Titan International Inc (TWI) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Titan International, Inc., second-quarter 2024 earnings conference call. (Operator Instructions)

早安，女士們、先生們，歡迎參加 Titan International, Inc. 2024 年第二季財報電話會議。（操作員說明）

It is now my pleasure to turn the floor over to Alan Snyder, Vice President, Financial Planning and Investor Relations for Titan. Mr. Snyder, the floor is yours.

現在我很高興請泰坦財務規劃和投資者關係副總裁艾倫·斯奈德 (Alan Snyder) 發言。斯奈德先生，請發言。

Thank you, Karli. Good morning. I'd like to welcome everyone to Titan's second-quarter 2024 earnings call. On the call with me today are Paul Reitz, Titan's President and CEO; and David Martin, Titan's Senior Vice President and CFO. I will begin with a reminder that the results we are about to review were presented in the earnings release issued yesterday, along with our Form 10-Q, which was also filed with the Securities and Exchange Commission yesterday.

謝謝你，卡莉。早安.我歡迎大家參加 Titan 的 2024 年第二季財報電話會議。今天與我通話的是 Titan 總裁兼執行長 Paul Reitz；以及 Titan 資深副總裁兼財務長 David Martin。首先我要提醒大家的是，我們即將審查的結果已在昨天發布的收益報告中以及我們的 10-Q 表格中列出，該表格也在昨天向美國證券交易委員會提交。

As a reminder, during this call, we will be discussing certain forward-looking information, including the company's plans and projections for the future that involve risks, uncertainties, and assumptions that could cause our actual results to differ materially from the forward-looking information. Additional information concerning factors that either individually or in the aggregate could cause actual results to differ materially from these forward-looking statements can be found within the Safe Harbor statement included in the earnings release attached to the company's Form 8-K filed earlier as well as our latest Form 10-K and Forms 10-Q, all of which have been filed with the SEC. In addition, today's remarks may refer to non-GAAP financial measures, which are intended to supplement but not be a substitute for the most directly comparable GAAP measures.

提醒一下，在這次電話會議中，我們將討論某些前瞻性訊息，包括公司對未來的計劃和預測，這些資訊涉及風險、不確定性和假設，這些風險、不確定性和假設可能導致我們的實際結果與前瞻性資訊有重大差異。有關單獨或總體可能導致實際結果與這些前瞻性陳述存在重大差異的因素的更多信息，可以在公司之前提交的 8-K 表格所附收益報告中的安全港聲明中找到。 K 表格和10-Q 表格，所有這些均已向SEC 提交。此外，今天的言論可能涉及非公認會計原則財務指標，這些指標旨在補充但不能取代最直接可比較的公認會計原則指標。

The earnings release, which accompanies today's call contains financial and other quantitative information to be discussed today as well as the reconciliation of the non-GAAP measures to the most comparable GAAP measures. The Q2 earnings release is available on the company's website. A replay of this presentation, a copy of today's transcript, and the company's latest quarterly investor presentation will all be available soon after the call on Titan's website.

今天的電話會議附帶的收益報告包含今天討論的財務和其他定量信息，以及非公認會計準則指標與最具可比性的公認會計準則指標的調節。第二季財報發布可在該公司網站上查看。本次演示的重播、今天的文字記錄副本以及公司最新的季度投資者演示將在電話會議結束後不久在泰坦網站上提供。

I would now like to turn the call over to Paul.

我現在想把電話轉給保羅。

Thanks, Alan, and good morning. Overall, Titan had a solid quarter performance generating good cash flow. Those of you that have been following Titan or the ag industry are likely well aware that industry conditions are difficult. Yet there are really several key positive themes for Titan that I want to highlight.

謝謝，艾倫，早安。總體而言，泰坦季度業績穩健，產生了良好的現金流。那些一直關注泰坦或農業行業的人可能很清楚行業狀況很困難。然而，我想強調《泰坦》確實有幾個關鍵的正面主題。

First, our management team here at Titan has a deep reservoir of experience operating a cyclical business. And the actions we have taken over the past several years have the company well positioned to manage through the cyclical trough and continue to drive accelerating growth as macro conditions improve. We firmly believe improving conditions are a matter of when, not if, as the secular demand drivers for the economic sectors we serve remain very much intact.

首先，我們泰坦的管理團隊擁有豐富的週期性業務營運經驗。我們過去幾年採取的行動使公司能夠很好地度過週期性低谷，並隨著宏觀條件的改善繼續推動加速成長。我們堅信，改善條件只是時間問題，而不是是否有問題，因為我們所服務的經濟部門的長期需求驅動因素仍然完好無損。

Second, we have a strong aftermarket business in both consumer and ag, fortified by market-leading one-stop shop strategy, which we have talked about on prior calls. That strategy is helping offset some of the OEM-centric weakness in the marketplace, and we expect it to be a strong attribute through all phases of the economic cycle. Beyond the strategic importance of the aftermarket, which was strengthened by our Carlstar acquisition, I also would like to say that the integration is progressing quite well.

其次，我們在消費者和農業領域擁有強大的售後業務，並透過市場領先的一站式商店策略得到加強，我們在先前的電話會議中已經討論過這一點。該策略正在幫助抵消市場上以 OEM 為中心的一些弱點，我們預計它將成為經濟週期所有階段的強大屬性。除了售後市場的策略重要性（透過收購 Carlstar 來加強）之外，我還想說，整合進展順利。

The last item I'll touch on is our innovative product portfolio. That is something we're proud of and a key differentiator here at Titan with our products such as LSW tire wheel assemblies, which we've noted still have plenty of opportunity for growth, both in ag and potential new markets such as Canada, Brazil, and the military.

我要談的最後一項是我們的創新產品組合。這是我們引以為傲的事情，也是Titan 的LSW 輪胎車輪組件等產品的一個關鍵差異化因素，我們注意到，無論是在農業市場還是在加拿大、巴西等潛在新市場，這些產品仍然有大量的成長機會和軍隊。

So to provide some context on current market conditions, really, the primary headwinds can be summarized as interest rates, where we're seeing market participants await potential rate cuts, and then farmer income. Agriculture equipment is a significant purchase for farmers, stating the obvious there; and financing costs are an important part of that equation. This prospect of rates coming down as soon as this fall has led many to defer such purchases and OEMs have responded by reducing their production schedules.

因此，為了提供有關當前市場狀況的一些背景信息，實際上，主要阻力可以概括為利率，我們看到市場參與者等待潛在的降息，然後是農民收入。農業設備對農民來說是一筆重要的採購，這是顯而易見的；融資成本是其中重要的一環。這種利率一旦今年秋季就會下降的前景導致許多人推遲了此類採購，而原始設備製造商則透過減少生產計劃來應對。

Then you look at the USDA, which forecasts 2024 net farmer income to drop 25% from '23, following a 16% decline from 2022 to '23. That would mark the two largest dollar value drops in history. That has certainly created some paralysis within the industry, and we're seeing some ag tire volumes down to levels well below the last cyclical trough in 2019. And again, this is primarily due to these reduced OEM purchases along with some of that inventory destocking that is taking place.

然後你看看美國農業部，它預測 2024 年農民淨收入將比 23 年下降 25%，而 2022 年到 23 年下降 16%。這將標誌著史上兩次最大的美元貶值。這無疑在業界造成了一些癱瘓，我們看到一些農用輪胎銷量下降至遠低於 2019 年上一個週期性低谷的水平。同樣，這主要是由於 OEM 採購量的減少以及正在進行的一些庫存去庫存所致。

As recently as two years ago, when we were seeing record-setting sales, I don't think many of us would have predicted volumes falling thus far this quickly. But even so, as we look back on those periods, the Titan has used that strong cash flow in '21, '22, and then again this year to rapidly de-lever our balance sheet, knowing that doing so would create significant strategic and financial flexibility for the future.

就在兩年前，當我們看到創紀錄的銷售量時，我認為我們中的許多人沒有預料到銷量會下降得這麼快。但即便如此，當我們回顧這些時期時，泰坦在 21 年、22 年以及今年再次利用強勁的現金流來快速降低我們的資產負債表槓桿，因為知道這樣做將創造重大的戰略和效益。財務靈活性。

So if you look prior to acquiring Carlstar, our leverage was down to one time. From there, we were at more than 10 times as recently as 2020. And then today, even after the Carlstar acquisition, we're still at a very reasonable 1.8 times. And of course, David will expand further on our balance sheet and our capital allocation. But the point is, and I really want to emphasize that compared with prior cyclical troughs, Titan is in a significantly better position through this part of the cycle than the past.

因此，如果你看看收購 Carlstar 之前的情況，你會發現我們的槓桿率下降了一倍。從那時起，截至 2020 年，我們的成長率已超過 10 倍。今天，即使在收購 Carlstar 之後，我們仍然處於非常合理的 1.8 倍。當然，大衛將進一步擴大我們的資產負債表和資本配置。但重點是，我真的想強調，與之前的周期性低谷相比，泰坦在周期的這一部分中處於比過去更好的位置。

Over the last few years, we've also devoted significant resources to optimizing our operations. Through this consistent effort to drive process efficiency, you've seen it result in a better margin profile that we're seeing in both good times and bad. As we work through the trough portion of the cycle, that improved margin profile is driving our ability to continue to generate positive free cash flow.

在過去幾年中，我們也投入了大量資源來優化我們的營運。透過不斷努力提高流程效率，您已經看到它帶來了更好的利潤狀況，無論順境或逆境。當我們度過週期的低谷部分時，利潤狀況的改善正在推動我們繼續產生正自由現金流的能力。

So turning to the secular demand drivers for the sectors we serve, we really see no reason to think anything has changed for the long-term and that those positive attributes are still there. Global population continues to increase. That's going to drive demand for food. While AI is the talk of the town and it's causing changes in some industries, farming still requires putting seeds in the ground and nurturing plants through to harvest.

因此，轉向我們所服務行業的長期需求驅動因素，我們確實認為沒有理由認為從長遠來看任何事情都發生了變化，並且這些積極的屬性仍然存在。全球人口持續增加。這將推動食品需求。雖然人工智慧已經成為人們談論的話題，而且它正在為一些行業帶來變化，但農業仍然需要將種子埋入地下，培育植物直到收穫。

Doing so requires capital equipment such as tractors, sprayers, combines, farmers continue to work their fields to feed the world and use the equipment that in turn continues to age. That drives demand for replacement tires and slowly but surely creates pent-up demand for new equipment over time. And our LSWs make both new and older model equipment perform better.

這樣做需要拖拉機、噴霧機、聯合收割機等資本設備，農民繼續在田地裡耕作以養活世界，並使用反過來不斷老化的設備。這推動了對更換輪胎的需求，並隨著時間的推移緩慢但肯定會產生對新設備的壓抑需求。我們的 LSW 讓新舊型號設備的性能都更好。

The second theme I noted at the outset of my comments was that our aftermarket business is one of the positives helping to offset some of the OEM weakness we are facing. Stating the obvious, one of the good things about the tire business is they need to be replaced over time. In both our consumer and ag segments, people may be deferring purchases of new machinery, again, such as tractors, lawnmowers, ATVs, but they're still using their equipment. And as those tires on those old machines wear out, they need replacing.

我在評論一開始指出的第二個主題是，我們的售後市場業務是有助於抵消我們面臨的一些 OEM 弱點的積極因素之一。顯而易見的是，輪胎業務的好處之一是它們需要隨著時間的推移而更換。在我們的消費和農業領域，人們可能再次推遲購買新機械，例如拖拉機、割草機、全地形車，但他們仍在使用他們的設備。隨著舊機器上的輪胎磨損，需要更換。

Titan is well positioned because we have built a strong global aftermarket presence, and our recent acquisition adds to that strength with a one-stop shop strategy that has only expanded our aftermarket offering further. We are seeing our consumer aftermarket hold up quite well at this point, which is a testament to our dealers and wholesalers in this segment and the resilience of our aftermarket business even when OE market conditions are challenged.

Titan 處於有利地位，因為我們已經建立了強大的全球售後市場影響力，而我們最近的收購透過一站式服務策略增強了這一實力，進一步擴大了我們的售後市場產品範圍。我們看到我們的消費者售後市場目前表現良好，這證明了我們在該領域的經銷商和批發商，以及我們售後市場業務的彈性，即使原廠市場條件受到挑戰。

Using that to give you an update on the Carlstar integration, I'm very pleased to see that it continues to go very well as our teams are working together to create additional value for our customers and shareholders. It is important to note that Carlstar's aftermarket customers, especially wholesalers and distributors, are mainly complementary to Titan's dealers. This creates a great opportunity to cross-sell Titan products within Carlstar's network.

透過它向您提供有關 Carlstar 整合的最新信息，我很高興看到它繼續進展順利，因為我們的團隊正在共同努力為我們的客戶和股東創造額外的價值。需要注意的是，Carlstar的售後客戶，尤其是批發商和經銷商，主要與Titan的經銷商形成互補。這創造了在 Carlstar 網路內交叉銷售 Titan 產品的絕佳機會。

And the other side of the coin is we would sell Carlstar products within Titan dealers. Our sales and engineering teams have been working extensively on this effort, but we really only scratched the surface since we're only six months in at this point.

另一方面，我們將在泰坦經銷商​​內銷售 Carlstar 產品。我們的銷售和工程團隊一直在這方面進行廣泛的工作，但我們實際上只觸及了表面，因為我們現在只花了六個月的時間。

There are also wide-open opportunities to sell Carlstar products in Europe and Latin America, where Titan currently has limited consumer presence. And at the same time, Carlstar can benefit from existing Titan distribution there. These are just a couple of examples of commercial opportunities presented from the acquisition, and David will touch further on cost synergies, which I will at least note at this time, are progressing nicely as well.

在歐洲和拉丁美洲銷售 Carlstar 產品的機會也很廣泛，而目前 Titan 在這些地區的消費者數量有限。同時，Carlstar 可以從那裡現有的 Titan 發行版中受益。這些只是收購帶來的商業機會的幾個例子，大衛將進一步討論成本綜效，我至少會注意到，目前成本協同效應也進展順利。

The final theme I discussed at the beginning of the call is we also continue to prioritize investments in R&D as our innovation pipeline is a key difference here in Titan and in the field with our end users. In our press release, I detailed how our LSW tires provide a number of tangible benefits for farmers ranging from direct cost savings on fuel, reduce soil compaction, and to a more comfortable ride in both the field and on the road.

我在電話會議開始時討論的最後一個主題是，我們還將繼續優先考慮研發投資，因為我們的創新管道是泰坦和最終用戶領域的關鍵區別。在我們的新聞稿中，我詳細介紹了我們的 LSW 輪胎如何為農民提供許多切實的好處，包括直接節省燃料成本、減少土壤壓實以及在田間和道路上提供更舒適的騎行體驗。

We think we still have plenty of room to increase LSW penetration in the ag market. And I'm looking forward to an opportunity to meet with several key Canadian farmers that also happen to be key influencers in the farming community.

我們認為我們仍有足夠的空間來提高 LSW 在農業市場的滲透率。我期待著有機會會見幾位主要的加拿大農民，他們也恰好是農業社區的主要影響者。

Creating enthusiasm with end users is what got us here with LSW and is important for us as it continues to create buy-in with the dealers that serve those farmers and in turn the OEMs. The large farmers I'll be visiting in Canada have a lot of influence amongst their peers and people do pay attention to what they are saying. I use this opportunity in Canada as just an example how Titan concede a continuing growth path ahead for LSWs to increase penetration there and abroad in Brazil while also continuing to grow our base in the US.

激發最終用戶的熱情是我們與 LSW 合作的原因，這對我們來說很重要，因為它不斷贏得為這些農民提供服務的經銷商以及原始設備製造商的認可。我將在加拿大拜訪的大農場主在他們的同行中具有很大的影響力，人們確實會關注他們所說的話。我以加拿大的這個機會為例，泰坦如何承認 LSW 未來有一條持續成長的道路，以提高巴西國內外的滲透率，同時繼續擴大我們在美國的基礎。

Beyond LSW, there are other significant areas of innovation going on here at Titan. We continue to work on those extensively across our portfolio in wheels, tires, and undercarriage using the strength of our Titan, Carlstar and ITM brands. And I really look forward to sharing more of that with all of you in the future and more specifically with our customers and end users that use our products.

除了 LSW 之外，Titan 還正在進行其他重要的創新領域。我們繼續利用 Titan、Carlstar 和 ITM 品牌的優勢，在車輪、輪胎和底盤系統產品組合中廣泛開展這些工作。我真的很期待將來與大家分享更多內容，更具體地說是與使用我們產品的客戶和最終用戶分享。

Before I hand the call off to David, I want to spend a few more minutes expanding our market conditions in our key geographic areas. In the US, I already noted how interest rates and farmer income continue to be a significant headwind. Speaking about conditions in the EMC segment, I mean, purchases of construction equipment are impacted by some of those same macro issues as ag equipment. But conversely, that end market demand for EMC equipment also has positive differences tied to infrastructure spending and demand for minerals. And at this time, we're seeing that segment hold up better for us.

在將電話交給 David 之前，我想再花幾分鐘時間擴大我們在關鍵地理區域的市場狀況。在美國，我已經注意到利率和農民收入仍然是一個重大阻力。談到 EMC 領域的狀況，我的意思是，建築設備的採購受到一些與農業設備相同的宏觀問題的影響。但相反，終端市場對 EMC 設備的需求也與基礎設施支出和礦物需求有正面差異。目前，我們發現該細分市場對我們來說更有利。

Outside the US, European farmer sentiment, it continues to be weaker due to the ongoing geopolitical concerns, particularly the potential increase of some protection as trade policy in that region. In South America, many of you are aware of the significant flooding that occurred in Brazil from late April into May. It hit Brazil's southernmost state, Rio Grande do Sul. That happens to be home to a significant production of agricultural commodities and will have a negative impact on the current year demand in what was already a down market.

在美國以外，歐洲農民的信心繼續疲軟，原因是持續的地緣政治擔憂，特別是該地區貿易政策可能會增加一些保護。在南美洲，很多人都知道巴西從四月下旬到五月發生了嚴重的洪水。它襲擊了巴西最南端的南里奧格蘭德州。這裡恰好是農產品大量生產的所在地，將對本已低迷的市場今年的需求產生負面影響。

So really taking that full circle in summary, macroeconomic conditions continue to be difficult. But really thanks to the superb efforts of everyone on the Titan team, what we've built here through recent years, the connection we have with our customers and our end users, we are continuing to produce solid results. We're well positioned for growth as cyclical conditions improve, and we firmly believe they will.

總而言之，宏觀經濟狀況仍然困難。但真正感謝泰坦團隊中每個人的出色努力，感謝我們近年來在這裡建立的一切，感謝我們與客戶和最終用戶的聯繫，我們正在繼續取得紮實的成果。隨著週期性條件的改善，我們已經做好了實現成長的有利條件，而且我們堅信它們會的。

With that, I would now like to turn the call over to David.

現在我想把電話轉給大衛。

Thank you, Paul, and good morning, and it's good to catch up with everyone on Titan again this quarter. We've been intensely focused on protecting our margins and cash flow as we work through the increasingly challenging market conditions Paul discussed. I'll start with a brief review of the key items in the second quarter and then provide more detail on our margin and cash flow strategies.

謝謝保羅，早安，很高興本季再次與泰坦上的大家見面。在應對保羅所討論的日益嚴峻的市場條件時，我們一直高度重視保護我們的利潤和現金流。我將首先簡要回顧第二季度的關鍵項目，然後提供有關我們的利潤和現金流策略的更多詳細資訊。

Revenues in the second quarter were $532 million with adjusted EBITDA of $49 million and free cash flow of $53 million. We're particularly satisfied to have significantly exceeded our free cash flow guidance for the quarter. We've been very focused on our aftermarket business, and that has been central to our M&A and investment strategies. The results that we're seeing validate the decisions we have been making, and that will be even more impactful in the long-term.

第二季營收為 5.32 億美元，調整後 EBITDA 為 4,900 萬美元，自由現金流為 5,300 萬美元。我們對本季自由現金流大幅超出指引感到特別滿意。我們一直非常專注於我們的售後業務，這一直是我們併購和投資策略的核心。我們看到的結果驗證了我們一直在做的決定，從長遠來看，這將產生更大的影響。

Our adjusted gross margin for Q2 was 16.5% compared to 17.9% a year ago, reflecting lower sales. In order to facilitate an apples-to-apples comparison, second-quarter 2024 gross margin was adjusted to exclude amortization of stepped-up inventory values that rolled through Q2 from the acquisition. On a segment basis, ag segment adjusted gross margin was 15.5%. Consumer adjusted gross margin was 21.8%, and EMC adjusted gross margin was 13%.

我們第二季調整後的毛利率為 16.5%，去年同期為 17.9%，反映出銷售額下降。為了便於進行同類比較，2024 年第二季的毛利率進行了調整，以排除收購中第二季增加的庫存價值的攤銷。按部門劃分，農業部門調整後毛利率為 15.5%。消費者調整後毛利率為 21.8%，EMC 調整後毛利率為 13%。

Our SG&A expenses for the second quarter were $52 million or 9.7% of sales compared to 35% in the prior year or 7.2% of sales. Again, with the acquisition, SG&A increased. Without that, the expenses related to Carlstar, SG&A would have been down 1% year over year.

我們第二季的 SG&A 費用為 5,200 萬美元，佔銷售額的 9.7%，而前一年為 35%，佔銷售額的 7.2%。同樣，隨著收購，SG&A 增加。如果沒有這一點，與 Carlstar、SG&A 相關的費用將比去年同期下降 1%。

R&D expenses were $4.2 million in the second quarter compared to $3.2 million a year ago. I'll just reiterate here that our ability to continue to fund R&D is one of the many benefits that follow from our ability to continue to drive free cash flow, and we're continuing to focus on those investments that will drive market innovation for years to come.

第二季研發費用為 420 萬美元，去年同期為 320 萬美元。我在此重申，我們繼續為研發提供資金的能力是我們繼續推動自由現金流的能力所帶來的眾多好處之一，並且我們將繼續專注於那些將在未來幾年推動市場創新的投資。

Our operating income was $22.3 million for the quarter and operating cash flow was $71 million. Working capital management has been a core strength of our team over the last number of years. This was demonstrated in the second quarter with $44 million in positive contribution to operating cash flow.

本季我們的營業收入為 2,230 萬美元，營業現金流為 7,100 萬美元。過去幾年來，營運資金管理一直是我們團隊的核心優勢。第二季對營運現金流的積極貢獻為 4,400 萬美元，這一點得到了證明。

Second-quarter CapEx totaled $17.6 million compared to $15.9 million during the prior-year period. This included $4.5 million related to CapEx with the acquisition. As we noted in the earnings release, we intend to reduce the pace of CapEx investments in the second half in response to the weaker demand environment, and we'll continue to prioritize a flexible posture as we navigate the current environment like we normally do.

第二季資本支出總計 1,760 萬美元，去年同期為 1,590 萬美元。其中包括與收購相關的資本支出 450 萬美元。正如我們在財報中指出的那樣，我們打算在下半年減少資本支出投資的步伐，以應對疲軟的需求環境，並且我們將像往常一樣，在應對當前環境時繼續優先考慮採取靈活的態度。

We also used cash to fund our share repurchase program, buying back 775,000 shares for a total of $6.4 million during the quarter, and we have approximately $9.6 million of available capacity remaining on our share repurchase program. We will continue to be active with share repurchases in the third quarter.

我們也使用現金為我們的股票回購計畫提供資金，本季回購了 775,000 股股票，總價值為 640 萬美元，我們的股票回購計畫剩餘約 960 萬美元的可用容量。我們將在第三季繼續積極進行股票回購。

Net debt at quarter end was $326 million or 1.8 times leverage, compared to $370 million on March 31, a very healthy improvement quarter over quarter. Our priorities continue to be the pay down of debt we took on related to the acquisition, and we'll pace that based on our cash flow. Beyond that, we will continue the strong focus on our investments in R&D and strategic growth, along with opportunistic share repurchases. It will be a balanced approach.

季度末的淨債務為 3.26 億美元，即槓桿的 1.8 倍，而 3 月 31 日為 3.7 億美元，季度環比有了非常健康的改善。我們的首要任務仍然是償還與收購相關的債務，我們將根據現金流來調整此進程。除此之外，我們將繼續專注於研發和策略成長的投資，以及機會性的股票回購。這將是一種平衡的方法。

The second quarter included a significant increase in our effective tax rate, which was 81.9% on a reported basis and 65% on an adjusted basis. This was due to the impact of where our different geographic entities produce profits and losses. With the reduction in our US operations profitability expected in 2024, we're now faced with additional non-deductible interest expense. We also have some temporary negative impacts of the tax structure of the acquisition, which we are actively managing through this year.

第二季我們的有效稅率大幅上升，報告稅率為 81.9%，調整後稅率為 65%。這是由於我們不同地理實體產生利潤和虧損的地點的影響。隨著 2024 年我們美國業務獲利能力的下降，我們現在面臨額外的不可扣除的利息費用。此次收購的稅收結構也為我們帶來了一些暫時的負面影響，我們今年正在積極管理這些影響。

In 2024, we're seeing more challenging conditions on our tax rate, and it will be higher than normal. Cash taxes continue to be significantly lower though than the reported income tax expense. For the first six months of 2024, our cash taxes were $12 million, and I expect the full year cash taxes will be in the range of $20 million to $25 million.

2024 年，我們的稅率將面臨更具挑戰性的情況，而且稅率將高於正常水準。但現金稅仍顯著低於報告的所得稅費用。2024 年前六個月，我們的現金稅為 1,200 萬美元，我預計全年現金稅將在 2,000 萬至 2,500 萬美元之間。

Now looking ahead to the third quarter and the remainder of the year, we are cautiously optimistic that some of the macro headwinds will start to abate, but we're managing the business as if it won't. When and if the Fed will cut interest rates seem to shift with each round of economic news, so we're focusing on the things within our control. That means aggressively managing our labor and our production schedules, and we have strong plans surrounding sourcing of raw materials and other input costs.

現在展望第三季和今年剩餘時間，我們對一些宏觀阻力將開始減弱持謹慎樂觀態度，但我們對業務的管理就好像它不會減弱一樣。聯準會何時以及是否降息似乎會隨著每一輪經濟消息而變化，因此我們將重點放在我們控制範圍內的事情上。這意味著積極管理我們的勞動力和生產計劃，並且我們圍繞原材料採購和其他投入成本製定了強有力的計劃。

We're also pushing hard to realize the various acquisition synergies we outlined last quarter. Immediate focus -- areas of focus include redundant back-office areas, raw materials, procurement, among other things. Regarding the latter, various inputs will see contract sunset moving forward. And as that occurs, we expect to find more savings as market prices have come down. During the second quarter, we realized $2 million in cost savings and other acquisition-related synergies on our early wins.

我們也正在努力實現我們上季度概述的各種收購協同效應。立即關注－重點領域包括多餘的後台區域、原料、採購等。對於後者，各種投入將使合約日落得以推進。當這種情況發生時，隨著市場價格的下降，我們預計會發現更多的節省。在第二季度，我們在早期勝利中實現了 200 萬美元的成本節省和其他與收購相關的協同效應。

With our aftermarket business faring better than the OEM side, given the various dynamics we've been discussing, that higher-margin sales mix also adds a positive bias to our margins that can offset some of the weakness elsewhere. The more we can hold margins as a result of these strategies, the better position we are to generate positive cash flow, and that is precisely our focus. In the second half, we'll manage working capital very diligently as usual.

鑑於我們一直在討論的各種動態，我們的售後市場業務表現優於 OEM 方面，較高利潤的銷售組合也為我們的利潤增加了積極的偏差，可以抵消其他地方的一些弱點。透過這些策略，我們能夠維持的利潤越多，我們就越能產生正現金流，而這正是我們的重點。下半年，我們會像往常一樣，非常努力地管理營運資金。

In discussing the CapEx earlier, I noted that we would intend to throttle back on some of that spend in the third quarter in order to preserve as much cash flow as possible. Also, as we noted in the earnings release and our commentary, our leverage ratio is very manageable, so interest expense is not nearly the burden than it was during the last industry downturn. All these things will help us to build strength through the cycle.

在之前討論資本支出時，我指出我們打算在第三季削減部分支出，以保留盡可能多的現金流。此外，正如我們在收益發布和評論中指出的那樣，我們的槓桿率非常可控，因此利息支出並不像上次行業低迷期間那樣成為負擔。所有這些都將幫助我們在整個週期中增強力量。

Moving on to our financial guidance, with conditions remaining in a state of uncertainty, we have chosen to continue with quarterly guidance again this quarter. Our guidance ranges for the third quarter are revenues of $450 million to $500 million, adjusted EBITDA of $25 million to $30 million, free cash flow of $20 million to $30 million, and CapEx of $10 million to $15 million.

延續我們的財務指引，由於情況仍處於不確定狀態，我們選擇在本季再次繼續採用季度指引。我們對第三季的指導範圍是：營收為4.5 億至5 億美元，調整後EBITDA 為2,500 萬至3,000 萬美元，自由現金流為2,000 萬至3,000 萬美元，資本支出為1,000 萬至1,500 萬美元。

Thank you for your time this morning and your attention to what matters for Titan. We now like to turn the call back over to Karli, our operator for the Q&A session.

感謝您今天早上抽出寶貴的時間以及對泰坦重要事務的關注。現在，我們想將電話轉回給問答環節的接線生 Karli。

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Steve Ferazani, Sidoti.

謝謝。我們現在開始問答環節。（操作員說明）Steve Ferazani，Sidoti。

Thank you. Good morning, Paul, David. Appreciate all the detail on the call. I think I asked about this the last quarter, but I'm going to ask again because the numbers that seem odd to me are in the EMC segment, which all you noted is holding up a lot better because of infrastructure and mining. Sales were down only 5%, but sales were down, what, about $9 million? Your gross profit came down $8 million. Your segment income came down $7.5 million.

謝謝。早安，保羅，大衛。欣賞通話中的所有細節。我想我在上個季度問過這個問題，但我會再問一次，因為對我來說似乎很奇怪的數字是在EMC 領域，而您所指出的，由於基礎設施和挖礦，該領域的表現好得多。銷售額只下降了 5%，但銷售額下降了，什麼，大約 900 萬美元？您的毛利減少了 800 萬美元。您的部門收入減少了 750 萬美元。

Given that's not -- you're not seeing a collapse in that market, those decremental margins seem really high. Is there something else going on there?

考慮到這一點，你沒有看到該市場的崩潰，這些下降的利潤率看起來確實很高。還有其他事情發生嗎？

No. It's a bit of a mix of the volume that we have going through the segment. We had some challenges within our wheel and tire business, particularly here in the US during the quarter. ITM itself is performing well. It had a quarter where it performed pretty much on par with where we expected them to be and actually better than the first quarter. So it's really entirely around the mix of the products that we sell more than anything.

不。這有點混合了我們已經經歷過的部分的數量。我們的車輪和輪胎業務遇到了一些挑戰，特別是本季在美國。ITM本身表現良好。它有一個季度的表現與我們的預期相當，而且實際上比第一季更好。因此，這實際上完全取決於我們銷售的產品組合。

We do have -- steel prices have come down. We don't have as much leverage on that this quarter either. So those are really the key elements.

我們確實看到了——鋼材價格已經下跌。本季我們也沒有那麼多的槓桿作用。所以這些確實是關鍵要素。

I mean, that doesn't cover why gross profit down almost the same amount of sales.

我的意思是，這並不能解釋為什麼毛利下降了幾乎相同的銷售額。

Yeah. I'm just saying that the mix of the products where we had -- the higher margin products are the ones that we lost this quarter. And we had challenges in our production with volume on the wheel and tire part of the business.

是的。我只是說我們擁有的產品組合——利潤率較高的產品是我們本季失去的產品。我們在車輪和輪胎業務的生產量方面遇到了挑戰。

Do you expect any kind of margin improvement in what would be seasonally slower second half?

您預計下半年的利潤率會因季節性放緩而改善嗎？

I would expect margins to be pretty solid for the second half of the year, particularly for ITM.

我預計下半年的利潤率將相當穩定，尤其是 ITM。

Okay, thanks for that. And I know you may not want to say this, but can you tell me how Carlstar is performing year over year?

好的，謝謝。我知道您可能不想這麼說，但您能告訴我 Carlstar 逐年表現如何嗎？

Qualitatively, absolutely. I mean, I would say that as we noted in our comments, I mean, Carlstar is performing very well, and there's solid reasons behind it. I mean, the business they're in with their one-stop strategy, they do an exceptional job. And with the aftermarket focus they have in the consumer segment, it's just -- they're doing an exceptional job and the market that they're in via the -- or the segment they're in via the aftermarket, as we noted, is holding up really well.

從品質上來說，絕對是。我的意思是，正如我們在評論中指出的那樣，我的意思是，Carlstar 的表現非常好，而且背後有堅實的理由。我的意思是，在他們從事的一站式策略業務中，他們做得非常出色。由於他們對消費者細分市場的售後市場關注，他們正在做著出色的工作，並且他們通過售後市場所處的市場，或者正如我們所指出的那樣，保持得很好。

So I think on both performance and integration and then kind of throw in their synergies that David talked about, six months in, I mean, we're very happy with where we're at. Or not even six months. I'm overstating that.

因此，我認為在性能和整合方面，然後將大衛談到的協同作用融入其中，六個月後，我的意思是，我們對我們所處的位置感到非常滿意。或甚至不到六個月。我誇大了這一點。

Yeah. Can you talk about the drivers of recovery? This provided you a little bit more diversification. Obviously, with that, you pointed to interest rates and farmer income. What's the recovery? What's the catalyst for a recovery in some of these consumer markets for Carlstar? And is it differentiated significantly from ag?

是的。您能談談復甦的驅動因素嗎？這為您提供了更多的多樣化。顯然，您提到了利率和農民收入。恢復情況如何？Carlstar 的部分消費市場復甦的催化劑是什麼？它與ag有顯著差異嗎？

Yeah. I'll answer that two ways. First, I think the key thing to point out is how Titan is rebuilding itself and diversifying our portfolio as a company. And this acquisition was a great springboard for that, gave us exposure into complementary products. It gave us good exposure into the aftermarket.

是的。我會用兩種方式來回答這個問題。首先，我認為需要指出的關鍵是泰坦如何重建自己並使我們作為一家公司的投資組合多樣化。此次收購是一個很好的跳板，讓我們接觸了互補產品。它讓我們在售後市場獲得了良好的曝光度。

Now those are things that all legacy Titan was building on. I mean, we have an exceptional aftermarket business for tires in North America and South America. But this just really brings us to that next level. It opens up cross-selling opportunities, as I noted.

現在，這些都是所有傳統泰坦的基礎。我的意思是，我們在北美和南美擁有出色的輪胎售後市場業務。但這確實把我們帶到了一個新的水平。正如我所指出的，它開啟了交叉銷售機會。

And so I would say let's look at the diversification of Titan going forward, along with the fact that we can take that one-stop shop, our incredible global portfolio we can grow within it. We look to grow the brands that we have via manufacturing opportunities that we have with partners and joint ventures. And so I look at the future as almost kind of like this endless picture that we're starting to fill in every time we get together and talk about it here at Titan.

因此，我想說，讓我們看看泰坦未來的多元化，以及我們可以採取一站式服務的事實，我們可以在其中發展令人難以置信的全球投資組合。我們希望透過與合作夥伴和合資企業的製造機會來發展我們的品牌。因此，我認為未來幾乎就像這張無盡的圖畫，每次我們在泰坦聚在一起討論它時，我們都會開始填寫它。

But to answer your question about the drivers within that, interest rates are big. There's no doubt about it. I think the news that we're starting to see with interest rates looking like they're going to crack here is definitely a positive. And with interest rates moving, I think those deferred purchases will get a little shot in the arm that will benefit it.

但要回答你關於其中驅動因素的問題，利率是很大的。毫無疑問。我認為我們開始看到利率即將崩潰的消息絕對是一個積極的消息。隨著利率的變化，我認為這些延期購買將獲得一劑強心劑，使其受益。

But again, I think we got to look here at Titan towards the long run. I mean, over the long term and in the long run, I think we're in a really good position for a lot of growth opportunities that can come out of the newly combined company.

但我再次強調，從長遠來看，我們必須著眼於泰坦。我的意思是，從長遠來看，我認為我們處於非常有利的位置，可以從新合併的公司中獲得很多成長機會。

As the markets -- and you've been through these cycles many times, Paul. As the markets start to recover, how quickly will channels need to restock? How fast can that come? Or do we still need to work -- will we need to work through some inventory first?

保羅，作為市場，你已經多次經歷過這些週期。隨著市場開始復甦，通路需要多快補充庫存？那能來多快？或者我們還需要工作嗎——我們需要先處理一些庫存嗎？

I am going to rely on history to answer that question and say that our business doesn't go up or down 5%. When it goes down, it goes down more than that, and part of that is because they bleed the inventory out of it. And we have seen OEMs be very aggressive during this cycle to get inventory out of the equation, both their own and within their dealer networks.

我將依靠歷史來回答這個問題，並說我們的業務不會上升或下降 5%。當它下跌時，它會下跌得更多，部分原因是他們耗盡了庫存。我們看到原始設備製造商在這個週期中非常積極地消除庫存，無論是他們自己還是經銷商網路內的庫存。

Typically, what then that means is when the catalysts kick into gear, you get that additional boost because inventory levels are not where they need to be. Dealers panic about losing sales. OEMs panic that their dealers don't have the product on their lot when people demand it. And so you see the order uptick move rapidly.

通常，這意味著當催化劑啟動時，你會得到額外的推動，因為庫存水準沒有達到需要的水準。經銷商對銷量下降感到恐慌。原始設備製造商擔心，當人們需要產品時，他們的經銷商卻沒有產品。所以你會看到訂單成長迅速。

And so that's where I think our experience is really important at Titan. I can say on behalf of the entire team, we are taking the actions needed quickly, effectively now where we don't have to get together in a room and fight with each other how to do it. We know what we need to do.

所以我認為這就是我們的經驗在泰坦非常重要的地方。我可以代表整個團隊說，我們現在正在快速、有效地採取所需的行動，我們不必聚集在一個房間裡，互相爭論如何做。我們知道我們需要做什麼。

But also, what I have instructed my team to be prepared for is that if -- when the market comes back, we better be prepared to serve our customers. They are counting on us. They expect it from us. We have the biggest, broadest portfolio in the industry. And so when that uptick happens, Steve, that you are talking about, I expect my team and I expect our company to be there for our customers as well.

而且，我指示我的團隊做好準備的是，當市場恢復時，我們最好做好準備為客戶提供服務。他們指望我們。他們期望我們這樣做。我們擁有業界最大、最廣泛的產品組合。因此，當這種上升發生時，史蒂夫，你正在談論的，我希望我的團隊和我希望我們的公司也能為我們的客戶服務。

So it's a fine line. It's an art, not a science of how we manage through this cycle. But I do expect when those catalysts kick into gear that there will be some inventory restocking that takes place. That's historically what we have seen.

所以這是一條很好的線。關於我們如何度過這個週期，這是一門藝術，而不是一門科學。但我確實預計，當這些催化劑發揮作用時，將會出現一些庫存補充。這就是我們在歷史上所看到的。

Great. Thanks, Paul. Thanks, David.

偉大的。謝謝，保羅。謝謝，大衛。

Thanks, Steve.

謝謝，史蒂夫。

Tom Kerr, Zacks Small-Cap Research.

Tom Kerr，Zacks 小型股研究公司。

Good morning guys. Just for a follow-up on that last answer, you are talking about the aging agriculture equipment, and it has to be replaced. We know the catalysts are, but is there any way bit of timeframe on the number on there? Are we talking 6 months, 2 years, 10 years? How can we look at that?

早安，夥計們。只是為了跟進最後一個答案，您正在談論老化的農業設備，並且必須更換它。我們知道催化劑是存在的，但是那裡的數字有什麼時間表嗎？我們說的是6個月、2年還是10年？我們該如何看待這一點？

I would say with farmer income, we got to watch that first, okay? So let's start there. This year's crops look solid. We mentioned Brazil with what's going on with the flooding, but it looks like there is plenty of stocks in place that I think we kind of go through this year being what it is without a significant amount of change.

我想說，對於農民收入，我們必須先關注這一點，好嗎？那麼就讓我們從這裡開始吧。今年的農作物看起來很結實。我們提到了巴西的洪水情況，但看起來有足夠的庫存，我認為我們今年的庫存不會發生重大變化。

But then I do think in '25, you look at farmer income first. You look at interest rates. Then you start looking at the age of the fleet. Updated equipment is good for farmers. Updated technology and what we offer at wheels and tires is good for farmers. They can make more money via both.

但我確實認為在 25 年，你首先要考慮農民的收入。你看看利率。然後你開始查看機隊的年齡。更新設備對農民有好處。更新的技術以及我們在車輪和輪胎方面提供的產品對農民來說是有好處的。他們可以透過兩者賺更多的錢。

So when we talk about LSWs, it's an income boost to our customers. It's not just something that's nice to have. And so as you look to next year then, I think when those catalysts kick in, then you see that inventory restocking take place.

因此，當我們談論 LSW 時，它會增加我們客戶的收入。這不僅僅是一件值得擁有的事。因此，當你展望明年時，我認為當這些催化劑發揮作用時，你會看到庫存補貨的發生。

So it's not 10 years away. I would say at this point, I don't see much going on for the rest of this year. But as we move the calendar into next year, I think when you start looking at those indicators and those forecasts closely to give you a better indication in '25 to see when things uptick. So I think right now, it's a little early to predict exact timeframe on when it ticks. But it's -- I don't think this is a deep, long, prolonged downturn. But I would say for the rest of this year, there is not going to be much catalyst to drive change.

所以距離現在還不到10年。我想說，在這一點上，我認為今年剩餘時間不會發生太多事情。但當我們把日曆移到明年時，我認為當你開始密切關注這些指標和預測時，你會在 25 年更了解情況何時會好轉。所以我認為現在預測確切的時間框架還為時過早。但我不認為這是一場深度、長期、持久的低潮。但我想說，在今年剩下的時間裡，不會有太多催化劑來推動改變。

Sounds good. That helps. And on the consumer segment, is there a way to let us know what the legacy business revenue decline would have been without Carlstar? Do you have a sort of the same-store sales decline in the consumer legacy business?

聽起來不錯。這有幫助。在消費領域，有沒有辦法讓我們知道如果沒有卡爾星，傳統業務收入會下降多少？您的傳統消費者業務是否出現了同店銷售額下降的情況？

Certainly, I don't believe it was -- I don't have that number off the top of my head, but it was -- it's not as deep a trough as we are seeing in agriculture. As you saw, not as much a deep impact on EMC either. So I don't have this precise figure for you, but it's down somewhat, probably similar to EMC.

當然，我不相信這是——我腦子裡沒有這個數字，但它是——它不像我們在農業中看到的那麼深。正如您所看到的，對 EMC 的影響也沒有那麼深。所以我沒有給你這個精確的數字，但它有所下降，可能與 EMC 類似。

Okay, sounds good. Two more quick ones. Any more color on the negative impacts of the tax structure of Carlstar? And if that's a detailed answer, we can do that offline. But just any further color on that?

好吧，聽起來不錯。還有兩個快的。關於 Carlstar 稅收結構的負面影響還有更多的資訊嗎？如果這是一個詳細的答案，我們可以離線完成。但還有更多的顏色嗎？

I can give you further color. I mean, it's -- this higher rate increase this year is probably a third of the impact -- at the higher rate than what we are saying. The rest of it is -- really relates to the nondeductible interest and other reasons why the US tax rate is really high because of that and among a couple of other things.

我可以給你更多的顏色。我的意思是，今年更高的利率成長可能是影響的三分之一，其利率比我們所說的還要高。剩下的部分確實與不可扣除的利息以及美國稅率如此高的其他原因以及其他一些原因有關。

Right. Okay. All right. And then lastly, I think last quarter, you gave a framework of what a normal year would look like. I think it was EBITDA of $250 million, $300 million cash flow -- free cash flow of $125 million. Is it -- are you still thinking of that guideline for a normal year outlook?

正確的。好的。好的。最後，我認為上個季度，您給出了正常年份的框架。我認為 EBITDA 為 2.5 億美元，現金流為 3 億美元，自由現金流為 1.25 億美元。您是否還在考慮正常年度展望的指導方針？

Yeah, absolutely. Again, that's a normalized year. There is a lot of things that are variables that are taking place in the market right now that would prevent us from getting there. But normal sales level, along with the operations that we have set up, it's all there for the taking. And it doesn't even include the significant synergies we see from the acquisition.

是的，絕對是。再說一遍，這是正常化的一年。目前市場上正在發生的許多事情都會阻礙我們實現這一目標。但正常的銷售水平以及我們已經建立的運營，這一切都是可以接受的。它甚至不包括我們從收購中看到的重大協同效應。

Sounds good. All right. That's all I have for now. Thank you.

聽起來不錯。好的。這就是我現在所擁有的一切。謝謝。

Okay. Thanks Tom.

好的。謝謝湯姆。

Kirk Ludtke, Imperial Capital.

柯克·路特克，帝都。

Thank you. Paul, David and Alan, thank you for the call. I noticed the guidance and that's very helpful. Appreciate it. Is there anything additional -- are there any additional cash requirements we should be thinking about -- thinking about maybe cash restructuring costs, debt amortization? And then any thoughts you have on working capital in the second half would be very helpful.

謝謝。保羅、大衛和艾倫，謝謝你們的來電。我注意到了指導，這非常有幫助。欣賞它。還有什麼額外的——我們是否應該考慮任何額外的現金需求——考慮現金重組成本、債務攤提？然後你對下半年營運資金的任何想法都會非常有幫助。

Well, you'll note from the guidance that we gave for the third quarter, obviously, volume being down pretty significantly, that impacts margins. But we are able to impact working capital to the extent and drive positive free cash flow in the third quarter, similar to the level of EBITDA. So that's really it. As far as things that are unusual requiring cash, no, there really isn't.

好吧，您會從我們為第三季度提供的指導中註意到，顯然，銷量大幅下降，這影響了利潤率。但我們能夠在一定程度上影響營運資本，並在第三季推動正自由現金流，類似於 EBITDA 水準。就是這樣。至於需要現金的不尋常的事情，不，確實沒有。

Okay. Thank you. With respect to the third-quarter guidance, is that -- is the guidance consistent with the underlying market activity, or are we still seeing some destocking of dealer and OE inventories in that number?

好的。謝謝。關於第三季的指導，該指導是否與基本市場活動一致，或者我們仍然看到經銷商和原始設備製造商庫存的一些去庫存？

Yeah. I think there is an impact of destocking still in that number. As they have lowered their production schedules, we do believe that there is some destocking that's still taking place and causing some additional decreases to our Q3 output.

是的。我認為這個數字仍然存在去庫存的影響。由於他們降低了生產計劃，我們確實相信仍在進行一些去庫存操作，並導致我們第三季的產量進一步下降。

As we mentioned, though, in earlier questions, I think that destocking now will probably lead us down a path that creates some restocking when the catalyst kick into gear. And so I think the answer is yes, '24 will continue to be impacted by destocking, but we are also prepared for that restocking event to take place, I envision, sometime next year.

不過，正如我們在前面的問題中提到的，我認為現在的去庫存可能會引導我們走上一條道路，當催化劑發揮作用時，會產生一些補充庫存。所以我認為答案是肯定的，'24 將繼續受到去庫存的影響，但我們也為明年某個時候進行的補貨活動做好了準備。

Got it. Thank you. And then also, you mentioned some operating issues in the second quarter. Do those continue into the third?

知道了。謝謝。另外，您提到了第二季的一些營運問題。這些會持續到第三個嗎？

Well, maybe it's misconstrued on operating issues. It's just the volume levels are so low in certain aspects of our plants that it creates a pretty tough absorption. And so that's why it really what was reflected in the margin. It's not really issues.

好吧，也許它在操作問題上被誤解了。只是我們植物的某些方面的體積水平太低，導致吸收相當困難。這就是為什麼它確實反映在邊距中。這並不是真正的問題。

Just under absorption.

剛剛吸收。

Yes.

是的。

Got it. That's helpful. Thank you. How much visibility do you have at this point into the fourth quarter?

知道了。這很有幫助。謝謝。目前您對第四季的了解有多少？

I would say at this point, it's probably not the way it has been in historic periods. We are clearly operating in a different environment when you listen to the comments coming out of the -- our sector, the large customers within our sector. Part of it is just a lot of the uncertainty in the world. I do think there are some hopeful catalysts that take place later this year, whether it's interest rate visibility.

我想說，在這一點上，這可能不是歷史時期的情況。當你聽到來自我們行業、我們行業內的大客戶的評論時，我們顯然是在一個不同的環境中運作。部分原因是世界上存在著許多不確定性。我確實認為今年晚些時候會出現一些有希望的催化劑，無論是利率的可見度。

You saw the Bank of England move today, looking like our Fed will -- the election, I think that's important to get some ideas of where we are going on tariff policies. And I think you get those events behind you. You start moving into next year. We will get back to more of a normal visibility outlook that we can provide and that we will get from our customers. But I would say right now, we are in a different environment because of all the uncertainty for that -- to answer your question, that visibility going into Q4 is just not historically what we would normally see.

你今天看到了英格蘭銀行的舉動，看起來就像我們的聯準會將在選舉中那樣，我認為這對於了解我們在關稅政策上的進展非常重要。我想你已經把這些事件拋在腦後了。你開始進入明年。我們將恢復我們可以提供並從客戶那裡獲得的更多正常可見性前景。但我現在想說的是，由於所有的不確定性，我們處於不同的環境中 - 回答你的問題，進入第四季度的可見性並不是歷史上我們通常看到的。

So I think what David provided with guidance is a good outlook. I think we are seeing our business hold up well. As David mentioned repeatedly in his comments, let's generate cash flow, let's manage that balance sheet. Let's look at working capital. Make sure we are investing for the future, prepared to take care of our customers. I think those are the key things we are going to be focused on.

所以我認為大衛提供的指導是一個很好的前景。我認為我們的業務表現良好。正如大衛在評論中反复提到的那樣，讓我們產生現金流，讓我們管理資產負債表。我們來看看營運資金。確保我們為未來投資，並準備好照顧我們的客戶。我認為這些是我們要關注的關鍵問題。

And where I look at it is we have an exceptionally strong team. Our finance team works well with our businesses. And so we know where our working capital is, we know what these drivers of how we can continue to generate cash flow are for us. And so perhaps we are looking at it a little bit differently. Like David said, some parts of our business, the absorption levels are terrible. So if you look at margins, when you are under absorbing, it's not a very good indicator of performance. And like David already said, those aren't operational issues. Those are just simple math.

我認為我們擁有一支非常強大的團隊。我們的財務團隊與我們的業務合作良好。因此，我們知道我們的營運資金在哪裡，我們知道我們如何繼續產生現金流的這些驅動因素對我們來說是什麼。所以也許我們的看法有點不同。正如大衛所說，我們業務的某些部分的吸收程度非常糟糕。因此，如果你看一下利潤率，當你吸收不足時，它並不是一個很好的績效指標。正如大衛已經說過的，這些不是營運問題。這些只是簡單的數學。

So let's trace -- let's follow the cash, make sure we are generating much cash flow as we can for the business for our investors, our shareholders. And let's prepare for the future. And I think we got a great team that can do all of that. And so again, it's a different outlook because you don't have visibility. You have under absorption going on, but that doesn't mean we can't be successful in doing what we need to do now the best we can and putting ourselves in a damn good position for the future.

因此，讓我們追蹤現金，確保我們為我們的投資者和股東的業務創造盡可能多的現金流。讓我們為未來做好準備。我認為我們擁有一支出色的團隊，可以做到這一切。再說一遍，這是一個不同的前景，因為你沒有可見性。你的注意力不集中，但這並不意味著我們不能成功地盡我們所能做我們現在需要做的事情，並為未來做好準備。

Got it. I appreciate it. Thank you. And then last question on seasonality. I know the old -- the legacy business was seasonally weakest -- I think the December quarter, if I am not mistaken. Is it more seasonal now with Carlstar?

知道了。我很感激。謝謝。最後一個關於季節性的問題。我知道傳統業務是季節性最弱的，如果我沒記錯的話，我認為是 12 月季度。現在Carlstar 的季節性更強嗎？

I wouldn't say it's more seasonal. I think we are going to see the typical seasonality in the second half and a little further exacerbated by the OEMs taking a lot of production out. But for Carlstar, they have more, I would say, even keeled quarterly seasonality, maybe a little bit in Q4 just because of just the end of the year in holidays and things like that. But Q3 is very similar to Q2 in that regard.

我不會說它更具季節性。我認為我們將在下半年看到典型的季節性，並且由於原始設備製造商大量生產而進一步加劇。但對於卡爾星來說，他們有更多，我想說，甚至是季度季節性因素，也許第四季度有一點點，只是因為年底的假期和類似的事情。但在這方面，Q3 與 Q2 非常相似。

It might be less seasonal with Carlstar.

Carlstar 可能不會那麼季節性。

Yeah, I think if you add everything up, yeah, I think you can make that -- you can make that conclusion.

是的，我想如果你把所有的東西加起來，是的，我想你可以做出這樣的結論——你可以得出這樣的結論。

Fantastic. I appreciate. Thank you.

極好的。我很欣賞。謝謝。

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

我們的問答環節到此結束。我想將會議轉回給雷茨先生發表閉幕詞。

Well, I want to thank everybody for their attendance on our call this morning and your participation. I really appreciate your involvement with Titan. Thank you. Have a great rest of the week. We will talk to you in Q3.

好吧，我要感謝大家今天早上參加我們的電話會議並參與。我非常感謝您對泰坦的參與。謝謝。本週好好休息。我們將在第三季與您交談。

This concludes today's call. Thank you everyone for joining. You may now disconnect your lines.

今天的電話會議到此結束。感謝大家的加入。現在您可以斷開線路。