Astronics Corp (ATRO) 2024 Q3 法說會逐字稿

Greetings and welcome to the Astronics Corporation Third Quarter, Fiscal Year 2024 Financial Results.

歡迎來到 Astronics Corporation 2024 財年第三季財務表現。

(Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Craig Mychajluk, Investor Relations. Thank you, sir. You may begin.

（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹主持人投資者關係部門的 Craig Mychajluk。謝謝您，先生。你可以開始了。

Yes. Thank you. And good afternoon everyone. We certainly appreciate your time today and your interest in Astronics. Joining me on the call are Peter Gundermann, our Chairman, President and CEO; David Burney, our Chief Financial Officer and Nancy Hedges, our corporate controller.

是的。謝謝。大家下午好。我們非常感謝您今天抽出時間以及您對天文學的興趣。與我一起參加電話會議的還有我們的董事長、總裁兼執行長 Peter Gundermann；我們的財務長 David Burney 和我們的公司財務長 Nancy Hedges。

Should have a copy of our third quarter 2024 financial results which crossed the wires after the markets closed today. You do not have the release. You can find it on our website at astronics.com.

應該有一份我們今天收盤後發布的 2024 年第三季財務業績的副本。你沒有釋放。您可以在我們的網站 astronics.com 上找到它。

As you are aware, we may make forward-looking statements during the formal discussion in the Q&A session of this conference call, the statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today.

如您所知，我們可能會在本次電話會議問答環節的正式討論中做出前瞻性聲明，這些聲明適用於受風險和不確定性以及其他可能導致實際結果不同的因素影響的未來事件從今天這裡所說的內容可以看出。

These risks uncertainties and other factors are providing their needs release as well as with other documents filed with the Securities and Exchange Commission.

這些風險的不確定性和其他因素正在提供他們的需求發布以及向美國證券交易委員會提交的其他文件。

You can find these documents on our website or at SEC.gov during today's call. We'll also discuss some non-GAAP measures. We believe these will be useful in evaluating our performance. Should not consider the presentation of this additional information in isolation or as a substitute for results prepared. In accordance with GAAP.

您可以在今天的電話會議期間在我們的網站或 SEC.gov 上找到這些文件。我們也將討論一些非公認會計原則措施。我們相信這些將有助於評估我們的績效。不應考慮單獨提供此附加資訊或作為準備結果的替代。根據公認會計準則。

We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release. With that, let me turn the call over to Pete to begin.

我們在今天發布的表格中提供了非公認會計準則衡量指標與可比較公認會計準則衡量指標的調整表。接下來，讓我把電話轉給皮特開始。

Thank you, Craig and good afternoon, everybody. I would like to begin this call by saying a few words about a couple of people here in the room with me, Dave Burney will be retiring as our CFO early in 2025, after a tenure of 29 years with the company. 22 years ago, he and I took over the C suite at about the same time, revenues for our company at that time were about $33 million and this year, we expect to again be in the $800 million range.

謝謝你，克雷格，大家下午好。在本次電話會議開始時，我想先介紹一下與我一起在場的幾個人，戴夫·伯尼 (Dave Burney) 將於 2025 年初退休，此前他已在公司任職 29 年。 22 年前，他和我大約在同一時間接管了 C 套件，當時我們公司的收入約為 3300 萬美元，今年我們預計將再次達到 8 億美元的水平。

So it has been quite a ride over these 29 years with Dave, but he's been a tireless leader within our company and a trusted friend and partner for me and he will be missed. Although I do have a cell phone number and I know where he lives. So if needed, we'll pull him back in.

因此，與 Dave 一起度過的這 29 年是一段相當漫長的旅程，但他一直是我們公司不知疲倦的領導者，也是我值得信賴的朋友和合作夥伴，我們會想念他的。雖然我有手機號碼並且知道他住在哪裡。所以如果需要的話我們會把他拉回來。

Also with me is Nancy Hedges. She is a new name probably for most of the people on this call, but she will be succeeding Dave as our CFO in January. Nancy has been around for a while. She joined in 2014 as Controller and Principal Accounting Officer of our company. And over the time since has established herself internally as a leader and top tier performer on our team.

和我在一起的還有南希·赫奇斯。對於參加本次電話會議的大多數人來說，她可能是一個新名字，但她將於一月份接替戴夫擔任我們的財務長。南希已經存在了一段時間了。她於 2014 年加入我們公司，擔任財務總監和首席會計官。從那以後，她在內部確立了自己作為團隊領導者和頂級執行者的地位。

She's very familiar with our personnel, our operations and the improvement initiatives we seek and I am confident the investor community will get to know her and appreciate her talents as time goes on. I'm very confident she will do a very good job as CFO going forward. We'll hear from both Dave and Nancy in just a few minutes.

她非常熟悉我們的人員、營運和我們尋求的改進舉措，我相信隨著時間的推移，投資者群體將會了解她並欣賞她的才能。我非常有信心她今後將作為財務長做好出色的工作。幾分鐘後我們就會收到戴夫和南希的訊息。

I want to move to a couple of comments on the top, you know, line trends that are affecting our company. Nothing really new here, but we felt operationally that the third quarter was a very good quarter for Astronics.

我想談談對影響我們公司的主要趨勢的一些評論。這裡沒什麼新鮮事，但我們認為，從營運角度來看，第三季對 Astronics 來說是一個非常好的季度。

Sales were strong up 25% year over year and in the high end of our forecasted range, once again, adjusted net income was 12.2 million or 35¢. A share adjusted EBITDA was 27 million. 13% of sales are trailing 12 months a justed EBITDA that is 91 million at this point.

銷售額年增 25%，調整後淨利再次達到我們預測範圍的上限，即 1,220 萬美元或 35 美分。A股調整後的EBITDA為2700萬。 13% 的銷售額是過去 12 個月的，此時的合理 EBITDA 為 9,100 萬美元。

Our Aerospace segment gets a lot of the credit for the improvement sales for our aerospace segment. Again, we're up 25% for the quarter and 19% for the year and adjusted operating margin was 14.2% in the quarter up from 3.5% in the comparative period a year ago.

我們的航空航天部門因航空航天部門銷售的改善而受到很大讚譽。同樣，我們本季成長了 25%，全年成長了 19%，本季調整後營業利潤率為 14.2%，而去年同期為 3.5%。

So we continue to recover with our volume and our margin improvement initiatives. They're starting to show up strongly on the bottom line. We have a ways to go still, but we're making progress for sure.

因此，我們的銷量和利潤率改善計劃持續恢復。他們開始在獲利方面表現強勁。我們還有很長的路要走，但我們肯定正在取得進展。

There are some kind of macro tailwinds which have been helping us over recent quarters and continue to help us. I'm not going to go into any of these in too much detail, but it's worth reminding ourselves kind of where we've been and where we're going. And the first and probably the most important thing is that our supply chain continues to improve and perform.

最近幾個季度，一些宏觀利好因素一直在幫助我們，並將繼續為我們提供幫助。我不會詳細討論其中任何一個，但值得提醒我們自己我們去過哪裡以及我們要去哪裡。第一件或許也是最重要的事情是我們的供應鏈不斷改進和運作。

We do regular reviews of our business units and not too long ago, every problem was attributed one way or another to the supply chain today. Those comments are fewer and farther between. There are still issues there always will be. But in general, the supply chain continues to improve and enables our improved performance.

我們對我們的業務部門進行定期審查，不久前，每個問題都以某種方式歸因於今天的供應鏈。這些評論越來越少，而且間隔越來越遠。問題仍然存在。但總的來說，供應鏈持續改善，使我們的績效得以提升。

Similarly, input cost pressures continue to subside the inflation that we experienced over the last year and a half has gotten much quieter.

同樣，投入成本壓力持續減弱我們在過去一年半所經歷的通貨膨脹已經變得更加平靜。

Our workforce continues to improve and get more efficient. Some of you might remember on the last call, I mentioned that we, we had something like 45% of our 3,000 employees have been with us for three years or less. That kind of turnover, which again was attributable to the, to the pandemic is really hard to operate in, but as time goes on and people get more and more familiar with what they're doing and how to work with each other.

我們的員工隊伍不斷改進並提高效率。你們有些人可能還記得在上次電話會議上，我提到我們 3,000 名員工中有 45% 已經在我們工作了三年或更短時間。這種再次歸因於大流行的人員流動確實很難運作，但隨著時間的推移，人們越來越熟悉他們正在做的事情以及如何彼此合作。

Our efficiency improves similarly, pricing adjustments which we negotiated through that period of inflation are now coming more and more into effect. Some of our major programs are beginning to take on new pricing structures which will be a contributor as we move forward through 2025.

我們的效率也得到了類似的提高，我們在通貨膨脹時期協商的定價調整現在越來越生效。我們的一些主要項目開始採用新的定價結構，這將有助於我們邁向 2025 年。

And finally, demand continues to be pretty strong. We are entering the fourth quarter with a backlog of 612 million, if you look back to like 2018, 2019 when we were last at an $800 million run rate, our backlog was much lower like in the 404 $120 million range. So we're entering the fourth quarter at 612 that sets us up, we think for continued results and continued improvement op line as we move forward.

最後，需求仍然相當強勁。我們正以 6.12 億美元的積壓進入第四季度，如果你回顧一下 2018 年和 2019 年，當時我們的運行速度為 8 億美元，我們的積壓要低得多，就像 404 的 1.2 億美元那樣。因此，我們進入第 612 季的第四季度，我們認為隨著我們的前進，我們會繼續取得成果並持續改進。

The press release talks a lot about adjusted measures. I thought it would be worth spending just a minute talking about some of the major adjustments in our third quarter, there were a few of them.

新聞稿大量談論了調整措施。我認為值得花一分鐘的時間來討論我們第三季度的一些重大調整，其中有一些。

We did a refinance in July and as part of that refinance, we had to expense about $7 million of assets related to the old credit facility that are no longer applicable on our financial statements. We also had legal expenses during the quarter of 5.6 million that was ramping up to a hearing that happened in the UK that I will talk about again later in the call.

我們在 7 月進行了再融資，作為再融資的一部分，我們不得不支出約 700 萬美元的與舊信貸安排相關的資產，這些資產不再適用於我們的財務報表。我們在本季度還承擔了 560 萬美元的法律費用，這些費用在英國舉行的聽證會上不斷增加，我將在稍後的電話會議中再次討論這個問題。

And finally, one of our eVTOL customers, Lillian filed for bankruptcy just a couple of weeks ago, and we took a total of about 2.2 million in charges related to that. I wanted to comment that we are involved with a number of EV to customers, but we were more heavily involved with Lillian than we are with the others. So for people who are concerned about whether this is the first shoe of many shoes to drop in this segment, I would tell you, I don't think that's the case.

最後，我們的 eVTOL 客戶之一 Lillian 幾週前申請破產，我們總共收取了約 220 萬美元的相關費用。我想說的是，我們參與了許多向客戶提供的電動車，但我們與莉蓮的合作比與其他公司的合作更多。因此，對於那些擔心這是否是該細分市場中第一雙鞋的人，我會告訴你，我認為情況並非如此。

What we have done with most customers is developed a a kind of a standard architecture off the shelf products that can be relatively easily integrated into their, into their aircraft without a high degree of customization. So I don't feel we have the same level of exposure that we are working with a pretty wide range of eVTOL aircraft that are being developed currently.

我們與大多數客戶合作開發了一種標準架構的現成產品，可以相對輕鬆地整合到他們的飛機中，而無需高度客製化。因此，我認為我們對目前正在開發的各種 eVTOL 飛機的接觸程度還不夠。

Finally, we had a rare warranty reserve of 3.5 million, this is related to a an electrical power system for a business jet aircraft that was experiencing less than desirable reliability over time. It's something that we introduced a few years ago and it's supposed to perform better and longer than it has been. So we need to take some actions to fix that. It's part of being a supplier with integrity and living up to our promises to our customers.

最後，我們有 350 萬美元的罕見保固儲備金，這與公務噴射機的電力系統有關，隨著時間的推移，該系統的可靠性不太理想。這是我們幾年前推出的東西，它應該比以前表現得更好、更長久。所以我們需要採取一些行動來解決這個問題。這是成為誠信供應商並履行對客戶承諾的一部分。

So it's kind of a long list and it's high dollars and we broke out a lot of our tables in our press release, more than we usually do to help everybody understand where the expenses were fitting in and what the adjustments were and what the company was performing like underneath.

所以這是一個很長的清單，而且價格很高，我們在新聞稿中列出了很多表格，比我們平常做的更多，以幫助每個人了解費用在哪裡、調整是什麼以及公司是什麼。表現就像下面一樣。

With that all said, I'm going to turn it over to Dave was going to talk about our consolidated results and then we'll go to Nancy to talk more a little bit about segment results.

話雖如此，我將把它交給戴夫，他將討論我們的綜合業績，然後我們將前往南希更多地討論部門業績。

All right. Thanks Pete, as Pete mentioned, there's quite a bit of noise in the quarter. So we, we presented some tables to help show where on the income statement, the impacts of these items are reflected and to highlight the performance of the, the underlying business.

好的。謝謝皮特，正如皮特所提到的，這個季度有相當多的噪音。因此，我們提出了一些表格，以幫助顯示這些項目的影響反映在損益表上的哪些位置，並突出顯示基礎業務的績效。

So I'll review the operational results on a consolidated basis and I'll pass it over to Nancy to review the segment results with higher sales volume. Our operating leverage was demonstrated with stronger gross profit and margins.

因此，我將綜合審查營運業績，並將其傳遞給南希，以審查銷售量較高的部門業績。我們的經營槓桿透過更強的毛利和利潤率得以體現。

The GAAP gross margins improved to 21% up 8.3 points over the prior year on an adjusted basis. Gross margin improved 23 to 23%.

調整後的 GAAP 毛利率比前一年提高 8.3 個百分點，達到 21%。毛利率提高了 23% 至 23%。

Impacting reported results with a $3.5 million for warranty reserve for a product that's been in the field for several years that requires modification. We also recorded an inventory reserve of $900,000 in the quarter related to the William bankruptcy filing.

為已投入使用多年、需要修改的產品提供 350 萬美元的保固儲備，從而影響報告結果。本季我們也記錄了與威廉破產申請相關的 90 萬美元的庫存儲備。

I should point out that last year's third quarter also had an inventory reserve of 3.6 million.

我要指出的是，去年第三季的庫存儲備也有360萬。

Also relating to the bankruptcy of a contract manufacturing customer. We adjusted both periods accordingly in the non-GAAP comparison.

也涉及合約製造客戶的破產。我們在非公認會計原則比較中相應地調整了兩個時期。

SG&A expense was also impacted by the bankruptcy in the amount of $1.3 million with $800,000 in outstanding receivables being reserved for and $500,000 in fixed asset impairment for equipment relating specifically to lilium.

SG&A 費用也受到破產的影響，金額為 130 萬美元，其中 80 萬美元的未清應收帳款預留，以及 50 萬美元的與 Lilium 相關的設備的固定資產減值。

Adjusting for the impacts of the warranty reserve, the bankruptcy and the other unusual items that are highlighted in the tables provided in the release, adjusted operating margin for the 2024 3rd quarter was about 9.6% compared with an adjusted operating margin in the prior year third quarter of zero. Below the operating line was the $7 million in costs relating to the extinguishment of our previous term loan that we had discussed last quarter.

根據新聞稿中提供的表格中突出顯示的保固準備金、破產和其他異常項目的影響進行調整後，2024 年第三季調整後營業利潤率約為9.6%，而上年第三季調整後營業利潤率約為9.6%零的四分之一。營運線下方是我們上季討論過的與終止上一定期貸款相關的 700 萬美元成本。

Our GAAP loss per share for the quarter was 34¢, adjusted earnings per share was 35¢ for the third quarter this year. And compares with these, compare with a GAAP loss per share in last year's third quarter of 51¢ and an adjusted loss per share in last year's quarter of 7¢.

我們本季的 GAAP 每股虧損為 34 美分，今年第三季調整後的每股盈餘為 35 美分。與這些相比，去年第三季的 GAAP 每股虧損為 51 美分，去年第三季調整後的每股虧損為 7 美分。

In the third quarter, we generated $8 million in cash from operations. We expect it better, but between the Boeing strike and two IFE related programs that were moved to the right by a few quarters, our inventory remains above where we would like it to be.

第三季度，我們從營運中產生了 800 萬美元的現金。我們預計情況會更好，但在波音罷工和兩個 IFE 相關計劃向右移動幾個季度之間，我們的庫存仍然高於我們希望的水平。

The improved cash flow was driven primarily by improvement of our net loss, which was $11.7 million adjusted for 23.8 million of non cash expenses and lower increase in our net operating assets. And you can see this on the cash flow statement.

現金流量的改善主要是由於我們的淨虧損改善，根據 2,380 萬美元的非現金支出調整後淨虧損為 1,170 萬美元，以及我們的淨營運資產增幅較小。您可以在現金流量表上看到這一點。

Our net debt at the end of the quarter was about $174 million about even with our second quarter. Thus far in the fourth quarter, we've had strong cash flow with our net debt today down to about $168 million and roughly $60 million available to draw on our revolver.

本季末我們的淨債務約為 1.74 億美元，與第二季持平。到目前為止，第四季我們的現金流強勁，淨債務已降至約 1.68 億美元，可動用的左輪手槍約 6,000 萬美元。

With that, I'll turn it to Nancy to review the segments.

這樣，我將把它交給 Nancy 來審查這些片段。

Thanks, Dave. If you have the results available in the press release, I'll just help pull out the major drivers of profitability for each of the segments.

謝謝，戴夫。如果您在新聞稿中獲得了結果，我將幫助找出每個細分市場盈利能力的主要驅動因素。

Starting with Aerospace, which represented about 88% of the business. The nearly $22 million improvement in operating income was driven primarily by higher sales volume and improved productivity. The comparator period was more heavily impacted by a customer bankruptcy making the year over year comparisons challenging on a GAAP basis.

首先是航空航天，約佔業務的 88%。營業收入增加近 2,200 萬美元，主要是由於銷售增加和生產力提高。比較期受到客戶破產的影響更為嚴重，使得按照公認會計準則（GAAP）基礎進行逐年比較具有挑戰性。

That's why we decided to include adjusted operating profit by segment to clearly delineate the noise of the two quarters, adjusted operating profit was 25.3 million in the quarter compared with 5 million in the prior year period.

這就是為什麼我們決定按部門納入調整後營業利潤，以清楚地描繪出兩個季度的噪音，該季度調整後營業利潤為 2530 萬美元，而去年同期為 500 萬美元。

Adjusted operating margin improved 10.7 points on the same impacts of higher volume and improved productivity, as well as the benefit of higher pricing that's rolling through now. Litigation expenses were more elevated in both the quarter and year-to-date periods as we've been in court more this year, especially as it relates to the UK which people discuss in more detail.

調整後的營業利潤率提高了 10.7 個百分點，這得益於產量增加和生產力提高的同樣影響，以及目前正在實施的更高定價的好處。由於今年我們出庭的次數更多，尤其是與人們更詳細討論的英國有關，因此本季和年初至今的訴訟費用都更高。

Turning to the Test segment, but the test business was near break even in the quarter, primarily the result of lower legal fees compared with the prior period. We're seeing positive results from our right sizing efforts but we were affected by less favorable sales mix in the quarter as well as under absorption of fixed costs at our current volumes.

轉向測試業務，但測試業務在本季接近收支平衡，這主要是由於法律費用較上一期下降。我們看到了正確調整規模的努力取得了積極成果，但我們受到了本季不太有利的銷售組合以及當前產量吸收固定成本的影響。

We also presented non-GAAP adjustments for the segment that show the significant decline in litigation related expenses that were associated with the Teradyne lawsuit, as there were no major developments in the quarter associated with that matter.

我們也對該部門進行了非公認會計準則調整，顯示與泰瑞達訴訟相關的訴訟相關費用大幅下降，因為該季度沒有與該事項相關的重大進展。

With that, let me turn it back to Pete.

說到這裡，讓我把話題轉回皮特身上。

Thank you, Nancy. So moving to this legal situation that we have in the UK by way of background, we've been in lengthy patent infringe. We've been, we have been in a lengthy patent infringement suit brought by a European Plaintiff, relative to our NC Power product line.

謝謝你，南希。因此，以我們在英國的法律情況為例，我們已經陷入了長期的專利侵權。我們一直處於歐洲原告針對我們的 NC Power 產品線提起的長期專利侵權訴訟。

Hearings have been going on since 2010 and they have moved around in the USA, France, Germany and the UK. In the USA and France. The subject patent was found to be invalid though the French decision is being appealed. Germany dismissed some of the claims of the patent but upheld others and found that Astronics had been infringing.

自 2010 年以來，聽證會一直在美國、法國、德國和英國舉行。在美國和法國。儘管正在對法國的決定提出上訴，但該專利仍被認定無效。德國駁回了該專利的部分主張，但維持了其他主張，並發現 Astronics 侵權。

The company paid 3.5 million in penalties and interest in 2020 has taken a reserve of 17.3 million to cover remaining estimated damages and associated interest.

該公司在 2020 年支付了 350 萬美元的罰款和利息，並已提取 1,730 萬美元的準備金來支付剩餘的估計損失和相關利息。

We expect proceedings may commence in the German matter in 2026.

我們預計德國案件的訴訟程序可能會在 2026 年啟動。

The UK court however, maintained the entire patent and found Astronics to be infringing, a damages hearing was held last month in October and a ruling is expected in December or January.

然而，英國法院維持了整個專利並認定 Astronics 侵權，上個月於 10 月舉行了損害賠償聽證會，預計將於 12 月或 1 月做出裁決。

We have reserved 7.4 million to cover anticipated damages but the Plaintiff is seeking damages of up to approximately 105 million excluding interest. Based on UK legal practices, the company expects that some amount of damages may be due in early 2025.

我們已預留 740 萬美元用於賠償預期損失，但原告正在尋求最多約 1.05 億美元的損失賠償（不包括利息）。根據英國法律慣例，該公司預計可能會在 2025 年初支付一定金額的損害賠償。

The company is engaged with its lenders to arrange financing to cover the range of possible outcomes and satisfy any potential damages award as required.

該公司正在與其貸方合作安排融資，以涵蓋一系列可能的結果，並根據需要滿足任何潛在的損害賠償。

The company believes that an appeal to a higher court is likely in the matter brought by one or both of the parties that appeal would start in late 2025 or 2026.

該公司認為，上訴雙方之一或雙方可能會在 2025 年末或 2026 年開始就此事向上級法院提起上訴。

And most importantly, perhaps rest assured that all of the subject patents expired years ago and do not restrict the business of Astronics today in any way.

最重要的是，也許請放心，所有主題專利幾年前就已過期，並且不會以任何方式限制 Astronics 今天的業務。

Apart from that. And looking ahead, we are expecting our fourth quarter sales to be in the range of 190 million to 210 million. That's a little bit wider than usual due in part to the Boeing strike situation.

除此之外。展望未來，我們預計第四季銷售額將在 1.9 億至 2.1 億之間。這個範圍比平常要寬一些，部分原因是波音公司的罷工情況。

The Boeing strike hurt our third quarter revenues a little bit but not badly by about $3 million. As we got shut down direct sales to Seattle in mid September or late September, the fourth quarter will get hurt more and the turn on schedule is a little bit uncertain. So we have a wider range than we normally would at this point in a quarter.

波音罷工對我們第三季的營收造成了約 300 萬美元的輕微影響，但並不嚴重。由於我們在9月中旬或9月下旬關閉了對西雅圖的直銷，第四季將受到更大的影響，並且開工時間有點不確定。因此，我們的範圍比通常在一個季度的此時點要寬。

But assuming we hit the midpoint or actually, that range of 190 to 210 million brings our 2024 year end sales forecast to the range of 777 million to 797 million. At the midpoint that would show a 14.2% increase for the yea, another year of strong growth.

但假設我們達到了中點或實際上，190 至 2.1 億的範圍使我們 2024 年年底的銷售預測達到 7.77 億至 7.97 億的範圍。以中點計算，今年將成長 14.2%，又是強勁成長的一年。

Looking a little further, we are working on our 2025 plan, which looks like another year of solid growth though, maybe not as high as what we're experiencing in 2024 and continued margin improvement.

再進一步看，我們正在製定 2025 年計劃，儘管這看起來又是穩健增長的一年，但可能沒有我們 2024 年經歷的那麼高，並且利潤率持續改善。

We expect to release a sales forecast to our shareholders in December or January.

我們預計將在 12 月或 1 月向股東發布銷售預測。

I think that ends our prepared remarks, Latonya. Maybe we can open it up for questions at this point.

我想我們準備好的演講到此結束，拉托尼亞。也許我們現在可以開放提問。

Sure. Thank you. We will now conduct a question and answer session. (Operator Instructions)

當然。謝謝。我們現在將進行問答環節。（操作員說明）

Jon Tanwanteng, CJS Securities.

Jon Tanwanteng，CJS 證券。

Hi. Thank you for taking my questions and next quarter. Congrats also Dave on the Retirement and Nancy on the on the appointment. I'm looking forward to working with you.

你好。感謝您回答我的問題，下個季度。也恭喜戴夫退休和南希任命。我期待與您合作。

Pete, I was going to ask you if you could quantify the impact from Boeing on a monthly basis and and kind of, what run rate do you expect to see as we ramp through 25? You know, as that program starts and kind of what, what kind of initial levels to start shipping out, what you will be shipping to Boeing?

皮特，我想問你是否可以按月量化波音公司的影響，以及當我們達到 25 小時時，你預計會看到什麼運行率？你知道，當該計劃開始時，你將向波音公司運送什麼？

Yeah, we really don't know the answer to that question at this point, John. But let me say a little bit about the situation. We because of they shut us down, we accumulated some inventory during the quarter. So that's going to be one factor in our rates going forward and they also accumulated some inventory as part of the strike process. So there's a little bit of an inventory burn down, that's got to happen.

是的，約翰，我們現在確實不知道這個問題的答案。但讓我簡單介紹一下狀況。由於他們關閉了我們，我們在本季度積累了一些庫存。因此，這將成為影響我們未來價格的因素之一，作為罷工過程的一部分，他們也累積了一些庫存。因此，庫存會減少，這是必然發生的。

We think they're going to, you know, we're guessing that they're going to start slow and they're going to accelerate as the year goes on. I think. You know, they have internal ambitions of catching up pretty quickly to the rate that they were at before the strike. We'll have to see how realistic those plans are.

我們認為他們會，你知道，我們猜測他們會開始緩慢，隨著時間的推移他們會加速。我認為。你知道，他們的內部野心是要迅速趕上罷工前的水平。我們必須看看這些計劃有多現實。

What we expect to happen is that they will hold us at some rate and that rate will be, you know, enough to keep us healthy and keep the supply chain going, but not so great that we get way ahead of them. And so, you know, we'll find out shortly here. I think what that plan is. We really don't know what it is at this point.

我們期望發生的是，他們將以某種速度控制我們，而這個速度將足以讓我們保持健康並保持供應鏈的運轉，但不會太高以至於我們遠遠領先於他們。所以，你知道，我們很快就會在這裡找到答案。我想那個計劃是什麼。我們現在真的不知道它是什麼。

But I would also further add that, you know, the main plane that they build up in Seattle is 737. And the situation I just talked through really involved, the product that Boeing buys from us directly that we ship to Boeing for 737 installation line fit installation, we call it.

但我還要進一步補充一點，你知道，他們在西雅圖建造的主力飛機是 737。而我剛才講的情況確實涉及到，波音直接從我們這裡購買的產品，我們運到波音進行737安裝線安裝，我們稱之為。

There's also a range of products that are primarily IFE in flight entertainment related that get installed in 737s on the production line, but are not bought by Boeing and not shipped by us to Seattle. They're in, rather shipped to airlines or shipped to seat companies. And that content, is maybe averaging 60 $70,000 an airplane has been ongoing through the shutdown and through to today.

還有一系列主要與飛行娛樂相關的 IFE 產品，安裝在生產線上的 737 飛機上，但不是由波音公司購買，也不是由我們運送到西雅圖。他們是在，而不是運送到航空公司或運送到座位公司。從停飛到今天，這些內容可能平均每架飛機 60 美元 70,000 美元。

So our assumption is that that's going to continue, you know, those shipments are going to continue and that Boeing will turn us back on for the direct shipments at some lower rate. We were operating at about 32, 33 ships a month. You know, maybe it's going to be somewhere in the 20 ships sets a month, but we don't know that for sure yet. And, you know, it's, it is an important part of our operating plan for 2025. So we need to get an answer to that.

因此，我們的假設是，這種情況將繼續下去，你知道，這些發貨將繼續進行，波音公司將以較低的價格重新開始直接發貨。我們每個月營運大約 32、33 艘船。你知道，也許它會出現在每月 20 艘船中的某個地方，但我們還不確定。而且，你知道，這是我們 2025 年營運計畫的重要組成部分。所以我們需要得到答案。

Got it. And at, at the lower ship rate per month, does that impact your margins? Or can you get that back in pricing somehow.

知道了。每月運費較低，這會影響您的利潤嗎？或者你能以某種方式在定價中得到回報嗎？

I think it's still a very profitable work. I mean, it's obviously higher volumes, higher profits but, I don't think it's going to materially affect our, our margins across the business.

我認為這仍然是一個非常賺錢的工作。我的意思是，這顯然會帶來更高的銷量、更高的利潤，但我認為這不會對我們整個業務的利潤率產生重大影響。

Okay, great. And then, just with the inventory situation, I guess, do you see the cash flow or at least the net debt improving in Q4? Does that do you have to extend that out until you start shipping and billing again?

好的，太好了。然後，就庫存情況而言，我想，您是否認為第四季度的現金流量或至少淨債務有所改善？您是否必須將其延長到再次開始運輸和計費為止？

Yeah. I do see a continued strong cash flow going into the fourth quarter here. When you said the, you know, a month into it, cash flow has been been very positive, very good and I think it'll continue for the rest of the quarter.

是的。我確實看到第四季度現金流持續強勁。當你說的時候，你知道，一個月後，現金流一直非常積極、非常好，我認為這種情況將在本季度剩餘的時間裡持續下去。

Okay, great. Thank you. I'll jump back. Thank you.

好的，太好了。謝謝。我會跳回來。謝謝。

Michael Ciarmoli, Truist securities.

邁克爾·恰莫利 (Michael Ciarmoli)，Truist 證券公司。

Hey, good evening guys. Thanks for taking the questions, Dave. Congratulations Nancy as well. Look forward to working with you and Dave best in best in retirement there.

嘿，大家晚上好。感謝您提出問題，戴夫。也祝賀南希。期待在退休後與您和戴夫一起工作。

Hey, Pete, just maybe asking this another way. Just obviously impossible to predict how fast Boeing ramps up Airbus having their own challenges. How much of your, you know, if you look at that, that revenue forecast in the fourth quarter, how much is new production versus retrofit or aftermarket?

嘿，皮特，也許只是用另一種方​​式問這個問題。顯然不可能預測波音公司能以多快的速度提升空中巴士公司的能力，而空中巴士公司也面臨自己的挑戰。如果你看看第四季的營收預測，你知道，新生產與改造或售後市場的收入有多少？

We've been running around 5,050 line fit and aftermarket the 737 coming down will probably hurt that to the tune of, got to do some thinking here, probably to the tune of 8 to $10 million if they don't turn us back on, so it will skew towards the aftermarket.

我們一直在運行大約 5,050 架線路安裝，而 737 的售後市場的下降可能會對其造成影響，我們必須在這裡進行一些思考，如果他們不讓我們重新啟動，可能會損失 8 到 1000 萬美元，所以它會偏向售後市場。

But, you know, the overall trends continue to be pretty positive. And what's interesting to me is that our airline customers, for the most part have been consistent with their demand schedules. They haven't been pushing a lot of stuff out.

但是，你知道，整體趨勢仍然非常積極。我感興趣的是，我們的航空公司客戶大部分都符合他們的需求時間表。他們並沒有推出很多東西。

So you get a little bit of that every once in a while here and there, but that hasn't been a major driver. So Boeing's, strike, it seems like a lot of our customers have been kind of looking through that and, not getting too worked up about it.

所以你偶爾會在這裡或那裡得到一點這樣的訊息，但這並不是主要的驅動因素。因此，波音公司的罷工，似乎我們的許多客戶都在仔細研究這一點，並且對此並沒有太激動。

Okay. That's helpful. And then could you maybe talk, just, I guess specifically if there's an opportunity, for IE power, all of your related products, at Southwest. Given kind of the major changes in overhaul they're going through. It sounds like, you know, the majority of their cabins are going to be retrofitted here. I know they've got a pretty aggressive schedule. Is that on your radar? And if it's something you can, you know, maybe give us a little bit more detail on if it is?

好的。這很有幫助。然後你可以談談嗎，只是，我想具體來說，西南航空是否有機會提供 IE 電源以及所有相關產品。考慮到他們正在經歷的重大改革。聽起來，你知道，他們的大部分小屋都將在這裡進行改裝。我知道他們的日程安排非常緊湊。你的雷達上有這個嗎？如果你可以，你知道，也許可以給我們更多的細節來說明是否可以？

Sure. Absolutely. That. Southwest is a pretty major customer of ours already and we're doing a lot of work in their cabin refreshes.

當然。絕對地。那。西南航空已經是我們的一個相當大的客戶，我們在他們的機艙更新方面做了很多工作。

Going back actually a little while now, we developed a new architecture of C power specifically based on USB type C power. Not for Southwest alone, but largely with and in partnership with Southwest because we've been chasing them around for many, many years and we finally kind of got through and it's pretty prominently featured in, in their new cabins. If you look at some of the pictures, you can see it.

實際上，回過頭來，我們專門基於 USB Type C 電源開發了新的 C 電源架構。不僅僅是西南航空，而是主要與西南航空合作，因為我們已經追趕他們很多很多年了，我們終於成功了，而且它在他們的新客艙中非常顯眼。如果你看一些圖片，你就可以看到這一點。

And not only that but that new architecture again, USB type C oriented is lighter weight and a little bit lighter cost. And we've been very successful selling it around the world. It's becoming an increasing part of our NC Power franchise or IFE franchise.

不僅如此，面向 USB Type C 的新架構重量更輕，成本也更輕。我們在世界各地銷售它非常成功。它正在成為我們 NC Power 特許經營權或 IFE 特許經營權的重要組成部分。

So, no, we certainly are involved with Southwest and, you know, maybe the current, you know, things that they're going through in terms of further cabin modifications, improve that opportunity and we might increase our content. But there's not much I can say about that at this point.

所以，不，我們當然參與了西南航空，你知道，也許目前他們正在經歷進一步的機艙改造，改善這個機會，我們可能會增加我們的內容。但目前我對此無話可說。

Okay. Last one for me, I mean, I know, you know, the legal battle has been going on for a long time here and I hate to get into the hypothetical but, you know, 100 and $5 million and damages, you know, given your balance sheet, you know, significant percent of the market cap. I mean, how, how are you guys kind of thinking about this?

好的。最後一個對我來說，我的意思是，我知道，你知道，這裡的法律鬥爭已經持續了很長時間，我不想進入假設，但是，你知道，100 和500 萬美元以及損害賠償，你知道，考慮到你知道，你的資產負債表佔市值的很大一部分。我的意思是，你們怎麼看待這個問題？

And I mean, is there a, I know, I typically think of you guys as having, you know, the dominant position in some of these product categories, you know, I guess the damage is one potential question. But then does this also sort of, make your products a little bit more vulnerable and you see more competition coming in, you know, in some of those MC Power and other related offerings.

我的意思是，我知道，我通常認為你們在某些產品類別中擁有主導地位，我想損害是一個潛在的問題。但這也會讓你的產品變得更加脆弱，你會看到更多的競爭出現，你知道，在一些 MC Power 和其他相關產品中。

Well, the second part of your question is the easiest to answer. No, the patents in question are all expired have been expired for years. So this is in a sense fighting about, you know, history.

嗯，你問題的第二部分是最容易回答的。不，涉案專利均過期，已過期多年。所以從某種意義上來說，這是一場關於歷史的鬥爭。

So, it doesn't restrict our business in any way today and it's really not a material issue at all competitively as far as, as far as I can see. So that's really a non issue. And, you know, II I would get into the realm of speculation about damages, but I guess I would say that, you know, we're coming out of the hole and we're financially gaining a lot of strength pretty quickly. And in that sense, have financial options that we wouldn't have had maybe a year and a half, two years ago. So I don't view it as a major crisis.

因此，它不會以任何方式限制我們今天的業務，而且據我所知，這實際上根本不是一個實質的競爭問題。所以這確實不是問題。而且，你知道，我會進入有關損害賠償的猜測領域，但我想我會說，你知道，我們正在走出困境，我們在財務上很快就獲得了巨大的實力。從這個意義上說，我們擁有了一年半、兩年前我們可能沒有的財務選擇。所以我不認為這是一場重大危機。

Also given the reality that it appears the court is going to allow appeals or even anticipates appeals. So, you know, it's been going on for 14 years this whole battle. It will go on at least for a couple more. And, and this will be, you know, one of those twists in the road, I guess that we'll someday look back on and be glad it's over with.

此外，考慮到法院似乎將允許上訴甚至預計上訴的現實。所以，你知道，整個戰鬥已經持續了 14 年。至少還會持續幾個。而且，這將是，你知道，道路上的曲折之一，我想有一天我們回顧起來，會很高興一切都結束了。

Jon Tanwanteng, CJS Securities.

Jon Tanwanteng，CJS 證券。

Thanks for the follow up. I was just wondering if you could talk about the strength in the test business in the quarter. You know, what do you see in the run rate going forward? And I think you had another restructuring that you talked about the press release. Do, do you expect that to be doing a positive operating profit going forward?

感謝您的跟進。我只是想知道您能否談談本季測試業務的實力。您知道，您對未來的運行率有何看法？我認為您在新聞稿中談到了另一項重組。您預計未來會帶來正的營業利潤嗎？

Well, I think we're going to get closer. The 25 it jumped up to 25 million from a typical run rate of 20 million. I don't think it's going to stay up at that level. I think it might retrench the situation, it kind of remains the same. Our anticipated radio test program for the US army called 4,549 is what we're waiting for.

嗯，我想我們會更接近。25 日，它的運行率從 2000 萬的典型運行率躍升至 2500 萬。我認為它不會保持在這個水平。我認為這可能會縮小情況，但情況保持不變。我們正在等待美國陸軍的 4,549 無線電測試計劃。

And the current look is that that should kick off in the series production at the very end of 2025. We got to get through the first three quarters of 2025, and this restructuring is designed to make that a less than painful experience.

目前看來，這應該會在 2025 年底開始系列製作。我們必須度過 2025 年前三個季度，這次重組的目的是讓這不再是一段痛苦的經歷。

I don't expect the company to be super profitable, but we are making progress doing what we need to do to get the 4,549 program going including shipping the low rate initial production units so that the army can do what they need to do to make sure it does what they wanted to do and then turn on series production.

我不指望該公司能獲得超級盈利，但我們正在做我們需要做的事情來讓 4,549 項目繼續進行，包括運送低速初始生產單位，以便軍隊能夠做他們需要做的事情確保它做了他們想做的事情，然後開始系列生產。

So, the restructuring is intended to kind of get us through the next nine months, acceptably in anticipation of that high volume job kicking in late in 2025.

因此，重組的目的是讓我們度過接下來的 9 個月，這是可以接受的，因為預計大量工作將於 2025 年底開始。

Got it. Thank you. And just wondering if you could, just is there any other bigger legal expense coming? What we expect from just the litigation expense side, not the reserves, but, you know, just paying your lawyers.

知道了。謝謝。只是想知道是否可以，還有其他更大的法律費用嗎？我們期望的只是訴訟費用方面，而不是準備金，而是，你知道，只是支付你的律師費。

It's something we do pretty well, I think it should be pretty quiet actually. Well, I don't, I don't know the parameters or the timing of an appeal in the UK situation if we get there, that's probably a late 2025 event.

這是我們做得很好的事情，我認為實際上應該很安靜。嗯，我不知道，我不知道英國上訴的具體參數或時間，如果我們能做到這一點，那可能是 2025 年末的事件。

Our experience in Germany has been pretty quiet. We think that's more of a 2026 event.

我們在德國的經驗相當安靜。我們認為這更像是 2026 年的事件。

And in France, you know, we have a victory where the other side is trying to appeal that victory. We don't know where that's going to go or when it's going to go. But there is an avenue here actually for, you know, things to be pretty quiet for a few months.

在法國，你知道，我們取得了勝利，而另一方正試圖呼籲這場勝利。我們不知道它會去哪裡或什麼時候會去。但這裡實際上有一條途徑，可以讓事情安靜幾個月。

Got it. Thank you.

知道了。謝謝。

Thank you. At this time. There are no further questions in queue. I would like to turn the call back to management for closing comments.

謝謝。此時。隊列中沒有其他問題。我想將電話轉回給管理層以徵求結束意見。

No closing comments. Thank you for your attention. Again, we thought it was a pretty good quarter, a lot of subsequent events and an exciting future going forward. So thank you for your attention.

沒有結束評論。感謝您的關注。我們再次認為這是一個非常好的季度，有很多後續事件以及令人興奮的未來。感謝您的關注。

Thank you. This does, concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation and have a great day.

謝謝。今天的電話會議得出結論，確實如此。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。