FreightCar America Inc (RAIL) 2023 Q3 法說會逐字稿

Greetings and welcome to FreightCar America third quarter earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Victoria Roseman, Investor Relations. Thank you, Mr. Rossman, you may begin.

您好，歡迎參加 FreightCar America 第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係部維多利亞·羅斯曼 (Victoria Roseman)。謝謝羅斯曼先生，您可以開始了。

Thank you, and welcome. Joining me today are Jim Meyer, President and Chief Executive Officer; Mike Riordan, Chief Financial Officer; Matt Tonn, Chief Commercial Officer; and Nick Randall, Chief Operating Officer.

謝謝你，也歡迎你。今天與我一起出席的有總裁兼執行長吉姆‧邁耶 (Jim Meyer)；麥克‧賴爾丹 (Mike Riordan)，財務長；馬特‧托恩 (Matt Tonn)，首席商務官；和首席營運官尼克蘭德爾。

I'd like to remind everyone that statements made during this conference call relating to the company's expected future performance, future business prospects, or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

我想提醒大家，本次電話會議期間發表的有關公司預期未來業績、未來業務前景或未來事件或計劃的聲明可能包括 1995 年《私人證券訴訟改革法案》所定義的前瞻性聲明。

Participants are directed to FreightCar America's Form 10-K for description of certain business risks, some of which may be outside of the control of the company that may cause actual results to materially differ from those expressed in the forward-looking statements. We expressly disclaim any duty to provide updates through our forward-looking statements, whether as a result of new information, future events, or otherwise.

參與者將被引導至 FreightCar America 的 10-K 表格以了解某些業務風險的描述，其中一些風險可能超出公司的控制範圍，可能導致實際結果與前瞻性陳述中表達的結果有重大差異。我們明確表示不承擔透過前瞻性陳述提供更新的義務，無論是由於新資訊、未來事件或其他原因。

During today's call, there will also be a discussion of some items that do not conform to US generally accepted accounting principles or GAAP. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in the earnings release issued yesterday afternoon. Our earnings release for the third quarter 2023 is posted on the company's website at FreightCaramerica.com along with our 8-K, which was filed yesterday after market.

在今天的電話會議中，還將討論一些不符合美國公認會計原則或公認會計準則的項目。這些非公認會計原則指標與其最直接可比較的公認會計原則指標的調節表包含在昨天下午發布的收益報告中。我們 2023 年第三季的收益發布以及昨天盤後提交的 8-K 報告均發佈在公司網站 FreightCaramerica.com 上。

With that, let me now turn the call over to Jim for opening remarks.

現在，讓我把電話轉給吉姆，讓他致開幕詞。

Good morning, everyone, and thank you all for joining us today. FreightCar America delivered another quarter that highlighted our team's operational and commercial discipline contributing favorably towards our continued focus on enhancing our quality of earnings. This comes despite headwinds in the quarter related to the halt of railroad services in Mexico due to migrant issues that limited shipments as well as three large line changeovers, which together muted our top line.

大家早安，感謝大家今天加入我們。 FreightCar America 的另一個季度業績突顯了我們團隊的營運和商業紀律，這對我們繼續專注於提高獲利品質做出了積極貢獻。儘管本季遇到了與墨西哥鐵路服務暫停有關的不利因素，原因是移民問題限制了運輸，以及三個大型線路轉換，這些因素共同削弱了我們的營收。

Revenue generated during the quarter decreased 28% year over year to $61.9 million on deliveries of 503 railcars, both lower than expected and both simply timing related. At the same time, we expanded our gross margin profile by an additional 30 basis points from last quarter, achieving an industry-leading 14.9% during the third quarter. Adjusted EBITDA increased versus the same quarter of the prior year to $3.5 million or approximately $7,000 per railcar.

本季交付的 503 輛軌道車產生的收入年減 28% 至 6,190 萬美元，均低於預期且僅與時間相關。同時，我們的毛利率較上季額外提高了 30 個基點，第三季達到業界領先的 14.9%。調整後 EBITDA 與去年同期相比增加至 350 萬美元，即每節車廂約 7,000 美元。

I am extremely pleased to see the fruits of our labor from the last several years begin to materialize, particularly in the face of a more muted top line driven by the aforementioned headwinds. The operational groundwork we laid and a commercial groundwork we continued to lay is we believe, spot on for this company.

我非常高興地看到我們過去幾年的勞動成果開始顯現，特別是面對上述不利因素導致的營收更加疲軟的情況下。我們相信，我們奠定的營運基礎和我們繼續奠定的商業基礎對這家公司來說是正確的。

Most importantly, while we do not expect progress to be achieved in a perfectly straight line, we do believe there's ample room to continue to improve the quality of our business vis-a-vis gross margin and profitability per railcar. This belief, along with us now being in a position to scale the business creates the potential we have been working towards.

最重要的是，雖然我們預計不會以完美的直線取得進展，但我們確實相信，在每輛鐵路車的毛利率和盈利能力方面，我們仍有足夠的空間繼續提高我們的業務品質。這種信念，加上我們現在能夠擴大業務，創造了我們一直在努力的潛力。

The completion of the fourth production line at our Castanos' manufacturing campus during the third quarter signifies the long anticipated completion of the facility and all of us are beyond pleased and beyond proud.

卡斯塔諾斯製造園區的第四條生產線於第三季竣工，標誌著該設施的竣工已在人們的期待之中，我們所有人都感到非常高興和自豪。

FreightCar America now has the capacity to seamlessly manufacture annual volume ranging from 4,000 to 6,000 railcars across four production lines. We are now starting up this fourth line and in yet another milestone moment for the company, we will see the first deliveries produced from this line in the fourth quarter.

FreightCar America 現在有能力透過 4 條生產線無縫製造年產量 4,000 至 6,000 輛軌道車。我們現在正在啟動第四條生產線，在該公司的另一個里程碑時刻，我們將在第四季度看到這條生產線生產的第一批產品。

When we speak about operational excellence, for us it is invariably measured in gross margin and profitability per railcar. To put a finer point on operational excellence and what it means to us, we are talking about railcar design and the ease in which our railcars can be manufactured, supply chain management, and achieving the right levels of vertical integration, the quality and flexibility of our tooling, jigs and fixtures, and of course, how we train and power and mobilize our nearly 2,000 production team members. This is the bedrock of our company and represents continued and we believe significant opportunity in an industry with deep traditions.

當我們談論卓越營運時，對我們來說，它總是以每輛鐵路車的毛利率和獲利能力來衡量。為了更詳細地闡述卓越營運及其對我們的意義，我們討論的是軌道車設計和製造軌道車的便利性、供應鏈管理以及實現適當水平的垂直整合、軌道車的品質和靈活性。我們的工具、夾具和固定裝置，當然還有我們如何訓練、激勵和動員近2,000 名生產團隊成員。這是我們公司的基石，代表著一個具有深厚傳統的產業持續存在的巨大機會。

Complementing the company's growing and successfully differentiated position and operational excellence is our concurrent work to establish a unique commercial position. It is important that we began to share another and equally important undertaking in the remaking of FreightCar America. And that is where and how we fit in an industry dominated by a very small number of much larger competitors.

我們同時致力於建立獨特的商業地位，以補充公司不斷發展、成功的差異化地位和卓越營運。重要的是，我們開始分享另一個同樣重要的任務，重塑 FreightCar America。這就是我們在一個由極少數規模大得多的競爭對手主導的行業中所處的位置和方式。

It is true that we now have a diverse portfolio of products, some of which have achieved market-leading positions. Our goal with respect to our product offering is simple, and that is to offer the products that customers want most. And that's simply as an alternative consideration or as part of a larger bidding process.

誠然，我們現在擁有多元化的產品組合，其中一些產品已經取得了市場領先地位。我們提供產品的目標很簡單，那就是提供顧客最想要的產品。這只是作為替代考慮因素或作為更大投標過程的一部分。

Like our operations, our products are under constant review and are constantly being improved. Continuous improvement is not simply a factory concept, it applies equally to engineering and product development. It is also true we believe that as a smaller company, we are better equipped to invest all the time required between our commercial and technical teams, and current and prospective customers in order to deliver product solutions that best match each customer's specification -- specific needs.

與我們的營運一樣，我們的產品也在不斷接受審查並不斷改進。持續改進不僅僅是一個工廠概念，它同樣適用於工程和產品開發。我們確實相信，作為一家規模較小的公司，我們更有能力在我們的商業和技術團隊以及當前和潛在客戶之間投入所需的所有時間，以便提供最符合每個客戶規格（特定需求）的產品解決方案。

We are not a one-size-fits-all manufacturer. Our customers make substantial and long-term investments when buying railcars and our goal every time is to give them the exact car they want. Rarely is this an off-the-shelf design. This level of customization is supported by the gains generated from our operational excellence and we believe contributes favorably to our margins.

我們不是一家一刀切的製造商。我們的客戶在購買軌道車時進行了大量的長期投資，我們每次的目標都是為他們提供他們想要的確切車輛。這種現成的設計很少見。這種程度的客製化得到了我們卓越營運所帶來的收益的支持，我們相信這對我們的利潤做出了有利的貢獻。

Thirdly, our team has worked incredibly hard to align our business with customer groups that value the aforementioned, along with the fact that we do not compete on leases. Our approach is to partner with, instead of compete with, this very important group of customers.

第三，我們的團隊非常努力地使我們的業務與重視上述內容的客戶群保持一致，並且我們不進行租賃競爭。我們的方法是與這個非常重要的客戶群合作，而不是競爭。

Fourthly and finally, we will continue to focus on providing what we believe to be the optimal balance between backlog and readiness to respond to customer needs. Backlog is critical to planning, but we are mindful of the drawbacks when acquiring backlog and quantity so large that it takes years to fulfill our backlog acquired as a result of large discounting practices. This is not our business model.

第四也是最後一點，我們將繼續致力於提供我們認為的積壓訂單和響應客戶需求的準備之間的最佳平衡。積壓訂單對於規劃至關重要，但我們注意到，當獲得大量積壓訂單和數量時，需要數年時間才能完成因大量折扣做法而獲得的積壓訂單。這不是我們的商業模式。

A perfect order book for us is one that is long enough to allow for well managed material planning and production scheduling and short enough to allow us to be responsive to our customers' needs. So in summary, our commercial excellence is focused on having the best value proposition for individual customer needs, attention and service, and maintaining the right balance of backlog quality and quantity.

對我們來說，完美的訂單簿是足夠長的，以便能夠進行良好管理的物料計劃和生產調度，並且足夠短，以便我們能夠響應客戶的需求。總而言之，我們的商業卓越之處在於為個人客戶的需求、關注和服務提供最佳價值主張，並維持積壓品質和數量的適當平衡。

At this point, I would like to address our guidance for the year. Due to our continued concerns over rail service disruption, we are lowering our fiscal 2023 guidance for revenue to be in the range of $365 million to $380 million, which is based on our forecasted production of 3,150 to 3,300 railcars. This is a shift in timing with some of our planned third quarter revenue now shifting into the fourth quarter and some of our fourth quarter revenue shifting into the first quarter of 2024.

此刻，我想談談我們今年的指導。由於我們對鐵路服務中斷的持續擔憂，我們將 2023 財年的收入指引下調至 3.65 億美元至 3.8 億美元之間，這是基於我們預測的 3,150 至 3,300 輛鐵路車產量。這是時間上的轉變，我們計劃的第三季收入的一些現在轉移到第四季度，第四季度的一些收入轉移到 2024 年第一季。

Importantly, our full year adjusted EBITDA guidance range remains unchanged. We are reaffirming our expectation for full year adjusted EBITDA to be between $18 million and $22 million.

重要的是，我們全年調整後的 EBITDA 指引範圍保持不變。我們重申全年調整後 EBITDA 的預期為 1,800 萬美元至 2,200 萬美元。

I will now turn the call over to Matt for a few commercial comments.

我現在將把電話轉給馬特，徵求一些商業評論。

Thank you, Jim, and good morning, everyone. During the quarter, our level of inquiries, order activity, and demand for our products remain healthy. For the third quarter 2023, we closed orders for 1,015 railcars valued at approximately $122 million with year-to-date orders totaling 3,356 railcars valued at approximately $379 million. This represents an order increase of approximately 200% versus the first three quarters of fiscal 2022. We ended the quarter with a backlog of 3,800 railcars valued at approximately $452 million, representing an increases of approximately 50% and 64% year over year, respectively.

謝謝吉姆，大家早安。本季度，我們的詢價、訂單活動和產品需求水準保持健康。 2023 年第三季度，我們完成了 1,015 輛軌道車訂單，價值約 1.22 億美元，年初至今訂單總計 3,356 輛軌道車，價值約 3.79 億美元。這意味著訂單比 2022 財年前三個季度增加了約 200%。截至本季末，我們積壓了 3,800 輛軌道車，價值約 4.52 億美元，年比分別成長約 50% 和 64%。

As Jim mentioned, our fourth production line at Castanos is now complete with the first shipments from that new line scheduled to be delivered in the fourth quarter. The sales team continues to build our pipeline for fiscal 2024 and having the fourth line available will increase our ability to better meet customers' needs for new railcars.

正如吉姆所提到的，我們在卡斯塔諾斯的第四條生產線現已完工，該新生產線的第一批貨物計劃於第四季度交付。銷售團隊將繼續在 2024 財年建造我們的產品線，第四條生產線的投入使用將提高我們更好地滿足客戶對新軌道車需求的能力。

Although weakness in freight loadings, the migrant issue at the border, and the overall macro environment continue to pose market uncertainties, we agree with industry forecasts of railcar deliveries of approximately 45,000 railcars in 2023. Our sales pipeline remains strong with customer inquiries indicating that demand is still largely tied to railcar replacements across a diversified range of car types.

儘管貨運量疲軟、邊境移民問題以及整體宏觀環境繼續帶來市場不確定性，但我們同意行業預測，即 2023 年鐵路車交付量約為 45,000 輛。我們的銷售管道仍然強勁，客戶詢問表明需求仍然在很大程度上與各種車輛類型的軌道車更換有關。

Order activity by customer segment, including lessors, shippers, and Class 1 railroads has remained consistent and includes the development of new customers who value our commercial proposition as outlined by Jim.

按客戶細分（包括出租人、托運人和 1 級鐵路）劃分的訂單活動保持一致，並包括開發重視我們商業主張的新客戶，如吉姆所述。

Our sales team continues to operate with discipline. Our overarching strategy is to prioritize business that delivers substantial value to customers and aligns with the core of our business, furthering our strategic objectives, which includes a healthy, well-managed backlog. This disciplined approach ensures that each decision aligns with both the needs of our customers and our long-term goals, reinforcing our commitment to growing -- providing value, while maintaining a strategic direction that fortifies our business.

我們的銷售團隊繼續遵守紀律。我們的整體策略是優先考慮為客戶提供實質價值並與我們業務核心保持一致的業務，從而進一步推進我們的策略目標，其中包括健康、管理良好的積壓工作。這種嚴格的方法確保每個決策都符合客戶的需求和我們的長期目標，強化我們對成長的承諾——提供價值，同時保持鞏固我們業務的策略方向。

I'll now turn the call over to Mike for comments related to our financial performance. Mike?

我現在將把電話轉給麥克，徵求有關我們財務業績的評論。麥克風？

Thanks, Matt, and good morning, everyone. As Jim discussed in his opening remarks, for the third quarter, we delivered significant year-over-year adjusted EBITDA growth and gross margin expansion. These were achieved despite a decrease in deliveries year over year, proving the success of our cost structure transformation. Our highly variable cost base provides us with the agility to scale our business to industry demand while maintaining profitability at lower delivery levels.

謝謝馬特，大家早安。正如吉姆在開場白中所討論的那樣，第三季度我們實現了調整後 EBITDA 的同比顯著增長和毛利率擴張。儘管交付量逐年下降，但仍實現了這些目標，證明了我們成本結構轉型的成功。我們高度可變的成本基礎使我們能夠靈活地根據行業需求擴展業務，同時在較低的交付水平下保持盈利能力。

Consolidated revenues for the third quarter of 2023 totaled $61.9 million with deliveries of 503 railcars compared to $85.7 million on deliveries of 783 railcars in the third quarter of 2022. Gross profit in the third quarter of 2023 was $9.2 million with a gross margin of 14.9% compared to gross profit of $4.6 million and gross margin of 5.3% in the third quarter of last year.

2023 年第三季的合併收入總計6,190 萬美元，交付了503 輛軌道車，而2022 年第三季的合併收入為8,570 萬美元，交付了783 輛軌道車。2023 年第三季的毛利為920 萬美元，毛利率為14.9%相比之下，去年第三季的毛利為 460 萬美元，毛利率為 5.3%。

Despite the lower deliveries and adverse impact of foreign currency in the quarter, we continued to expand gross margins driven by our increased production efficiencies, coupled with strong commercial performance. SG&A for the third quarter of 2023 totaled $7.5 million, up from $7.1 million in the third quarter of 2022, as we continued to recruit and invest in operational talent.

儘管本季交付量較低且受到外匯的不利影響，但由於生產效率提高以及強勁的商業業績，我們的毛利率繼續擴大。由於我們持續招募和投資營運人才，2023 年第三季的銷售、管理及管理費用總計 750 萬美元，高於 2022 年第三季的 710 萬美元。

Consolidated operating income for the third quarter of 2023 was $1.4 million compared to an operating loss of $10.7 million in the third quarter of 2022. The increase in consolidated operating income in the third quarter of 2023 was primarily driven by increased gross profit as well as the third quarter of 2022, having an $8.1 million noncash charge related to settling historical pension liabilities.

2023 年第三季的合併營業收入為 140 萬美元，而 2022 年第三季的營業虧損為 1,070 萬美元。2023 年第三季合併營業收入的成長主要是由於毛利的增加以及2022 年第三季度，與結算歷史退休金負債相關的非現金費用為810 萬美元。

In the third quarter of 2023, we achieved adjusted EBITDA of $3.5 million compared to $1.6 million in the third quarter of 2022, primarily driven by increased operational and commercial excellence initiatives that Jim discussed previously.

2023 年第三季度，我們實現了 350 萬美元的調整後 EBITDA，而 2022 年第三季度為 160 萬美元，這主要是由於吉姆之前討論過的運營和商業卓越計劃的增加。

For the third quarter of 2023, our adjusted net income was $0.2 million or a loss of $0.14 per share compared to an adjusted net loss of $5.4 million or $0.21 per share in the third quarter of last year. Under US GAAP, accrued dividends related to our preferred shares are treated as a reduction to net income available to common shareholders when calculating our earnings per share resulting in negative earnings per share for the quarter.

2023 年第三季度，我們調整後的淨利潤為 20 萬美元，即每股虧損 0.14 美元，而去年第三季調整後的淨虧損為 540 萬美元，即每股虧損 0.21 美元。根據美國公認會計準則，在計算每股收益時，與優先股相關的應計股息被視為普通股股東可獲得的淨利潤的減少，導致本季度每股收益為負。

Capital expenditures for the third quarter of 2023 were approximately $4 million as we completed construction of a fourth line at our Castanos facility. There will be further cash outflows during the fourth quarter related to the timing of payments for work that finished at the end of the third quarter. However, now that the Mexico build-out is complete, capital expenditure should decrease considerably in 2024.

我們完成了卡斯塔諾斯工廠第四條生產線的建設，2023 年第三季的資本支出約為 400 萬美元。第四季將出現進一步的現金流出，這與第三季末完成的工作的付款時間有關。然而，既然墨西哥的擴建工程已經完成，2024 年的資本支出應該會大幅減少。

Now turning to guidance, as Jim previously mentioned, due to the impact of railroad disruptions (technical difficulty) migrant issue, we are adjusting our full year 2023 revenue guidance to be between $365 million and $380 million, which is based on a lowered forecast delivery of 3,150 to 3,300 railcars. At the same time, we are reaffirming our previously stated full year adjusted EBITDA guidance of between $18 million and 2020 -- $22 million. The inherent strength of our business foundation has enabled us to maintain a solid bottom line despite this external challenge.

現在轉向指導，正如吉姆之前提到的，由於鐵路中斷（技術困難）移民問題的影響，我們正在將2023 年全年收入指導調整為3.65 億美元至3.8 億美元之間，這是基於降低的預測交車量3,150 至 3,300 輛電車。同時，我們重申先前提出的全年調整後 EBITDA 指引為 1,800 萬美元至 2020 年 2,200 萬美元。儘管面臨外部挑戰，我們業務基礎的內在實力使我們能夠保持堅實的底線。

Reflecting on the journey we have been on the past several years, we are very proud of the achievements our business has made in such a short time. Our operational and commercial excellence initiatives have laid the foundation for us to achieve industry-leading margins.

回顧我們過去幾年的歷程，我們對我們的業務在如此短的時間內所取得的成就感到非常自豪。我們卓越的營運和商業計劃為我們實現領先業界的利潤奠定了基礎。

Looking ahead, the combination of our highly variable cost structure and carefully manage SG&A should create significant operational leverage as we scale our business to four lines of production. This in turn, we believe should provide significant growth in our bottom-line profitability.

展望未來，當我們將業務規模擴大到四條生產線時，我們高度可變的成本結構和仔細管理銷售、一般費用的結合應該會創造顯著的營運槓桿。我們相信，這將為我們的獲利能力帶來顯著成長。

With that financial overview, I'd like to now turn the call back over to Jim for a few closing remarks.

了解了財務概況後，我現在想將電話轉回給吉姆，讓他做一些結束語。

Thank you, Mike. And let me wrap up our formal remarks with one other piece of work extremely important to our future, and that is our debt structure and relationship with PIMCO. As all of you know, our company was in a challenging position this time three years ago. After evaluating multiple options to ensure that FreightCar America would have the liquidity necessary for the creation of a new and much stronger future, we aligned with a partner we believed would not only provide the necessary support, but also the reliability during the uncertainties prevailing at the time. PIMCO proved to be exactly that partner.

謝謝你，麥克。讓我用另一項對我們的未來極為重要的工作來結束我們的正式發言，那就是我們的債務結構以及與太平洋投資管理公司的關係。大家都知道，三年前的這個時候，我們公司正處於一個充滿挑戰的境地。在評估了多種選擇以確保FreightCar America 擁有創造新的、更強大的未來所需的流動性後，我們與合作夥伴結盟，我們相信該合作夥伴不僅能夠提供必要的支持，而且能夠在當前市場普遍存在的不確定性中提供可靠性。時間。事實證明，太平洋投資管理公司正是這樣的合作夥伴。

Now as we move forward and as our business continues to demonstrate strength, we will look to improve our capital structure, take out the preferred shares held by PIMCO, and effectively conclude this chapter of what has been a very beneficial relationship for FreightCar America. This has always been our shared vision. Although I cannot provide you with additional details on when this might occur, I do want to state our intention to get this done just as soon as conditions permit.

現在，隨著我們向前邁進，隨著我們的業務繼續展現實力，我們將尋求改善我們的資本結構，收購PIMCO 持有的優先股，並有效地結束對FreightCar America 非常有益的關係的這一章。這一直是我們的共同願景。儘管我無法向您提供有關何時發生這種情況的更多詳細信息，但我確實想表明我們打算在條件允許的情況下盡快完成此操作。

In closing, we continue to set goals quarter by quarter and the team continues to deliver on these goals. I'm very pleased with how we sit as a company today, the prospect of transitioning out of the PIMCO financing, and what the next several years hold for us.

最後，我們繼續每季設定目標，團隊將繼續實現這些目標。我對我們公司今天的表現、擺脫太平洋投資管理公司融資的前景以及未來幾年的發展感到非常滿意。

With that, I will ask the operator to open the lines for some Q&A. Thank you.

這樣，我會要求接線員開一些問答線。謝謝。

(Operator Instructions)

（操作員說明）

Justin Long, Stephens Inc.

賈斯汀朗，史蒂芬斯公司

Thanks and good morning. Maybe to start with the US-Mexico cross-border issues that everyone saw in the third quarter. Is there a way to think about the delivery impact you saw from that disruption? And secondly, it sounds like those deliveries will be made up in both the fourth quarter and the first quarter. But maybe you could talk a little bit more about that cadence.

謝謝，早安。或許可以從第三季大家看到的美墨跨國問題開始。有沒有辦法考慮您從這次中斷中看到的交付影響？其次，聽起來這些交付量將在第四季和第一季完成。但也許你可以多談談這種節奏。

Good morning, Justin. This is Jim. I wish we had more clarity and specifics on this. We experienced obviously a level of disruption in the third quarter. It has not abated itself. It has sort of ebbed and flowed. We're hoping to get this thing behind us as quickly as we can.

早安，賈斯汀。這是吉姆。我希望我們對此有更多的清晰度和細節。我們在第三季明顯經歷了一定程度的混亂。它並沒有自行減弱。它有某種程度的潮起潮落。我們希望盡快解決這個問題。

But our guidance adjustment, our top line guidance adjustment is really based on what we think might happen, based on kind of the ebbing and flowing of this. It's fluid. It's a bit hard to quantify and predict.

但我們的指導調整，我們的頂線指導調整實際上是基於我們認為可能發生的事情，基於這種潮起潮落。它是液體。量化和預測有點困難。

I'm more comfortable with the range, the revised range we've given. But it gives us just a little bit of protection against what we really don't know for sure just yet. What I can tell you is we are working with the railroad out of the factory daily and doing the best they can in a temporarily turbulent situation.

我對這個範圍更加滿意，我們給出的修改後的範圍。但它只為我們提供了一點保護，以應對我們尚不確定的事情。我可以告訴你的是，我們每天都在工廠外與鐵路部門合作，並在暫時動盪的情況下盡最大努力。

Got it. And maybe just to put a bow on that if I look at the full year delivery guidance, it implies more than a doubling of deliveries in the fourth quarter versus the third. So do you need the disruptions at the border to get better in order to hit that? Or can you achieve that based on the kind of steady state of what we're seeing today?

知道了。也許只是為了證明這一點，如果我看一下全年交付指引，這意味著第四季的交付量比第三季增加了一倍以上。那麼，為了解決這個問題，你是否需要邊境的干擾來改善？或者你能根據我們今天所看到的穩定狀態來實現這一目標嗎？

Yeah, when you do the math on what we're projecting to get out in the fourth quarter, there is actually built into that a level of pessimism, if you will, on the consistency of the outbound freight. We're confident as we sit today in those numbers.

是的，當你計算我們預計在第四季度實現的目標時，如果你願意的話，實際上對出境貨運的一致性存在一定程度的悲觀情緒。今天我們對這些數字充滿信心。

And, so -- we're feeling pretty comfortable with that. It's obviously a lot higher number than we saw in Q3 and that's, we were taken a little bit by surprise towards the end of the third quarter, which presented a number of shipments at the end. And the other thing you have to factor in with the additional volume in the fourth quarter is the fact that we're now starting up the fourth production line.

所以，我們對此感到非常滿意。這顯然比我們在第三季看到的數字要高得多，也就是說，我們在第三季末感到有點驚訝，第三季末出現了一些出貨量。關於第四季度的額外產量，您必須考慮的另一件事是我們現在正在啟動第四條生產線。

Got it. That's a fair point on the fourth line.

知道了。第四行的觀點很合理。

And second question or topic I wanted to hit on -- it was encouraging to see the adjusted EBITDA guidance was maintained despite the fact that the revenue guidance came down by about 10% at the midpoint. That implies that margins will be better than you originally expected. So can you talk a little bit more specifically about what's driving that margin upside?

我想談的第二個問題或主題是，儘管收入指引中點下降了約 10%，但看到調整後的 EBITDA 指引得以維持，令人鼓舞。這意味著利潤率將比您最初預期的要好。那麼您能否更具體地談談是什麼推動了利潤率上升？

Yeah, and this is Jim again. And then I'll let Mike or Nick jump on with any additional comments. I think the thing to say about this is this is what we've been talking about and working towards for three-plus years. And our business is built on the principle of operational excellence. And as that has taken root, we have surely expanded it to now encompass what we call internally commercial excellence.

是的，這又是吉姆。然後我會讓麥克或尼克繼續發表任何其他評論。我認為關於這一點要說的是，這就是我們三年多來一直在談論和努力的目標。我們的業務建立在卓越營運的原則之上。隨著這一點已經紮根，我們肯定已經將其擴展至現在涵蓋我們所謂的內部商業卓越。

So our business being the smallest of the big producers, it is about efficiency on the plant side. And as you know, we have -- we've built this brand-new campus specifically designed to build railcars in the most efficient way we could possibly envision. And then we have proceeded now for three years straight since we opened the doors down there to just continually invest in LEAN manufacturing and the training of our workforce.

因此，我們的業務是大型生產商中規模最小的，這關係到工廠的效率。如您所知，我們已經建造了這個全新的園區，專門用於以我們所能想像的最有效的方式建造軌道車。自從我們打開大門以來，我們已經連續三年繼續投資精益製造和員工培訓。

So, we're very pleased, obviously, with our gross margins where they are right now. We are pleased to see the EBITDA on so few deliveries. And I think what's most exciting for us is this is not work that's finished. There's more opportunity. There's more to come. Progress is never a straight line, so don't assume it will be. But the trend is certainly been strongly favorable over the past 12, 18 months.

因此，顯然我們對目前的毛利率非常滿意。我們很高興看到如此少的交付量就實現了 EBITDA。我認為對我們來說最令人興奮的是這還不是完成的工作。還有更多機會。還有更多的事情要做。進步從來都不是一條直線，所以不要假設它會是一條直線。但過去 12、18 個月的趨勢無疑是非常有利的。

And while it may not stay on the same level of trajectory, we expect further progress and improvement going forward. So this is with us, it's part of us. And it's how we envisioned and how we're demonstrating we run the business. So we're very happy with the things that are obvious to look at like gross margin, or gross profit, or EBITDA per car, we feel good about all of those metrics, again, knowing that there's still more to come.

儘管它可能不會保持在同一軌道水平，但我們預計未來會取得進一步的進展和改進。所以這與我們同在，是我們的一部分。這就是我們的設想以及我們展示我們經營業務的方式。因此，我們對毛利率、毛利或每輛車的 EBITDA 等顯而易見的指標非常滿意，我們對所有這些指標都感到滿意，因為我們知道還有更多指標即將到來。

Okay. And maybe last one for me. This one might be more for Mike. But if I look at the implied guidance for the fourth quarter, big step up in deliveries and revenues, assuming SG&A stays pretty steady, it seems to imply that gross margins will come down in the fourth quarter relative to the third. So I was wondering if that's a fair assumption. And if there's any color you can provide on what's driving that, maybe it's mix or something else?

好的。也許對我來說是最後一個。這可能更適合麥克。但如果我看一下第四季度的隱含指引，假設銷售、一般費用保持相當穩定，那麼交付和收入將大幅增長，這似乎意味著第四季度的毛利率將比第三季度下降。所以我想知道這是否是一個合理的假設。如果您可以提供任何顏色來說明其驅動因素，也許是混合或其他什麼？

Sure. That's a astute observation. And that's what the numbers would tell you. The one thing that's going to drive that in the fourth quarter is our start-up of a fourth line. Here we're going to have a lot of people that we're bringing in training fixed costs before we're actually running on that line. With all that we'll provide a temporary drag on margin in the fourth quarter before the base itself, and it's a fully running mine and full run rate efficiency in 2024.

當然。這是一個敏銳的觀察。這就是數字所告訴你的。第四季推動這一目標的一件事是我們第四條生產線的啟動。在這裡，我們將有很多人在我們真正在那條線上運行之前，我們會帶來固定成本的培訓。儘管如此，我們將在基地本身之前的第四季度暫時拖累利潤率，並且到 2024 年，該礦將完全運作並達到完全運行率效率。

Got it. That makes sense. I'll pass it on. I appreciate the time.

知道了。這就說得通了。我會把它傳遞下去。我很感激時間。

Thank you, Justin.

謝謝你，賈斯汀。

Thank you, Justin.

謝謝你，賈斯汀。

Matt Elkott, TD Cowen.

馬特·埃爾科特，TD·考恩。

Good morning. Thank you. Staying on the gross margin question, I know it's expected to be a bit down sequentially, but Mike or Jim, can you talk about the exit rate in the fourth quarter for the gross margin? And if it says anything about 2024, how should we think about the margin bit beyond Q4?

早安.謝謝。繼續討論毛利率問題，我知道預計會比上一季下降，但是麥克或吉姆，你能談談第四季度毛利率的退出率嗎？如果它說明了 2024 年的情況，我們應該如何考慮第四季之後的利潤率？

First, as I just mentioned in Q4, you will see a sequential step down given the overhead starting up the fourth line, the start-up costs associated with that. But if you're looking at costs as a full year in 2023 and that exit rate on an annual basis, we see Q2 and Q3 run inefficiently on two, three lines. I think looking holistically at 2023 would be a decent indication of 2024 and beyond and what we're capable of.

首先，正如我剛剛在第四季度提到的，考慮到啟動第四條生產線的開銷以及與之相關的啟動成本，您將看到連續的下降。但如果您考慮 2023 年全年的成本以及每年的退出率，我們會發現第二季和第三季在兩三條線路上運行效率低。我認為，從整體來看 2023 年將是 2024 年及以後以及我們能力的一個很好的指標。

Okay. So you feel comfortable you can match the 2023 gross margin or exceed it in 2024?

好的。那麼您認為自己可以在 2024 年達到或超過 2023 年的毛利率嗎？

I can say that's our -- with the commercial and operational excellence initiatives we have in place, that's where we're focused on.

我可以說，這就是我們的——透過我們制定的商業和卓越營運計劃，這就是我們關注的重點。

Okay. And then, Mike, since I have you just want a couple of questions on the balance sheet. I know you had a big increase in inventory. How much of that is related to cars being built and unable to be delivered because of the border issues.

好的。然後，麥克，你只想問幾個關於資產負債表的問題。我知道你們的庫存大幅增加。其中有多少與正在製造但由於邊境問題而無法交付的汽車有關。

On the bright side you had -- halving of accounts receivable went down significantly, and cash went up. So a lot of moving parts. Can you just help us gauge the different dynamics of the balance sheet at the end of Q3?

好的一面是－應收帳款減半顯著下降，現金增加。所以有很多活動部件。您能否幫助我們衡量第三季末資產負債表的不同動態？

Yeah, definitely. So inventories is higher than we would have planned in Q3, given the delays at the border and the issue that caused. And as you go through the 10-Q, you'll see a breakout of that inventory in the inventory footnote between raw material versus finished goods. You can see finished goods is elevated compared to last year, which is obviously the shipments in transit, but you also see with this high. And that is you're unable to ship the products fully (technical difficulty) property.

是的，絕對是。因此，考慮到邊境延誤及其造成的問題，庫存高於我們第三季的計劃。當您查看 10-Q 時，您會在庫存腳註中看到原材料與成品之間的庫存突破。你可以看到成品比去年有所提高，這顯然是在途出貨量，但你也看到了這個高。也就是說，您無法完全（技術難度）地運送產品。

It's much higher than last year but based on our delivery guidance for Q4 and our outlook, we do expect to get that all off. And importantly, we haven't really come off that we still expect to be operating cash flow positive for the year.

它比去年高得多，但根據我們第四季度的交付指導和我們的前景，我們確實希望能夠實現這一目標。重要的是，我們還沒有真正意識到我們仍然預計今年的經營現金流為正。

Are you guys able to tell us how many cars were built and were unable to be delivered in the third quarter because of the border issues.

你們能告訴我們第三季有多少輛汽車因為邊境問題而無法交付嗎？

I'm not able to share that number right now.

我現在無法分享該號碼。

Okay.

好的。

And then just I want to switch to the three line changeovers that Jim mentioned in the prepared remarks. Jim, were they in response to something new that happened or were they already planned for the third quarter? And are you anticipating any more line changeovers plans for 4Q and into next year.

然後我想切換到吉姆在準備好的發言中提到的三行轉換。吉姆，他們是為了應對新發生的事情還是已經為第三季做好了計劃？您是否預計第四季和明年會有更多的生產線轉換計畫？

Yeah, man. No, there was nothing unplanned in these line changeovers. You may recall our book of business for the year was really cemented in the February type timeframe. So no surprises to us there. It was coming.

是的，夥計。不，這些生產線轉換並沒有任何計劃外的事情。您可能還記得我們今年的業務記錄實際上是在二月類型的時間範圍內確定的。所以我們沒有感到驚訝。它來了。

The surprise was it coming at the same time we had some issues with the rail service getting product out. In terms of -- and then they were big line changeovers. There's -- not all line changeovers are equal, and these happened to be larger ones. But again, nothing unplanned in that.

令人驚訝的是，同時，我們在鐵路服務運送產品方面遇到了一些問題。就——然後是大的生產線轉換而言。並不是所有的生產線轉換都是平等的，而且這些轉換恰好是更大的。但話又說回來，這一切都不是計畫外的。

What we have in the fourth quarter is a couple of much smaller quicker-to-implement line changeovers. So the ability to run -- essentially use all of our time for producing product as opposed to using any of the time for setting up product. Again, one of the enablers to why we expect to get so much product out in the fourth quarter.

我們在第四季進行了一些規模小得多、實施速度快的生產線轉換。因此，運作的能力——本質上是使用我們所有的時間來生產產品，而不是使用任何時間來設定產品。這也是我們期望在第四季推出如此多產品的推動因素之一。

Got it. And then switching back to the backlog here, I think this is your highest backlog ASP since 4Q 2019 and possibly the second highest ever. Is this just purely a function of inflation and higher costs or is there favorable mix?

知道了。然後回到這裡的積壓，我認為這是自 2019 年第四季以來最高的積壓 ASP，並且可能是有史以來第二高的。這純粹是通貨膨脹和成本上升的結果還是有利的組合？

I think it's a little bit of a combination of both. Obviously, steel costs are higher than they would have been if you look back a decade, but also the car types we're building -- not all car types are the same sell price. And so when you look at the higher average selling price, that's going to speak to the mix of cars as well in our backlog.

我認為這是兩者的結合。顯然，鋼鐵成本比十年前要高，而且我們正在製造的車型也是如此——並非所有車型的售價都相同。因此，當你看到較高的平均售價時，這也將說明我們積壓的汽車組合。

Got it. Just one final question from me guys here. I know demand is pretty solid in general, but how concerned are you that if the weaken our ability to deliver cars remains constrained by border issues and other supply disruptions that some customers who are not getting cars when they need them might cancel orders. I mean it looks like you did not have any cancellations in the third quarter but is there -- is this a risk if the disruptions continue?

知道了。我這裡還有最後一個問題。我知道需求總體上相當強勁，但您是否擔心，如果我們交付汽車的能力仍然受到邊境問題和其他供應中斷的限制，一些在需要時沒有得到汽車的客戶可能會取消訂單。我的意思是，看起來第三季沒有任何取消，但如果中斷繼續存在，這是否有風險？

Matt, we don't view that as a risk. The outbound delivery is on any particular car associated with any particular order is measured in days or weeks. I mean, these aren't like months long, drawn out type things. And we have had a very steady track record of accepting and delivering orders without cancellations. I mean, I don't think we've seen a cancellation in the time I've been here, certainly not that I recall. So we would view that as very low risk.

馬特，我們不認為這是一個風險。與任何特定訂單相關的任何特定汽車的外向交貨以天或週為單位。我的意思是，這些並不是長達數月、曠日持久的事。我們在接受和交付訂單方面有著非常穩定的記錄，沒有取消訂單。我的意思是，我認為我來這裡期間沒有看到取消，當然我記得沒有。所以我們認為這是非常低的風險。

Got it. And Jim, one final one. As when we get to February, I imagine you will be providing guidance for 2024, do you think you'll be sticking with the same kind of metrics you've been providing for the last few quarters? Or should we expect any new metrics that you might talk about?

知道了。還有吉姆，最後一位。到了 2 月份，我想您將為 2024 年提供指導，您認為您會堅持使用過去幾季提供的相同指標嗎？或者我們應該期待您可能談論的任何新指標嗎？

Well Matt, we haven't really thought about it. We certainly won't provide fewer metrics. We'll certainly provide the same. And whether or not we expand upon that I think we'll have those discussions. And our goal is always, provide the most visibility we can come with -- without sort of running too close to the edge that we might have to pull some of it back later on. So the guidance will be at least what it was this year, possibly enhanced. We'll see.

好吧，馬特，我們還沒有真正考慮過這個問題。我們當然不會提供更少的指標。我們當然會提供相同的。無論我們是否對此進行擴展，我認為我們都會進行這些討論。我們的目標始終是，提供我們所能提供的最大可見性——而不是過於接近邊緣，以至於我們稍後可能不得不將其拉回來。因此，指導意見至少會與今年相同，甚至可能有所增強。我們拭目以待。

Yeah. That's good to know. Thank you, Jim. And thank you, everyone. Appreciate it.

是的。很高興知道這一點。謝謝你，吉姆。謝謝大家。欣賞它。

Thanks, Matt.

謝謝，馬特。

Thanks, Matt.

謝謝，馬特。

Thank you. This concludes today's question-and-answer session. I would now like to turn the floor over to Jim Meyer for closing comments.

謝謝。今天的問答環節到此結束。現在我想請吉姆·邁耶 (Jim Meyer) 發表結束評論。

Well as always, thank you, everyone, for joining us today. Thank you for your interest and support of the company, and we look forward to the next call and keeping everyone abreast of our progress as we proceed forward. So thank you and have a nice day.

一如既往，感謝大家今天加入我們。感謝您對公司的關注與支持，我們期待下次通話，讓大家了解我們前進的進展。謝謝你，祝你有美好的一天。

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。