AAR Corp (AIR) 2013 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the AAR Corp first quarter fiscal year 2013 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time.

女士們、先生們，美好的一天，歡迎參加 AAR Corp 2013 財年第一季財報電話會議。此時，所有參與者都處於只聽模式。稍後，我們將進行問答環節，屆時將有說明。

(Operator Instructions)

（操作員說明）

As a reminder, this conference is being recorded.

提醒一下，本次會議正在錄製中。

I would now like to turn the call over to your host, Greg Dellinger. Please go ahead.

我現在想將電話轉給主持人 Greg Dellinger。請繼續。

Thank you, Stephanie. Good morning, ladies and gentlemen, and thank you for joining our first quarter fiscal year 2013 earnings conference call.

謝謝你，斯蒂芬妮。早安，女士們、先生們，感謝你們參加我們 2013 財年第一季的收益電話會議。

Before we begin, I would like to remind you that comments made this morning may include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. We ask that you refer to the disclaimer contained in our news release, as well as the risk factor section of the Company's Form 10-K for the fiscal year ended May 31, 2012. In providing forward-looking statements, the Company assumes no obligation to provide updates to reflect future circumstances or the occurrence of anticipated or unanticipated events.

在我們開始之前，我想提醒您，今天早上發表的評論可能包含 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。 2012 年5 月31 日的財政年度10-K 表格的風險因素部分。

At this time, I would like to turn the call over to our Chairman and Chief Executive Officer, David Storch.

現在，我想將電話轉給我們的董事長兼執行長 David Storch。

Thank you very much, Greg, and good morning today. Joining me in Chicago, in our office at corporate headquarters, is Tim Romenesko and Rick Poulton.

非常感謝你，格雷格，今天早上好。蒂姆·羅梅尼斯科 (Tim Romenesko) 和里克·保爾頓 (Rick Poulton) 和我一起來到芝加哥公司總部的辦公室。

Yesterday afternoon, we reported results for our fiscal year 2013 first quarter. We are pleased with our performance as both sales and earnings per share came in at the top end of the previously announced guidance. As you know, we have been very focused on generating cash, and during the first quarter, cash from operations was a strong $33 million. We repurchased 475,000 shares on the open market for $6.1 million, and we also repurchased $13 million face value of our convertible bonds at attractive terms. We also reported improvement in both our consolidated gross profit and operating profit margins, and Rick will provide more detail around margin performance in his prepared remarks.

昨天下午，我們公佈了 2013 財年第一季的業績。我們對我們的業績感到滿意，因為銷售額和每股盈餘都達到了先前公佈的指導的上限。如您所知，我們一直非常注重創造現金，第一季的營運現金高達 3,300 萬美元。我們以 610 萬美元的價格在公開市場上回購了 475,000 股股票，並以有吸引力的條件回購了面值 1300 萬美元的可轉換債券。我們還報告了我們的綜合毛利和營業利潤率均有所改善，里克將在他準備好的講話中提供有關利潤率表現的更多詳細資訊。

During the quarter, we continued to win new business and expand relationships with existing customers. When excluding the aircraft sale from the prior year, organic sales growth to commercial customers was 13%, far outpacing the overall growth rate in the airline industry. We saw strength in our aviation services businesses, which included a strong summer quarter in our airframe maintenance facilities. Sales increased significantly over the prior year, as we continue to execute against our 1MRO strategy. We are in the process of opening a four-line airframe maintenance facility in Duluth, Minnesota and have secured our first customer, with work expected to begin in December. In addition to opening the Duluth facility, we were selected by other unnamed airlines for additional work in other facilities.

本季度，我們繼續贏得新業務並擴大與現有客戶的關係。如果剔除上一年度的飛機銷售，商業客戶的有機銷售成長率為 13%，遠超過航空業的整體成長率。我們看到了航空服務業務的實力，其中包括我們的機身維修設施在夏季季度表現強勁。由於我們繼續執行 1MRO 策略，銷售額比上一年大幅成長。我們正在明尼蘇達州德盧斯開設一家四線機身維修設施，並已獲得第一個客戶，預計工作將於 12 月開始。除了開設德盧斯設施外，其他未具名的航空公司還選擇我們在其他設施中進行額外工作。

Our parts supply businesses reported strong top-line growth, while experiencing reduced margins due to lower margin program activity. We had significant improvement in airlift due to higher operational readiness and increased flying activity. Our team has done a good job, actually a great job, with their motto, fix them and fly them, and are filling a vital need for our customer. We received early indications from the customer of their interest in exercising options for the large rotary wing contracts, which come due November 1 and December 1. We are very pleased with the results coming from the Telair and Nordisk acquisitions, and they are exceeding our expectations. Performance on our mobility products unit was also strong in the first quarter; but as we have previously indicated, the unit will be faced with pressure the balance of the fiscal year, as we are seeing reduced backlogs. Results in our precision systems business improved from the fourth quarter, and we are expecting continued improvement throughout the fiscal year.

我們的零件供應業務報告了強勁的營收成長，但由於利潤計畫活動較低，利潤率有所下降。由於更高的營運準備度和飛行活動的增加，我們的空運有了顯著改善。我們的團隊做得很好，實際上是很棒的工作，他們的座右銘是“修復它們並飛行它們”，並且正在滿足我們客戶的重要需求。我們收到了客戶的早期指示，表示他們有興趣行使大型旋翼合約的選擇權，這些合約將於11 月1 日和12 月1 日到期。我們的預期。我們的行動產品部門第一季的表現也很強勁；但正如我們之前所指出的，該部門將面臨財政年度餘額的壓力，因為我們看到積壓的情況減少。我們的精密系統業務業績較第四季有所改善，我們預計整個財年將持續改善。

I will now hand the call over to Rick, who will provide further details on our financial performance during the quarter. After Rick's comments, I will provide some closing remarks.

我現在將把電話轉交給里克，他將提供有關我們本季財務業績的更多詳細資訊。在 Rick 發表評論之後，我將發表一些結束語。

Thanks, David; and good morning, everyone.

謝謝，大衛；大家早安。

As is customary, I would like to provide a little more detail on our performance, including some comments around interest, depreciation, and capital expenditures as well. Within our aftermarket aviation services businesses, our top-line sales performance was quite strong. Our supply chain management businesses saw 16% year over year growth, when we exclude the two aircraft sales last year that we discussed in our release. This was driven by strong program volumes, including programs managed through Airinmar, as well as strong growth in our distribution agreements. Additionally, our repair and engineering services businesses also saw a double-digit year over year growth, as we continue to win market share.

按照慣例，我想提供有關我們業績的更多詳細信息，包括有關利息、折舊和資本支出的一些評論。在我們的售後航空服務業務中，我們的營收表現相當強勁。當我們排除我們在新聞稿中討論的去年的兩架飛機銷售時，我們的供應鏈管理業務年增了 16%。這是由強勁的項目數量（包括透過 Airinmar 管理的項目）以及我們的分銷協議的強勁增長所推動的。此外，隨著我們不斷贏得市場份額，我們的維修和工程服務業務也實現了兩位數的同比增長。

Our airframe overhaul centers, in particular, remain very busy, and this is the third quarter in a row that each of the centers has reported higher year over year sales. It's on the back of this consistently strong demand that we feel very good about opening the new facility in Duluth that David mentioned. Finally, as a relates to our aviation services businesses, while our airlift and defense logistics businesses reported flat year over year sales, sales were up double-digit percentages on a sequential basis from Q4, as our flight hour volumes and aircraft demand remained strong, and we delivered significantly improved aircraft availability to accommodate that demand. Within our manufacturing and systems design businesses, our top-line sales performance was also quite strong, as it was up 79% on a year over year basis. Although a large portion of this increase is attributable to the acquisitions of Telair and Nordisk, organic growth was also strong at 9% on a year over year basis.

尤其是我們的機身大修中心仍然非常繁忙，這是連續第三個季度每個中心的銷售額同比增長。大衛提到，正是在這種持續強勁的需求的支持下，我們對在德盧斯開設新工廠感到非常高興。最後，與我們的航空服務業務相關，雖然我們的空運和國防物流業務銷售額同比持平，但銷售額較第四季度環比增長了兩位數百分比，因為我們的飛行小時數和飛機需求仍然強勁，我們顯著提高了飛機的可用性以滿足這一需求。在我們的製造和系統設計業務中，我們的營收業績也相當強勁，較去年同期成長了 79%。儘管這一成長的很大一部分歸功於 Telair 和 Nordisk 的收購，但有機成長也很強勁，年成長 9%。

If I moved onto margins, consolidated gross profit margins of 16.4% were up 80 basis points year over year, and they also compared very favorably to consolidated margins in Q2, Q3, and Q4 of fiscal year 2012. The large driver of this improvement is the inclusion of Telair in our results, as well as the more efficient utilization of facilities and workforce in our airframe and overhaul businesses, compared to last year. I would also add that, while it does not result in a significant year over year impact in Q1, we are very happy to see our margins in our airlift business recover fully from their depressed levels of Q3 and Q4 of last year.

如果我轉向利潤率，綜合毛利率為16.4%，年增80 個基點，與2012 財年第二季、第三季和第四季的綜合利潤率相比也非常有利。力是與去年相比，我們將 Telair 納入我們的業績，以及我們的機身和大修業務中的設施和勞動力的利用效率更高。我還想補充一點，雖然這不會對第一季產生重大的同比影響，但我們很高興看到空運業務的利潤率從去年第三季和第四季的低迷水平中完全恢復。

Our net interest expense for the quarter was $10.2 million, which is up from $7.4 million last year. The cash portion of this interest expense increased to $7.3 million from $4.2 million last year as a result of the increase in borrowings we have to make our acquisitions. The non-cash portion of interest expense was $2.9 million in Q1; and at the end of the quarter, we had approximately $806 million face value of outstanding debt obligations. As David mentioned, during the quarter we generated a very strong $33 million in cash flow from operations, and we had CapEx of $11 million. We are very pleased to deliver free cash flow conversion in excess of 100% of net income for the quarter, and free cash flow generation will continue to be a primary focus for the Company throughout the year. Our depreciation and amortization, including amortization of stock-based compensation, was approximately $23 million during the quarter, and this resulted in EBITDA, or earnings before interest, taxes, depreciation, and amortization, in excess of $61 million for the quarter. This is up approximately 20% on a year over year basis.

本季我們的淨利息支出為 1,020 萬美元，高於去年的 740 萬美元。由於我們必須進行收購的借款增加，利息支出的現金部分從去年的 420 萬美元增加到 730 萬美元。第一季利息支出的非現金部分為 290 萬美元；截至本季末，我們的未償債務面額約為 8.06 億美元。正如 David 所提到的，本季我們透過營運產生了 3,300 萬美元的強勁現金流，資本支出為 1,100 萬美元。我們很高興本季實現超過淨利潤 100% 的自由現金流轉換，而自由現金流產生將繼續成為公司全年的主要關注點。本季我們的折舊和攤提（包括股票薪資攤提）約為 2,300 萬美元，這導致本季的 EBITDA（息稅折舊攤提前利潤）超過 6,100 萬美元。這一數字年增約 20%。

Finally, I would like to brief you on a change in our financial reporting, which we expect to implement beginning in our second quarter. As you know, we currently describe our Company and report segment financial information along four segments. Increasingly, we are going to market as a much more integrated Company, blurring the lines of our different entities and different segments. And, it is becoming very common for us to sell a customer a suite of services in the same program that may cross over several of our different business units. We see this as a competitive advantage for us, in both the breadth of the services we offer as well as the operating synergies we can create through having our multiple aviation services businesses work together. So, this new market reality change also reflects how we are evaluating the results of the Company and how we are thinking about the Company. Beginning in the second quarter, we expect to report our aviation services businesses in one segment and our manufacturing and systems design businesses in a second segment. Before we report our second-quarter results, we will provide restated results for relevant prior periods so that all of you can adjust your models appropriately.

最後，我想向您介紹我們財務報告的變化，我們預計從第二季開始實施。如您所知，我們目前描述了我們的公司並報告了四個部門的部門財務資訊。我們將越來越多地作為一家更加一體化的公司進行行銷，模糊我們不同實體和不同細分市場的界限。而且，我們在同一計劃中向客戶出售一套可能跨越我們多個不同業務部門的服務已變得非常普遍。我們認為這對我們來說是一個競爭優勢，無論是在我們提供的服務的廣度上，還是在我們透過多個航空服務業務合作所創造的營運綜效方面。因此，這項新的市場現實變化也反映了我們如何評估公司的表現以及我們如何看待公司。從第二季開始，我們預計將在一個部門報告我們的航空服務業務，在第二個部門報告我們的製造和系統設計業務。在我們報告第二季業績之前，我們將提供相關前期的重述結果，以便大家適當地調整模型。

With that, I would like to turn the call back to David, who will provide some closing comments.

說到這裡，我想把電話轉回給大衛，他將提供一些結束語。

Excellent, Rick, thank you.

太棒了，瑞克，謝謝你。

As you saw in our release, we did increase our EPS guidance somewhat modestly; and although we see continued strength in our commercial aviation services business, we are faced with headwinds in our mobility products unit. I am encouraged by our improved performance at certain key businesses; and as you have heard from me, you have heard from Rick, and you have heard before, we remain squarely focused on generating a significant amount of free cash flow to continue to pay down our debt, deleverage our balance sheet, and return money to shareholders.

正如您在我們的新聞稿中看到的，我們確實適度提高了每股收益指引；儘管我們看到商業航空服務業務持續強勁，但我們的行動產品部門面臨阻力。我對我們在某些​​關鍵業務上的業績改善感到鼓舞；正如你們從我那裡聽到的，你們從里克那裡聽到的，你們以前也聽說過，我們仍然專注於產生大量的自由現金流，以繼續償還我們的債務，去槓桿化我們的資產負債表，並將資金返還給股東。

With that, I'd like to open up the call to any questions you may have. We are here, ready to answer your questions.

至此，我想打開電話詢問您可能有的任何問題。我們在這裡，準備回答您的問題。

(Operator Instructions)

（操作員說明）

Tyler Hojo, Sidoti & Company.

泰勒‧霍霍 (Tyler Hojo)，西多蒂公司 (Sidoti & Company)。

Firstly, I get the updated earnings guidance, and nice to see that. But, wondering if you could talk a little bit about updated sales expectations, if there are any?

首先，我得到了最新的獲利指引，很高興看到這一點。但是，想知道您是否可以談談更新的銷售預期（如果有的話）？

We had, obviously, a broader range, Tyler, on the sales side. See the sales we had for Q1 are, certainly on a linear basis, are within the guidance we had out there, so we haven't really decided to make any update to that. If we feel it is appropriate to do so, we will do that prospectively, but we're sticking with what we have out there.

顯然，我們在銷售方面有更廣泛的範圍，泰勒。看看我們第一季的銷售額，當然是線性的，在我們的指導範圍內，所以我們還沒有真正決定對此進行任何更新。如果我們認為這樣做合適，我們會前瞻性地這樣做，但我們會堅持現有的做法。

Okay, that sounds good. Next, you gave us a little bit of update on the Duluth facility. Just wondering if you could talk a little bit about how much capacity you are adding, what the revenue potential is for that facility, and if there is any differential just in terms of the margin dynamic that you are going to look to generate within that facility?

好吧，聽起來不錯。接下來，您向我們介紹了德盧斯工廠的一些最新情況。只是想知道您是否可以談談您要增加多少產能，該設施的收入潛力有多大，以及您希望在該設施內產生的利潤動態方面是否存在任何差異？

We are excited about the prospects for Duluth. We think we can add some place between 350,000 and 450,000 man hours a year. It just depends on the mix of work that comes through the facility. We are expecting it to be a lower-cost facility, so we're optimistic about our opportunity for margin and delivering real value to the customers.

我們對德盧斯的前景感到興奮。我們認為每年可以增加一些 35 萬到 45 萬工時的地方。這僅取決於該設施的工作組合。我們預計它將成為一個成本較低的設施，因此我們對利潤機會和為客戶提供真正價值的機會持樂觀態度。

The value proposition for our MRO business is very strong. Customers like the breadth of the offerings that we have for them, the flexibility, the ability to go to a variety of different locations. The benefits of having our engineering capability as well as our parts support. So, it was -- when the opportunity came to us, it was a natural, and we are excited to be in that facility.

我們的 MRO 業務的價值主張非常強大。客戶喜歡我們為他們提供的產品的廣泛性、靈活性以及前往各個不同地點的能力。擁有我們的工程能力以及零件支援的好處。所以，當機會來到我們身邊時，這是很自然的，我們很高興能來到那個工廠。

Tyler, I would add just for context, what Tim mentioned, that that man-hour opportunity is about a 10% delta to what we have, what we performed last year.

泰勒，我想補充一下蒂姆提到的上下文，即工時機會與我們去年的表現相比，大約有 10% 的增量。

Okay, that is helpful. One more, and I will jump back in the queue. A few days ago, I saw that you guys won a $75 million pallet repair contract. I don't think you put out a press release on it. But, just wondering, is that just a recurrence of existing sales, or is that something incremental for you guys?

好的，這很有幫助。再來一張，我就會重新回到隊列中。前幾天，我看到你們贏得了一份7500萬美元的托盤維修合約。我認為你沒有就此發布新聞稿。但是，只是想知道，這只是現有銷售的重複，還是對你們來說是增量？

Yes, that was a option exercise that our current customer did, it is activity we have done for years, Tyler. The dollar amount is a ceiling that allows a customer to go that high. We don't expect volumes to be that high. The volumes we do expect under that contract are embedded in our plan and the guidance we have already provided.

是的，這是我們目前客戶所做的一項選擇權練習，這是我們多年來所做的活動，泰勒。美元金額是允許客戶達到如此高水準的上限。我們預計銷量不會那麼高。我們根據該合約預期的產量已包含在我們的計劃和我們已經提供的指導中。

Perfect, thanks a lot.

完美，非常感謝。

Larry Solow, CJS Securities.

拉里·索洛，CJS 證券。

First question on aviation supply. I see your gross margin was a little bit under pressure, not so much year over year, but just in the general scheme of things. Anything unusual? Is the mix of the distribution lower margin, or is there anything in there that caused it?

第一個問題關於航空供應。我發現你們的毛利率有點​​壓力，不是逐年壓力，而是整體狀況。有什麼不尋常的嗎？是分配組合的利潤率較低，還是有什麼原因導致了這種情況？

I think mix is the operative word, Larry, both distribution as well as some of our program business that we do. We are very happy about that at an operating profit margin line, but on a gross margin line doesn't compare as favorably as some of the parts transaction business.

我認為混合是最重要的詞，拉里，無論是發行還是我們所做的一些節目業務。我們對營業利益率線感到非常高興，但毛利率線並不像某些零件交易業務那樣有利。

And is this, looking out, is this a better base to use, as opposed to the 18% full-year number you did last year? Or, is it still a choppy type number that could be improved upon as the year progresses?

與去年 18% 的全年數字相比，這是一個更好的基數嗎？或者，它仍然是一個不穩定的數字，可以隨著時間的推移而改善嗎？

I guess I would go to my comments -- I would like to start with my comments that were made. Increasingly, all of our businesses are going to market much more integrated, Larry, so what gets reported in one segment is not necessarily indicative of what a program value may be because we have a lot of activity in other segments as well. So, I think that's a large driver for why we are going to portray the Company in a little different manner as we go forward. But, yes, suffice it to say, we like program activity, it is a stickier business, and we think it gives us an opportunity to touch a lot of our various business units.

我想我會談談我的評論——我想從我提出的評論開始。拉里，我們所有的業務越來越多地走向更加一體化的市場，因此在一個細分市場中報告的內容並不一定表明項目的價值可能是什麼，因為我們在其他細分市場也有很多活動。因此，我認為這是我們在前進過程中以稍微不同的方式描繪公司的一個重要推動因素。但是，是的，可以說，我們喜歡計劃活動，這是一項更具黏性的業務，我們認為它給了我們一個接觸許多不同業務部門的機會。

Just so I understand, so going forward, you are basically going to have two segments essentially, is that -- two reporting segments --?

據我了解，展望未來，您基本上將有兩個部分，是——兩個報告部分——嗎？

Correct.

正確的。

Will you still give any color, maybe not the old style of breaking out how you do it today, but will it still -- will you still talk about, or quantify, some of the differences between the government and commercial businesses and whatnot?

你仍然會給出任何顏色，也許不是打破你今天如何做的舊風格，但你仍然會談論或量化政府和商業企業之間的一些差異等等嗎？

I think we will be responsive to what investors need to make informed decisions, and we will certainly talk about anything that makes sense to talk about as a driver of the business.

我認為我們將響應投資者做出明智決策所需的信息，並且我們肯定會談論作為業務驅動因素有意義的任何事情。

Fair enough.

很公平。

Lastly, on the interest expense, it had a pretty good sequential drop, over $1 million. Anything -- I know you retired some of the converts, but I imagine that couldn't have moved the needle that much. So, is there anything else in there that I'm missing, or --?

最後，在利息支出方面，連續下降幅度相當大，超過 100 萬美元。任何事情——我知道你讓一些皈依者退休了，但我想這不會有那麼大的影響。那麼，還有什麼我遺漏的東西嗎，還是──？

On a sequential basis? No, we did take out -- we bought back some of our bonds --

按順序進行？不，我們確實拿出了——我們買回了一些債券——

Last quarter, I guess too, right, so --?

上個季度，我想也是，對吧，所以──？

That creates a bit of a positive arbitrage for us --

這為我們創造了一些正面的套利——

Okay.

好的。

I can't think of anything else off the top of my head, Larry, that explains that --

拉里，我想不出還有什麼可以解釋這一點——

All right. If I can squeeze one more in, on the precision parts and the AWS business -- it seems like AWS certainly improved a lot, sequentially and year over year, and I know precision parts also has been a thorn. Seems like that's probably part of the reason for the upside in the quarter, just a faster realization of some improvement. Is there still a lot -- is there still more low-hanging fruit? Are you still looking for further improvements in those businesses as we go out?

好的。如果我能在精密零件和 AWS 業務上再擠進一點——看來 AWS 確實連續、逐年進步了很多，而且我知道精密零件也一直是一根刺。看起來這可能是本季上漲的部分原因，只是更快地實現了一些改進。還有很多──還有更多容易實現的目標嗎？您還在尋找我們走出去時這些業務的進一步改進嗎？

We are continuing to see improvement in our precision systems business. But, we are not where we need to be yet. The short answer is, yes, that we see opportunity for improved results coming out of that business.

我們的精密系統業務不斷取得進展。但是，我們還沒有達到我們需要達到的目標。簡短的回答是，是的，我們看到了該業務改善績效的機會。

Okay, great. Thanks.

好的，太好了。謝謝。

And airlift, obviously, has come back strong, although we do still see opportunities for improved results there.

顯然，空運已經強勢回歸，儘管我們仍然看到了改善結果的機會。

Perfect. Thanks so much.

完美的。非常感謝。

Jon Braatz, Kansas City Capital.

喬恩‧布拉茨 (Jon Braatz)，堪薩斯市首府。

Going back to airlift. David, you mentioned that, obviously, you saw some nice improvement, but you have more opportunity on the upside. I wonder if you could touch base on that issue a little bit. How much more might we be able to see in terms of improvement in airlift?

回到空運。大衛，你提到，顯然，你看到了一些不錯的進步，但你有更多的上升機會。我想知道你是否可以稍微談談這個問題。在空運方面我們還能看到多少改進？

I think if you look at the existing fleet profile and the existing business mix, you have some room for improvement. I would say it's, at this level, more modest than dramatic. I do believe, though, you will continue to see modest improvement. We have the demand, the incoming demand, for the service; it is fairly strong. We have to weigh how we manage the fleet against these opportunities. Most of these opportunities would be non-DoD related, which is some we are interested in, as it relates to diversifying the mix inside that business. So, I would be cautiously optimistic that there are good growth opportunities for that business.

我認為，如果你看看現有的機隊概況和現有的業務組合，你會有一些改進的空間。我想說，在這個層面上，它是溫和的，而不是戲劇性的。不過，我確實相信，您將繼續看到適度的改進。我們有服務的需求，傳入的需求；它相當強大。我們必須根據這些機會權衡如何管理機隊。這些機會大多與國防部無關，這是我們感興趣的一些機會，因為它與業務內部組合的多元化有關。因此，我對該業務存在良好的成長機會持謹慎樂觀態度。

I am pleased -- I just was at the business on Monday, visiting with the leadership team and discussing the future of the business. And what we really determined, John, was that we wanted to give the business, starting back on June 1, we wanted to focus the next six months on meeting our commitments and supporting the existing customer, doing a better job of capturing the available revenue that we have, and that we would then sit down at the end of November, after a six-month period, and look at the investment opportunities -- the business opportunity, the investment that goes with that opportunity, and then make some determinations. I would anticipate that through the balance of this fiscal year, you will continue to see steady improvement, the results will be -- will continue to be solid. I think at some point in time, within this fiscal year, we will probably make some determinations as to how we grow from here. Keep in mind, when we acquired the business, the revenues were approximately $175 million, and this year we will look be looking at somewhere between, let's call it, $300 million and $340 million. So, we've had some pretty meaningful growth in this 2.5-year period. We stubbed our toe a little bit at the end of last fiscal year, so we want to make sure we are on solid footing as we look at any dramatic expansion opportunities.

我很高興——週一我剛來到公司，拜訪了領導團隊並討論了公司的未來。約翰，我們真正決定的是，我們希望從 6 月 1 日開始為業務提供幫助，我們希望在接下來的六個月裡集中精力履行我們的承諾並支持現有客戶，更好地獲取可用收入六個月後，我們將在11 月底坐下來審視投資機會——商業機會、與該機會相關的投資，然後做出一些決定。我預計，透過本財年的平衡，您將繼續看到穩定改善，結果將繼續是堅實的。我認為在本財年的某個時間點，我們可能會就如何在此基礎上實現成長做出一些決定。請記住，當我們收購該業務時，收入約為 1.75 億美元，今年我們將考慮介於 3 億美元和 3.4 億美元之間。因此，我們在這 2.5 年期間取得了一些相當有意義的成長。我們在上一財年結束時遭遇了一些挫折，因此我們希望確保在尋找任何大幅擴張機會時立足穩固。

Okay, thank you. One other follow-up question. Going back to Duluth, Tim, is Duluth a drag on margins at this point? And, were you able to cut a deal in Duluth that was similar to Indianapolis, in terms of leasing lines and so on and so forth?

好的謝謝。另一個後續問題。回到德盧斯，提姆，德盧斯目前是否會拖累利潤率？而且，你們是否能夠在德盧斯達成一項與印第安納波利斯類似的、在租賃線路等方面的交易？

Yes, we have a lot of flexibility in our lease, in terms of synchronizing our payments with the level of activity. And, we also got -- had a good working relationship with the city and the state that made it attractive for us to come in there. They helped us with some of the start-up training. They helped us get the facility configured. So, the impact on margins, in the grand scheme of things, is minimal as we start up.

是的，在將付款與活動水平同步方面，我們的租賃具有很大的靈活性。而且，我們還與該市和州建立了良好的工作關係，這對我們進入那裡具有吸引力。他們幫助我們進行了一些啟動訓練。他們幫我們配置了設施。因此，從整體來看，在我們剛起步時，對利潤率的影響很小。

Lastly, American Airlines has been in the news recently. Any new developments you see there that might be a precursor to some business flowing your way?

最後，美國航空最近成為新聞焦點。您在那裡看到的任何新發展可能是某些業務向您發展的先兆？

Nothing that's obvious at this moment. I think if you look at if the past is a prologue to the future, then there would be an indication, at least, that there will be more opportunities going forward than there have been in the past. I would say, stay tuned.

目前還沒有什麼是顯而易見的。我認為，如果你看看過去是否是未來的序幕，那麼至少會有跡象表明，未來將比過去有更多的機會。我想說，請繼續關注。

Yes, okay. All right, thank you, David.

是的，好的。好的，謝謝你，大衛。

(Operator Instructions)

（操作員說明）

JB Groh, DA Davidson.

JB格羅，DA戴維森。

Could you give us your thoughts on sequestration and which segments, as they exist now, get impacted the most? And, how you see that rolling out, and how it impacts your thoughts on this guidance? Also, have you seen any pull through of defense spending into the fiscal year and that sort of thing?

您能否告訴我們您對封存以及目前存在的哪些細分市場受到最大影響的想法？您如何看待這項舉措的推出，以及它如何影響您對此指南的看法？另外，您是否看到本財年的國防支出有任何成長以及諸如此類的情況？

Let me take a crack at sequestration. It is in our minds, so it is factored into our view of the balance of this fiscal year. It's a very hard matter for us to handicap. The activities we have that support live action, if you will, we don't see the impact in any fashion. In terms of some of the longer-term programs, and I think one of the reasons why we dialed it back on the mobility business is because of concerns around sequestration. I think it's really -- it's a very troublesome concept. And yet, I don't think, as we sit here today, I, or too many other companies like us, really have a lot of visibility.

讓我來嘗試隔離措施。它在我們的腦海中，因此它被納入我們對本財年餘額的看法中。這對我們來說是一件非常困難的事。我們支持真人表演的活動，如果你願意的話，我們沒有看到任何形式的影響。就一些長期計劃而言，我認為我們在行動業務上回撤的原因之一是出於對隔離的擔憂。我認為這確實是一個非常麻煩的概念。然而，我認為，當我們今天坐在這裡時，我或太多像我們這樣的其他公司確實擁有很高的知名度。

So, there is no dialogue, per se, with us and the customer talking about any pullbacks or anything of that nature. We do not, unlike others who feel compelled to issue WARN notices, we are not looking at issuing WARN notices, at least as we sit here today. That is, obviously, subject to change in the event that we are notified, or get some indication, that some of our programs are under severe pressure. So, that has not been the case yet, but it is on our minds, it is factored into our view on the balance of the fiscal year, and there is a degree of uncertainty surrounding that issue.

因此，我們和客戶本身沒有對話討論任何回調或任何此類性質的事情。與其他覺得有必要發布警告通知的人不同，我們並不考慮發布警告通知，至少我們今天坐在這裡的時候是這樣。顯然，如果我們收到通知或得到一些跡象表明我們的某些計劃面臨巨大壓力，這種情況可能會發生變化。所以，情況還不是這樣，但我們考慮到了這一點，它被納入我們對財政年度平衡的看法中，並且圍繞這個問題存在一定程度的不確定性。

Okay. Then on the other question, specifically supply chain, is there any early pull through there, do you think, or is --?

好的。那麼關於另一個問題，特別是供應鏈，您認為是否有任何早期的推動力，或者是——？

No, we haven't seen any impact there, and we actually haven't seen any impact in our businesses. If you take a look at our defense results in the first quarter, they are up 1%. We are expecting, as we have indicated, based on backlogs, we are expecting our mobility business to soften throughout the balance of the fiscal year.

不，我們沒有看到任何影響，實際上我們也沒有看到對我們的業務有任何影響。如果你看我們第一季的防守結果，你會發現他們上升了 1%。正如我們所指出的，我們預計，根據積壓情況，我們的行動業務在整個財年的剩餘時間內將會疲軟。

All right, okay.

好吧，好吧。

There's 10 days left in the month, obviously JB, but nothing unusual is happening now in terms of a big push at the end of the year here.

這個月還剩 10 天，顯然是 JB，但就今年年底的大推動而言，現在沒有什麼不尋常的事情發生。

Got you. Okay, thanks for your time.

明白你了。好的，謝謝您的寶貴時間。

I'm currently showing no further questions at this time.

我目前沒有提出任何進一步的問題。

Think you very much for your participation, and I wish everybody a good day. Thank you.

非常感謝你們的參與，祝大家有美好的一天。謝謝。

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect, and have a wonderful day.

謝謝。女士們、先生們，今天的會議到此結束。你們可以斷開連接，度過美好的一天。