CPS Technologies Corp (CPSH) 2023 Q2 法說會逐字稿

Good day and welcome to the CPS Technologies' second quarter 2023 earnings call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Chuck Griffith, CFO at CPS Technologies. Sir, the floor is yours.

美好的一天，歡迎參加 CPS Technologies 的 2023 年第二季財報電話會議。 （操作員說明）現在我很高興將發言權交給主持人 CPS Technologies 的財務長 Chuck Griffith。先生，地板是你的了。

Thank you, Paul, and good morning, everyone. Today I'm joined by Brian Mackey, our incoming President and CEO, and Anthony Koski, our Corporate Development Officer. But first, Chris Witty, our Investor Relations adviser will provide a brief Safe Harbor statement. Chris?

謝謝你，保羅，大家早安。今天，我們即將上任的總裁兼執行長布萊恩·麥基 (Brian Mackey) 和我們的企業發展官安東尼·科斯基 (Anthony Koski) 也加入了我的行列。但首先，我們的投資人關係顧問 Chris Witty 將提供一份簡短的安全港聲明。克里斯？

Thanks, Chuck, and good morning, everyone. Before we begin the business portion of the call, I would like to point out that statements in this conference call (technical difficulty) historical are forward-looking statements within the meaning of the Private Securities Litigation (technical difficulty) 1995 and should be considered as subject to the many uncertainties that exist in CPS's operations and environment. These uncertainties include, but are not limited to: the war in Ukraine, economic conditions, market demands, and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statement. Additional information can be found in our filings with the SEC.

謝謝，查克，大家早安。在我們開始電話會議的業務部分之前，我想指出，本次電話會議（技術難度）歷史中的陳述是 1995 年私人證券訴訟（技術難度）含義內的前瞻性陳述，應被視為受到CPS 運營和環境中存在的許多不確定因素的影響。這些不確定因素包括但不限於：烏克蘭戰爭、經濟狀況、市場需求和競爭因素。這些因素可能導致實際結果與任何前瞻性聲明中的結果有重大差異。更多資訊可以在我們向 SEC 提交的文件中找到。

Now I'll turn the call over to Chuck to offer his perspectives on the second-quarter results.

現在我將把電話轉給查克，提出他對第二季業績的看法。

Thank you, Chris. First, let me just take a moment to introduce Brian Mackey, our next President and CEO. The company led an exhaustive search to find an experienced leader for our next phase of growth. And Brian's background makes him perfect to fill this role. We look forward to him being fully on board in the very near future as well as on our next earnings call.

謝謝你，克里斯。首先，讓我花點時間介紹一下我們的下一任總裁兼執行長布萊恩·麥基 (Brian Mackey)。該公司進行了詳盡的搜尋，為我們下一階段的發展尋找一位經驗豐富的領導者。布萊恩的背景使他非常適合擔任這個角色。我們期待他在不久的將來以及我們的下一次財報電話會議上全面加入。

Would you like to say a few words, Brian?

你願意說幾句話嗎，布萊恩？

Thanks, Chuck, and good morning, everyone. While I don't expect to be answering any questions this morning, I just wanted to let our investors know I'm excited to join CPS at this critical point, or growth trajectory. I'm familiar with our products and target markets. I firmly believe the company is poised for a substantial acceleration in topline profile due to innovative technology and unique applications. My background does include helping organizations meet their full potential by responding to demanding dynamics and bringing on new customers, which I look forward to doing in the near future.

謝謝，查克，大家早安。雖然我預計今天早上不會回答任何問題，但我只是想讓我們的投資者知道，我很高興能在這個關鍵點或成長軌跡上加入 CPS。我熟悉我們的產品和目標市場。我堅信，由於創新技術和獨特的應用，該公司的營收將大幅提升。我的背景確實包括透過回應需求動態和吸引新客戶來幫助組織充分發揮潛力，我期待在不久的將來做到這一點。

I'd like to thank the Board of Directors of CPS for this great opportunity. With that, I'll turn the call back over to Chuck.

我要感謝 CPS 董事會給我這個絕佳的機會。說完，我會把電話轉回給查克。

Thank you, Brian, and welcome aboard. Today we're pleased to announce second quarter revenue of $7.4 million and an operating profit of $731,000 for the period ending July 1, 2023. Both of those are records for the company. As I'll discuss more in a moment, we've continued to execute in a way that puts us squarely on track for our best year ever, setting the stage for even further improvement in 2024. I'll speak more later about the overall business progress moving forward. But for now let me discuss the financial results in more detail.

謝謝你，布萊恩，歡迎加入。今天，我們很高興地宣布截至 2023 年 7 月 1 日的第二季收入為 740 萬美元，營業利潤為 731,000 美元。這兩項都是該公司的記錄。正如我稍後將討論的更多內容，我們繼續以一種讓我們完全步入有史以來最好的一年的方式執行，為 2024 年的進一步改進奠定了基礎。稍後我將詳細討論總體情況業務進展不斷向前推進。但現在讓我更詳細地討論財務結果。

As I just mentioned, revenue totaled $7.4 million in the second quarter compared to $7.1 million last year for the second quarter, an increase of 4%. The revenue for the second quarter of 2023 represents the best quarter in our company history. Sales growth was driven by demand from one of our major customers as well as increased armor shipments.

正如我剛才提到的，第二季的營收總計為 740 萬美元，比去年第二季的 710 萬美元成長了 4%。 2023 年第二季的營收是我們公司史上最好的季度。銷售成長是由我們主要客戶之一的需求以及裝甲出貨量的增加所推動的。

Gross profit in the second quarter totaled $2.2 million or 30% of sales. This compares with gross profit of $1.8 million or 26% of sales last year. The increase year-over-year reflects the impact of higher sales on fixed factory costs as well as improved factory efficiencies and product yields. Selling, general and administrative expenses totaled $1.5 million in the second quarter, an increase of 25% when compared to $1.2 million in the prior year period.

第二季毛利總計 220 萬美元，佔銷售額的 30%。相比之下，去年的毛利為 180 萬美元，佔銷售額的 26%。同比增長反映了銷售增加對工廠固定成本以及工廠效率和產品產量提高的影響。第二季銷售、一般和管理費用總計 150 萬美元，比去年同期的 120 萬美元成長 25%。

There were three major reasons for the higher expense. First, there was a significant increase in travel costs since last year. We were just beginning to come out of the COVID-19 pandemic. And at that time, many conferences continue to be virtual and numerous customers continue to prohibit outside visitors. In contrast, this year, our business development team has been doing significantly more travel to meet with customers and bid on new opportunities.

費用較高的三個主要原因。首先，去年以來出遊費用大幅增加。我們剛開始擺脫 COVID-19 大流行的影響。當時，許多會議仍然是虛擬的，許多客戶仍然禁止外部訪客。相較之下，今年我們的業務開發團隊出差次數明顯增多，以便會見客戶並競標新機會。

In addition, the company increased its 401(k) matching formula in 2023, resulting in increased payroll costs. And lastly, the company accrued severance to a long-time employee whose service with the company was terminated. The company generated operating income of $731,000 in the second quarter compared with $669,000 last year. This increase of 9% was a result of the higher gross profit, partially offset by the increase in SG&A expenses.

此外，該公司在2023年增加了401(k)匹配公式，導致薪資成本增加。最後，公司向一名被公司終止服務的長期員工支付了遣散費。該公司第二季營業收入為 731,000 美元，而去年同期為 669,000 美元。 9% 的成長是毛利增加的結果，但部分被 SG&A 費用的增加所抵銷。

Turning to the balance sheet, we ended the quarter with $8.7 million of cash, up from $8.3 million at the end of 2022. The increase was due primarily to higher net profit, partially offset by an increase in accounts receivable and a reduction in deferred revenue. Trade accounts receivable at July 1, 2023, totaled $5.1 million versus $3.8 million as of December 31, 2022. This change was due to increased sales in the quarter and the impact of deferred revenue. Our other receivable account balance of $75,000 was reduced from December 2022 balance of $686,000 due to the receipt of the employee retention tax credit in April. Inventories totaled $4.8 million as of July 1, compared with $4.9 million at the start of the fiscal year.

轉向資產負債表，本季末我們的現金為 870 萬美元，高於 2022 年底的 830 萬美元。增加的主要原因是淨利潤增加，但被應收帳款增加和遞延收入減少部分抵銷。截至 2023 年 7 月 1 日的貿易應收帳款總額為 510 萬美元，而截至 2022 年 12 月 31 日為 380 萬美元。這項變更是由於本季銷售額增加以及遞延收入的影響。由於 4 月收到了員工保留稅收抵免，我們的其他應收帳款餘額為 75,000 美元，較 2022 年 12 月的 686,000 美元餘額減少。截至 7 月 1 日，庫存總額為 480 萬美元，而本財年年初為 490 萬美元。

Turning to the liability side, payables and accruals totaled $3.2 million as of July 1, 2023, an increase from $2.7 million as of December 31. This primarily reflects a timing issue and that a number of bills came late in the quarter, which were not due to be paid until Q3. Deferred revenue increased from $2.8 million at the end of 2022 to $1.8 million on July 1, 2023. As a reminder, deferred revenue predominantly represents prepayments for large orders to help defray the impact on cash of large inventory purchases for those orders. A number of these were shipped in 2023, resulting in the recognition of revenue and thus a decrease in deferred revenue.

就負債方面而言，截至2023 年7 月1 日，應付帳款和應計費用總計320 萬美元，較截至12 月31 日的270 萬美元有所增加。這主要反映了時間安排問題，以及許多帳單在本季較晚才收到，而這些帳單並未在截止至第三季支付。遞延收入從2022 年底的280 萬美元增加到2023 年7 月1 日的180 萬美元。需要提醒的是，遞延收入主要是大筆訂單的預付款，以幫助抵消這些訂單的大筆庫存採購對現金的影響。其中一些已於 2023 年發貨，從而確認了收入，從而減少了遞延收入。

During the second quarter, we announced one major contract win, an additional follow-on purchase order valued at $1.4 million for HybridTech Armor Panels from Kinetic Protection, the US Navy's prime subcontractor. The panels are an integrated component of advanced ballistic shield developed in support of protection system upgrades by the Navy. The purchase order will equip more ships with enhanced ballistic protection for crew-served weapon stations.

在第二季度，我們宣布贏得了一項重大合同，即來自美國海軍主要分包商 Kinetic Protection 的價值 140 萬美元的 HybridTech 裝甲板後續採購訂單。這些面板是先進彈道防護罩的整合式組件，旨在支援海軍防護系統升級。這項採購訂單將為更多艦艇配備增強的艦員武器站彈道防護。

In addition, the company continues to see an active bid environment across all its end markets, including SBIRs and new contract opportunities within the Department of Defense. Anthony will speak more about the outlook in a moment, which remains very positive.

此外，該公司在所有終端市場上繼續看到活躍的投標環境，包括 SBIR 和國防部內的新合約機會。安東尼稍後將更多地談論前景，前景仍然非常樂觀。

While the overall business activity level gives us confidence in the company's growth trajectory, we want to let investors know that as was the case last year, contract and shipping timing will likely lead to Q3 revenue being lower than the second quarter's record pace. Conversely, since some of the revenue for the third quarter has been pushed into the fourth quarter, we anticipate a very robust end to the fiscal year with 2023 performance being our best ever.

雖然整體業務活動水平讓我們對公司的成長軌跡充滿信心，但我們想讓投資者知道，與去年的情況一樣，合約和運輸時間可能會導致第三季收入低於第二季創紀錄的速度。相反，由於第三季度的部分收入已推至第四季度，我們預計本財年將非常強勁，2023 年的業績將是我們有史以來最好的。

I'd now like to turn the call over to Anthony. So that he can get into a little more detail on some of the numerous growth opportunities across the business development front. But before I do so let me just mention that this will be Anthony's last time joining us on our earnings call as he will be leaving CPS to pursue a new opportunity at the end of this week. It has truly been a pleasure and honor to work with Anthony these past few years, and we all wish him the best going forward. Anthony?

我現在想把電話轉給安東尼。這樣他就可以更詳細地了解業務發展領域中眾多成長機會中的一些。但在此之前，請允許我提一下，這將是安東尼最後一次參加我們的財報電話會議，因為他將在本週末離開 CPS 去尋找新的機會。在過去的幾年裡與安東尼一起工作確實是一種愉快和榮幸，我們都祝福他未來一切順利。安東尼？

Thank you, Chuck. I'm pleased to see CPS pull together in post record results this quarter as the business development and marketing teams look for new opportunities to drive growth and position the company for the future. As Chuck mentioned, the outlook for CPS remains bright, given recent wins, the many items in our pipeline and an overall active bid environment. Demand from key customers for AlSiC remains strong and this continues trending upward.

謝謝你，查克。我很高興看到 CPS 在本季度取得創紀錄的業績，業務開發和行銷團隊正在尋找新的機會來推動成長並為公司的未來定位。正如查克所提到的，鑑於最近的勝利、我們管道中的許多項目以及整體積極的投標環境，CPS 的前景仍然光明。主要客戶對 AlSiC 的需求依然強勁，且呈現持續上升趨勢。

The previously announced HybridTech Armor Panels installation on naval aircraft carriers has begun, and we successfully ramped up to two Kinetic Protection shipments per week during the quarter without any disruptions or significant headcount additions required. At the same time, we're working to expand our reach across other military platforms and applications, and we're currently negotiating a new long-term agreement with a Tier 1 aerospace OEM to supply a wide range of hermetic packaging products. We should have more details about this and several SBIR opportunities later this year.

先前宣布的在海軍航空母艦上安裝混合技術裝甲板的工作已經開始，我們在本季度成功地將動能防護出貨量增加到每週兩次，沒有任何中斷或需要大量增加人員。同時，我們正在努力擴大我們在其他軍事平台和應用領域的影響力，目前我們正在與一級航空航天 OEM 商談一項新的長期協議，以供應各種氣密包裝產品。我們應該會在今年稍後獲得有關此問題的更多詳細資訊以及幾個 SBIR 機會。

During the quarter, we attended PCIM Europe, the Thermal Management Expo and exhibited at the Electronic Components and Technology Conference in Orlando. The outlook for 2023 remains strong, and our team is delivering on all of our growth objectives. I continue to be upbeat about the company's ability to convert this into backlog and backlog into revenue, as we leverage our innovative solutions across a growing set of markets in new industry applications.

本季度，我們參加了 PCIM Europe、熱管理博覽會，並在奧蘭多舉行的電子元件和技術會議上展出。 2023 年的前景依然強勁，我們的團隊正在實現我們的所有成長目標。我仍然對公司將其轉化為積壓訂單並將積壓訂單轉化為收入的能力感到樂觀，因為我們在新行業應用中不斷增長的市場中利用我們的創新解決方案。

Lastly, as Chuck mentioned, my last day at CPS Technologies will be tomorrow August 4. This was a very difficult decision. The team here has made great progress over the past few years, but in many ways, we're only at the tip of the iceberg for what's to come. Ultimately, I made a choice based on an opportunity closer to family. I would like to thank the senior management team, Dan Barton, our VP of Operations, Dr. Kachur, VP of Technology, and of course, Chuck, you for all of your support these past years. I am confident that the company under Brian's leadership will continue our growth trajectory, building a truly great organization. Thank you also to the Board of Directors as well as our shareholders for your support and trust.

最後，正如 Chuck 所提到的，我在 CPS Technologies 的最後一天是明天 8 月 4 日。這是一個非常困難的決定。在過去的幾年裡，這裡的團隊取得了巨大的進步，但在許多方面，我們對於未來的發展只是冰山一角。最終，我基於離家人更近的機會做出了選擇。我要感謝高階管理團隊、營運副總裁丹‧巴頓 (Dan Barton)、技術副總裁卡楚爾 (Kachur) 博士，當然還有查克 (Chuck)，感謝您過去幾年的所有支持。我相信，在布萊恩的領導下，公司將繼續我們的發展軌跡，建立一個真正偉大的組織。也感謝董事會和股東的支持與信任。

In closing, it has been my honor to be a part of such a fantastic enterprise, and I look forward to following your bright future. Thank you. This concludes our prepared remarks. Chuck and I are now available to take any question.

最後，我很榮幸能夠成為這樣出色企業的一部分，我期待著追隨您的光明未來。謝謝。我們準備好的演講到此結束。查克和我現在可以回答任何問題。

Thank you. (Operator Instructions) [Steve Fossi].

謝謝。 （操作員說明）[史蒂夫·福西]。

Thank you. Good morning.

謝謝。早安.

Good morning.

早安.

I was a couple of minutes late. So I apologize if this has already been covered, do you expect the SG&A to go back down in the next quarter?

我遲到了幾分鐘。因此，如果這已經涵蓋了，我很抱歉，您預計 SG&A 會在下個季度回落嗎？

Yes, we didn't cover it, but yes, we do. There were definitely a couple of things in there that were unique to the second quarter, in particular the severance payment that I mentioned.

是的，我們沒有涵蓋它，但是，是的，我們涵蓋了。其中肯定有一些第二季特有的事情，特別是我提到的遣散費。

Okay, good.

好的。

And the other thing is, if I might, can you provide maybe a little bit of color on like the mix of business that you have at the moment?

另一件事是，如果可以的話，您能否提供一點顏色，例如您目前的業務組合？

Sure. Yeah, so I would say it's fairly close to a third, a third, a third, in terms of armor, hermetic packages, and AlSiC. Not exactly, but maybe 35 for one, and 30 for another, that type of thing.

當然。是的，所以我想說，就裝甲、密封封裝和 AlSiC 而言，它相當接近第三、第三、第三。不完全是這樣，但也許一個是 35 個，另一個是 30 個，諸如此類。

Yeah.

是的。

So it is pretty well spaced out amongst the three product lines and that sort of has been our goal right along, although -- and obviously, there's also a small amount that goes for R&D with the SBIR projects, but that's [relev] just a few percent. So for the most part, basically a third, a third, a third.

因此，它在三個產品線之間的間隔相當好，這一直是我們的目標，儘管 - 顯然，還有少量用於 SBIR 項目的研發，但這只是[相關]百分之幾。所以在大多數情況下，基本上是三分之一，三分之一，三分之一。

Great, thanks.

萬分感謝。

Welcome.

歡迎。

(Operator Instructions) [Wolf Scheck].

（操作員說明）[Wolf Scheck]。

Good morning, everybody. Congratulations on a very good quarter. Maybe you could just update us in terms of the role, the investor relations firm is playing through for you and how they've helped you.

大家早安。恭喜您度過了一個非常好的季度。也許您可以向我們介紹投資者關係公司的角色、為您提供的幫助以及他們如何幫助您的最新情況。

Sure.

當然。

(inaudible) be getting one and finally have one?

（聽不清楚）得到一個並最終擁有一個？

Yes, I know that's something you've been asking us about for many years. So we've certainly -- Chris and his firm came on board with us on May 1. And I think so far the relationship has been excellent. We've had a number of calls with -- outside investors that Chris has been instrumental in setting up. In addition, he's made what I would consider some very insightful comments about some of the ways we did our presentations in the past versus suggestions for ways to improve them as well. So I think so far so good. It's been -- I guess August 1, would be three months, if I'm doing my math correctly. And yeah, we're very pleased with the relationship so far.

是的，我知道這是您多年來一直問我們的問題。所以我們當然——克里斯和他的公司在 5 月 1 日加入了我們。我認為到目前為止，我們的關係非常好。我們已經與外部投資者進行了多次通話，克里斯在其中發揮了重要作用。此外，我認為他對我們過去的一些演示方式提出了一些非常有見地的評論，並提出了改進方法的建議。所以我認為到目前為止一切都很好。已經過去了——我想 8 月 1 日，如果我沒算錯的話，應該是三個月了。是的，到目前為止我們對這段關係非常滿意。

Thank you.

謝謝。

Steve Fossi.

史蒂夫·福西。

Okay. Thanks. I just wanted to thank you, Chuck, for fill in during the break there.

好的。謝謝。我只是想感謝你，查克，在休息期間填補了空白。

Thanks.

謝謝。

[Ron Richards].

[羅恩·理查茲]。

Hey, guys. On previous conference calls, you mentioned possible armor contract with Southeast Asia customer. It was supposed to be done by the end of last year and it was delayed, is there any update on that particular contract?

大家好。在先前的電話會議上，您提到了可能與東南亞客戶簽訂的裝甲合約。原定於去年年底完成，但被推遲了，該合約有任何更新嗎？

Sure.

當然。

[We do] Ron.

[我們願意]羅恩。

Yeah. Anthony you can take that one. You know, -- go for it.

是的。安東尼，你可以接受那件事。你知道，——努力吧。

Yeah. Hey, Ron, how are you? So yeah, it's still very much active. We continued to see delays. And I think we briefed on the last quarterly call that we were awaiting one final shoot to get us to the next round of qualification for what they call production qualification. That shoot unfortunately has continued to be pushed. We've been expecting over the year that it will happen by the end of the year. And that's still the expectation. Right now, we're tentatively looking at mid-September for that shoot to happen. It is happening overseas.

是的。嘿，羅恩，你好嗎？所以是的，它仍然非常活躍。我們繼續看到延誤。我想我們在上個季度的電話會議上通報說，我們正在等待最後一次拍攝，以使我們能夠進入下一輪他們所謂的生產資格認證。不幸的是，那次拍攝仍被推遲。我們一年來一直預計這將在年底實現。這仍然是期望。目前，我們暫定在九月中旬進行拍攝。這種事正在海外發生。

The majority of the delays on the shoot has been related to identifying a facility in a range that allows us to shoot the level of threat that this test requires. Obviously, I can't get into specific on that piece. But yeah, it is still very much active. We're still planning to do the shoot by the end of the year. At the moment it is tentatively scheduled for mid-September.

拍攝的大部分延誤與確定某個範圍內的設施有關，該設施使我們能夠拍攝本次測試所需的威脅等級。顯然，我無法具體討論那篇文章。但是，是的，它仍然非常活躍。我們仍計劃在今年年底前進行拍攝。目前暫定為9月中旬。

Okay, thank you.

好的謝謝。

Wolf Scheck

沃爾夫謝克

Thank you. Just switching subjects, is there a way you could comment on your defense business and maybe your electronic car involvement in any fashion? I am not quite sure how far you can go on that, but may want to discuss it?

謝謝。只是轉換主題，您是否可以以任何方式評論您的國防業務以及您的電子汽車參與？我不太確定你能走多遠，但可能想討論一下？

Well, certainly that relates to the to the AlSiC and the baseplate side of our business. It's something that's out there. We have customers that are supplying IGBT modules to automobile manufacturers. Some of them are utilized copper baseplates, which of course we're not really involved with and others are using AlSiC baseplate. There's certainly a lot of opportunity there. The real question is how much will these vehicle manufacturers want to spend the extra money to use AlSiC. I think as you get to larger vehicles, larger trucks, maybe perhaps military vehicles, that kind of thing, it's more likely that we'll be involved in those kinds of things.

嗯，這當然與我們業務的 AlSiC 和基板方面有關。這是外面的東西。我們有一些客戶正在向汽車製造商供應 IGBT 模組。其中一些使用銅基板，當然我們並沒有真正參與其中，而另一些則使用 AlSiC 基板。那裡肯定有很多機會。真正的問題是這些汽車製造商願意花多少錢來使用 AlSiC。我認為，當你接觸到更大的車輛、更大的卡車，也許是軍用車輛之類的東西時，我們更有可能參與這些事情。

I think a little small economical relatively inexpensive electric car is probably not going to be where you're going to find an AlSiC baseplate. So I guess an answer to your question, Wolf, it's something that we see as an opportunity down the road. It's not something that we're counting on today, of course. But certainly if it comes to fruition, it could be a -- have a major positive impact on our growth. Anthony, is there anything you want to add to that?

我認為小型經濟型相對便宜的電動車可能不會找到 AlSiC 基板。所以我想回答你的問題，沃爾夫，我們認為這是未來的一個機會。當然，這不是我們今天所指望的。但可以肯定的是，如果它取得成果，可能會對我們的成長產生重大的正面影響。安東尼，你還有什麼要補充的嗎？

Yeah. I'll say we're working on the defense side of the business. It's certainly much more active at current than the electric vehicle side of things. We have multiple development projects ongoing, but really aerospace and defense, I want to clarify that. The long-term agreement that I referenced that we're negotiating is in support of aerospace application. So the defense and aerospace side is certainly more active at the moment.

是的。我想說的是，我們正在致力於業務的防禦方面。目前它肯定比電動車方面活躍得多。我們正在進行多個開發項目，但我想澄清的是航空航太和國防項目。我提到的我們正在談判的長期協議是為了支持航空航天應用。因此，國防和航空航太方面目前肯定更加活躍。

In terms of EV, it's still very much a developing market. And as this transition from silicon to silicon-carbide chip continues to advance at a rapid pace, identifying where and what those new challenges bring is where we're currently at. So we've got some very new development projects, I'll say, that are at various stages in their infancy. But are more geared toward what does a next generation, if you will, AlSiC or thermal management type baseplate look like. And that's really where we're focusing our efforts. A piece of it is we have the niche applications for luxury, high performance, high stress applications for -- where AlSiC has always had a play.

就電動車而言，它仍然是一個發展中的市場。隨著從矽晶片到碳化矽晶片的轉變繼續快速推進，確定這些新挑戰帶來的地點和內容就是我們目前所處的位置。所以我想說，我們有一些非常新的開發項目，它們正處於起步階段的不同階段。但更適合下一代（如果你願意的話）AlSiC 或熱管理型基板的外觀。這確實是我們重點關注的地方。其中一個原因是我們擁有豪華、高性能、高應力應用的利基應用——AlSiC 一直在這些應用中發揮作用。

But when we're looking at more of the mainstream EV application, it's always been a difficult sell. So we're looking at what are ways that we can leverage our expertise to maybe move up the value chain a bit, add some different materials, embed it into the AlSiC, there's a lot of different avenues that we're currently going down and multiple ones that are in conjunction with customers who are developing this technology.

但當我們關注更多主流電動車應用時，它一直很難推銷。因此，我們正在研究如何利用我們的專業知識來稍微提升價值鏈，添加一些不同的材料，將其嵌入到 AlSiC 中，我們目前正在採取很多不同的途徑，與正在開發該技術的客戶合作的多個專案.

So I will say that defense and aerospace, while being much more active at the moment and where I think a lot of near term growth is positioned, we're certainly still very active in EV. It's just -- it's a slow process that we're still continuing to work through to identify where are there areas where we can bring real value and have a differentiator compared to a copper baseplate or other monolithic type of thermal management application. So a lot of stuff going on there, but it's very much development, low volume building up towards that. It's nowhere near where I think some of the aerospace and defense opportunities are.

因此，我想說的是，國防和航空航天業雖然目前更加活躍，我認為短期內會有很大的成長，但我們在電動車領域肯定仍然非常活躍。只是——這是一個緩慢的過程，我們仍在繼續努力，以確定在哪些領域我們可以帶來真正的價值，並與銅基板或其他單片類型的熱管理應用程式相比具有差異化優勢。那裡發生了很多事情，但這是一個非常大的開發過程，為此而進行的少量工作。它與我認為的一些航空航天和國防機會相去甚遠。

Thank you very much for your update.

非常感謝您的更新。

(Operator Instructions) And there doesn't appear to be any other questions at this time. I would like to hand the call back to Chuck Griffith for closing remarks.

（操作員說明） 目前似乎沒有其他問題。我想將電話轉回給查克·格里菲斯 (Chuck Griffith)，讓其致閉幕詞。

Okay. Well, thank you very much, Paul, and thank you, everyone, for joining us this morning. In summary, we're very excited about the future here at CPS, and certainly very excited about Brian coming on board to help lead us through that future, to that future. And yeah. So I think that again, we're very, very optimistic about the future.

好的。嗯，非常感謝你，保羅，也感謝大家今天早上加入我們。總而言之，我們對 CPS 的未來感到非常興奮，當然也對 Brian 加入幫助帶領我們度過這個未來、走向那個未來感到非常興奮。是的。所以我再次認為，我們對未來非常非常樂觀。

And with that to Brian, do you have any final comments or anything?

布萊恩，你有什麼最後的評論或什麼嗎？

No. Thanks, Chuck.

不，謝謝，查克。

Okay. Very good. So thank you, everybody, for joining us, and we'll talk to you in about three months.

好的。非常好。謝謝大家加入我們，我們將在大約三個月後與您交談。

Thank you. This does conclude today's conference. You may disconnect your lines at this time. And have a wonderful day. Thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路。祝你有美好的一天。感謝您的參與。