關。例如，我們在電動助力轉向、電動制動系統、座椅和車門組件以及安全氣囊安全系統方面的解決方案都具有通用汽車的特點，因為它們可以在電動混合動力汽車和傳統內燃機汽車上找到。

We are also pleased with the low capital ratio we achieved as the new business wins require incremental capital expenditures of just $2 million to $3 million, allowing us a strong opportunity to improve our financial return on our existing equipment base. Part of our disciplined approach is knowing what opportunities to forgo as we declined participation in nonstrategic or capital-intensive opportunities.

我們還對我們實現的低資本比率感到滿意，因為贏得新業務只需增加 200 萬至 300 萬美元的資本支出，這使我們有很大的機會提高現有設備基礎的財務回報。我們嚴格的方法的一部分是知道當我們拒絕參與非戰略性或資本密集型機會時要放棄哪些機會。

On Page 10, we highlight some significant news and recognition by customers for the value that NN provides. Schaeffler is a manufacturer of rolling element bearings for automotive, aerospace and industrial applications with revenue totaling EUR 15.8 billion in 2022. Out of more than 600 suppliers in China, Schaeffler awarded our Wuxi, China manufacturing plant with the 2022 Best Supplier Award, highlighting the solid work performed by our team in China and the valuable relationships we have built with major global customers.

在第 10 頁，我們重點介紹了一些重要新聞以及客戶對 NN 提供的價值的認可。舍弗勒是一家汽車、航空航天和工業應用滾動軸承製造商，2022 年收入總計158 億歐元。舍弗勒從中國600 多家供應商中，向我們的中國無錫製造工廠頒發了2022 年最佳供應商獎，突顯了我們在中國的團隊所做的紮實工作以及我們與全球主要客戶建立的寶貴關係。

On Slide 11, we highlight 2 awards we received from Cummins, a leading global manufacturer, designer and distributor of engines, filtration and power generation products with $28.1 billion in revenue in 2022. At their recent Global Supplier Recognition event, Cummins awarded NN with 2 Best Delivery Performance - Direct Sourcing awards for both the North American and the global categories. To give you an idea of how significant these 2 awards are, of the thousands of suppliers serving Cummins, the company only awards 26 of these globally and NN won 2 of them. This is an amazing testimony for the hard work and dedication of our team to deliver to Cummins, the precision engineered components for fuel injectors, turbochargers and emissions dosing systems, which contribute to Cummins' production of more energy-efficient powertrains in a broad range of demanding industrial applications.

在幻燈片11 中，我們重點介紹了康明斯頒發的2 個獎項，康明斯是全球領先的發動機、過濾和發電產品製造商、設計商和分銷商，2022 年收入為281 億美元。在最近的全球供應商表彰活動中，康明斯向NN 授予了2 個獎項最佳交付績效 - 北美和全球類別的直接採購獎。為了讓您了解這 2 個獎項的重要性，在為康明斯提供服務的數千家供應商中，該公司在全球範圍內僅授予了其中 26 個獎項，而 NN 贏得了其中 2 個獎項。這是對我們團隊的辛勤工作和奉獻精神的驚人證明，為康明斯提供了用於燃油噴射器、渦輪增壓器和排放計量系統的精密工程部件，這些部件有助於康明斯在各種領域生產更節能的動力總成要求苛刻的工業應用。

Turning to Slide 12, you will find that we have provided a macro automotive market update. In their January executive update, LMC has forecasted global light vehicle production to increase 4.6% with a positive production outlook in all regions. Lingering impacts of supply chain and COVID are expected to affect first quarter, offset by a stronger outlook for the remainder of the year. While positive, the forecast is subject to risks of the broader global macro economy.

翻到幻燈片 12，您會發現我們提供了宏觀汽車市場更新。在 1 月份的執行更新中，LMC 預測全球輕型汽車產量將增長 4.6%，所有地區的生產前景均樂觀。供應鍊和新冠疫情的持續影響預計將影響第一季度，但被今年剩餘時間的強勁前景所抵消。雖然這一預測是積極的，但它受到更廣泛的全球宏觀經濟風險的影響。

LMC also noted mixed views on the evolution of powertrains over the decade. But regardless of how the automotive market evolves, NN stands in a strong and unique competitive position due to our process technology range and experience.

LMC 還注意到對過去十年動力總成發展的不同看法。但無論汽車市場如何發展，NN 憑藉我們的工藝技術範圍和經驗，始終處於強大而獨特的競爭地位。

Slide 13 shows the electrical grid market update and key drivers. As we consider the evolution of the power grid towards renewables, grid scale battery energy storage will become more prominent in order to capture, store and distribute energy from the sun and wind. The global grid battery market is forecast to grow at 32% CAGR through the decade, reaching a total market size of approximately $6.6 billion in 2030.

幻燈片 13 顯示了電網市場的最新動態和關鍵驅動因素。當我們考慮電網向可再生能源發展時，為了捕獲、存儲和分配來自太陽和風的能量，電網規模的電池儲能將變得更加重要。全球電網電池市場預計未來十年將以 32% 的複合年增長率增長，到 2030 年市場總規模將達到約 66 億美元。

We estimate that for any end, the total addressable segment of the grid scale battery market will be between $300 million and $500 million, providing a significant runway for growth in this strategically important market. Finally, as you look at the key players in the market, you will see many familiar names from the current NN customer group as well as prospective clients we aspire to reach.

我們估計，無論如何，電網規模電池市場的總可尋址部分將在 3 億至 5 億美元之間，為這個具有重要戰略意義的市場的增長提供重要的跑道。最後，當您觀察市場上的主要參與者時，您會看到許多來自當前 NN 客戶群以及我們渴望接觸的潛在客戶的熟悉名字。

On Page 14, we will review our sales pipeline and how it aligns with our longer-term growth strategy. We are pleased with the opportunities generated by our sales and business development teams. Those teams have delivered a significant pipeline expansion in targeted growth markets associated with the electric grid space and electric vehicles. And we are currently pursuing several opportunities to strengthen our position in each market. This focused approach, along with reductions in fuel cell programs by OEMs has resulted in a decline of ICE-dependent pursuits and a dramatic expansion in EV and electrical opportunities.

在第 14 頁，我們將審查我們的銷售渠道以及它如何與我們的長期增長戰略保持一致。我們對銷售和業務開發團隊創造的機會感到高興。這些團隊在與電網空間和電動汽車相關的目標增長市場中實現了重大的管道擴張。我們目前正在尋求多個機會來加強我們在每個市場的地位。這種專注的方法，加上原始設備製造商燃料電池項目的減少，導致了對內燃機依賴的追求的減少以及電動汽車和電動機會的急劇增加。

In 2023, we will continue our strategic growth with a focus on the core market areas that define our long-term growth plan through 2025. We plan to focus on cross-selling to unlock incremental revenue streams by leveraging Power Solutions process technologies to our existing customer base. To enhance our return on invested capital, we will leverage existing capital for new business targets. Finally, we will take a disciplined approach, resulting in profitable growth in sales and improved cash flow through 2026.

2023 年，我們將繼續戰略增長，重點關注定義我們到 2025 年長期增長計劃的核心市場領域。我們計劃重點關注交叉銷售，通過利用 Power Solutions 工藝技術來釋放增量收入流。客戶群。為了提高我們的投資資本回報率，我們將利用現有資本實現新的業務目標。最後，我們將採取嚴格的方法，到 2026 年實現銷售盈利增長並改善現金流。

I will now turn the call over to Mike, who will provide an update on the fourth quarter and full year financial results. Mike?

我現在將把電話轉給邁克，他將提供第四季度和全年財務業績的最新情況。麥克風？

Thank you, Andrew. Now if you turn to Page 16, I will review some of the financial highlights for the fourth quarter. Compared to the prior year period, sales increased 6.9% to $118 million, driven primarily by price and volume increases, partially offset by foreign exchange headwinds given the stronger U.S. dollar. From a profitability standpoint, net price inflation was approximately $3 million unfavorable year-over-year comprised of unrecovered inflation of approximately $1 million in the current year and the impact of a customer pricing settlement in the fourth quarter of 2021 of $2 million. Overhead absorption negatively impacted our results by approximately $2 million relative to the prior year, while incentive compensation was $1 million favorable.

謝謝你，安德魯。現在，如果您翻到第 16 頁，我將回顧第四季度的一些財務亮點。與去年同期相比，銷售額增長了 6.9%，達到 1.18 億美元，這主要是由價格和銷量增長推動的，但由於美元走強，部分被外匯不利因素所抵消。從盈利能力的角度來看，淨價格通脹約為 300 萬美元，同比不利，其中包括本年度未恢復的通脹約 100 萬美元以及 2021 年第四季度客戶定價結算的影響 200 萬美元。與上一年相比，管理費用吸收對我們的業績產生了約 200 萬美元的負面影響，而激勵性薪酬則對我們的業績產生了 100 萬美元的有利影響。

Turning to Slide 17, I will review our financial highlights from the full year. Total sales increased $21.1 million or 4.4% from 2021 to $498.7 million. The sales increase was driven by pricing actions taken throughout the year partially offset by decreased volume and the impact of foreign exchange with the stronger dollar. The volume decline was driven by lower sales in Mobile Solutions as a result of the semiconductor chip shortage, supply chain disruptions, the resurgence of COVID-19 in China and the impact of the Russia-Ukraine conflict in Europe.

轉向幻燈片 17，我將回顧我們全年的財務亮點。總銷售額較 2021 年增加 2,110 萬美元，即 4.4%，達到 4.987 億美元。銷售額增長是由全年採取的定價行動推動的，部分被銷量下降和美元走強的外匯影響所抵消。銷量下降的原因是半導體芯片短缺、供應鏈中斷、中國新冠肺炎疫情死灰復燃以及俄羅斯-烏克蘭衝突對歐洲的影響，導致移動解決方案銷售額下降。

Adjusted EBITDA for the full year was $43.9 million, down from $52.1 million in 2021. The main drivers for the decrease were lower volume and unrecovered inflation and unfavorable overhead absorption, partially offset by reduced incentive compensation expense for the year.

全年調整後 EBITDA 為 4390 萬美元，低於 2021 年的 5210 萬美元。下降的主要驅動因素是銷量下降、通脹未恢復以及不利的管理費用吸收，但部分被當年激勵薪酬費用減少所抵消。

Turning to Slide 18. Working capital turns improved in the fourth quarter to 4.3 turns from 4.2 in the previous quarter. We saw our working capital decrease by $13.6 million compared to the third quarter as a result of normal seasonality, utilization of programs to improve receivable terms and inventory reduction initiatives. Due to the prolonged impact of supply chain challenges, we continue to hold higher-than-usual levels of inventory to ensure our ability to meet customer needs. While inventory levels remain elevated, we will continue our initiatives to further reduce inventory, which we expect will mitigate some of the seasonal increase in working capital that usually occurs in the first quarter.

轉向幻燈片 18。第四季度營運資金周轉率從上一季度的 4.2 周轉率提高到 4.3 周轉率。與第三季度相比，我們的營運資金減少了 1,360 萬美元，原因是正常的季節性因素、利用改善應收賬款條款的計劃以及減少庫存舉措。由於供應鏈挑戰的長期影響，我們繼續持有高於平常的庫存水平，以確保我們有能力滿足客戶需求。儘管庫存水平仍然較高，但我們將繼續採取措施進一步減少庫存，我們預計這將緩解通常發生在第一季度的營運資本季節性增長。

Slide 19 provides a look at our continued disciplined approach that we have taken to capital expenditures over the past year. We have slightly decreased CapEx for the full year to $18 million from $18.2 million in 2021. This is at the low end of our previously announced guidance of $18 million to $19 million. As we look to maintain focus on cash, we will continue to take a disciplined approach to CapEx and allocate capital expenditures to higher growth markets that we have identified as part of our long-term growth strategy.

幻燈片 19 展示了我們在過去一年中對資本支出採取的持續嚴格的方法。我們將全年資本支出從 2021 年的 1820 萬美元略微降低至 1800 萬美元。這是我們之前宣布的 1800 萬美元至 1900 萬美元指導值的下限。當我們希望保持對現金的關注時，我們將繼續對資本支出採取嚴格的方法，並將資本支出分配給我們已確定為長期增長戰略一部分的高增長市場。

Please turn to Slide 20. This slide illustrates our free cash flow for the quarter and full year. Free cash flow was $6.4 million in the fourth quarter of 2022. Full year free cash flow for 2022 was an outflow of $9.8 million compared with an outflow of $1.2 million in 2021. The decline in operating cash flow from the prior year was primarily driven by an increase in net loss, partially offset by dividend payments from the China JV. Fourth quarter and full year free cash flow was consistent with our outlook during our third quarter conference call. We incurred approximately $2.6 million in cash costs for severance, litigation and settlement, FICA deferral repayment and facility closure costs during the quarter. This brings our total cost for these items as well as the final Life Sciences sales tax payment to approximately $7.2 million for the full year.

請參閱幻燈片 20。這張幻燈片說明了我們本季度和全年的自由現金流。 2022 年第四季度自由現金流為 640 萬美元。2022 年全年自由現金流流出 980 萬美元，而 2021 年流出 120 萬美元。經營現金流較上年下降的主要原因是淨虧損增加，部分被中國合資企業支付的股息所抵消。第四季度和全年自由現金流與我們在第三季度電話會議上的預期一致。本季度，我們因遣散費、訴訟和和解、FICA 延期還款以及設施關閉費用而產生了約 260 萬美元的現金費用。這使得我們全年這些項目的總成本以及最終的生命科學銷售稅支付達到約 720 萬美元。

Turning to Slide 21. Net debt at the end of the fourth quarter was $146.3 million versus $151.5 million in the third quarter of 2022, a decrease of $5.2 million. Our net debt to adjusted EBITDA ratio stood at 3.33x at the end of the fourth quarter compared to 3.15x at the end of the third quarter. We had $48.1 million of liquidity, including cash and availability on our revolver as of December 31. Our ABL was drawn by $1 million, and our domestic liquidity was $35.6 million.

轉向幻燈片 21。第四季度末的淨債務為 1.463 億美元，而 2022 年第三季度為 1.515 億美元，減少了 520 萬美元。第四季度末我們的淨債務與調整後 EBITDA 比率為 3.33 倍，而第三季度末為 3.15 倍。截至 12 月 31 日，我們擁有 4810 萬美元的流動資金，包括現金和左輪手槍的可用資金。我們的 ABL 提取了 100 萬美元，我們的國內流動資金為 3560 萬美元。

On Page 22, you will see that we have outlined the key terms to our recent amendment to our term loan and ABL agreement. Given the current uncertainty surrounding the broader economy as well as continued supply chain and inflationary concerns we proactively negotiated amendments that would protect and improve liquidity while reducing the risk of a covenant violation.

在第 22 頁，您將看到我們概述了我們最近對定期貸款和 ABL 協議進行的修訂的關鍵條款。鑑於當前圍繞更廣泛經濟的不確定性以及持續的供應鍊和通脹擔憂，我們積極協商修正案，以保護和改善流動性，同時降低違反契約的風險。

This process also highlights the confidence and commitment of our term loan and ABL lenders and will allow the management team to focus on improving our results and executing our long-term strategy. Please note, we have included additional detail on the amendment terms in the appendix. I will comment on some of the key terms of the amendments.

這一過程還凸顯了我們的定期貸款和 ABL 貸方的信心和承諾，並使管理團隊能夠專注於改善我們的業績和執行我們的長期戰略。請注意，我們在附錄中包含了有關修訂條款的更多詳細信息。我將對修正案中的一些關鍵條款進行評論。

The term loan amendment provides leverage ratio relief through the duration of the term loan. The cost of the term loan amendment was structured to preserve or improve liquidity by having the incremental interest structured on a paid-in-kind basis and having the amendment fee paid by issuance of penny warrants in lieu of cash. The completion of a qualifying equity raise by June 30 would provide additional liquidity. The existing cap on customer receivable financing programs has been increased from $20 million to $30 million, allowing further utilization of these programs to improve liquidity and free cash flow. Finally, a new domestic liquidity covenant was introduced. Overall, we believe these changes will allow us the flexibility to execute our strategy while reducing compliance risk.

定期貸款修正案在整個定期貸款期限內降低了槓桿率。定期貸款修改的成本旨在通過以實物支付的方式構建增量利息並通過發行便士認股權證代替現金來支付修改費，從而保持或提高流動性。 6 月 30 日之前完成合格股權融資將提供額外的流動性。客戶應收賬款融資計劃的現有上限已從 2000 萬美元增加到 3000 萬美元，允許進一步利用這些計劃來改善流動性和自由現金流。最後，引入了新的國內流動性契約。總的來說，我們相信這些變化將使我們能夠靈活地執行我們的戰略，同時降低合規風險。

With that, I will turn it back over to Warren.

這樣，我會將其轉回給沃倫。

Thank you, Mike. We have presented additional information for each of our operating groups, starting with Power Solutions on Page 24. Power Solutions generated an increase in sales of 11.7% year-over-year primarily driven by increased electrical component sales and more favorable customer pricing to recover inflationary costs. Profitability increased compared to the prior year period driven by variable and fixed cost efficiencies gained from improved volume, increased pricing and improved mix of product sales with higher-margin components.

謝謝你，邁克。我們從第24 頁的電源解決方案開始，為每個運營部門提供了更多信息。電源解決方案的銷售額同比增長了11.7%，這主要是由於電氣元件銷售增加以及為恢復通貨膨脹而採取的更優惠的客戶定價所致。成本。與上年同期相比，盈利能力有所增長，這是由於產量增加、定價提高以及產品銷售與高利潤組件的組合改善所帶來的可變和固定成本效率的推動。

Looking forward, the closures of our Taunton and Irvine facilities are proceeding on schedule, and we expect them to be completed in the second quarter. We expect that new business wins and market dynamics will offset the loss of our aerospace and defense customers as we complete the shutdown of those facilities.

展望未來，我們湯頓和爾灣工廠的關閉正在按計劃進行，我們預計將在第二季度完成。我們預計，隨著我們完成關閉這些設施，新的業務勝利和市場動態將抵消我們航空航天和國防客戶的損失。

On Page 25, sales in our Mobile Solutions group increased 3.6% versus the prior year period. The increase was primarily driven by increased pricing, partially offset by a customer settlement received in the fourth quarter of 2021 as well as foreign exchange headwinds due to the stronger dollar. Profitability decreased in Mobile Solutions compared to the fourth quarter of 2021 due to operational inefficiencies associated with new business launches in our Mexico facility, price increases not fully recovering inflation, and pricing settlement recorded in the prior year and reduced overhead absorption with lower volumes.

在第 25 頁，我們的移動解決方案部門的銷售額比去年同期增長了 3.6%。這一增長主要是由於定價上漲推動的，但部分被 2021 年第四季度收到的客戶結算以及美元走強帶來的外匯不利因素所抵消。與2021 年第四季度相比，移動解決方案的盈利能力有所下降，原因是墨西哥工廠推出新業務導致運營效率低下、價格上漲未能完全恢復通脹、上一年記錄的定價結算以及銷量下降導致管理費用吸收減少。

Looking ahead, we are seeing positive trends in customer demand and expect improved sales in the first quarter compared with the fourth quarter. We have finalized numerous pricing negotiations to recover 2022 nonmaterial inflation, which are effective January 1, 2023, in most cases. We have 3 facility closures expected to be completed in the second quarter of 2023, which will provide incremental cost savings and efficiencies. Finally, our efforts to secure new business wins and non-ICE markets are showing positive results.

展望未來，我們看到客戶需求呈積極趨勢，預計第一季度的銷售額將較第四季度有所改善。我們已經完成了多項定價談判，以恢復 2022 年非物質通脹，在大多數情況下，這些談判將於 2023 年 1 月 1 日生效。我們預計將在 2023 年第二季度完成 3 個設施的關閉，這將進一步節省成本並提高效率。最後，我們爭取新業務和非 ICE 市場的努力正在取得積極成果。

Turning to Page 26. We are introducing our outlook for 2023, which reflects the following: net sales in the range of $525 million to $555 million, an increase of 5% to 11% compared to 2022 sales of $498.7 million. Adjusted EBITDA in the range of $50 million to $60 million up from up 14% to 37% compared to 2022 adjusted EBITDA of $43.9 million and a free cash flow range of $10 million to $20 million compared to the free cash outflow of $9.8 million in 2022.

翻到第26 頁。我們正在介紹2023 年的展望，其中反映了以下內容：淨銷售額在5.25 億美元至5.55 億美元之間，與2022 年的銷售額4.987 億美元相比增長5% 至11 %。調整後 EBITDA 範圍為 5,000 萬至 6,000 萬美元，較 2022 年調整後 EBITDA 4,390 萬美元增長 14% 至 37%，自由現金流範圍為 1,000 萬至 2,000 萬美元，而 2022 年自由現金流出為 980 萬美元。

We assume no significant ongoing impact from production or supply chain disruption due to the Russia-Ukraine conflict, COVID-19 or the semiconductor chip shortage. While we believe that a mild recessionary impact will likely be limited due to the pent-up demand in the auto industry, our outlook does not consider the potential impact of a more severe recession or the impact of higher-than-expected interest on auto and housing demand.

我們假設俄羅斯-烏克蘭衝突、COVID-19 或半導體芯片短缺導致的生產或供應鏈中斷不會產生重大的持續影響。雖然我們認為，由於汽車行業的需求被壓抑，溫和的衰退影響可能有限，但我們的前景並未考慮更嚴重的衰退的潛在影響或對汽車和汽車的興趣高於預期的影響。住房需求。

Our sales growth will be driven by both increased volume and improved pricing, partially offset by foreign exchange and includes an expected $9 million decrease in aerospace and defense sales with the closure of our Taunton and Irvine facilities. Our adjusted EBITDA outlook includes a sequential improvement of $11 million to $12 million from 2022 from our facility closures. We expect moderating inflation and reduced impact of non-recovered inflation from pricing actions already taken are underway. Finally, the outlook includes approximately $5 million in incremental costs for incentive compensation, which was eliminated in 2022.

我們的銷售增長將由銷量增加和定價改善推動，部分被外匯抵消，其中包括隨著湯頓和歐文工廠的關閉，航空航天和國防銷售額預計將減少 900 萬美元。我們調整後的 EBITDA 前景包括，從 2022 年起，我們的設施關閉將連續改善 1100 萬美元至 1200 萬美元。我們預計，已經採取的定價行動將緩解通脹，並減少未恢復通脹的影響。最後，展望包括約 500 萬美元的激勵補償增量成本，該成本將於 2022 年消除。

Our free cash flow outlook reflects net capital expenditures in the range of $16 million to $18 million, cash interest of $18 million to $19 million and cash taxes of $2 million to $3 million. We also include an estimated $6 million in cash outlays for facility closures. Also note that our free cash flow outlook does not include CARES Act tax refund of approximately $11 million due to uncertain timing.

我們的自由現金流前景反映了 1600 萬至 1800 萬美元的淨資本支出、1800 萬至 1900 萬美元的現金利息和 200 萬至 300 萬美元的現金稅。我們還包括估計 600 萬美元的設施關閉現金支出。另請注意，由於時間不確定，我們的自由現金流前景不包括 CARES 法案中約 1100 萬美元的退稅。

I would like to conclude my remarks noting how pleased I am with our team's consistent focus and commitment during what turned out to be a very challenging year. We continue to make progress to position our company for long-term success by focusing on top line growth and the expansion of our new business pipeline and maintaining cost discipline in every area of our operations. And while we are focused on effectively managing working capital and capital expenditures to drive improved free cash flow and a higher return on invested capital. We expect the ultimate result of these efforts will drive improved shareholder value.

在結束我的發言時，我想指出我對我們團隊在充滿挑戰的一年中始終如一的專注和承諾感到非常高興。我們通過專注於營收增長和新業務渠道的擴展以及在我們運營的每個領域保持成本控制，不斷取得進展，使我們的公司獲得長期成功。同時，我們專注於有效管理營運資本和資本支出，以推動改善自由現金流和更高的投資資本回報率。我們預計這些努力的最終結果將推動股東價值的提高。

I will now turn the call back to the operator for questions. Thank you.

我現在將把電話轉回給接線員詢問問題。謝謝。

(Operator Instructions) And our first question today comes from Steve Barger from KeyBanc Capital Markets.

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

And congratulations on your pending retirement, Warren.

祝賀你即將退休，沃倫。

Thank you, Steve.

謝謝你，史蒂夫。

Question on the potential for an equity raise. The slides say you have global liquidity of $48 million. So what are you seeing that suggests that might be necessary? And what -- or what should we be watching for the trigger events on that?

關於股權融資潛力的問題。幻燈片顯示您的全球流動資金為 4800 萬美元。那麼您看到什麼表明這可能是必要的？那麼什麼——或者說我們應該關注什麼觸發事件呢？

Yes, I'll take this. This is Mike. So as we negotiated the amendments with Oaktree on the term loan, in particular, they were looking at our domestic liquidity in particular, which is $35 million, we introduced the $20 million domestic liquidity covenant there. I think in exchange for some of the significant relief we got on the leverage ratios that they introduced additional protection via the domestic liquidity covenant.

是的，我會接受這個。這是邁克。因此，當我們與橡樹資本就定期貸款的修正案進行談判時，他們特別關注我們的國內流動性，即 3500 萬美元，我們在那裡引入了 2000 萬美元的國內流動性契約。我認為，為了換取槓桿率方面的一些重大緩解，他們通過國內流動性契約引入了額外的保護。

And they also -- if you look at the amendment terms in the appendix slide, structured the cost of both the interest and the amendment fee to incentivize us to pursue or evaluate an equity raise. I think just to have more participation in the capital structure of the company. So it's something that we're evaluating. Obviously, there's a cost differential on amendment that's beneficial. If we pursue that relevant -- considering the cost of the equity raise, we'll evaluate whether that's something that would be beneficial for us.

如果您查看附錄幻燈片中的修訂條款，他們還構建了利息和修訂費的成本，以激勵我們追求或評估股權融資。我認為只是為了更多地參與公司的資本結構。所以這是我們正在評估的事情。顯然，修正的成本差異是有利的。如果我們追求相關性——考慮到股權融資的成本，我們將評估這是否對我們有利。

Yes. And Steve, we're talking about $10 million, right? And really the cost of that is, as Mike said, is almost 100% covered right now in the cost structure that we have with our primary lender. So introducing that additional equity, not only dry, it will be cost neutral to us over where we are today, but provide us some additional liquidity that will certainly be viewed, I think, positively both by the customer and the supplier communities.

是的。史蒂夫，我們談論的是 1000 萬美元，對吧？事實上，正如邁克所說，我們與主要貸方的成本結構目前幾乎 100% 涵蓋了這一成本。因此，引入額外的股權，不僅是乾的，相對於我們今天的處境來說，它對我們來說成本是中性的，而且還為我們提供了一些額外的流動性，我認為，客戶和供應商社區肯定會積極看待這些流動性。

So we should be thinking that that's more likely than not just based on how you're describing that?

所以我們應該認為這更有可能不是僅僅基於你的描述？

Well, certainly, we have to go through the process and talk to parties. So I wouldn't characterize it as likely until we get it done, frankly. But it's something certainly that economically in our view, makes sense.

嗯，當然，我們必須完成整個過程並與各方交談。因此，坦率地說，在我們完成它之前，我不會將其描述為可能的情況。但在我們看來，這在經濟上確實是有意義的。

Understood. And so you would -- if it made sense for you and you went through that process, could you execute that before the next CEO is in place?

明白了。所以你會——如果這對你有意義並且你經歷了這個過程，你能在下一任首席執行官就位之前執行它嗎？

Yes, I think that -- I mean, it will depend on the 2 work streams. So it's kind of hard to say that. We have until June 30, which was the agreement with Oaktree. They didn't want to give us an unlimited amount of time to do that. So obviously, we're going to be -- now that the amendment has been announced, we're certainly going to be actively working on what are our options there and trying to get that in place. From our standpoint, given the cost trade-off, it's in our interest to work through that process as quickly as possible.

是的，我認為——我的意思是，這將取決於兩個工作流程。所以這很難說。我們的截止日期是 6 月 30 日，這是與橡樹資本達成的協議。他們不想給我們無限的時間來做這件事。顯然，既然修正案已經公佈，我們肯定會積極研究我們的選擇，並努力將其落實到位。從我們的角度來看，考慮到成本權衡，盡快完成該流程符合我們的利益。

Understood. And to the CEO search, what are the primary skill sets that the Board is looking for?

明白了。對於首席執行官的搜尋，董事會正在尋找哪些主要技能？

Well, certainly, somebody that has been in a leadership position in the past is extremely important. Someone that has exposure to our targeted strategic industry growth areas, primarily the electrical side of the business and someone who has a track record of growing a business historically. I think those are 3 of the main tenants that they would be looking for.

嗯，當然，過去擔任過領導職務的人非常重要。接觸過我們目標戰略行業增長領域（主要是業務的電氣方面）的人，並且擁有歷史上發展業務的記錄。我認為這是他們正在尋找的三個主要租戶。

Got it. And can you just talk about the percentage of programs in Mobile that are loss-making right now? Or which have returns, which are unacceptably low, however you define that.

知道了。您能談談目前移動領域虧損的程序所佔的百分比嗎？或者它的回報率低得令人無法接受，無論你如何定義。

I don't know if -- look, I don't know if we have it broken down by the percentage of the programs. Certainly, one of the issues -- we have 2 specific issues that we're focused on right now. We've had some difficulty in a couple of program launches out of our Mexico facility. We're frankly, struggling with some of the technical aspects of some programs that we're launching down there. So we've engaged some of our global teams to participate and help solve some of the problems down there. It's going to be a little bit longer-term process in order to fix some of that because we're struggling with some process capabilities right now on some parts that have some relatively tight tolerances. So we're working through that.

我不知道是否——看，我不知道我們是否按計劃的百分比對其進行了細分。當然，問題之一是我們現在重點關注兩個具體問題。我們在墨西哥工廠啟動幾個項目時遇到了一些困難。坦率地說，我們正在努力解決我們在那裡啟動的一些計劃的一些技術問題。因此，我們聘請了一些全球團隊來參與並幫助解決那裡的一些問題。為了解決其中的一些問題，這將是一個稍微長期的過程，因為我們現在正在努力解決某些具有相對嚴格公差的零件的某些工藝能力。所以我們正在解決這個問題。

I would tell you, by and large, as you look at Mobile around the globe, our Chinese operations are very successful and profitable. Our Brazilian operations are successful and profitable. Our Poland operations are successful and profitable and several of the North American-based facilities primarily those in Michigan have historically been very profitable as well. So we're struggling right now with some program launches in Mexico and one program in particular, out of our Ohio facility, electric power assist program that we're launching out of that facility, we think we'll have our hands around that one, certainly much sooner than the issues that we're struggling with in Mexico.

我想告訴你，總的來說，當你觀察全球移動業務時，我們的中國業務非常成功並且盈利。我們的巴西業務非常成功且盈利。我們在波蘭的業務非常成功且盈利，並且北美的幾家工廠（主要是密歇根州的工廠）歷來也非常盈利。因此，我們現在正在努力在墨西哥啟動一些計劃，特別是一個計劃，從我們的俄亥俄州工廠啟動，我們正在從該工廠啟動電力輔助計劃，我們認為我們會著手解決這個問題，當然比我們在墨西哥正在努力解決的問題要早得多。

Historically, and you mentioned some of the areas where you're profitable right now. Historically, you've been good at holding tight tolerances. Is this a tooling issue or the machines themselves? What is the source of the problem?

從歷史上看，您提到了一些目前可以盈利的領域。從歷史上看，您一直擅長控制嚴格的公差。這是工具問題還是機器本身的問題？問題的根源是什麼？

Yes. It's really a process-layout issue and some stack-up tolerances. And frankly, it's a personnel issue for us, Steve, as much as anything. When we look at what's going on in Juarez, and we're not alone in this, okay? I would tell you that the turnover that we've had in that facility and getting employees to stay on a consistent basis, we train them, they're there for a period of time, and then they leave for an opportunity where they then get a signing bonus someplace else.

是的。這實際上是一個工藝佈局問題和一些層疊公差。坦率地說，這對我們史蒂夫來說是一個人事問題。當我們看看華雷斯正在發生的事情時，我們並不孤單，好嗎？我會告訴你，我們在該設施中的人員流動率很高，並讓員工始終如一地留下來，我們對他們進行培訓，他們在那里工作一段時間，然後他們離開尋找機會，然後他們就得到了機會其他地方的簽約獎金。

Our turnover per month in our Mexican site today is, I think, in the 15% range per month. So we're having some difficulty with retention. We've benchmarked ourselves against other suppliers in that region that are all suffering through the same types of issues. So we're looking at different opportunities to potentially move some of the more difficult machine operations to either sites in Poland -- low labor cost sites in Poland or in Brazil.

我認為，目前墨西哥工廠每月的營業額在 15% 左右。所以我們在保留方面遇到了一些困難。我們將該地區的其他供應商與其他供應商進行了比較，這些供應商都遇到了相同類型的問題。因此，我們正在尋找不同的機會，將一些較困難的機器操作轉移到波蘭的任何一個地點——波蘭或巴西的勞動力成本較低的地點。

But again, some of those fixes will be a little bit longer term. So we're working with our technical teams primarily out of Kentwood, some out of Brazil and some out of Wellington as well to help us support our Juarez facility.

但同樣，其中一些修復的期限會更長一些。因此，我們正在與主要來自肯特伍德、一些來自巴西、一些來自惠靈頓的技術團隊合作，幫助我們支持華雷斯工廠。

Our next question comes from Rob Brown from Lake Street Capital Markets.

我們的下一個問題來自 Lake Street Capital Markets 的 Rob Brown。

On the pricing actions you've taken, how much is sort of done now? And how much do you have left in terms of negotiations and activity?

關於您所採取的定價行動，現在完成了多少？談判和活動還剩下多少？

Yes. So this is Andrew Wall. I'll take that. The way I think about it is we continue to do it every single day, engaging customers to address the uncontrolled inflation that we're having. I think we've made some pretty significant progression, I'd say, over last year, if you look at the results that Warren shared a bit earlier in his slides. And we're continuing to do that in this quarter even today, right?

是的。這是安德魯·沃爾。我會接受的。我的想法是，我們每天都會繼續這樣做，讓客戶參與解決我們目前不受控制的通貨膨脹問題。我認為，如果你看看沃倫早些時候在幻燈片中分享的結果，我會說，去年我們已經取得了一些相當重大的進展。即使在今天，我們仍在本季度繼續這樣做，對嗎？

So we're still working through that with customers. I don't think the job is done. We are starting to see some pushback where in certain small pockets, things are deflating a bit or inflation is not as bad but we're continuing to work it.

所以我們仍在與客戶一起解決這個問題。我認為工作還沒有完成。我們開始看到一些阻力，在某些小領域，情況有些通貨緊縮，或者通脹沒有那麼糟糕，但我們正在繼續努力。

So to answer your question, it's kind of hard to say how far along are we. We're going to continue to move it forward, and be able to report a little bit more of that after the close of the first quarter, right?

因此，要回答你的問題，很難說我們已經走了多遠。我們將繼續向前推進，並能夠在第一季度結束後報告更多內容，對嗎？

So -- but Rob, let me just say this, when you look at the slide that we presented on this we talked about $12 million of pricing actions that we've already taken, and I'll reiterate some of my comments, right? When you look at that, the noninflationary pricing is more predominant for us in the Mobile Solutions area because as we talked about last year, we were able to affect pricing pretty consistently on the Power side as we saw our cost structure move. But when you look at what's going on in the Mobile, we were able to get -- we were able to get material-related pricing but it was the non-material piece that they pushed back.

所以，但是 Rob，讓我這麼說，當你看我們就此提交的幻燈片時，我們談到了我們已經採取的 1200 萬美元的定價行動，我會重申我的一些評論，對吧？當你看到這一點時，非通貨膨脹定價對我們在移動解決方案領域更為主導，因為正如我們去年談到的，當我們看到我們的成本結構發生變化時，我們能夠相當一致地影響電力方面的定價。但是，當你看看手機中發生的情況時，我們能夠得到——我們能夠獲得與材料相關的定價，但他們卻推遲了非材料部分。

And so far, through the first quarter of this year on an annualized rate, I think we've closed out $8.6 -- $8.5 million, $8.6 million of annualized price increases on the Mobile side. And Andrew and his team are working. Most of that was domestic, North American-based. So we're working very hard on the international side right now in Europe and in China, where some of the inflation in China hasn't been as great but Andrew and his teams are pushing hard there as well.

到目前為止，今年第一季度，按年率計算，我認為我們已經在移動端實現了 8.6 美元、850 萬美元、860 萬美元的年化價格上漲。安德魯和他的團隊正在努力。其中大部分是國內的、北美的。因此，我們現在在歐洲和中國的國際方面非常努力，中國的通貨膨脹並不那麼嚴重，但安德魯和他的團隊也在這方面努力推動。

And I would tell you, we're probably as it relates to what we've worked through from our total population. We're probably 60%, 65% of the way of working through the issue. So we still have opportunity with Mobile. What we put on the slide was only what we -- Andrew and his team have closed out.

我想告訴你，我們可能會因為這與我們從總人口中所經歷的事情有關。我們可能已經完成了該問題的 60%、65%。所以我們在移動領域仍然有機會。我們在幻燈片上展示的只是我們——安德魯和他的團隊已經完成的內容。

Okay. Great. And then second question is on the outlook. I think you talked about kind of an offsetting recession, issues with some pent-up demand. But how do you sort of think through the visibility on '23 at this point in the -- given some of the moving pieces out there, I'm sure it's not great. But how do you think of visibility and what are your sort of customer indications say?

好的。偉大的。第二個問題是關於前景。我認為您談到了某種抵消性衰退，以及一些被壓抑的需求的問題。但是你如何看待 23 年的可見度——考慮到那裡的一些變化，我確信這不是很好。但是您如何看待可見性以及您的客戶指示是什麼？

Yes. I think that when you look at the automotive piece of it, right, they're projecting at least the latest update that we got from IHS is projecting some form of stability because of pent-up demand, as Andrew said, that currently is our expectation. So we're expecting some, I would call it, modest growth on the automotive side then you have the pricing adjustments that we've made on top of that.

是的。我認為，當你看看汽車部分時，對吧，他們預計至少我們從 IHS 獲得的最新更新預計會出現某種形式的穩定性，因為被壓抑的需求，正如安德魯所說，目前是我們的期待。因此，我們預計汽車方面會出現一些（我稱之為）適度增長，然後我們會在此基礎上進行定價調整。

And Andrew went through some of the things that we're seeing from a growth standpoint on the electrical. Certainly, interest rates and how that moves during the year is going to have an impact on that. If mortgage rates continue to stay high or higher, that could impact some of the business that we have on the electrical side with new housing starts and that type of thing. But we do see -- longer term, we see those markets moving in a positive direction. Anything, Andrew, you want to add there?

安德魯從電氣增長的角度講述了我們所看到的一些事情。當然，利率及其在年內的變動方式將會對此產生影響。如果抵押貸款利率繼續保持在高位或更高，這可能會影響我們在電力方面的一些業務，如新房開工等。但我們確實看到——從長遠來看，我們看到這些市場正朝著積極的方向發展。安德魯，你還有什麼要補充的嗎？

Yes. I think the only thing I'd mention just for a little bit more color. If you look at the projection on the slide that I had on the automotive side, it is a 4.6% jump year-over-year. but we're still looking at -- still short of where we were in 2019, pre-pandemic, right? So the context of that, I think there's certainly some pent-up demand. Of course, the wildcard for it all is the potential risk of a massive recession, right? I think that's the one thing that is hard to predict, but I think you outlined it well, where we're at. So thanks.

是的。我想我唯一要提到的只是為了多一點顏色。如果你看一下我在汽車方面的幻燈片上的預測，就會發現同比增長 4.6%。但我們仍在關注——仍然低於 2019 年大流行前的水平，對嗎？因此，我認為肯定存在一些被壓抑的需求。當然，這一切的通配符是大規模衰退的潛在風險，對嗎？我認為這是一件很難預測的事情，但我認為你很好地概述了我們所處的位置。那謝謝啦。

Our next question comes from Tom Kerr from Zacks Investment Research.

我們的下一個問題來自 Zacks Investment Research 的 Tom Kerr。

I think most of my questions have just been covered. Any update on the China operations? Is that back to business as usual or any news there?

我想我的大部分問題都已經得到解答。有關中國業務的最新消息嗎？一切恢復正常還是有什麼消息？

Yes. Look, I would tell you that we had, what I would characterize as a pretty significant interruption in our business right near the end of the fourth quarter when the zero-tolerance policy went away. At one point in time, we had I think 70% of our employees were out with COVID between our JV and our wholly owned. But the interesting -- I think the interesting aspect of it is they were out for a week, a week to 10 days or what have you, and then they were back to work. And they kind of snapped back. I would tell you, snapped back relatively quickly after the first week of January.

是的。看，我會告訴你，在第四季度末零容忍政策取消時，我們的業務出現了相當嚴重的中斷。在某個時間點，我們的合資企業和全資企業之間有 70% 的員工因新冠病毒而外出。但有趣的是——我認為有趣的是他們出去了一個星期，一周到十天或者什麼，然後他們就回去工作了。他們很快就回復了。我會告訴你，在一月的第一周之後，相對較快地恢復了。

Okay. That's good. And then on sort of margin progression -- sorry if I missed this, but looking out quarter-by-quarter during this year, how do we look at gross margin recoveries? Is it a later-half-of-the-year type situation? Or is it steady throughout the year?

好的。那挺好的。然後關於利潤率的進展——抱歉，如果我錯過了這一點，但從今年的季度來看，我們如何看待毛利率的複蘇？這是下半年的情況嗎？還是全年都穩定？

Yes, I'll take that. I mean, I think you're going to see sequential improvement as we go through the year, certainly accelerating in the second half, I think for 2 primary reasons. One, we'll have the benefit of the 5 facility closures that will be completed in the second quarter and that will be encompassed in our run rate in Q2 and then fully in Q3 and Q4.

是的，我會接受的。我的意思是，我認為隨著這一年的發展，你會看到連續的改善，而且下半年肯定會加速，我認為有兩個主要原因。第一，我們將受益於將在第二季度完成的 5 個設施關閉，這將包含在我們第二季度的運行率中，然後完全包含在第三季度和第四季度。

And then the 2 facilities Warren mentioned, we still anticipate some impact to those facilities, particularly Mexico in the first half of the year and that improving in the second half of the year. So those would be the 2 drivers and then also some sequential volume growth as we go through the year. So we would expect margins to be improving sequentially quarter-to-quarter through the year.

然後沃倫提到的兩個設施，我們仍然預計這些設施會受到一些影響，特別是上半年的墨西哥，下半年情況會有所改善。因此，這將是兩個驅動因素，然後是全年銷量的連續增長。因此，我們預計全年利潤率將逐季度持續改善。

And our next question is a follow-up from Steve Barger from KeyBanc Capital Markets.

我們的下一個問題是來自 KeyBanc Capital Markets 的 Steve Barger 的後續提問。

Just another pricing question. You talked about the 5% price increases on new POs not tied to long-term agreements. What percentage of revenue is tied to LTAs? And do you expect you'll build in escalators into LTAs in the future?

只是另一個定價問題。您談到了與長期協議無關的新採購訂單價格上漲 5%。多少百分比的收入與長期協議相關？您預計將來會在長期協議中安裝自動扶梯嗎？

Yes. Steve, Andrew Wall again. So if you look at the business, Power Solutions, about half of that business is under some kind of formal agreement and the other half roughly is not. So that 5%, call it, $100 million, $105 million in that range. And then the other half of the business is under some term of agreement.

是的。史蒂夫，又是安德魯·沃爾。因此，如果你看看 Power Solutions 業務，大約一半的業務受到某種正式協議的約束，而另一半則大致沒有。所以 5%，稱之為 1 億美元，1.05 億美元在這個範圍內。然後另一半的業務是根據某些協議條款進行的。

Yes. I think your second question by way of the inflation of last year and things of that nature. We've incorporated both material and nonmaterial inflationary provisions inside of the contracts going forward. So we have mechanisms to exercise when those events do happen and that's what we plan to do going forward.

是的。我認為你的第二個問題是關於去年的通貨膨脹和類似性質的事情。我們已在未來的合同中納入了重大和非重大的通脹條款。因此，當這些事件確實發生時，我們有可以行使的機制，這就是我們計劃繼續做的事情。

What's the average term of the LTAs that don't have escalators built in?

沒有內置自動扶梯的長期協議的平均期限是多少？

The average term you mean?

您指的是平均術語嗎？

How long do those contracts run before you can build in escalators?

這些合同要持續多久才能建造自動扶梯？

Yes. Most of our contracts are on the power side, in particular, or a year to 2 years, maybe 2 is probably a better average, before they're renewed. But we -- again, we've gone back and looked at all of our contracts and engaged customers and the -- there are some but not a significant proportion that doesn't have some kind of provision that's been built into it.

是的。我們的大多數合同都是電力方面的，特別是一年到兩年，也許 2 年可能是更好的平均水平，然後才續簽。但我們——再次，我們回顧了我們所有的合同和參與的客戶——有一些但不是很大比例的客戶沒有內置某種條款。

Got it. And just more holistically, if you step back and look at your whole business model, where -- what would you have to change to become more flexible? Or how can you adapt to changing input costs on a more real-time basis?

知道了。更全面地說，如果你退後一步，看看你的整個商業模式，你需要改變什麼才能變得更加靈活？或者如何更實時地適應不斷變化的投入成本？

I think what you just talked about, Steve, is a primary way to do that. And when you look -- as we said, the flexibility that we have to do it more timely has not been an issue for us on the Power Solutions side. But on the Mobile Solutions side, where we have contracts and if you think about our contracts running typically 5 to maybe on the outside 7 years, the average life is maybe -- left is like 2 to 3 years, right, which is too long when you see the inflation that we've had over the past period of time.

史蒂夫，我認為你剛才所說的是實現這一目標的主要方法。正如我們所說，我們必須更及時地做到這一點的靈活性對於我們電源解決方案方面來說並不是問題。但在移動解決方案方面，我們有合同，如果你考慮一下我們的合同通常運行 5 到 7 年，那麼平均壽命可能是 - 左邊是 2 到 3 年，右邊是太長了當你看到我們過去一段時間的通貨膨脹時。

So building in some sort of mechanism going forward into our contracts is a key to do that. And historically, on the material side, we would take a certain amount of material risk in our contracts. And today, we're taking 0 material risk because the material is the first thing that started moving on us. And we were -- we've been chasing that for a year, 1.5 years because it resets in some cases, every 6 months or resets at the beginning or the end of the quarter.

因此，在我們的合同中建立某種機制是實現這一目標的關鍵。從歷史上看，在物質方面，我們會在合同中承擔一定程度的物質風險。今天，我們承擔的材料風險為零，因為材料是我們首先開始移動的東西。我們一直在追求這一目標一年，1.5 年，因為在某些情況下它會重置，每 6 個月或在季度初或季度末重置。

But the next quarter, if you're still in an inflationary environment, you're still behind, right? So we've seen that over the last year. So having the reset times be more frequent than semiannual, maybe quarterly or maybe retroactive resets are the types of things that we're looking at with customers.

但下個季度，如果你仍然處於通脹環境中，你仍然落後，對嗎？所以我們在去年已經看到了這一點。因此，重置時間比半年一次更頻繁，也許每季度一次或追溯重置是我們正在與客戶一起考慮的事情。

And I would say on the material side, customers have been pretty compromising on the material piece of it, especially in situations and you know the business well, where we have a directed source from our customers, where we only have one person we can go to, it's very difficult for them to argue that they're not going to take that.

我想說的是，在物質方面，客戶在物質方面相當妥協，尤其是在你很了解業務的情況下，我們有來自客戶的直接來源，我們只有一個人可以去對他們來說，很難說他們不會接受這一點。

But the non-material piece of it for us has been the area where I'm sure you've talked to other automotive supply companies. We have good relationships with our customers, but let's face it. This has been a combative period okay, that Andrew and his team and our management team have struggled through with our customers, and we've had numerous instances where we've had to either stop shipments or something like that in order to finally conclude on getting some of the cost increases that we need on the nonmaterial side.

但對我們來說，非物質部分是我確信您已經與其他汽車供應公司交談過的領域。我們與客戶有著良好的關係，但讓我們面對現實吧。這是一個好鬥的時期，安德魯和他的團隊以及我們的管理團隊一直在與我們的客戶鬥爭，我們已經遇到過很多情況，我們不得不停止發貨或類似的事情才能最終得出結論在非物質方面獲得我們需要的一些成本增加。

So I think the efforts that we've accomplished so far in January have been solid. We'd like to see some additional closures here on pricing over the next couple of months. And then we need to monitor inflation as we go forward. And as we've negotiated the pricing as of January 1, we've been trying to position ourselves with our customers. Look, if we're still seeing this type of inflation through the summer months, we're going to be back at you guys this summer because it's not something that we can continue to absorb.

所以我認為我們一月份迄今為止所完成的努力是紮實的。我們希望在接下來的幾個月裡看到一些額外的定價關閉。然後我們需要在前進的過程中監控通貨膨脹。當我們從 1 月 1 日起協商定價時，我們一直在努力與客戶定位。聽著，如果我們在整個夏季仍然看到這種類型的通貨膨脹，我們將在今年夏天回到你們身邊，因為這不是我們可以繼續吸收的東西。

Right. So as you think about your pricing actions and the challenges on those launch programs and the costs incurred with that and how you expect volume in Mobile to roll out this year, is it fair to think that you can get back to the 2021 level in terms of segment margin versus the 2.5% that you put up in 2022? Like is that a bridge too far? Should we be thinking in the middle somewhere? How just -- what do you think -- what do you have line of sight to?

正確的。因此，當您考慮您的定價行動、這些發布計劃面臨的挑戰以及由此產生的成本，以及您預計今年移動業務量將如何推出時，您是否可以公平地認為，您可以回到 2021 年的水平與您在2022 年設定的2.5% 相比，部門利潤率是多少？好像那座橋太遠了？我們應該在中間某個地方思考嗎？你覺得怎麼樣？你的視線能看到什麼？

Look, I would tell you that in some of our -- in some of the businesses that I talked about that are profitable, can we get back to those types of margins? I think definitely with some of the pricing actions that we've taken.

聽著，我想告訴你，在我們談到的一些盈利業務中，我們可以恢復到這些類型的利潤嗎？我認為我們已經採取的一些定價行動肯定是這樣。

It's the 2 facilities -- talking about Mobile, it's the 2 facilities that I outlined where we're having these product launches that are going to be, in the case of the Juarez facility, a little bit longer term in nature from a corrective action standpoint that it will have a more of an adverse impact on our margins. I don't want to get too into the weeds on some of that stuff, but maybe that's something that we could think about breaking out in the future, just so you can understand that it's not the whole business that is suffering from a margin standpoint. We do have some high-performing facilities within the group.

這是我概述的 2 個設施，就移動而言，我們將在這兩個設施中發布這些產品，就華雷斯設施而言，從本質上來說，糾正措施的實施時間會更長一些認為這將對我們的利潤產生更大的不利影響。我不想太深入地討論其中的一些事情，但也許這是我們可以考慮在未來突破的事情，這樣你就可以明白，並不是整個業務都受到利潤率的影響。我們集團內確實擁有一些高性能的設施。

Yes. And I would say the other aspect that puts some pressure on it from a margin standpoint, Steve, is the material pass-through is all one to one, right? So in an inflationary environment, you're maintaining your EBITDA dollars or your operating profit dollars but at a lower margin. And hopefully, as inflation stabilizes, we can start to correct some of that via additional pricing and maybe see some deflation that will benefit the margins.

是的。我想說的是，從利潤的角度來看，另一個方面給它帶來了一些壓力，史蒂夫，材料傳遞是一對一的，對吧？因此，在通貨膨脹的環境中，您可以維持 EBITDA 美元或營業利潤美元，但利潤率較低。希望隨著通脹穩定，我們可以開始通過額外定價來糾正其中的一些問題，也許會看到一些通貨緊縮，這將有利於利潤率。

And ladies and gentlemen, with that, we're going to conclude today's question-and-answer session. I'd like to turn the floor back over to the management team for any closing remarks.

女士們、先生們，我們今天的問答環節就到此結束。我想將發言權交還給管理團隊，讓他們發表結束語。

Yes. Thank you, operator. I want to thank our analysts for participating in the call today. Especially in concluding, I want to thank, again, the NN greater team, this potentially could be my last earnings call. So I'd like to thank them for the support and the dedication that they've given to this company certainly over the last 3.5 years that I've been the Chief Executive Officer.

是的。謝謝你，接線員。我要感謝我們的分析師參加今天的電話會議。最後，我要再次感謝 NN 更大的團隊，這可能是我最後一次財報電話會議。因此，我要感謝他們在我擔任首席執行官的過去 3.5 年裡對公司的支持和奉獻。

Also like to in parting thank John Buchan for the service that he's had over the past 20-plus years to the company and wish him well in his retirement. Thank you very much for your time today.

在臨別之際，我還要感謝約翰·巴肯 (John Buchan) 在過去 20 多年里為公司做出的貢獻，並祝愿他退休後一切順利。非常感謝您今天抽出時間。

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

女士們先生們，我們今天的電話會議和演示就到此結束。我們感謝您的加入。您現在可以斷開線路。