Polaris Inc (PII) 2020 Q3 法說會逐字稿

Good morning and welcome to the Polaris Third Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

早上好，歡迎來到北極星 2020 年第三季度收益電話會議。 （操作員說明）請注意正在記錄此事件。

I would now like to turn the conference over to Richard Edwards, Vice President, Investor Relations. Please go ahead.

我現在想將會議轉交給投資者關係副總裁理查德愛德華茲。請繼續。

Thank you, Gary, and good morning, everyone. Thank you for joining us for our 2020 third quarter earnings call. A slide presentation is accessible at our website at ir.polaris.com, which has additional information for this morning's call. Scott Wine, our Chairman and Chief Executive Officer; and Mike Speetzen, our Chief Financial Officer, have remarks summarizing the quarter, and then we'll take some questions.

謝謝你，加里，大家早上好。感謝您加入我們的 2020 年第三季度財報電話會議。幻燈片演示可在我們的網站 ir.polaris.com 上訪問，其中包含有關今天上午電話會議的更多信息。我們的董事長兼首席執行官 Scott Wine；我們的首席財務官 Mike Speetzen 對本季度進行了總結，然後我們將回答一些問題。

During the call, we will be discussing various topics, which should be considered forward-looking for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projections in the forward-looking statements. You can refer to our 2019 10-K for additional details regarding these risks and uncertainties.

在電話會議期間，我們將討論各種主題，根據 1995 年《私人證券訴訟改革法案》，這些主題應被視為前瞻性。實際結果可能與前瞻性陳述中的預測存在重大差異。您可以參考我們的 2019 年 10-K，了解有關這些風險和不確定性的更多詳細信息。

All references to the third quarter 2020 actual results are reported on an adjusted non-GAAP basis unless otherwise noted. Please refer to our Reg D reconciliation schedules at the end of this presentation for the GAAP to non-GAAP adjustments.

除非另有說明，否則所有對 2020 年第三季度實際結果的引用均按調整後的非公認會計原則報告。請參閱本演示文稿末尾的 Reg D 調節表，了解 GAAP 與非 GAAP 的調整。

Now I will turn it over to our CEO, Scott Wine. Scott?

現在我將把它交給我們的首席執行官 Scott Wine。斯科特？

Thanks, Richard. Good morning and thank you for joining us.

謝謝，理查德。早上好，感謝您加入我們。

Nearly 10 months into this year that continues to present serious and surprising challenges, I remain inspired and impressed by the dedication and execution of this Polaris team. Their safety is always our #1 priority and is never compromised as we accelerate production to meet rising demand.

今年將近 10 個月，挑戰依然嚴峻且令人驚訝，但北極星團隊的奉獻精神和執行力仍令我深受鼓舞和印象深刻。他們的安全始終是我們的第一要務，並且在我們加速生產以滿足不斷增長的需求時從不妥協。

We will mostly review the resulting financials this morning, but the combination of agility, teamwork and creativity that is driving those numbers is much more noteworthy.

今天早上我們將主要審查最終的財務數據，但推動這些數字的敏捷性、團隊合作和創造力的結合更值得注意。

Consumer interest in powersports stayed at record levels throughout the quarter as our dealers continue to attract new customers. Winning the competitive battle now is as much about availability as it is innovation. So our emphasis is temporary shift with from demand creation to demand fulfillment. All Polaris businesses are outperforming our internal expectations as our factories and supply chain ramped to replenish the ORV inventories.

隨著我們的經銷商繼續吸引新客戶，整個季度消費者對動力運動的興趣保持在創紀錄的水平。現在贏得競爭不僅取決於可用性，還取決於創新。因此，我們的重點是從需求創造到需求滿足的臨時轉變。隨著我們的工廠和供應鏈迅速補充 ORV 庫存，所有 Polaris 業務的表現都超出了我們的內部預期。

The investments in talent and tools we made to execute factory choice and supply chain transformation are paying off, allowing us to manage, not fight, the several dozen suppliers that are still working to recover. In stark contrast to a year earlier, we ended the third quarter with total liquidity at an all-time high. Mike Speetzen and his team have dramatically improved our cash management capabilities, which is a nice boost to a business that historically generates a lot of cash.

我們為執行工廠選擇和供應鏈轉型而對人才和工具的投資正在取得回報，使我們能夠管理而不是對抗仍在努力恢復的數十家供應商。與一年前形成鮮明對比的是，我們在第三季度結束時的總流動性處於歷史最高水平。 Mike Speetzen 和他的團隊極大地提高了我們的現金管理能力，這對過去產生大量現金的企業來說是一個很好的推動。

Between our strong year-to-date results and improving outlook for the fourth quarter, we are raising our full year earnings per share guidance, which now sits above our original targets for 2020.

在我們強勁的年初至今業績和改善的第四季度前景之間，我們提高了全年每股收益指引，該指引目前高於我們 2020 年的原定目標。

Third quarter North American retail sales were up a healthy 15%, but our internal analysis suggests that it could have been double that if we had been able to accelerate production faster. A good example is our boat business, which achieved 50-plus percent retail growth as they efficiently ramped production and outshift their competition. Availability hurt our off-road vehicle market share, which was down slightly, but Motorcycles, Boats and Snow each gained share in the quarter. Indian continues to outperform globally while posting record market share performance in North America. With our recently introduced model year 2021 vehicles and an exciting lineup still to come, extensive customer-focused brand-building and improved factory output, I am confident that Steve Menneto and his team will get our off-road vehicle business back to gaining market share in the fourth quarter and the year ahead.

第三季度北美零售額健康增長了 15%，但我們的內部分析表明，如果我們能夠更快地加快生產，它可能會翻一番。一個很好的例子是我們的船舶業務，由於他們有效地提高了產量並超越了競爭對手，該業務實現了 50% 以上的零售增長。可用性損害了我們的越野車市場份額，該市場份額略有下降，但本季度摩托車、船和雪地車的份額均有所增加。印度繼續在全球表現出色，同時在北美市場份額創下歷史新高。憑藉我們最近推出的 2021 年車型和即將推出的令人興奮的陣容、廣泛的以客戶為中心的品牌建設和提高的工廠產量，我相信 Steve Menneto 和他的團隊將使我們的越野車業務重新獲得市場份額在第四季度和來年。

Strong vehicle demand and overall ridership increases are supporting record sales for Polaris PG&A and improving growth in profitability at cap. North American dealer inventory slight -- declined slightly sequentially, but 55% year-over-year, leading to off-road vehicle DSO at its lowest level in decades. The coordination amongst our production, logistics and sales team to maximize retail sales in this constrained environment is impressive and constantly improving as we strive to reach targeted inventory levels. This close collaboration is one of many reasons we are enjoying record dealer sentiment scores, leading the composite ranking and more individual categories than any other OEM. We expect to begin replenishing dealer inventory in the fourth quarter and continue through the first half of 2021.

強勁的汽車需求和整體乘客量的增加正在支持 Polaris PG&A 創紀錄的銷售額，並提高上限盈利能力的增長。北美經銷商庫存略有下降——環比略有下降，但同比下降 55%，導致越野車 DSO 處於幾十年來的最低水平。在我們努力達到目標庫存水平的過程中，我們的生產、物流和銷售團隊在這種受限環境中最大限度地提高零售銷售額的協調令人印象深刻，並且不斷改進。這種密切的合作是我們享有創紀錄的經銷商情緒分數、領先綜合排名和比任何其他 OEM 更多的單獨類別的眾多原因之一。我們預計將在第四季度開始補充經銷商庫存，並持續到 2021 年上半年。

We can ramp factory output reasonably quickly because of our flexible assembly lines, training and standard work and outstanding production teams. Not unexpectedly, some of our suppliers are not yet capable of meeting the same rapid demand spikes. So Ken Pucel and his team are aggressively working to accelerate their output. The number of suppliers past due is almost 3x the normal rate and a moderately high number of those suppliers are limiting production, but we are tightly managing them to limit impact. The path to more normal production rhythm is very clear, with our off-road vehicle build plan ramping up nearly 50% year-over-year in the fourth quarter.

由於我們靈活的裝配線、培訓和標準工作以及出色的生產團隊，我們可以相當快地提高工廠產量。不出所料，我們的一些供應商尚無能力滿足同樣快速的需求高峰。因此，Ken Pucel 和他的團隊正在積極努力加速他們的產出。逾期供應商的數量幾乎是正常比率的 3 倍，其中相當多的供應商正在限制生產，但我們正在嚴格管理它們以限制影響。通往更正常生產節奏的道路非常清晰，我們的越野車製造計劃在第四季度同比增長近 50%。

With new and diverse customers driving the majority of our growth and expanding the categories they increasingly invite their friends and colleagues to the sport, we are encouraged by the potential persistence of overall demand strength. Polaris Adventures is evidence of this with rides running at roughly twice the 2019 level since May. While Polaris is not unique in benefiting from this new customer growth, the approach Pam Kermisch and her team are taking to cultivate and engage them should extend our leadership position with these important demographics.

隨著新的和多樣化的客戶推動我們的大部分增長並擴大他們越來越多地邀請他們的朋友和同事參加這項運動的類別，我們對整體需求強度的潛在持久性感到鼓舞。 Polaris Adventures 自 5 月以來的遊樂設施運行量大約是 2019 年水平的兩倍就是證明。雖然 Polaris 在受益於這種新客戶增長方面並不是獨一無二的，但 Pam Kermisch 和她的團隊正在採取的培養和吸引他們的方法應該會擴大我們在這些重要人群中的領導地位。

I have probably opined enough on the partnership with Zero Motorcycles, but knowing the product plans and the opportunity we have to both disrupt the industry and earn our next $1 billion in electric vehicle sales significantly more quickly and enjoyably than the first, it is worth highlighting again this morning. When I asked Chris Musso to lead our electrification initiative a year ago, we had bold ambitions but no clear plan. He built the team, refined the strategy and orchestrated the Zero relationship that other OEMs had tried but failed to cultivate.

我可能已經對與 Zero Motorcycles 的合作夥伴關係發表了足夠的意見，但了解產品計劃和我們必須顛覆行業並比第一個更快更愉快地賺取下一個 10 億美元電動汽車銷售額的機會，值得強調的是今天早上又一次。一年前，當我請 Chris Musso 領導我們的電氣化計劃時，我們雄心勃勃，但沒有明確的計劃。他組建了團隊，完善了戰略，並精心策劃了其他 OEM 嘗試但未能培養的零關係。

With that foundation established, Chris has decided to leave Polaris at the end of November to return to Denver and McKinsey for an opportunity that is important for him and his family. We are a better company for his contributions to both electrification and off-road vehicles and wish him well in his next chapter.

有了這個基礎，克里斯決定在 11 月底離開北極星，返回丹佛和麥肯錫，尋找對他和他的家人來說很重要的機會。我們是一家更好的公司，因為他對電氣化和越野車的貢獻，並祝愿他在下一章一切順利。

As our electrification efforts transitioned from strategy to execution, Mike Donoughe, our Chief Technical Officer; will add that responsibility. Mike's leadership roles at Tesla, Bright Automotive and other electric vehicle manufacturers, along with his experience with Alta Motors, provide him with the unique skill set necessary to achieve our goal of leading the powersports industry in electrification.

隨著我們的電氣化工作從戰略轉變為執行，我們的首席技術官 Mike Donoughe；將增加該責任。 Mike 在 Tesla、Bright Automotive 和其他電動汽車製造商的領導角色，以及他在 Alta Motors 的經驗，為他提供了實現我們在電氣化領域引領動力運動行業的目標所必需的獨特技能。

I will now turn it over to our Chief Financial Officer, Mike Speetzen, who will update you on our financial results and plans.

我現在將其轉交給我們的首席財務官 Mike Speetzen，他將向您介紹我們的財務業績和計劃。

Thanks, Scott, and good morning, everyone. First, I want to echo Scott's enthusiasm for our third quarter results, which were nothing short of outstanding. The Polaris team rallied together to get product out the door as quickly and as safely as possible to meet ongoing strong consumer demand during the quarter.

謝謝，斯科特，大家早上好。首先，我想表達 Scott 對我們第三季度業績的熱情，這是非常出色的。 Polaris 團隊齊心協力，盡可能快速、安全地推出產品，以滿足本季度持續強勁的消費者需求。

Third quarter sales were up 10% on a GAAP and adjusted basis versus the prior year. Shipments improved considerably across ORV, Motorcycles and Boats.

根據 GAAP 和調整後的基礎，第三季度銷售額較上年增長 10%。 ORV、摩托車和船隻的出貨量顯著改善。

Third quarter earnings per share on a GAAP basis was $2.66. Adjusted earnings per share was $2.85, which was up 71% for the quarter, exceeding our expectations. This incredible performance was driven by a combination of revenue growth, positive product mix, lower promotional costs and operating expense leverage during the quarter.

根據 GAAP 計算，第三季度每股收益為 2.66 美元。調整後每股收益為 2.85 美元，本季度增長 71%，超出我們的預期。這一令人難以置信的業績是由本季度收入增長、積極的產品組合、較低的促銷成本和運營費用槓桿共同推動的。

Adjusted gross margins were up approximately 260 basis points year-over-year, primarily driven by lower promotion and floor plan financing costs driven by lower dealer inventory and the lack of a factory-authorized clearance in the quarter. Improved absorption at our factories was muted by higher logistics costs associated with supply constraints.

調整後的毛利率同比增長約 260 個基點，這主要是由於較低的經銷商庫存和本季度缺乏工廠授權清關導致的促銷和平面圖融資成本下降。與供應限制相關的更高物流成本削弱了我們工廠吸收能力的提高。

Operating expenses were down 4% in the quarter as we benefited from the continued postponement of nonessential expenditures along with the timing of expenses, which pushed approximately $15 million of spend into the fourth quarter. Given the significant operating performance improvement, we have reversed many of the employee-related cost actions taken during the second quarter and have approved select strategic projects, which will ramp up in the fourth quarter. Foreign exchange also had a positive impact on our quarterly results, primarily driven by the euro.

由於我們受益於非必要支出的持續推遲以及支出的時間安排，本季度的運營支出下降了 4%，這將大約 1500 萬美元的支出推到了第四季度。鑑於經營業績的顯著改善，我們已經扭轉了第二季度採取的許多與員工相關的成本行動，並批准了一些戰略項目，這些項目將在第四季度增加。主要受歐元推動，外匯也對我們的季度業績產生了積極影響。

From a segment reporting perspective, ORV, Snowmobile, Motorcycles and Boats all reported increased sales for the quarter, driven by strong demand. ORV/Snowmobile segment sales were up 12%, Motorcycles were up 11%, and Boats increased 30% during the third quarter. All segments benefited from lower promotional costs, which decreased considerably across the powersports industry given high demand and the lack of product in the channel. Aside from Motorcycles, all segments also experienced improved product mix during the quarter. ORV/Snow mix was driven by strong PG&A sales. Q3 motorcycle product mix was skewed more towards our lower-margin midsized bikes.

從細分市場報告的角度來看，ORV、雪地車、摩托車和船隻均報告稱，在強勁需求的推動下，本季度的銷售額有所增長。第三季度，ORV/雪地車部門的銷售額增長了 12%，摩托車增長了 11%，船增長了 30%。所有細分市場都受益於較低的促銷成本，鑑於高需求和渠道產品缺乏，整個動力運動行業的促銷成本大幅下降。除摩托車外，本季度所有細分市場的產品組合也有所改善。 ORV/Snow mix 是由強勁的 PG&A 銷售推動的。第三季度摩托車產品組合更傾向於我們利潤率較低的中型自行車。

Global adjacent market sales were down 6% during the quarter as continued outperformance from Aixam and Polaris Adventures was offset by lower sales in our commercial, government and defense businesses. Given the pandemic's impact on government and commercial budgets this year, many capital expenditures, including vehicles, have either been postponed or canceled in 2020. However, our commercial, government and defense businesses remain poised to capitalize when capital budgets begin to reopen.

由於 Aixam 和 Polaris Adventures 的持續出色表現被我們的商業、政府和國防業務的銷售額下降所抵消，本季度全球鄰近市場銷售額下降了 6%。鑑於今年大流行病對政府和商業預算的影響，包括車輛在內的許多資本支出在 2020 年已被推遲或取消。但是，我們的商業、政府和國防業務仍準備在資本預算開始重新開放時利用資本。

Aftermarket sales were flat to last year, with TAP sales up 1% and other aftermarket sales down 1% during the quarter. Retail sales remains a bright spot for TAP as sales at 4-wheel parts retail stores were up 6% in the quarter. The TAP team continues to rightsize the wholesale business for improved growth and profitability. The remaining aftermarket sales were down during the quarter as a result of low inventory availability.

售後市場銷售額與去年持平，本季度 TAP 銷售額增長 1%，其他售後市場銷售額下降 1%。零售額仍然是 TAP 的亮點，因為本季度 4 輪零件零售店的銷售額增長了 6%。 TAP 團隊繼續調整批發業務的規模，以提高增長和盈利能力。由於庫存可用性低，本季度剩餘的售後市場銷售額有所下降。

Our international sales were up 9% during the quarter mostly driven by strong ORV, Snow, Motorcycles and PG&A sales. About 1/4 of the growth came from improved currency rates.

本季度，我們的國際銷售額增長了 9%，這主要是由於強勁的 ORV、雪地車、摩托車和 PG&A 銷售。大約 1/4 的增長來自匯率的改善。

And lastly, our parts, garments and accessories sales increased a whopping 28% during the quarter, driven by strong retail demand, primarily for parts and accessories.

最後，我們的零件、服裝和配飾銷售額在本季度增長了 28%，這主要是受到強勁的零售需求（主要是零件和配飾）的推動。

Moving on to our guidance for 2020. Given stronger-than-anticipated performance in the third quarter, we have increased our total company sales growth guidance and now expect sales to increase versus 2019 in the 2% to 3% range for the year. You will recall our previous segment sales guidance was flat to down 2% versus 2019. I'll cover the specifics by segment in a few minutes.

繼續我們對 2020 年的指導。鑑於第三季度的業績強於預期，我們提高了公司總銷售額增長指導，現在預計全年銷售額將比 2019 年增長 2% 至 3%。你會記得我們之前的細分市場銷售指導與 2019 年持平或下降 2%。我將在幾分鐘內按細分市場介紹具體細節。

We are significantly increasing our full year adjusted earnings per share guidance for 2020 and now expect earnings to be in the range of $7.15 to $7.30 per diluted share, in excess of our pre-COVID guidance levels. The increase is driven by higher volume, lower promotions and floor plan financing costs, improved foreign exchange rates and operating expense management. These benefits are partially offset by manufacturing inefficiencies and higher logistics costs related to supply chain and efficiencies.

我們將大幅提高 2020 年全年調整後每股收益指引，現在預計每股攤薄收益將在 7.15 美元至 7.30 美元之間，超過我們在 COVID 之前的指引水平。這一增長是由銷量增加、促銷和平面圖融資成本降低、外匯匯率改善和運營費用管理推動的。這些好處部分被製造效率低下以及與供應鍊和效率相關的更高物流成本所抵消。

Moving down the P&L, our previously issued guidance ranges remain unchanged as shown on the current slide, with the exception of the additional leverage generated at the operating expense line. We continue to monitor our spending in the face of the ongoing pandemic, while adding back select operating expenses based on our current performance and certain strategic projects. Foreign exchange also is expected to be better than previously anticipated for the year.

向下移動 P&L，我們之前發布的指導範圍保持不變，如當前幻燈片所示，但運營費用線產生的額外槓桿除外。面對持續的大流行，我們將繼續監控我們的支出，同時根據我們目前的業績和某些戰略項目增加精選的運營費用。預計今年的外匯也將好於先前的預期。

While we haven't discussed tariffs in detail for some time, it's something we continue to closely monitor while aggressively pursuing ways to minimize their impact. Year-to-date, our tariff impact totaled approximately $45 million, lower than previously anticipated due to the receipt of additional exemptions and refunds as well as our ongoing proactive mitigation efforts. We now expect tariff costs for the full year to total approximately $65 million, which is primarily the China 301 tariffs Lists 1 to 4, a small amount of EU retaliatory tariff costs, all net of the refunds we received through the exemption process. While I'm not providing a view on 2021, I would remind you that our exemptions have either expired or will expire by the end of the year, and we'll provide an update at our earnings call in January.

雖然我們已經有一段時間沒有詳細討論關稅了，但我們會繼續密切關注它，同時積極尋求將其影響降至最低的方法。年初至今，我們的關稅影響總計約為 4500 萬美元，低於之前的預期，原因是收到了額外的豁免和退款，以及我們正在進行的主動緩解措施。我們現在預計全年的關稅成本總計約為 6500 萬美元，主要是中國 301 關稅清單 1 至 4，少量歐盟報復性關稅成本，全部扣除我們通過豁免程序收到的退款。雖然我沒有提供對 2021 年的看法，但我想提醒您，我們的豁免已經到期或將在今年年底到期，我們將在 1 月份的財報電話會議上提供最新情況。

Lastly, as you do the math around the fourth quarter, keep in mind that while revenue is growing sequentially, the mix of shipments coupled with the timing of the promo favorability from Q3 negatively impacts the expected gross margin. And as I mentioned earlier, we deferred $15 million in strategic investments to the fourth quarter.

最後，當您在第四季度左右進行計算時，請記住，雖然收入環比增長，但出貨量的組合加上第三季度促銷優惠的時間對預期毛利率產生了負面影響。正如我之前提到的，我們將 1500 萬美元的戰略投資推遲到第四季度。

Moving on to sales expectations by segment. All of our businesses are expected to generate improved sales and profitability compared to our previously issued guidance. The consumer-focused portion of our business continues to perform better than the B2B segments. But even the latter, we're seeing sequential improvement, albeit at a slower pace.

繼續按細分市場銷售預期。與我們之前發布的指南相比，我們所有的業務都有望產生更高的銷售額和盈利能力。我們業務中以消費者為中心的部分繼續比 B2B 部分錶現更好。但即使是後者，我們也看到了連續的改善，儘管速度較慢。

Year-to-date, third quarter cash -- operating cash flow finished at $676 million, up 55% over the same period last year driven by lower working capital requirements and business growth. Given our year-to-date cash flow performance, we now expect full year cash flow to be up in the mid-30% range compared to last year.

年初至今，第三季度現金——運營現金流為 6.76 億美元，比去年同期增長 55%，這主要得益於較低的營運資金需求和業務增長。鑑於我們年初至今的現金流量表現，我們現在預計全年現金流量將比去年增加 30% 左右。

Our bank leverage ratio, defined as total debt to EBITDA, improved sequentially to approximately 2.45x. Our liquidity is strong with $821 million of cash on hand at the end of the quarter and just under $700 million of available borrowing capacity on our revolver. Given continued uncertainty in the broader global economy, we will maintain flexibility with our capital for the remainder of the year.

我們的銀行槓桿率（定義為總債務與 EBITDA 之比）環比提高至約 2.45 倍。我們的流動性很強，本季度末手頭現金為 8.21 億美元，我們的循環貸款可用借貸能力略低於 7 億美元。鑑於更廣泛的全球經濟持續存在不確定性，我們將在今年剩餘時間內保持資本的靈活性。

With that, I'll turn it back over to Scott for some final thoughts.

有了這個，我會把它轉回給 Scott 做一些最後的想法。

Thanks, Mike. We enter the final months of the year with a great team, improving production capability and comprehensively strong business momentum. Employee safety, as always, is our top priority. It is not lost on me that we are exactly one week away from a very consequential U.S. election. We cannot control the outcome, but we will be prepared to manage and mitigate the potential impact.

謝謝，邁克。我們以強大的團隊進入了今年的最後幾個月，提高了生產能力和全面強勁的業務勢頭。一如既往，員工安全是我們的首要任務。我並沒有忘記我們距離非常重要的美國大選只有一周的時間。我們無法控制結果，但我們會做好管理和減輕潛在影響的準備。

We are cautiously optimistic that consumer demand for powersports will remain healthy throughout 2021, and we have numerous plans and actions to help sustain that momentum. We will work with our dealers to maximize growth and share gains in 2021.

我們謹慎樂觀地認為，消費者對動力運動的需求將在整個 2021 年保持健康，我們有許多計劃和行動來幫助維持這種勢頭。我們將與我們的經銷商合作，在 2021 年實現增長和分享收益最大化。

Our short-term success is contingent upon our ability to manage our supply chain and accelerate production output, and I'm very confident our team will do just that. While much of our focus is on the outperformance of our powersports portfolio, as Mike mentioned, improving trends at TAP, Aixam, Goupil, GEM and our other adjacent market businesses are encouraging. We have been deep in long-term planning in the past few weeks, and the outlook for earnings growth in 2021 is quite good, and beyond that, significantly better.

我們的短期成功取決於我們管理供應鍊和加速生產輸出的能力，我非常有信心我們的團隊會做到這一點。正如 Mike 所提到的，雖然我們的重點是我們的動力運動產品組合的出色表現，但 TAP、Aixam、Goupil、GEM 和我們其他相鄰市場業務的改善趨勢令人鼓舞。過去幾週我們一直在深入進行長期規劃，2021 年的盈利增長前景相當不錯，除此之外，還要好得多。

With that, I'll turn it over to Gary to open the line for questions.

有了這個，我會把它交給加里來打開問題熱線。

(Operator Instructions)

（操作員說明）

Our first question comes from Greg Badishkanian with Wolfe Research.

我們的第一個問題來自 Wolfe Research 的 Greg Badishkanian。

Just a first clarification, when you said doubling the retail sales, I assume that's going from 15% to 30%. Is that what you meant?

首先澄清一下，當你說零售額翻倍時，我假設是從 15% 到 30%。這是你的意思嗎？

Yes, Craig. You're good with math.

是的，克雷格。你數學很好。

Perfect. Okay. I just wanted to make sure it wasn't something else. And then when you think about promotional strategy, feedback on -- first, the feedback on the factory-authorized clearance, and then when you're thinking about future promotions, just given that inventory levels are low, you're trying to replenish the channel, but you also want to maybe stimulate some demand. How are you thinking about promotions going forward over the next few quarters?

完美的。好的。我只是想確定它不是別的東西。然後當你考慮促銷策略時，反饋——首先是工廠授權清倉的反饋，然後當你考慮未來的促銷活動時，鑑於庫存水平很低，你正在嘗試補充渠道，但您可能還想刺激一些需求。您如何看待未來幾個季度的促銷活動？

Well, I think you heard both Mike and I talk about the confidence we have and Steve Menneto and Pam Kermisch and the team to manage the business appropriately. Certainly, with inventories, as I referred to, a decade -- multi-decade lows DSO, we're not -- don't need to drive a lot of promotions. But whether it's the ag advantage or the military advantage, we're looking for ways to make sure that our brand is the most relevant, and we're confident that Steve and the team can do that. They've got tremendous experience, great analytical tools. And we think we can overall prior to the pandemic even, we had plans to be more efficient with our promo use. And what's happened now is we've taken those plans that had us more efficient and taking advantage of lower inventory and dramatically lowered that. But we think overall we'll be able to maintain a more efficient promo usage. Mike, do you want to add anything?

好吧，我想你聽到邁克和我都談到了我們有信心，史蒂夫門內托和帕姆克米施以及團隊適當地管理業務。當然，正如我所提到的，庫存是十年來——幾十年的低點 DSO，我們不是——不需要推動很多促銷活動。但無論是農業優勢還是軍事優勢，我們都在尋找方法來確保我們的品牌最相關，我們相信史蒂夫和團隊能夠做到這一點。他們擁有豐富的經驗和出色的分析工具。而且我們認為我們甚至可以在大流行之前總體上計劃提高我們的促銷使用效率。現在發生的事情是我們採取了那些使我們更有效率並利用較低庫存並大幅降低庫存的計劃。但我們認為總體而言，我們將能夠保持更有效的促銷使用。邁克，你想補充什麼嗎？

The only thing I'd add, Greg, is we've talked historically about the split between dealer and consumer facing. And I would tell you right now, it's far more oriented towards the dealer and the dealer's team, salesman's [best], things like that.

格雷格，我唯一要補充的是，我們從歷史上講過經銷商和消費者之間的分歧。我現在要告訴你，它更面向經銷商和經銷商的團隊，銷售員的[最佳]，諸如此類。

The next question is from James Hardiman with Wedbush Securities.

下一個問題來自 Wedbush Securities 的 James Hardiman。

So first, Mike, I'm going to ask the boring question about tariffs, but it seemed somewhat relevant here. You gave us that -- I think it was a $65 million number that you're assuming for this year. What does that number look like if you didn't have any of those exclusions, which I think would be the same as asking what is the assumption in terms of the incremental headwind for next year? And I think you've said that you expect earnings to grow even factoring in that incremental headwind?

所以首先，邁克，我要問一個關於關稅的無聊問題，但它在這裡似乎有點相關。你給了我們 - 我認為這是你今年假設的 6500 萬美元的數字。如果你沒有任何這些排除，這個數字會是什麼樣子，我認為這與詢問明年增量逆風的假設是什麼一樣？而且我認為您已經說過，即使考慮到這種不利因素，您預計收益也會增長？

And then my follow-up would just be what's your level of confidence that, given all the puts and takes, that retail can grow next year?

然後我的後續行動就是你對明年零售業可以增長的信心程度如何？

So I think James, from a tariffs standpoint, we had originally guided the year that we thought refunds would be just over $10 million. They're about $25 million, so obviously that's a onetime item associated with the backward looking. So you can do the math relative to what that $65 million would look like. I think from a retail standpoint.

所以我認為詹姆斯，從關稅的角度來看，我們最初指導的那一年我們認為退款將超過 1000 萬美元。它們大約是 2500 萬美元，所以很明顯這是與回顧過去相關的一次性項目。因此，您可以相對於 6500 萬美元的樣子進行數學計算。我認為從零售的角度來看。

I mean the backdrop is from my perspective, is very healthy. I think Steve and the team have done a lot of work obviously the overall environment right now is favorable. But when you look at the fact that we're pulling in so many new customers, and we know one thing for sure that those new customers tend to bring even more new customers in. And we continue to see that trend.

我的意思是從我的角度來看，背景非常健康。我認為史蒂夫和團隊做了很多工作，顯然現在的整體環境是有利的。但是當你看到我們吸引瞭如此多的新客戶這一事實時，我們肯定知道一件事，這些新客戶往往會帶來更多的新客戶。我們繼續看到這種趨勢。

I mean you saw that the chart we had in the deck today. And the work that Pam and Steve and Mike Dougherty are doing is really paying off. And I think that's going to provide momentum into next year, regardless of what's going on in the backdrop on COVID in the broader economy.

我的意思是你看到了我們今天在甲板上的圖表。 Pam、Steve 和 Mike Dougherty 所做的工作確實得到了回報。而且我認為這將為明年提供動力，無論在更廣泛的經濟中 COVID 的背景下發生了什麼。

And just to clarify, Mike, so the $65 million, 25 are refunds, but there's also the exclusion benefit, right? Like I know sometimes we're counting this twice. There's a onetime benefit and sort of an ongoing benefit. Does that $65 million go to 90? Or does it something higher than that as I look to 2021 if nothing were to change?

澄清一下，邁克，所以 6500 萬美元，25 美元是退款，但也有排除利益，對吧？就像我知道有時我們會計算兩次。有一次性的好處，也有持續的好處。那 6500 萬美元會用到 90 歲嗎？或者如果什麼都沒有改變，它會比我展望 2021 年時更高嗎？

Yes. Well, I don't want to get into speculating. I think you can do the math relative to the overall refund impact. And we're still working through what the volume is. We did do some advance buys to try and at least mitigate when the tariffs come back on. So there's a fair amount of complicated work that has to go into it. So I'd hate to put a number out there and then have to provide something new in January.

是的。好吧，我不想猜測。我認為您可以相對於整體退款影響進行數學計算。我們仍在研究音量是多少。我們確實做了一些提前購買，以嘗試至少在關稅恢復時減輕影響。因此，必須進行大量複雜的工作。所以我不想在那裡放一個數字，然後必須在 1 月份提供一些新的東西。

But at the end of the day, you guys think that you can grow even including that incremental headwind that you're assuming sort of worst-case scenario right now?

但歸根結底，你們認為你們可以增長，甚至包括你們現在假設的最壞情況的增量逆風？

Yes. I mean the thing you have to think about is number one, I mentioned it several times, we've got a fair amount of manufacturing inefficiencies. And we are expecting those to continue into the fourth quarter, and we're working through what we think next year looks like. But when we've got the level of increase in our output that we have planned, I think it's the prudent thing to do. So as we get into next year, obviously as we work those efficiencies down, our supply chain transformation program is kicking in substantial savings, and we're going to exit the year with a very strong run rate. So those will help us. So all those things together are going to more than offset any of the additional headwind that we get from tariffs.

是的。我的意思是你必須考慮的事情是第一，我多次提到過，我們有相當多的製造效率低下。我們預計這些將持續到第四季度，我們正在研究我們認為明年的情況。但是，當我們達到計劃的產量增長水平時，我認為這是謹慎的做法。因此，當我們進入明年時，顯然隨著我們降低這些效率，我們的供應鏈轉型計劃正在大量節省開支，我們將以非常強勁的運行率結束這一年。所以那些會幫助我們。因此，所有這些加起來將抵消我們從關稅中獲得的任何額外逆風。

Our next question is from Scott Stember with CL King.

我們的下一個問題來自 Scott Stember 和 CL King。

Fourth quarter looks like you're going to be able to ramp up production pretty dramatically, but it also looks like you're going to have to, I guess, move heaven and earth to make sure that it happens without the capacity. Can you maybe just talk about how you're going to do that, the impact to margins, if there's any incremental inefficiencies, and how we should look at that heading into the early parts of next year?

第四季度看起來你將能夠非常顯著地提高產量，但我猜你看起來也必須移動天地以確保它在沒有產能的情況下發生。你能不能談談你將如何做到這一點，對利潤率的影響，如果有任何增量低效率，以及我們應該如何看待明年年初的標題？

Well, I mean you think about it, there's puts and takes with ramping up production. One is we get better factory utilization, which is a helpful input to margins. But on the other side, there's additional logistics costs as we expedite suppliers and expedite shipments.

好吧，我的意思是你想一想，提高產量是有代價的。一是我們獲得了更好的工廠利用率，這有助於提高利潤率。但另一方面，隨著我們加快供應商和發貨速度，會產生額外的物流成本。

As I mentioned, one of the things the team did extremely well in the third quarter was move shipments around to make sure they got to the right dealer at the right time. And that's an expensive cost, but overall it's predominantly the expedited -- expedite cost that we have to do with our suppliers. But as I said, Ken and his team -- it's almost the science. They know exactly what the suppliers are, they're monitoring their capacity. They know what they need to get to, and we're working our production schedules based on that.

正如我提到的，該團隊在第三季度做得非常出色的一件事是四處運送貨物，以確保他們在正確的時間到達正確的經銷商。這是一項昂貴的成本，但總的來說，它主要是我們必須與供應商打交道的加速成本。但正如我所說，Ken 和他的團隊——這幾乎就是科學。他們確切地知道供應商是什麼，他們正在監控他們的能力。他們知道他們需要做什麼，我們正在以此為基礎制定生產計劃。

But with all that said, we believe year-over-year, we're going to ramp up production about 50%. So that clearly indicates them our confidence in the team to do that reasonably well.

但話雖如此，我們相信與去年同期相比，我們將把產量提高 50% 左右。因此，這清楚地向他們表明了我們對團隊做得相當好的信心。

And Scott, what I would add to that is when we look from Q3 to Q4, obviously when you do the math, the margins are coming down. Pull the promo stuff off to the side, that the inefficiencies started in, call it, mid- to late August and really were at full force in September. And right now, we're banking on that essentially continuing through the fourth quarter. As Scott said, it's the right thing to assume. And it's hard to imagine that the logistics costs and other things that we're incurring here coming out of the third quarter into the fourth quarter aren't going to continue.

斯科特，我要補充的是，當我們從第三季度到第四季度時，顯然當你進行數學計算時，利潤率正在下降。將促銷材料放到一邊，效率低下開始於 8 月中下旬，並在 9 月真正全面發揮作用。而現在，我們寄希望於這種情況基本上會持續到第四季度。正如斯科特所說，這是正確的假設。很難想像從第三季度到第四季度我們在這裡發生的物流成本和其他事情不會繼續下去。

So that's a little bit of the headwind. Obviously, the work we can do to mitigate that, that will help. But the priority is to safely get product into the dealers so we can move it through the channel.

所以這有點不利。顯然，我們可以做的工作來減輕這種情況，這將有所幫助。但首要任務是將產品安全地送到經銷商處，以便我們可以通過渠道轉移它。

All right. Great. And last question, just I guess once we get through the fourth quarter and assuming that retail demand remains very strong next year, do you have plans to add additional capacity? Or can you continue to grow under the footprint that you have right now?

好的。偉大的。最後一個問題，我想一旦我們度過第四季度並假設明年零售需求仍然非常強勁，您是否有計劃增加額外產能？或者你能在你現在的足跡下繼續成長嗎？

No. Our footprint can carry us for a while. We've obviously, as I mentioned in our prepared remarks, we've done our long range planning. And certainly, it gets constrained there at some point, but we believe we can get make it through 2021.

不，我們的足跡可以承載我們一段時間。正如我在準備好的發言中提到的，我們顯然已經完成了長期規劃。當然，它在某個時候會受到限制，但我們相信我們可以在 2021 年做到這一點。

We've added almost 500 employees in our factory network in the third quarter. So we ramped up quickly. So it really isn't a -- we've got additional capacity within our current network, but it's just managing the supply base, and we're confident we're doing that. It's just -- with a few suppliers, it's taken us a little bit longer than we would like.

第三季度，我們在工廠網絡中增加了近 500 名員工。所以我們迅速升級。所以它真的不是 - 我們在當前網絡中有額外的容量，但它只是管理供應基地，我們有信心我們正在這樣做。只是 - 對於一些供應商，我們花費的時間比我們想要的要長一點。

The next question is from Joe Altobello with Raymond James.

下一個問題來自 Joe Altobello 和 Raymond James。

And Scott, I just wanted to pick up on that comment you just made about the supply chain issues. You mentioned earlier today your market share in ORVs is really more about availability on innovations. So why do you think that some of your competitors have not been as impacted by these supply chain issues to the same degree? Is it simply they have lower volume? And do you see that getting better in the winter as things have slowed down?

斯科特，我只是想听聽你剛剛就供應鏈問題發表的評論。您今天早些時候提到您在 ORV 中的市場份額實際上更多地與創新的可用性有關。那麼，為什麼您認為您的一些競爭對手沒有受到同樣程度的這些供應鏈問題的影響？僅僅是他們的音量較低嗎？隨著情況放緩，您是否看到冬天情況有所好轉？

Well, I think it's primarily because they started with much higher DSO than we did, so they had more availability as they wound down. So they're going to end up in the same place we are. But it just took a little bit longer to get there because their demand wasn't as high.

好吧，我認為這主要是因為他們開始時的 DSO 比我們高得多，所以他們在結束時有更多的可用性。所以他們最終會和我們一樣。但是因為他們的需求沒有那麼高，所以到達那裡需要更長的時間。

But ultimately I mean, as I said, we -- Steve Menneto and his team ran the analysis, and that was the sole limiter. And it's why we've got so much focus right now on improving output in the fourth quarter.

但最終我的意思是，正如我所說，我們 - Steve Menneto 和他的團隊進行了分析，這是唯一的限制因素。這就是為什麼我們現在非常關注提高第四季度的產出。

And I'd also say the size differential, when you look at the ramp-up that the markets had, given that competitors are substantially smaller than us, it's a very different equation for them.

而且我還要說規模差異，當你看到市場的增長時，考慮到競爭對手比我們小得多，這對他們來說是一個非常不同的等式。

That's helpful. And just secondly, I'm curious how retail looked in October, and if you're seeing any evidence that the election uncertainty is weighing on retail over the past few weeks?

這很有幫助。其次，我很好奇零售業在 10 月份的表現如何，以及您是否看到任何證據表明選舉的不確定性在過去幾週對零售業造成了壓力？

None.

沒有任何。

The next question is from Robin Farley with UBS.

下一個問題來自瑞銀的 Robin Farley。

Great results here. I just want to clarify one thing though. When you're talking about consumer demand continuing into next year, you're not specifically saying that you expect retail to be positive in '21? Or are you saying that? I just want to clarify. Obviously, with such a tremendously strong year this year, you could be optimistic about retail next year and still not think it's going to be positive. So I just wanted to kind of clarify that.

很棒的結果。不過，我只想澄清一件事。當您談到消費者需求將持續到明年時，您並不是在明確表示您預計 21 世紀零售業將是積極的？或者你是這麼說的？我只是想澄清一下。顯然，今年表現如此強勁，你可能對明年的零售業持樂觀態度，但仍然認為它不會是積極的。所以我只是想澄清一下。

Yes. No, you're exactly right, Robin. I mean, we've had unbelievable -- actually, but we had reasonably good growth in January, February before things happened, then down in March and April and then picked up beyond that.

是的。不，你完全正確，羅賓。我的意思是，我們經歷了令人難以置信的——實際上，但在事情發生之前，我們在 1 月、2 月取得了相當不錯的增長，然後在 3 月和 4 月下降，然後又回升。

So I think it's going to be spotty throughout the year, but overall what we've said, and we tried to make sure we were careful with our words, is consumer demand to be healthy. Now -- and to your point, it could be very healthy and still not be positive to a plus 50 comp that we had in the second quarter. But ultimately, we do expect to go to healthy environment.

所以我認為全年都會參差不齊，但總的來說，我們所說的，我們試圖確保我們用詞謹慎，是消費者對健康的需求。現在 - 就你的觀點而言，它可能非常健康，但對我們第二季度的 50+ comp 仍然不是積極的。但最終，我們確實期望去健康的環境。

And what we're seeing right now is literally, it's just part of the challenge with replenishing the channel is just products going off the shelf almost as soon as we get into the dealership and that at some point, it's going to slow down. We just don't know when it's going to be.

從字面上看，我們現在看到的只是補充渠道挑戰的一部分，產品幾乎是在我們進入經銷商後立即下架的，而且在某個時候，它會放慢速度。我們只是不知道什麼時候會發生。

Okay. Great. And then the corollary to that I guess would be given how much dealer inventory is depleted, even if retail is down next year, if you -- what would shipments -- and I know you're not guiding to next year. But if we just look at your block chart showing that your inventory is about 1/3 of what it should be, what is that just restocking dealers to where you would like them to be for off-road or where they would want to be for off-road, would represent kind of what percent of -- that's equivalent to kind of what percent of retail sales in say, 2019? Just to think about how that restocking will be able to drive your growth even if retail is not positive.

好的。偉大的。然後我猜想的必然結果是經銷商庫存耗盡了多少，即使明年零售量下降，如果你 - 出貨量是多少 - 我知道你沒有指導明年。但是，如果我們只看一下您的框圖，顯示您的庫存約為應有的 1/3，那隻是將經銷商補貨到您希望他們用於越野的地方或他們想要的地方越野，將代表多少百分比 - 這相當於 2019 年零售額的多少百分比？想想即使零售不樂觀，補貨將如何推動你的增長。

Yes. I don't know if I can answer it in that context. But what I would tell you is as we're doing the projections around where we want to get from an optimal dealer inventory DSO, it's going to take us through, call it, the first half to essentially get dealer inventory back on a consistent basis. And that's assuming retail plays out as we're expecting in the fourth quarter and through the first half.

是的。我不知道我是否可以在那種情況下回答它。但我要告訴你的是，當我們圍繞我們希望從最佳經銷商庫存 DSO 中獲得的位置進行預測時，它將帶我們通過，稱之為上半年，以在一致的基礎上基本上恢復經銷商庫存.這是假設零售業如我們預期的那樣在第四季度和上半年發揮作用。

The next question is from Craig Kennison with Baird.

下一個問題來自 Craig Kennison 和 Baird。

Slide 8, it shows really impressive growth in the total addressable market. Up around 6%, I think, year-to-date, with still 3 months to go.

幻燈片 8，它顯示了整個潛在市場的真正令人印象深刻的增長。我認為今年迄今上漲了 6% 左右，還有 3 個月的時間。

I guess I'm curious about your core customer, not that incremental customer, but the core customer. Is that customer upgrading at the same rate? Are they sort of deferring some of those upgrades, given it's just so tough to find inventory?

我想我對你的核心客戶很好奇，不是那個增量客戶，而是核心客戶。該客戶是否以相同的速度升級？鑑於很難找到庫存，他們是否在某種程度上推遲了其中一些升級？

We're seeing consistent demand from our core customers. So I would -- small single-digit growth. It's just the incremental demand. And almost all of the incremental demand is from those new customers and those new demographics. So -- but certainly, it's a good environment for our core customers, but it's a great environment for new ones.

我們看到核心客戶的持續需求。所以我會 - 小的個位數增長。這只是增量需求。幾乎所有的增量需求都來自這些新客戶和新的人口統計數據。所以 - 但當然，這對我們的核心客戶來說是一個很好的環境，但對新客戶來說也是一個很好的環境。

And I'd argue they're spending money for PG&A. You look at the significant performance we've had where they can't get a vehicle, I know I have some personal friends that they can't get their hands on a vehicle, so they're doing upgrades to their existing vehicles.

我認為他們正在為 PG&A 花錢。你看看我們在他們無法獲得車輛的情況下取得的顯著表現，我知道我有一些私人朋友他們無法獲得車輛，所以他們正在升級他們現有的車輛。

And then I don't know if you can put a number on it, but I would think a powersport vehicle has a higher attachment rate to it when it comes to buying that second or third unit. If somebody in the family buys one, somebody else may buy one later. That's certainly not true for a boat, for example. Is there any way to quantify what you think that follow-through demand might look like?

然後我不知道你是否可以給出一個數字，但我認為在購買第二個或第三個單元時，powersport 車輛對它的依戀率更高。如果家裡有人買了一個，其他人以後可能會買一個。例如，對於船來說肯定不是這樣。有沒有什麼方法可以量化您認為後續需求可能是什麼樣的？

It's hard to quantify, Craig, but it's certainly indicative of the growth that Steve Eastman and his team are seeing and well, like I -- we've demonstrated record PG&A results. And it's really what we've seen at TAP, where we do see that second and third buyer doing incrementally more and as we broaden our portfolio, not just with more attachments, but with more innovative attachments, we're certainly seeing that happen. And some of it, RIDE COMMAND is a great example where it's a benefit that people want. So we're seeing that happen, but I can't quantify it for you.

克雷格，這很難量化，但它肯定表明史蒂夫伊士曼和他的團隊正在看到的增長，就像我一樣 - 我們已經展示了創紀錄的 PG&A 結果。這確實是我們在 TAP 上看到的，我們確實看到第二和第三個買家做的越來越多，隨著我們擴大我們的產品組合，不僅有更多的附件，而且還有更多創新的附件，我們肯定會看到這種情況發生。其中一些，RIDE COMMAND 是一個很好的例子，它是人們想要的好處。所以我們看到這種情況發生了，但我無法為你量化它。

The next question is from Jaime Katz with Morningstar.

下一個問題來自 Morningstar 的 Jaime Katz。

I have a question, I guess, on the proximity to the election since you brought it up. Do you care to opine on maybe what your top issues might be, for just troubleshooting what might come up dependent on which candidate gets into office?

自從你提出以來，我想我有一個關於選舉臨近的問題。您是否願意就您的首要問題發表意見，只是為了解決可能取決於哪位候選人上任的問題？

Tariff, taxes and regulatory.

關稅、稅收和監管。

Okay, for both.

好吧，對雙方來說。

I mean, yes, that -- obviously tariffs have been a headwind with the current administration. Taxes could be a headwind if it changes. And the regulatory environment certainly has been good with the Trump administration. So we just -- we have to manage that. And I said in my remarks, we can't control it, but we'll be ready to deal with it.

我的意思是，是的 - 顯然關稅一直是本屆政府的逆風。如果它發生變化，稅收可能會成為不利因素。特朗普政府的監管環境當然很好。所以我們只是 - 我們必須管理它。我在發言中說過，我們無法控制它，但我們會做好應對的準備。

Okay. And then I know global adjacent market is small, but it looks like there is going to be some decent growth in the final quarter of the year. Was there a timing shift on some deliveries or something with the supply chain that was delayed that's being pushed into the fourth quarter? I know we're lapping weak results. How can we think about what is driving that improvement?

好的。然後我知道全球相鄰市場很小，但看起來今年最後一個季度會有一些不錯的增長。是否有一些交付時間發生了變化，或者供應鏈的某些延遲被推遲到第四季度？我知道我們的結果很差。我們如何思考是什麼推動了這種改進？

Yes. There's some -- you have remember that our defense business has some timing associated with it. And that coupled with the fact that it's the law of small numbers, and that will be the main driver there.

是的。有一些 - 你記得我們的國防業務有一些與之相關的時間。再加上小數定律，這將成為那裡的主要驅動力。

The next question is from David MacGregor with Longbow Research.

下一個問題來自 Longbow Research 的 David MacGregor。

I wonder if just you could give us -- you mentioned, Mike, the gross profit is up 260 basis points. How much of the margin contribution there do you think is from lower promotional activity?

我想知道你是否可以給我們 - 你提到，邁克，毛利潤上升了 260 個基點。您認為有多少利潤貢獻來自較低的促銷活動？

Yes, it's probably just under 100 basis points that would have been from promo. And the way to think about that is a portion of it probably should have been skewed into Q2 and a little bit into Q4 just in terms of the way we do the promo reserve. And once we have line of sight that we're not going to need those reserves, given what's going on in the marketplace, we have to make the adjustments right away.

是的，促銷可能會帶來不到 100 個基點。考慮到這一點，就我們進行促銷儲備的方式而言，其中一部分可能應該偏向第二季度，稍微偏向第四季度。一旦我們意識到我們不需要這些儲備，考慮到市場上正在發生的事情，我們就必須立即做出調整。

Great. And then ORV, is there any way you can talk about some of these sort of traditional subgroups like Ag and O&G and just the impact that they may have had on the numbers for the quarter?

偉大的。然後是 ORV，你有什麼辦法可以談論一些傳統的子集團，比如 Ag 和 O&G，以及它們可能對本季度的數字產生的影響？

Yes. I mean, we were -- we had most of our weakness in product availability in the ranger category, and ultimately that is more related to Ag. So interestingly, we've got -- with the Ag program being as successful as it's been, it's great demand there, we just -- we're not able to fulfill it. And ultimately we're seeing good -- we got a great leadership in that team down in Huntsville. And they're ramping up production quickly, but that was more where we had the constraints in the quarter. So that was the biggest issue for us.

是的。我的意思是，我們 - 我們在遊俠類別的產品可用性方面存在大部分弱點，最終這與 Ag 更相關。有趣的是，我們已經 - 隨著 Ag 計劃的成功，那裡的需求很大，我們只是 - 我們無法實現它。最終我們看到了好消息——我們在亨茨維爾的那個團隊中得到了很好的領導。他們正在迅速提高產量，但這更多是我們在本季度受到限制的地方。所以這對我們來說是最大的問題。

Great. Last question for me, just Slingshot, you talked about high 50s. How much of that is the AutoDrive response?

偉大的。我的最後一個問題，只是 Slingshot，你談到了高 50 年代。 AutoDrive 響應有多少？

It's hard to say. Obviously, with such a de minimis portion of the population being able to drive a stick shift, you'd have to say that a good bit of it is. But the -- really, the refinement of that vehicle is so good, and I think at lot -- we're seeing a lot of people trade up. So we're -- it's really good demand for Slingshot, and the AutoDrive is going to give us a much larger opportunity than we had previously with only stick shifts.

這很難說。顯然，由於人口中如此微不足道的一部分能夠駕駛變速桿，你不得不說這是很大一部分。但是 - 真的，那輛車的改進非常好，而且我認為很多 - 我們看到很多人進行交易。所以我們 - 對 Slingshot 的需求真的很好，而 AutoDrive 將為我們提供比以前只有變速桿更大的機會。

The next question is from Gerrick Johnson with BMO Capital Markets.

下一個問題來自 BMO Capital Markets 的 Gerrick Johnson。

Mike, you guys mentioned that the supply chain transformation program was beneficial in this challenging environment. Maybe you could talk a little bit about that. I recall the goal was 60% for your suppliers. So intuitively, it would make me think that you might be in an disadvantageous position. So tell me how that's benefiting you in this environment?

邁克，你們提到供應鏈轉型計劃在這個充滿挑戰的環境中是有益的。也許你可以談談這個。我記得您的供應商的目標是 60%。所以直覺上，這會讓我覺得你可能處於不利地位。那麼告訴我這對您在這種環境中有何好處？

Yes. I'd say a couple of things. One, if you go back to when COVID first came on the scene, coronavirus came on the scene, Ken and his team mobilized around the Asia-based suppliers and what the impact was. We -- because of wave 1 and essentially we're through wave 2, our knowledge of that supply base, coupled with what we were doing during the tariffs, was very high. And so we were able to get in very quickly, prioritized. We've got a team that can go in and help from a production standpoint where need be.

是的。我想說幾件事。第一，如果你回到 COVID 首次出現時，冠狀病毒出現時，Ken 和他的團隊動員了亞洲供應商，以及影響是什麼。我們——因為第一波，基本上我們正在經歷第二波，我們對該供應基地的了解，加上我們在關稅期間所做的事情，非常高。因此，我們能夠非常快速、優先地進入。我們有一個團隊可以在需要的時候從生產的角度介入並提供幫助。

I would argue because of the work we've done, we've made sure that we've got stronger suppliers. So fewer doesn't mean weaker. Fewer actually means stronger. And our knowledge of them is much -- I call it, much more intimate. We're only through now the second wave starting the implementation . So there's still a fair amount that has to go. And I would argue where we trimmed off suppliers probably actually helped us during this, because those tended to be weaker suppliers with poorer performance and probably would not have been able to keep up as we went through this substantial volume ramp up.

我會爭辯說，由於我們所做的工作，我們已經確保我們擁有更強大的供應商。所以更少並不意味著更弱。更少實際上意味著更強。我們對他們的了解很多——我稱之為，更加親密。我們現在才剛剛開始實施的第二波浪潮。所以還有相當多的錢需要去。而且我會爭辯說，我們削減供應商的地方可能實際上在這期間幫助了我們，因為那些供應商往往是性能較差的較弱供應商，並且可能無法跟上我們經歷這一大幅增長的步伐。

Okay. That makes a lot of sense. And how are you guys planning RFM profiles for off-road next season for your North American dealers?

好的。這很有意義。你們如何為北美經銷商規劃下一季越野的 RFM 配置文件？

Well, we're planning to meet them. Yes.

好吧，我們正計劃去見他們。是的。

No. But in all seriousness, Steve and his team are really looking at, can we run the business with slightly less DSO than we did previously as we help our factories continue to get better at replenishing products. So we've got -- we constantly work with our dealers to help them manage their -- what their profile looks like.

不，但說真的，史蒂夫和他的團隊真的在考慮，我們能否以比以前稍微少一點的 DSO 來經營業務，因為我們幫助我們的工廠繼續更好地補充產品。所以我們已經——我們不斷地與我們的經銷商合作，幫助他們管理他們的——他們的個人資料是什麼樣的。

I will tell you that it was an interesting phenomena because when we started in January and February, we, as you might recall, in the first quarter we're trying to bring down dealer inventory, and we had dealers lobbying for lower profiles. And now we've got every single dealer asking for more, so we're going to balance that out. But I think in balance, we'll have just slightly lower DSO than we had coming into this.

我會告訴你這是一個有趣的現象，因為當我們在 1 月和 2 月開始時，你可能還記得，在第一季度我們試圖降低經銷商庫存，並且我們有經銷商遊說降低知名度。現在我們每個經銷商都要求更多，所以我們要平衡這一點。但我認為總的來說，我們的 DSO 只會比我們進入這個時略低。

The next question is from Joseph Spak with RBC.

下一個問題來自 RBC 的 Joseph Spak。

Actually, I wanted to maybe follow up on that comments you made, Scott. I know you made it clear that you think the inventory has scrimped demand, and obviously, the level of inventories is certainly extremely low. But with gross margins, the highest in over 5 years or about 5 years, does this really make you rethink your inventory strategy somewhat? And maybe even further, do you think it may have caused the industry to finally find some religion on inventory and promotion?

事實上，斯科特，我可能想跟進你發表的評論。我知道你明確表示你認為庫存抑制了需求，顯然，庫存水平肯定非常低。但是毛利率是 5 年多或 5 年左右的最高水平，這真的會讓您重新考慮您的庫存策略嗎？甚至更進一步，您是否認為這可能導致該行業最終在庫存和促銷方面找到一些信仰？

Well, clearly we're confident that what Ken and Steve and the team have done to manage the whole value chain gives us the opportunity to manage our network with a lower net inventory. It really -- unfortunately, I do think you're right. The pandemic helped them find religion. But it really takes the -- some discipline across the competitive set and I don't have any confidence that that's true once we get back to normal operating procedure.

好吧，顯然我們相信肯和史蒂夫以及團隊為管理整個價值鏈所做的工作讓我們有機會以較低的淨庫存管理我們的網絡。真的——不幸的是，我確實認為你是對的。大流行幫助他們找到了宗教。但這確實需要 - 整個競爭環境中的一些紀律，一旦我們恢復正常的操作程序，我不相信這是真的。

So we've all seen -- it benefits our dealers, their margins are better. The OEMs are all of our margins are better. But I think it's a false promise to think that everyone's found religion and that the world is going to go back and be a completely different place going forward. There's hope, but hope is not a strategy. But I think we'll be a little bit better as an industry, but probably not a lot.

所以我們都看到了——它有利於我們的經銷商，他們的利潤率更高。原始設備製造商都是我們的利潤率更好。但我認為認為每個人都找到了宗教並且世界將倒退並成為一個完全不同的地方的想法是錯誤的承諾。有希望，但希望不是一種策略。但我認為我們作為一個行業會好一點，但可能不會好很多。

Okay. And then the second question is just on the 10-year partnership with Zero, and I think you indicated with that you want to have an electric product in each of your core segments by 2025. Can you just explain the partnership a little bit more? And I don't think there was an investment. And maybe why that differs from some of the other electrification strategy you've done in the past where you've actually acquired technology?

好的。然後第二個問題是關於與 Zero 的 10 年合作夥伴關係，我想你表示你希望到 2025 年在每個核心領域都有一個電子產品。你能再解釋一下合作關係嗎？而且我認為沒有投資。也許為什麼這與您過去實際獲得技術的其他電氣化戰略不同？

Yes. Well, as you correctly pointed out, with owning Brammo's motorcycle business for a while and all of the experience we've had with Goupil and GEM and Taylor done in the electric space, and even with the best-selling electric product in the industry with our Ranger EV, we've got a lot of experience.

是的。好吧，正如您正確指出的那樣，擁有 Brammo 的摩托車業務已有一段時間，我們在電動領域擁有 Goupil、GEM 和 Taylor 的所有經驗，甚至擁有業內最暢銷的電動產品我們的 Ranger EV，我們有很多經驗。

But as we approach this time around with Musso's leadership, we really looked at who has the best -- before we looked at available technology. And I think if you look at others in the industry, they found available technology, and that's what they're going with. We chose what we're confident and it is the best technology for our types of products. And what they've proven with 15 million miles of on-road experience with Zero's motorcycle business and the leading industry sales of electric motorcycles, they know how to make electric powertrains that fit in a constrained environment.

但是，當我們這次在 Musso 的領導下進行時，我們真正地考察了誰擁有最好的技術——在我們研究可用技術之前。而且我認為，如果你看看這個行業的其他人，他們會發現可用的技術，這就是他們要做的。我們選擇了我們有信心的，它是我們產品類型的最佳技術。他們通過 Zero 摩托車業務 1500 萬英里的道路經驗和領先的電動摩托車行業銷售證明，他們知道如何製造適合受限環境的電動動力總成。

Again, if you build -- you know this because you cover the space, if you build an electric pickup truck, you've got a sh**load of space to put batteries. We don't have that real estate. So what Zero has figured out is with a great battery supplier and a great power management system, how to integrate that into a motorcycle. And with what -- it's not plug and play, but it's not that far from it where we can take that powertrain capability and put it into our off-road vehicles. And the teams are off and running. But the reason we chose them is because we believe that they are the best in the world to help us electrify powersports.

再一次，如果你建造——你知道這一點，因為你覆蓋了空間，如果你建造一輛電動皮卡，你就有足夠的空間來放置電池。我們沒有那個不動產。所以 Zero 想出了一個偉大的電池供應商和一個偉大的電源管理系統，如何將其集成到摩托車中。還有什麼——它不是即插即用的，但離我們可以將動力總成能力應用到我們的越野車上並不遙遠。團隊正在運行。但我們選擇它們的原因是因為我們相信它們是世界上最好的，可以幫助我們使動力運動電氣化。

The next question is from Shawn Collins with Citigroup.

下一個問題來自花旗集團的肖恩柯林斯。

So retail is more than healthy across all your segments, so I wanted to ask about motorcycles. Industry is down about 2% or 3% in the third quarter. Maybe it's up 2% or 3% if you include 3 wheels. Yet Indian is up 42%, so the impressive growth continues to run, Slingshot up high 50s. Can you just talk about recent trends in Indian? And if there's anything different most recently with the impact of COVID? And also maybe touch upon the competitive environment and landscape for Indian that you're seeing in general?

所以零售業在你們所有的細分市場都非常健康，所以我想問一下摩托車。工業在第三季度下降了約 2% 或 3%。如果包括 3 個輪子，可能會增加 2% 或 3%。然而，印度上漲了 42%，因此令人印象深刻的增長仍在繼續，Slingshot 上漲了 50 多倍。你能談談印度最近的趨勢嗎？最近 COVID 的影響是否有任何不同？也可能觸及您所看到的印度的競爭環境和格局？

Yes. I'm probably one of the few people that watched it, but they had the bagger races this weekend and Indian won against the field of almost all competitive bikes than -- that's kind of what's going on globally right now. We're doing really well in Europe, really well in Australia and Asia.

是的。我可能是為數不多的觀看比賽的人之一，但他們在本週末舉行了 bagger 比賽，Indian 贏得了幾乎所有競技自行車領域的勝利——這就是目前全球正在發生的事情。我們在歐洲做得很好，在澳大利亞和亞洲也做得很好。

But the U.S. market, which is the biggest for us and for our competitor, is really exceptionally well for us. The Challenger has been a great bike for us. I talked about Slingshot and what the AutoDrive has done for us.

但美國市場對我們和我們的競爭對手來說都是最大的市場，對我們來說真的非常好。挑戰者對我們來說是一輛很棒的自行車。我談到了 Slingshot 以及 AutoDrive 為我們所做的事情。

But FTR is doing well. The Indian Scout and Scout Bobber continue to do well. And really, Mike Dougherty and the team, with Indian globally, are driving great performance. And not only are we driving growth, but we're accelerating margin expansion as well. And that's going to continue into next year, so we're really encouraged about where we are with the Motorcycle business.

但 FTR 做得很好。 Indian Scout 和 Scout Bobber 繼續表現出色。實際上，Mike Dougherty 和 Indian 全球團隊正在推動出色的表現。我們不僅在推動增長，而且也在加速利潤率擴張。這將持續到明年，所以我們對摩托車業務的進展感到非常鼓舞。

Next question is from Mark Smith with Lake Street Capital Markets.

下一個問題來自 Lake Street Capital Markets 的 Mark Smith。

I wanted to ask about average selling price and any shift during the quarter. Did you see new consumers coming in and looking for kind of entry-level, lower-priced things? Or were those all sold out, and they would buy basically anything that was at a dealer?

我想問一下本季度的平均售價和任何變化。你有沒有看到新的消費者進來尋找入門級、低價的東西？還是那些都賣光了，他們基本上會購買經銷商處的任何東西？

I think it's a mix of both. The -- obviously if you look at our ASP during the quarter, it is skewed by the fact that we had to reverse the promo out. And I think if you look at the rest of the year, it's call it more flattish once you adjust for that.

我認為這是兩者的結合。 - 顯然，如果你在本季度查看我們的平均售價，就會發現我們不得不取消促銷這一事實是有偏差的。而且我認為，如果你看看今年餘下的時間，一旦你對此進行調整，它就會變得更加平淡。

I mean we certainly have seen, I mean clearly with how well our ATV business is doing, that people are coming in at all ranges of the spectrum. I don't know that it's easy to characterize that they're all coming in at the value segment or at the high end. I think it depends. It depends on consumer, it depends on the geography. And to your point, it also depends on availability of the product.

我的意思是我們當然已經看到，我的意思是清楚地看到我們的 ATV 業務做得如何，人們正在進入各個領域。我不知道是否很容易將它們都歸入價值細分市場或高端市場。我認為這取決於。這取決於消費者，取決於地理位置。就您而言，這還取決於產品的可用性。

And that leads to the next question, which is as you ramp production here, are you really focused on these higher priced, maybe higher-margin products versus a line dedicated to 4 wheelers rather than XP pros?

這就引出了下一個問題，即當您在這裡提高產量時，您是否真的專注於這些價格更高、利潤可能更高的產品，而不是專用於 4 輪車而不是 XP 專業人士的生產線？

No, I would tell you it's pretty much across the board. When you look at our dealer inventory, I mean I don't want to say it's all down equally. But there are certain spots where we have bigger deficits that we're working through, but I don't know that it's disproportionate either way.

不，我會告訴你這幾乎是全面的。當您查看我們的經銷商庫存時，我的意思是我不想說它全部下降了。但在某些方面，我們正在努力解決更大的赤字，但我不知道這兩種方式是否不成比例。

(Operator Instructions) The next question is from Brandon Rolle with Northcoast Research.

（操作員說明）下一個問題來自 Northcoast Research 的 Brandon Rolle。

Congratulations on the strong earnings results. I just have one question largely just on the recalls announced this month. There were 2 stop sales stop rides. In prior years, sometimes there were more recalls in the pipeline that hadn't been announced yet. And I guess my question is are the recalls over with these 2 in October? Or should we be expecting more on the way?

祝賀強勁的盈利結果。我只有一個問題，主要是關於本月宣布的召回事件。有 2 次停止銷售停止遊樂設施。在前幾年，有時會有更多尚未宣布的召回計劃。我想我的問題是 10 月份對這 2 件產品的召回結束了嗎？還是我們應該期待更多？

Well, I mean first and foremost. As I said in my prepared remarks, the safety of our employees is our top priority. And we feel the same way about our customers. So when we identify a problem with any of our vehicles, we're going to address it if it presents a risk to our customers.

好吧，我的意思是首先。正如我在準備好的發言中所說，我們員工的安全是我們的首要任務。我們對我們的客戶也有同樣的感覺。因此，當我們發現我們的任何車輛存在問題時，如果它給我們的客戶帶來風險，我們將予以解決。

And these were 2 disparate issues that we've had. They weren't related at all.

這些是我們遇到的兩個不同的問題。他們根本沒有關係。

I think when you're referring to a series of recalls, I think that goes back to when we had the problem with thermal that we were working through on various things to make sure we were improving the thermal efficacy of our vehicles.

我想當你提到一系列召回時，我想這可以追溯到我們遇到熱問題的時候，我們正在努力解決各種問題，以確保我們正在提高車輛的熱效率。

And that's not the case now. What we're doing is looking, we've got incredibly capable team and tools to evaluate what's happening with our products in the field. And when we identify a risk that we don't find acceptable, puts our customers at risk, we're going to go out and fix it. And that's what you're seeing here, and we do it with speed.

而現在情況並非如此。我們正在做的是尋找，我們擁有非常有能力的團隊和工具來評估我們的產品在該領域發生的事情。當我們發現一個我們認為不可接受的風險，將我們的客戶置於風險之中時，我們將出去解決它。這就是您在這裡看到的，我們正在快速完成。

Our -- key to do it is before anyone has the risk of getting injured on our products. And I think that's what you're saying. But no, it is absolutely not indicative of a whole bunch more recalls coming down the pike. That being said, if we need to recall a vehicle, we will do it.

我們的關鍵是在任何人有因我們的產品受傷的風險之前。我認為這就是你所說的。但不，這絕對不代表會有更多的召回事件發生。話雖這麼說，如果我們需要召回車輛，我們會這樣做。

This concludes our question-and-answer session. I would like to turn the conference back over to Richard Edwards for any closing remarks.

我們的問答環節到此結束。我想將會議轉回理查德愛德華茲的閉幕詞。

Thank you. I just want to thank everyone for participating in the call this morning. And we look forward to talking to you at the end of the year. Thanks again and goodbye.

謝謝。我只想感謝大家今天早上參加電話會議。我們期待在年底與您交談。再次感謝，再見。

The conference has now concluded. Thank you for participating, for attending today's presentation. You may now disconnect.

會議現已結束。感謝您的參與，感謝您參加今天的演講。您現在可以斷開連接。