Park Ohio Holdings Corp (PKOH) 2024 Q3 法說會逐字稿

Good morning, and welcome to the Park-Ohio third quarter 2024 results conference call. (Operator Instructions) Today's conference is being recorded. Before we get started, I want to remind everyone that certain statements made on today's call may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

早安，歡迎參加 Park-Ohio 2024 年第三季業績電話會議。（操作員指示）今天的會議正在錄音。在我們開始之前，我想提醒大家，今天電話會議上發表的某些聲明可能是 1995 年《私人證券訴訟改革法案》定義的前瞻性聲明。

These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A list of relevant risks and uncertainties can be found in the earnings press release as well as in the company's 2023 10-K, which was filed on March 6, 2024, with the SEC. Additionally, the company may discuss adjusted EPS, adjusted operating income and EBITDA as defined on a continuing operations or consolidated basis.

這些前瞻性陳述受風險和不確定性的影響，可能導致實際結果與預測結果有重大差異。相關風險和不確定性的清單可在收益新聞稿以及公司於 2024 年 3 月 6 日向美國證券交易委員會提交的 2023 年 10-K 中找到。此外，該公司還可能討論按持續經營或合併基礎定義的調整後每股收益、調整後營業收入和 EBITDA。

These metrics are not measures of performance under generally accepted accounting principles. For a reconciliation of EPS to adjusted EPS, operating income to adjusted operating income and net income attributable to Park-Ohio common shareholders to EBITDA as defined, please refer to the company's recent earnings release.

這些指標並不是公認會計原則下的績效衡量標準。有關 EPS 與調整後 EPS、營業收入與調整後營業收入以及歸屬於 Park-Ohio 普通股股東的淨收入與 EBITDA 定義的對照表，請參閱該公司最近的收益報告。

I'll now turn the conference over to Mr. Matthew Crawford, Chairman, President and CEO. Please proceed, Mr. Crawford.

現在，我將會議交給董事長、總裁兼執行長馬修·克勞福德先生。請繼續，克勞福德先生。

Thank you, Kevin, and good morning to everyone. We appreciate you taking time this morning to join us. We are pleased with the performance during the third quarter, both in terms of the overall results and with the progress we continue to make in reshaping our company as a more nimble, more profitable and faster-growing enterprise through the business cycle.

謝謝你，凱文，大家早安。感謝您今天上午抽出時間加入我們。我們對第三季的表現感到滿意，無論是從整體業績來看，還是從我們在將公司重塑為一個在整個商業週期中更靈活、更盈利、增長更快的企業方面所取得的進展來看。

Specifically, I want to make three points. First, while overall demand was stable during the quarter, there were significant headwinds in numerous industrial markets. Pat will discuss some specifics, but the bottom line is that we're happy about our diverse global business in addition to new business initiatives that offset some of these challenges and allowed us to remain largely flat in revenue year-over-year.

具體來說，我想講三點。首先，雖然本季整體需求穩定，但許多工業市場面臨巨大阻力。帕特將討論一些細節，但最重要的是，我們對我們的多元化全球業務以及新的業務舉措感到高興，這些舉措抵消了其中的一些挑戰並使我們的收入同比基本保持平穩。

While we're not prepared to discuss the future too explicitly, we do believe that we will return to growth in the fourth quarter and are optimistic that many of our end markets that were down double-digit amounts in unit volume during 2024 will improve and along with new business awards and historic backlogs in our equipment business set us up for growth in 2025.

雖然我們還沒有準備好過於明確地討論未來，但我們確實相信我們將在第四季度恢復成長，並樂觀地認為，2024 年許多終端市場在單位銷量上出現兩位數的下降，這些市場將會改善，加上我們設備業務中的新業務獎項和歷史積壓訂單，為我們在 2025 年的成長奠定了基礎。

Second, we continue to improve our overall margin profile, including a 60 basis point improvement in year-over-year gross margin. Our focus on execution and on investing in our best products and services will continue to bolster our margin improvements and make them more sustainable.

其次，我們持續改善整體利潤狀況，毛利率較去年同期提高了 60 個基點。我們專注於執行並投資於我們最好的產品和服務，這將繼續增強我們的利潤率改善並使其更具永續性。

In addition, these margin enhancements helped offset some of the demand weakness and limited the impact of any negative flow-through. In the near term, we will continue to manage closely fluctuations in year-end demand, including a close eye on expenses and improved productivity initiatives, especially in our automotive and forging businesses. These adjustments will benefit us as we emerge into 2025.

此外，利潤率的提高有助於抵消部分需求疲軟的影響，並限制任何負面影響。短期內，我們將繼續密切管理年底需求的波動，包括密切關注費用和提高生產力的舉措，特別是在我們的汽車和鍛造業務中。這些調整將使我們在邁向2025年時受益。

Third, we continue to use all tools available to us to reduce leverage. During the quarter, we sold roughly $25 million worth of common stock to support this initiative. These sales were led partially by myself and our family with a $4.5 million investment at $30 a share. We anticipate strong year-end operating cash flows, and we'll continue to use stock sales opportunistically to help meet our debt reduction goals.

第三，我們持續利用一切可以利用的工具來降低槓桿。本季度，我們出售了價值約 2500 萬美元的普通股來支持這項計劃。這些銷售部分由我和我們的家人主導，以每股 30 美元的價格投資了 450 萬美元。我們預計年底的營運現金流將強勁，並且我們將繼續利用股票銷售機會來幫助實現我們的減債目標。

Last but not least, I want to thank all of our Park-Ohio team members. Our improving financial results are the result of taking care of our customers and all 6,000-plus of us committing to be a little better at our job each day. With this simple philosophy, we'll build a stronger business, not only for 2025, but for the next 5 to 10 years and beyond. Thank you.

最後，但同樣重要的一點是，我要感謝 Park-Ohio 團隊的所有成員。我們財務表現的不斷提高是我們關心客戶的結果，也是我們 6,000 多名員工每天努力在工作中做得更好的結果。本著這簡單的理念，我們將建立更強大的業務，不僅面向 2025 年，也面向未來 5 到 10 年及更遠的未來。謝謝。

I'll turn it over to Pat now to discuss the quarter.

現在我將把話題交給帕特來討論本季的情況。

Thank you, Matt. Our third quarter results were highlighted by year-over-year sales growth in two of our three business segments and higher gross margins and adjusted earnings. Also, we repaid just over $23 million of debt significantly increased our liquidity during the quarter.

謝謝你，馬特。我們第三季業績的亮點是，三個業務部門中有兩個部門的銷售額年增，毛利率和調整後收益也有所提高。此外，我們償還了超過 2,300 萬美元的債務，大大提高了本季的流動性。

Consolidated net sales of $418 million were flat compared to $419 million a year ago. In spite of a challenging industrial environment, we saw a consistent demand in many end markets in our supply chain business, continued growth in our proprietary fastener manufacturing business and improved sales in our capital equipment and aftermarket business, which was offset by lower revenues in our assembly components and forging businesses.

綜合淨銷售額為 4.18 億美元，與去年同期的 4.19 億美元持平。儘管行業環境充滿挑戰，但我們看到供應鏈業務的許多終端市場需求穩定，專有緊固件製造業務持續增長，資本設備和售後市場業務的銷售額也有所提高，但這些都被我們組裝件及鍛造業務。

Our consolidated gross margin was 17.3% in the quarter, up 60 basis points from 16.7% last year. On a year-to-date basis, our gross margin has increased 80 basis points to 17.1% compared to 16.3% a year ago. Year-over-year improvement was driven by the continued efforts to implement margin improvement initiatives across all businesses in addition to strong operational execution.

本季我們的綜合毛利率為 17.3%，較去年的 16.7% 上升了 60 個基點。從年初至今，我們的毛利率從一年前的 16.3% 增加了 80 個基點至 17.1%。年比成長的動力來自於持續努力在所有業務領域實施利潤率提高計劃以及強勁的營運執行力。

On an adjusted basis, total consolidated operating income was $25 million, down slightly from $27 million last year and $26 million in the second quarter. SG&A expenses were approximately $48 million, representing 11% of net sales compared to $43 million a year ago, with the increase driven by the SG&A expenses related to the acquisition of human induction completed in the first quarter and higher employee-related costs.

經調整後，綜合營業收入總額為 2,500 萬美元，略低於去年同期的 2,700 萬美元和第二季的 2,600 萬美元。銷售、一般及行政開支約為4,800 萬美元，佔淨銷售額的11%，而去年同期為4,300 萬美元，成長的主要原因是第一季完成的人力引進相關的銷售、一般及行政開支以及員工相關成本的增加。

Interest costs totaled $12.1 million during the quarter compared to $11.6 million last year, with the increase driven by higher interest rates in the current year, partially offset by lower borrowings. During the quarter, the income tax benefit on pretax income of $12.6 million was a result of recognizing certain discrete benefits related to federal R&D credits.

本季利息成本總計 1,210 萬美元，而去年同期為 1,160 萬美元，利息成本的增長是由於本年度利率上升所致，但藉款減少部分抵消了這一增長。本季度，稅前收入的所得稅優惠為 1,260 萬美元，是由於確認了與聯邦研發抵免相關的某些單獨收益。

We continue to implement tax planning initiatives to reduce our overall effective tax rate worldwide. And as a result, our current effective tax rate is expected to be approximately 15%. For the foreseeable future, we estimate that our core annual effective tax rate will be between 20% and 23%, reflecting the impact of these ongoing tax strategies.

我們持續實施稅務規劃舉措，以降低全球整體有效稅率。因此，我們目前的有效稅率預計約為 15%。在可預見的未來，我們估計我們的核心年度有效稅率將在 20% 至 23% 之間，這反映了這些持續稅收策略的影響。

Our GAAP earnings per share of $1.02 was up 3% in the quarter, and our adjusted earnings per share of $1.07 increased 8% compared to $0.99 a year ago. Year-to-date, our adjusted earnings per share of $2.94 was up 15% compared to $2.55 in the same period last year.

本季度，我們的 GAAP 每股收益為 1.02 美元，成長 3%，調整後每股收益為 1.07 美元，較去年同期的 0.99 美元成長 8%。年初至今，我們的調整後每股收益為 2.94 美元，較去年同期的 2.55 美元成長 15%。

We generated EBITDA of $39 million in the quarter, which is in line with the third quarter a year ago. As a percentage of sales, our EBITDA margin was 9.2%. Year-to-date, our EBITDA has improved 10% over the same period a year ago, and we expect our full year EBITDA as defined to be approximately $150 million, an increase of 12% over $134 million last year.

本季度，我們的 EBITDA 為 3,900 萬美元，與去年同期第三季持平。作為銷售額的百分比，我們的 EBITDA 利潤率為 9.2%。年初至今，我們的 EBITDA 較去年同期成長了 10%，我們預計全年 EBITDA 約為 1.5 億美元，較去年的 1.34 億美元成長 12%。

During the quarter, we generated operating cash flows of $9 million, which was negatively affected by the timing of receivable collections in several of our businesses. We expect a meaningful reduction in working capital during the fourth quarter and expect our fourth quarter free cash flow to be approximately $25 million.

在本季度，我們產生了 900 萬美元的營運現金流，這受到我們幾項業務的應收帳款收款時間的負面影響。我們預計第四季營運資本將大幅減少，預計第四季自由現金流約為 2,500 萬美元。

Also during the quarter, our liquidity increased 21% from the end of the second quarter and totaled $194 million, which consisted of approximately $59 million of cash on hand and $135 million of unused borrowing capacity under our various banking arrangements. During the quarter, we raised cash of $25 million through the sale of Park-Ohio common shares and used the majority of the proceeds to pay down $23 million of bank debt.

此外，在本季度，我們的流動資金較第二季末增加了 21%，總計 1.94 億美元，其中包括約 5,900 萬美元的庫存現金和 1.35 億美元的各種銀行安排下未使用的借貸能力。本季度，我們透過出售 Park-Ohio 普通股籌集了 2,500 萬美元現金，並用大部分收益償還了 2,300 萬美元的銀行債務。

Turning now to our segment results. Supply Technologies generated net sales of $195 million in the third quarter compared to $193 million a year ago. Sales were higher year-over-year in several end markets, most notably in aerospace and defense, consumer electronics, electrical distribution and medical equipment, which more than offset lower year-over-year sales in our heavy-duty truck and power sports end markets.

現在來談談我們的分部業績。Supply Technologies 第三季的淨銷售額為 1.95 億美元，去年同期為 1.93 億美元。多個終端市場的銷售額年增，最明顯的是航空航太和國防、消費性電子、配電和醫療設備，足以抵消重型卡車和動力運動終端銷售額同比下降的影響市場。

In addition, sales in our past and manufacturing business grew 9% year-over-year as global demand for our proprietary products continues to be robust. Operating income was an all-time record in this segment and totaled $20.5 million, an increase of 31% year-over-year.

此外，由於全球對我們專有產品的需求持續強勁，我們過去和製造業務的銷售額年增 9%。該部門的營業收入創下了歷史新高，達到 2,050 萬美元，年增 31%。

Operating margins were 10.5%, also an all-time record and improved 240 basis points from 8.1% a year ago. The higher profitability in the quarter was driven by an increase in sales of higher-margin products, strong operational execution, lower operating costs in our supply chain business and continued strong demand in our proprietary fastener business.

營業利益率為 10.5%，也創下歷史新高，比一年前 8.1% 提高了 240 個基點。本季獲利能力的提高得益於高利潤產品銷售的成長、強勁的營運執行力、供應鏈業務營運成本的降低以及專有緊固件業務持續強勁的需求。

On a year-to-date basis, sales in this segment were $594 million and operating income was $59 million, both all-time records for the nine-month period. Segment operating margin was 9.9%, an increase of 220 basis points compared to last year. Our strategic focus in this segment continues to revolve around expanding operating margins, increasing sales in our industrial supply and aerospace and defense businesses and expanding our proprietary fastener products into new applications, customers and geographies.

今年迄今，該部門的銷售額為 5.94 億美元，營業收入為 5,900 萬美元，均創下九個月以來的歷史新高。分部營業利益率為9.9%，較去年同期增加220個基點。我們在這一領域的戰略重點繼續圍繞擴大營業利潤率、增加工業供應、航空航天和國防業務的銷售額以及將我們的專有緊固件產品擴展到新的應用、客戶和地區。

In our assembly components segment, sales were $99 million in the quarter compared to $108 million a year ago and $103 million last quarter. The year-over-year decrease in sales was driven by lower unit volumes on end-of-life programs and lower product pricing on certain legacy programs, which partially offset the sales growth from other OEM platforms.

在我們的組裝零件部門，本季的銷售額為 9,900 萬美元，而去年同期為 1.08 億美元，上季為 1.03 億美元。銷售額較去年同期下降的原因是由於停產項目的單位產量下降以及某些傳統項目的產品價格下降，這部分抵消了其他 OEM 平台的銷售成長。

On an adjusted basis, operating income in the segment totaled $6.6 million in the current quarter and was generally in line with $6.9 million last quarter with 6.7% operating margins in both periods. Compared to a year ago, profitability was down due to the lower product pricing on certain legacy programs and lower revenue on programs that ended last year.

經調整後，本季該部門的營業收入總計 660 萬美元，與上季的 690 萬美元基本持平，兩個期間的營業利潤率均為 6.7%。與一年前相比，獲利能力下降是由於某些遺留項目的產品定價較低以及去年結束的項目的收入較低。

On a year-to-date basis, sales were $309 million in this segment compared to $331 million a year ago, and adjusted operating income margin was 7.2% compared to 8.6% a year ago. In this segment, we are focused on new business launches and continuous operational improvement. New business launches, which began during the third quarter, will incrementally add $50 million in revenue once full production levels are met, which we expect to occur by the middle of next year. We also continue to identify and implement product and plant for profit improvement initiatives in each of our manufacturing facilities, which will enhance operating margins in future periods.

從年初至今，該部門的銷售額為 3.09 億美元，而去年同期為 3.31 億美元，調整後營業收入利潤率為 7.2%，而去年同期為 8.6%。在這一領域，我們專注於新業務的推出和持續的營運改善。新業務的啟動始於第三季度，一旦達到全面生產水準（我們預計明年年中），新業務將逐步增加 5,000 萬美元的收入。我們也將繼續在每個製造工廠中確定和實施產品和工廠的獲利改善舉措，這將提高未來時期的營業利潤率。

In our engineered products segment, sales were $124 million and increased 6% compared to $118 million a year ago, driven by higher demand in our industrial equipment business, which was up 19% year-over-year. The year-over-year sales increase occurred in most regions with notable strength throughout Europe, where revenues were up 32% year-over-year. In addition, revenue from aftermarket parts and services in North America were up 19% from last year.

在我們的工程產品部門，銷售額為 1.24 億美元，比一年前的 1.18 億美元增長了 6%，這得益於我們工業設備業務的需求增加，該業務同比增長了 19%。歐洲大部分地區的銷售額均出現年增，其中，成長勢頭強勁，營收年增 32%。此外，北美售後零件及服務收入比去年成長了19%。

New equipment backlogs continue to be strong, totaling $161 million compared to $162 million at the end of last year. During the quarter, operating income in this segment was $5.2 million compared to $7.1 million a year ago. The decrease in profitability year-over-year was driven by the lower sales levels and lower operating margins in our forged and machine products business, more than offset higher sales and improved profitability in our industrial equipment business.

新設備積壓訂單持續保持強勁，總額為 1.61 億美元，而去年底為 1.62 億美元。本季度，該部門的營業收入為 520 萬美元，而去年同期為 710 萬美元。獲利能力較去年同期下降是由於鍛造和機械產品業務的銷售水準下降和營業利潤率下降，但超過了工業設備業務的銷售額增加和盈利能力提高。

In the year-to-date period, sales in this segment were $365 million, an increase of 3% compared to last year. Adjusted operating income was $16 million compared to $20 million a year ago.

年初至今，該部門的銷售額為 3.65 億美元，比去年成長 3%。調整後的營業收入為 1,600 萬美元，而去年同期為 2,000 萬美元。

Also, corporate expenses totaled $7.8 million during the quarter compared to $7.6 million last quarter. For the year-to-date period, corporate costs were $23 million in the current year compared to $22 million a year ago.

此外，本季公司支出總計 780 萬美元，而上一季為 760 萬美元。年初至今，本年度公司成本為 2,300 萬美元，去年同期為 2,200 萬美元。

And finally, with respect to our full year guidance, we now expect current year revenue growth between 1% and 2% and revenues to grow in the fourth quarter year-over-year. Overall, we believe most of our end markets will be stable for the rest of the year. In addition, we now expect adjusted earnings per share to increase more than 10% year-over-year and EBITDA as defined to be approximately $150 million, an increase of 12% compared to last year.

最後，關於我們的全年指導，我們目前預計今年全年營收將成長 1% 至 2%，第四季營收將年增。總體而言，我們相信今年剩餘時間內我們的大多數終端市場將保持穩定。此外，我們現在預計調整後的每股盈餘將年增 10% 以上，EBITDA 約為 1.5 億美元，比去年同期成長 12%。

Now I'll turn the call back over to Matt.

現在我將把電話轉回給馬特。

Great. Thank you very much, Pat. We'll now open the line for questions.

偉大的。非常感謝，帕特。我們現在開始回答提問。

(Operator Instructions) Steve Barger, KeyBanc Capital Markets.

（操作員指示）KeyBanc 資本市場 Steve Barger。

Matt, I'm going to start on the gross margin. You pointed out it's been running well. It's really the highest rate in about 10 years. And you mentioned investing in your best products and services. Can you just expand on that?

馬特，我將開始討論毛利率。您指出它運作良好。這確實是大約10年來的最高水準。您提到了對最佳產品和服務的投資。能詳細闡述嗎？

I mean, I think that we've been repositioning the portfolio for really going back to 2018 and '19, and we've been doing it in several different ways. I hesitate to use the word restructuring, but I think that we underwent, I think, a strategy to make our core manufacturing and distribution operations more nimble and more profitable as I say through the business cycle. As you know, we invested a lot in increasing productivity, whether it be plant closures or repositioning over 1 million square feet in the US. So we divested ourselves of some low-margin, high capital businesses.

我的意思是，我認為我們一直在重新定位投資組合，以真正回到 2018 年和 2019 年，而且我們一直在以幾種不同的方式來進行。我不太願意使用重組這個詞，但我認為我們實施了一項策略，使我們的核心製造和分銷業務在整個商業週期中更加靈活、更有利可圖。如您所知，我們為提高生產力投入了大量資金，無論是關閉工廠還是重新定位美國超過 100 萬平方英尺的工廠。因此，我們剝離了一些利潤低、資本高的業務。

So to begin answering your question, I want to talk about capital allocation and say the first force at the trough, which I like to say, is making our business better and our earnings more sustainable. And that's true across the board. We like our portfolio. We like the businesses we're in. And we believe, though, we can invest in those current business portfolio and be better at what we do to reposition ourselves for landing more business. And we're seeing that happen.

因此，在開始回答你的問題之前，我想談談資本配置，並且說低谷時的第一個力量，我喜歡說，就是讓我們的業務變得更好，我們的收益更具可持續性。對所有人來說都是如此。我們喜歡我們的投資組合。我們喜歡我們所從事的事業。但我們相信，我們可以投資現有的業務組合，並更好地重新定位自己，以獲得更多業務。我們正在見證這一幕的發生。

We are absolutely seeing our new business pipelines get more robust every day. We've seen it in firm backlogs in the equipment business, but we've also seen it, I think, across the portfolio from automotive to the more diverse industrial businesses where we see a more robust pipeline of new inquiries and top of the funnel action. So first and foremost, I want to speak to that.

我們確實看到我們的新業務管道每天都變得更加強勁。我們在設備業務的訂單積壓中看到了這一點，但我認為，我們也看到了這一點，從汽車到更多樣化的工業業務，我們看到了更強勁的新諮詢管道和漏斗頂端行動。因此首先我想談談這個問題。

Second of all, I think that we will continue, I think, to look at each of our businesses and really do a deep dive in understanding where the sustainable investment opportunities are and candidly, given the opportunity to invest in businesses and not just for high IRR, but high margin. We've got some wonderful pockets in the business; I would highlight aftermarket. In our equipment business I would highlight adjacent markets like aerospace and our supply tech business. I would highlight some new business in the automotive segment that leans on some innovation that isn't new to us, but 1 plus 1 equals 3 in the extruded hose and bed metal space.

其次，我認為我們將繼續審視我們的每項業務，並真正深入挖掘永續投資機會，坦白說，我們有機會投資於企業，而不僅僅是高內部收益率(IRR)，但利潤率較高。我們在這個行業裡有一些非常出色的人才；我想重點介紹售後市場。在我們的設備業務中，我會專注於相鄰市場，例如航空航太和我們的供應技術業務。我想強調汽車領域的一些新業務，這些業務依賴於一些對我們來說並不新鮮的創新，但在擠壓軟管和床金屬領域，1加1等於3。

So I don't want to suggest that we're doing a different allocation broadly across the portfolio. What I'm saying is we're more cognizant inside each business of making sure we're investing for sustainable higher-margin businesses long term, whether that be in new business or again, first source of the trough is making our current businesses better.

所以我不想建議我們在整個投資組合中做出不同的分配。我想說的是，我們在每項業務中都更加清楚，要確保我們長期投資於可持續的高利潤業務，無論是新業務，還是低谷的第一個來源，都是讓我們現有的業務變得更好。

I think I've highlighted in the past, and I'll highlight again, we invested in vertical integration and mixing capacity in the automotive space. Again, that positions us for long-term sustainable growth. I don't use those terms to pick one business over the other. I use those terms to say we challenge each business unit to invest in their highest margin, most sustainable innovations.

我想我過去曾強調過，現在我再強調一次，我們在汽車領域的垂直整合和混合能力方面進行了投資。這再次為我們實現長期永續成長奠定了基礎。我不會用這些術語來選擇一家企業。我使用這些術語來表示我們挑戰每個業務部門投資於利潤最高、最永續的創新。

Yeah. That's great detail. And I think the flip side of the investments is restructuring sometimes or divestitures. Are there other lines of business that have gross margin consistently below corporate average or which are unable to generate consistent cash flow where divestitures could be additive?

是的。細節很精彩。我認為投資的另一面有時是重組或資產剝離。是否存在其他業務線的毛利率始終低於公司平均或無法產生穩定的現金流，而可以透過資產剝離來增加利潤？

Yeah. Of course, I did leave out in my discussion just then one of the businesses we are most excited about, which is our fastener manufacturing business. So we have a number of bites at the apple relative to investing in what I'd say our best products and services. I don't want to single any one out or leave anyone out because we got a lot of opportunities.

是的。當然，我剛才的討論中遺漏了我們最興奮的業務之一，那就是緊固件製造業務。因此，我們在投資我們最好的產品和服務方面有很多機會。我不想挑出任何一個人或排除任何人，因為我們有很多機會。

But the answer is not in terms of our business portfolio. I would say, yeah, in terms of inside the four walls of our business. Initiatives, again, around reshaping our ability to compete long term are undergoing full time. Explicitly, I would say that we continue to close some facilities and sort of rationalize where and how we want to do business. But that's not about walking away from customers per se, although that may happen here and there. That's about making sure that we're serving our customers with the highest quality, lowest cost service to them on a total cost basis. So I would say we're tweaking. We're not necessarily broadly exiting parts of the business.

但答案並不在我們的業務組合方面。我想說，是的，就我們業務的內部而言。再次，圍繞重塑我們長期競爭力的舉措正在全力進行中。明確地說，我想說我們將繼續關閉一些設施，並合理化我們想要在哪裡和如何開展業務。但這並不意味著放棄客戶，儘管這種情況時有發生。這是為了確保我們以總成本為基礎為客戶提供最高品質、最低成本的服務。所以我想說我們正在進行調整。我們不一定會廣泛退出部分業務。

It's a good segue to my next question in terms of the closing some facilities. You have roughly 130. What is the right number of rooftops for the revenue that you anticipate without having too big of an impact to capacity or your ability to serve your customers?

這很好地引出了我關於關閉一些設施的下一個問題。您大約有 130 個。在不對容量或為客戶提供服務的能力產生太大影響的情況下，您預計多少屋頂才合適？

I'll let Pat think about it in a second while I start, you know better than anyone the diverse nature of our business. Certainly, in the supply tech space, largely, we have distribution centers, but some of those are absolutely locked at the hip with their key customers, providing daily, if not hourly, services.

我會先讓帕特考慮一下，然後開始，你比任何人都更了解我們業務的多樣性。當然，在供應技術領域，我們基本上都有一個配送中心，但其中一些配送中心與其主要客戶緊密相連，提供每日甚至每小時的服務。

So those are important locations and shouldn't necessarily be viewed in the context of a traditional manufacturing consolidation play. So as it relates to the rest of the business, again, I think we will continue to see opportunity to consolidate, whether that be consolidating North American facilities or whether that be consolidating into lower-cost countries, whether they be in Southeast Asia or Mexico, et cetera.

因此，這些都是重要的地點，不一定要從傳統製造業整合的角度來看。因此，就其他業務而言，我認為我們將繼續看到整合的機會，無論是整合北美設施，還是整合到成本較低的國家，無論是東南亞還是墨西哥等等。

So I'll let Pat jump in here, but I would say the answer is, absent acquisitions, we will have fewer rooftops next year than we have this year. Those opportunities still exist. Having said that, the 110 sounds like a lot until you really peel back and understand the nature of the supply tech business. It doesn't mean we don't have opportunity. It means that, that's a different business model than the high-cost manufacturing locations.

所以我讓帕特插話，但我想說的答案是，如果沒有收購，明年我們的屋頂數量將比今年少。這些機會仍然存在。話雖如此，如果你真正深入了解並理解供應技術業務的本質，那麼 110 聽起來似乎很多。這並不意味著我們沒有機會。這意味著，這是一種與高成本製造地點不同的商業模式。

Steve, this is Pat. I would add that this is a normal process that we go through and have gone through for many, many, many years. As you know, we consolidated almost 1 million square feet of space over the last three or four years. Each of our business leaders is actively looking for ways to improve on our margins. It's somewhat fluid because customers move and change locations, and we have to react to that. But it's something that we do quite well, and we're experienced in it, and we're not afraid to do it.

史蒂夫，這是帕特。我想補充一點，這是我們經歷的正常過程，而且已經經歷了很多年了。如您所知，我們在過去三、四年整合了近 100 萬平方英尺的空間。我們的每位業務領導都在積極尋找提高利潤的方法。它有點不穩定，因為顧客會移動並改變位置，我們必須對此做出反應。但這是我們做得相當好的事情，我們在這方面有經驗，而且我們不怕去做這件事。

So if we have plants that are under-absorbed, for example, we're always looking for ways to consolidate into plants that may have the capacity to take on that business without losing market share or without losing customers.

因此，如果我們的工廠吸收不足，我們就會一直尋找方法進行整合，打造有能力承擔該業務而不會失去市場份額或失去客戶的工廠。

So to try to pin a number off the $130 million is very difficult. But to Matt's point, to the extent that we've got excess capacity that cannot be filled, we will react pretty quickly. And as all of our businesses grow, there's going to be opportunities to exit certain locations and move into a larger, more efficient operations.

因此，試圖確定 1.3 億美元這個數字是非常困難的。但正如馬特所說，如果我們的產能過剩而無法填補，我們很快就會做出反應。隨著我們所有業務的成長，我們將有機會退出某些地點，轉而進入更大、更有效率的營運。

And Steve, we're not trying to be loose with the answer. We have consolidated operations, both in Europe and in the US during the third quarter. So this is happening. It just won't be as notable as maybe we did when we closed that 1 million square feet, but it is absolutely an ongoing initiative in each of the business segments and will continue to happen in 2025.

史蒂夫，我們並不想輕易給答案。我們在第三季合併了歐洲和美國的業務。所以這是正在發生的。它可能不會像我們關閉 100 萬平方英尺時那樣引人注目，但它絕對是每個業務部門的一項持續舉措，並將在 2025 年繼續進行。

I know at some point; the rate of expansion has to slow. You have driven 300 basis points of expansion in tough markets over the last few years, and we're just looking forward to seeing you continue to pull those levers for additional improvements.

我知道在某個時候；擴張速度必須放緩。過去幾年，您在艱難的市場中推動了 300 個基點的擴張，我們期待看到您繼續發揮這些槓桿的作用，以實現進一步的改善。

I think our next leg up on consolidated margin is going to have to be -- we will continue to benefit, I think, explicitly in the automotive business as we rebuild with new product initiatives, as I mentioned, at higher margins.

我認為，我們下一步的綜合利潤率提升將是——我們將繼續受益，特別是在汽車業務方面，因為正如我提到的那樣，我們透過新的產品計劃重建，利潤率會更高。

And also, I think, in continuing to improve the operations, specifically in the forged group. I mean those are isolated opportunities for improvement going into 2025 that will move the needle. Supply Tech has done a great job. We have a diverse portfolio for a reason. We expect great things out of them in 2025. But in terms of moving the needle, we're going to have to look at some of the other businesses as well because they've done a fabulous job in 2024.

而且我認為，還要繼續改進運營，特別是在鍛造集團。我的意思是，這些都是進入 2025 年的獨立改進機會，將推動事態的發展。Supply Tech 做得很好。我們擁有多元化的投資組合是有原因的。我們期待他們在 2025 年取得偉大的成就。但就推動發展而言，我們也必須關注其他一些企業，因為它們在 2024 年表現非常出色。

Dave Storms, Stonegate.

戴夫‧斯托姆斯 (Dave Storms)，Stonegate。

Just wanted to touch -- you just mentioned the forged segment and improving operations there. Is there anything more you could give us on maybe the outlook in Forged, what operational improvement looks like there?

只是想提一下——您剛才提到了鍛造部分以及那裡的改進操作。您能否向我們提供更多關於 Forged 前景的信息，以及那裡的運營改進情況如何？

I think -- probably discussed over the last few -- at least last two or three calls, the challenges in the Forged Group that I think are unique, and we've seen some of this in all of the Engineered Product Group, including our equipment business.

我認為——可能在過去的幾次——至少是最後兩三次電話會議中討論過，我認為鍛造集團面臨的挑戰是獨一無二的，我們在整個工程產品集團都看到了一些這樣的挑戰，包括我們的設備業務。

Some of the challenges that existed in the COVID and post-COVID environment, and I think I promised last time I never say COVID again, the kinds of employees and the kinds of knowledge that left the business have been the most difficult to replace anyone in our business.

在新冠疫情和後新冠疫情環境中存在的一些挑戰，我想我上次承諾過我再也不會提新冠疫情了，離開企業的員工類型和知識類型是最難替代的。

So I think I've talked openly about hammerman in front of a forge. It's an art and a science, losing decades and decade's worth of experience. We are making progress. We are seeing incremental improvement month-over-month. And I expect 2025 to be a better year. And we have reason to be optimistic. But just to be clear, I don't anticipate that turning on a dime. I mean we've got a lot of work to do there.

所以我認為我已經在鍛造廠前公開談論過錘子人了。這是一門藝術，也是一門科學，它會浪費你數十年的經驗。我們正在取得進展。我們看見情況逐月逐步改善。我預計 2025 年將會更好。我們有理由感到樂觀。但要先明確的是，我並不認為這種情況會突然改變。我的意思是我們在那裡有很多工作要做。

And again, when those businesses are running well, they have proven to be our most sustainable, highest margin businesses. And we have great exposure to great end markets, including aerospace and defense, including rail, some really nice long-term markets where we have good market share.

而且，當這些業務運作良好時，它們已被證明是我們最永續、利潤率最高的業務。我們在大型終端市場佔有很大的份額，包括航空航太、國防和鐵路等，這些都是非常好的長期市場，我們在這些市場佔有良好的市場份額。

But we have to get better at executing. It's not for lack of market opportunity, it's not for lack of good demand, it's not for lack of customers, not for lack of good assets, it's just we got to get better at executing. So we are getting better. But at the same time, I don't want to suggest to you or anyone that, that is going to be as simple as a light switch or one quarter. But we are improving, and I would anticipate continued improvement into 2025.

但我們必須在執行上做得更好。這並不是因為缺乏市場機會，並不是因為缺乏良好的需求，並不是因為缺乏客戶，並不是因為缺乏優質資產，而只是我們必須更好地執行。所以我們正在變得更好。但同時，我不想向你或任何人建議說，這會像打開電燈或投幣那麼簡單。但我們正在進步，我預計到 2025 年還會繼續進步。

And then just sticking with end markets, aerospace and defense has been a great tailwind for you guys and really capitalized there. How do you see the runway for aerospace and defense? Is it a sustainable path that you're on? Or how do you view that?

然後堅持終端市場，航空航太和國防對你們來說是一個巨大的順風，你們真正從中獲益。您如何看待航空航太和國防領域的跑道？您所走的是一條可持續發展的道路嗎？或者您如何看待這一點？

So let's back up and make sure we're talking the same language. Our aerospace exposure runs the gamut from defense and commercial and also aftermarket to OEM. So we have a tremendous amount of exposure across the customer base. I think in some of the longer lead time aftermarket stuff, we see backlog that still extend through 2025.

因此，讓我們回過頭來確保我們講的是同一種語言。我們在航空航太領域的涉足範圍廣泛，從國防和商業，到售後市場和 OEM。因此，我們在客戶群中擁有巨大的曝光率。我認為，在一些交貨期較長的售後市場中，我們看到積壓訂單仍會延續到 2025 年。

So I think we feel pretty comfortable we've got some good runway there. We've seen lead times shorten or evaporate on steel and especially specialty steels, which is a good thing in terms of our ability to execute, but we've got pretty good visibility there. I think on the supply chain side and more of the hardware business, I think that supply chains have been more challenged there.

所以我認為我們感到非常放心，我們在那裡擁有一些良好的跑道。我們已經看到鋼鐵，特別是特種鋼的交貨時間縮短或消失，這對我們的執行能力而言是一件好事，但我們在這方面擁有相當好的可見性。我認為在供應鏈方面以及更多的硬體業務方面，供應鏈面臨的挑戰更大。

So while I think that as I think about over the next three years, and I think about OEs like Airbus, in particular, and some of their supply chain, I think we know it's going in the right direction. I don't think we know per se if -- they kind of keep moving their build rates around based on how they're managing their own supply chain.

因此，當我考慮未來三年，特別是考慮像空中巴士這樣的原始設備製造商及其一些供應鏈時，我認為我們知道它正朝著正確的方向發展。我認為我們並不知道他們是否根據他們管理自己的供應鏈的方式來不斷調整他們的建造率。

So I think we feel pretty good about directionally where it's going. I don't know that we have wonderful visibility. I don't know that they have wonderful visibility. We obviously were pleased to see the machine is strike settle, the 737 to get back to production levels here shortly in 2025 that are meaningful. So good news, but the visibility is a little less.

所以我認為我們對它的發展方向感到很滿意。我不知道我們的能見度是否很好。我不知道它們的能見度是否很好。我們顯然很高興看到機器的罷工得以解決，737 將在 2025 年很快恢復到生產水平，這具有重要意義。這是個好消息，但是知名度稍差一些。

I would add one other point to Matt's comments that in the supply chain business, we operate a fantastic brand called Apollo Aerospace, which covers both commercial and defense locations in the US, Birmingham, England, France, Poland. And those locations were opened up to grow that business, and we expect to grow that business, not only with the OEMs, but also the Tier 1s who assemble different modules for Airbus and others. So although the picture isn't very clear relative to build rates because of supply chain issues, our goal is to continue to grow that business by further penetration of some of the Tier 1s that we haven't had in the past.

我想補充一點，針對馬特的評論，在供應鏈業務中，我們經營著一個名為阿波羅航空航天(Apollo Aerospace) 的優秀品牌，其業務覆蓋美國、伯明翰、英國、法國、波蘭的商業和防禦地點。這些工廠的設立都是為了拓展業務，我們希望不僅與原始設備製造商 (OEM) 合作，還與為空中巴士和其他公司組裝不同模組的一級供應商合作，拓展業務。因此，儘管由於供應鏈問題，建造率的情況還不是很清楚，但我們的目標是透過進一步滲透過去尚未涉及的一些一級市場來繼續發展業務。

I'd add one more thing, and it bears a little bit more on the equipment business. You've heard us talk a little bit about aerospace and defense and the equipment business. A lot of that clarity -- and we've gotten some great orders during the last year, a year and a half. I think a lot of uncertainty around the election sort of slowed that down.

我還要補充一點，這與設備業務有更大的關係。您已經聽我們談論了一些有關航空航太、國防和設備業務的問題。非常清晰——過去一年半里，我們獲得了一些很好的訂單。我認為選舉周圍的許多不確定性在一定程度上減緩了這一進程。

Not being political, either way, I think there will be some continued clarity around investments in the defense sector, which will help the equipment business. And again, how that in the Forged business, by the way. Again, I'm not sure that's so political as it is just getting past the election.

不管怎樣，不考慮政治因素，我認為國防領域的投資將會繼續明朗，這將有助於設備業務。順便問一下，偽造業務的情況又是如何呢？再說一次，我不確定這是否具有政治意義，因為這只是選舉之後的事情。

Sticking in US politics, some of the rhetoric leading up to the election was around increased tariffs. Now that we have maybe a little more clarity on the potential for increased tariffs domestically, are there any parts of your business that you feel are uniquely exposed or uniquely positioned to take advantage should that come to life?

回到美國政壇，選舉前夕的一些言論都圍繞著提高關稅。現在我們對國內增加關稅的可能性可能已經有了更清晰的認識，如果關稅上調，您認為貴公司業務中哪些部分具有獨特的優勢或獨特的定位？

Well, again, our general business philosophy is to produce in the markets where we do business now on the manufacturing side. On the supply chain side, we do rely out of some important vendors out of Asia. Generally, that's not China, by the way, to the extent we want to talk about a specific area of interest for the President-elect. We don't import a ton of product out of China. That's a risk. It's not a huge risk, but we do import a fair amount of harbor out of Asia. So I'd say, generally, I think our expectation is that it will not be a significant impact to the business because of generally liking to produce locally.

嗯，再說一次，我們的整體經營理念是在我們現在開展業務的製造市場進行生產。在供應鏈方面，我們確實依賴亞洲的一些重要供應商。順便說一句，總的來說，就我們想談論當選總統感興趣的特定領域而言，這不是關於中國的。我們不會從中國進口大量產品。這是有風險的。這不是一個很大的風險，但我們確實從亞洲進口了相當數量的港口。因此，我想說，總體而言，我認為我們的預期是，這不會對業務產生重大影響，因為我們普遍喜歡在當地生產。

Having said that, we're decidedly a North American company. At the end of the day, 70% of our business is North American. So a strong investment cycle in North America is disproportionately good for us. So I don't know how that's going to play out precisely. But if trade policy allows for an investment cycle in manufacturing, in the energy grid, in defense, in rail, in semiconductors, you name it, that's disproportionately good for our business despite what kind of offset we might see in a little bit of inflation in our supply chain.

話雖如此，我們確實是一家北美公司。總的來說，我們的業務 70% 來自北美。因此，北美強勁的投資週期對我們來說是極為有利的。所以我不知道事情究竟會如何發展。但如果貿易政策允許在製造業、電網、國防、鐵路、半導體等領域進行投資週期，那麼這對我們的業務來說將是非常有利的，儘管我們可能會看到一些通貨膨脹的抵消。的供應鏈中。

That's my opinion, and that's, I think, what we've seen over the last couple of years. Again, the steel industry, another good one. These are important markets for us. So I think net-net, whoever is in charge, if their goal is to help American manufacturing, those are our customers.

這是我的觀點，我認為，這也是我們在過去幾年所看到的情況。再次，鋼鐵業也是一個好的產業。這些對我們來說都是重要的市場。所以我認為，無論誰負責，如果他們的目標是幫助美國製造業，那麼他們就是我們的客戶。

We have reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

我們的問答環節已經結束。我想將發言權轉回給大家，以便大家可以發表進一步的評論或結束語。

Thank you again for your time this morning. We, again, are excited about the performance, especially with some of the headwinds in some of our key markets. So it makes us optimistic for the future. Thank you very much. Bye-bye.

再次感謝您今天上午抽出時間。我們再次對業績感到興奮，特別是在我們一些主要市場面臨一些阻力的情況下。這讓我們對未來充滿樂觀。非常感謝。再見。

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議和網路直播到此結束。此時您可以斷開您的線路，並享受美好的一天。我們感謝您今天的參與。