CPS Technologies Corp (CPSH) 2024 Q1 法說會逐字稿

Good morning, everyone, and welcome to the CPS Technologies First Quarter Earnings Call.

大家早安，歡迎參加 CPS Technologies 第一季財報電話會議。

(Operator Instructions)

（操作員說明）

It is now my pleasure to turn the floor over to your host, Chuck Griffith of CPS Technologies.

現在我很高興將發言權交給主持人 CPS Technologies 的查克·格里菲斯 (Chuck Griffith)。

Chuck, over to you.

查克，交給你了。

Thank you, Jenny, and good morning, everyone.

謝謝你，珍妮，大家早安。

Today, I'm joined by Brian Mackey, our President and CEO.

今天，我們的總裁兼執行長布萊恩·麥基 (Brian Mackey) 也加入了我的行列。

We look forward to discussing our first quarter results with you.

我們期待與您討論我們第一季的業績。

But first, Chris Witty, our Investor Relations adviser, will provide a brief safe harbor statement.

但首先，我們的投資人關係顧問克里斯·威蒂（Chris Witty）將提供一份簡短的安全港聲明。

Chris?

克里斯？

Thanks, Chuck, and good morning, everyone.

謝謝，查克，大家早安。

Before we begin the business portion of today's call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered as subject to the many uncertainties that exist in CPS' operations and environment.

在我們開始今天電話會議的業務部分之前，我想指出，本次電話會議中並非嚴格歷史性的陳述屬於 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述，應被視為主題CPS 的營運和環境中存在許多不確定性。

These uncertainties include, but are not limited to, the wars in Ukraine and Israel, other geopolitical events, economic conditions, market demands and competitive factors.

這些不確定因素包括但不限於烏克蘭和以色列的戰爭、其他地緣政治事件、經濟狀況、市場需求和競爭因素。

Such factors could cause actual results to differ materially from those in any forward-looking statements.

這些因素可能導致實際結果與任何前瞻性陳述中的結果有重大差異。

Additional information can be found in our filings with the SEC.

更多資訊可以在我們向 SEC 提交的文件中找到。

Now I will turn the call over to Brian to offer his perspective on the first quarter highlights.

現在我將把電話轉給布萊恩，提出他對第一季亮點的看法。

Afterwards, Chuck will review the financial results in greater detail.

之後，查克將更詳細地審查財務業績。

Brian?

布萊恩？

Thank you, Chris.

謝謝你，克里斯。

First quarter revenue was $5.9 million with an operating loss of approximately $260,000.

第一季營收為 590 萬美元，營運虧損約 26 萬美元。

The Revenue declined year-over-year due to production constraints related to continued quality control testing as well as production inefficiencies due to labor shortages and turnover.

由於與持續的品質控制測試相關的生產限制以及勞動力短缺和人員流動導致的生產效率低下，收入較去年同期下降。

Bottom line results were similarly negatively impacted due to nonrevenue-producing spend in the first quarter, which I will discuss in more detail later.

由於第一季的非創收支出，底線結果也受到了類似的負面影響，我將在稍後更詳細地討論這一點。

We anticipate that while demand remains strong across our product portfolio, the coming quarters, as we've discussed in the past, will also face headwinds from the anticipated drop-off in near-term Armor revenue.

我們預計，儘管我們的產品組合需求依然強勁，但正如我們過去討論的那樣，未來幾季也將面臨近期 Armor 營收預期下降的阻力。

I'll now turn the call over to Chuck to provide more details about our financial results, after which I'll provide some additional detail.

現在，我將把電話轉給查克，以提供有關我們財務業績的更多詳細信息，然後我將提供一些其他詳細信息。

Chuck?

查克？

Thanks, Brian.

謝謝，布萊恩。

As mentioned earlier, the company's revenue totaled $5.9 million in the first quarter compared with $7.1 million last year.

如前所述，該公司第一季的總收入為 590 萬美元，而去年同期為 710 萬美元。

We've had some level of difficulty filling opening manufacturing positions.

我們在填補空缺製造職位方面遇到了一定程度的困難。

Additionally, while we are cautiously optimistic that our quality issues have been resolved, we continue to run tests which occupy machine time that would otherwise be spent on production for customers.

此外，雖然我們對品質問題已解決持謹慎樂觀的態度，但我們仍繼續進行測試，這些測試佔用了機器時間，而這些時間本來可以用於為客戶生產。

We do, however, believe that strong demand across our other offerings should lead to top line growth as the year progresses.

然而，我們確實相信，隨著時間的推移，我們其他產品的強勁需求應該會導致收入成長。

In addition, our Navy partner Kinetic protection remains cautiously optimistic about additional work for other Navy ship classes with contracts possible later than 2024.

此外，我們的海軍合作夥伴 Kinetic Protection 對 2024 年後可能簽訂的其他海軍艦艇類別的額外工作仍持謹慎樂觀態度。

The gross profit in the first quarter totaled $0.9 million or approximately 15.3% of sales compared with $2.2 million or 31.6% of sales last year.

第一季的毛利總計為 90 萬美元，約佔銷售額的 15.3%，而去年為 220 萬美元，佔銷售額的 31.6%。

This decrease was due to the lower sales volumes in Q1 2024 on consistent fixed costs as well as the aforementioned testing being done on the quality issues.

這一下降是由於固定成本持續不變以及上述針對品質問題進行的測試導致 2024 年第一季銷售下降。

That said, we anticipate gross margins to improve in the second half of 2024.

也就是說，我們預計 2024 年下半年毛利率將有所改善。

Selling, general and administrative or SG&A expenses totaled $1.2 million in the first quarter versus $1.6 million in the prior year period as we remain focused on cost controls, even while investing in new business development initiatives aimed to accelerate long-term growth.

第一季的銷售、一般和管理或 SG&A 費用總計 120 萬美元，而去年同期為 160 萬美元，因為我們仍然專注於成本控制，同時投資於旨在加速長期增長的新業務開發計劃。

The company had an operating loss of $260,000 in the first quarter compared with operating income of approximately $694,000 last year, and we posted a net loss of $143,000 or $0.01 per share versus net income of $459,000 or $0.03 per diluted share in Q1 of fiscal 2023.

該公司第一季的營業虧損為260,000 美元，而去年的營業收入約為694,000 美元，我們公佈的淨虧損為143,000 美元，即每股0.01 美元，而2023 財年第一季的淨利潤為459,000 美元，即每股攤薄收益0.03 美元。

Turning to the balance sheet.

轉向資產負債表。

We ended the quarter with $8.7 million of cash versus $8.8 million at the start of 2024.

本季結束時，我們的現金為 870 萬美元，而 2024 年初為 880 萬美元。

Trade accounts receivable as of March 30, 2024, totaled $3.8 million versus $4.4 million as of December 31, 2023.

截至 2024 年 3 月 30 日，貿易應收帳款總額為 380 萬美元，而截至 2023 年 12 月 31 日，應收帳款總額為 440 萬美元。

Inventories totaled $4.6 million at the end of the first quarter, essentially equivalent with the $4.6 million at the end of the fiscal year.

第一季末庫存總額為 460 萬美元，基本上相當於本財年末的 460 萬美元。

Turning to the liability side, payables and accruals totaled $3.3 million at the end of the first quarter versus $3.6 million as of the end of December.

說到負債方面，第一季末應付帳款和應計費用總計 330 萬美元，而截至 12 月底為 360 萬美元。

Now Brian will provide a more in-depth discussion of the first quarter.

現在布萊恩將對第一季進行更深入的討論。

Thank you, Chuck.

謝謝你，查克。

First of all, I would like to discuss CPS vision for the future.

首先，我想談談CPS對未來的願景。

Over the last few years, we've invested significant amounts of time, energy and dollars to the growth of CPS, and we continue to do so.

在過去的幾年裡，我們為 CPS 的發展投入了大量的時間、精力和資金，我們將繼續這樣做。

Today, we have three more salaried engineers and material scientists than we did in Q1 of 2023, including the addition of a lead for new product introduction in the first quarter of 2024.

如今，我們比 2023 年第一季多了三名受薪工程師和材料科學家，其中包括 2024 年第一季增加了新產品推出的負責人。

These additions provide more depth to our technical team, enable us to be more responsive to customer requests and improve our ability to win orders.

這些補充為我們的技術團隊提供了更多的深度，使我們能夠更好地回應客戶的要求並提高我們贏得訂單的能力。

Having said that, the financial return from these new personnel will take time to develop.

話雖如此，這些新進員工的財務回報需要時間來實現。

As a direct example, in the first quarter, we completed and shipped eight new first articles.

舉一個直接的例子，在第一季度，我們完成並發布了八篇新的第一篇文章。

These eight compares to two in the same period last year.

這八個與去年同期的兩個相比。

These first articles are new parts, which CPS has not made in the past, but if done successfully, will lead to significant production runs in the future.

這些首批產品是 CPS 過去未生產過的新零件，但如果成功，將在未來帶來大量生產。

Some of these would be an expansion of our portfolio with an existing customer, while others indicate a business opportunity with a new customer.

其中一些是我們與現有客戶的產品組合的擴展，而另一些則是與新客戶的商機。

Producing these first articles is engineering-intensive, and this was certainly one factor in the lower margins we saw in Q1.

製作這些第一篇文章是工程密集的，這無疑是我們在第一季看到的利潤率較低的一個因素。

Nevertheless, we believe that in current costs, such as these today will be a significant contributing factor to the growth of CPS in the future.

儘管如此，我們相信當前成本（例如今天的成本）將成為未來 CPS 成長的重要因素。

Also, our manufacturing licensing agreement with Triton systems for fiber reinforced aluminum composites or FRA, will soon set the stage for expanded offerings to address market needs, expanding our product portfolio heading into fiscal 2025.

此外，我們與 Triton 系統簽訂的纖維增強鋁複合材料（FRA）製造許可協議很快將為擴大產品範圍以滿足市場需求奠定基礎，從而在 2025 財年擴大我們的產品組合。

Our relationships in the aerospace and defense markets provide insight into the market demand for strong, durable and lightweight materials.

我們在航空航太和國防市場的關係讓我們能夠深入了解市場對堅固、耐用和輕質材料的需求。

FRA composites address these needs.

FRA 複合材料滿足了這些需求。

As a reminder, FRA composites are comprised of high-strength aluminum alloys discontinuously reinforced with short ceramic fibers.

提醒一下，FRA 複合材料由短陶瓷纖維不連續增強的高強度鋁合金組成。

These materials have demonstrated high strength at elevated temperatures, lightweight and superior endorse characteristics, which will facilitate the introduction of many new products for our military, commercial and industrial end markets.

這些材料在高溫下表現出高強度、輕質和卓越的背書特性，這將有助於為我們的軍事、商業和工業終端市場推出許多新產品。

We are on track to initiate our manufacturing trials for FRA composites later this quarter, and we have already begun speaking with customers about possible relevant applications.

我們預計在本季稍後啟動 FRA 複合材料的製造試驗，並且我們已經開始與客戶討論可能的相關應用。

We're very excited to have these complementary products coming to market.

我們非常高興這些互補產品進入市場。

We also previously announced the award we recently received from the Massachusetts Manufacturing Accelerate program.

我們之前也宣布了最近從馬薩諸塞州製造加速計劃獲得的獎項。

In response to customer demand for products requiring 5-axis machine capability, we requested and received $200,000 to support the purchase of a 5-axis CNC machine.

為了滿足客戶對需要 5 軸工具機功能的產品的需求，我們請求並收到了 200,000 美元來支援購買 5 軸 CNC 工具機。

These funds expand our manufacturing capabilities and enable us to be more responsive to customer requirements.

這些資金擴大了我們的製造能力，使我們能夠更好地回應客戶的要求。

We have ordered the CNC machine and also expect to have this up and running later this quarter.

我們已經訂購了CNC機床，並預計在本季稍後啟動並運行。

Again, this will pave the way for higher production of hermetic packaging and other products later this year.

同樣，這將為今年稍後提高密封包裝和其他產品的產量鋪平道路。

In addition, while our current armor contract is coming to completion, we are cautiously optimistic that working with kinetic protection, new Navy orders may be forthcoming later in 2024.

此外，雖然我們目前的裝甲合約即將完成，但我們對動能防護方面持謹慎樂觀態度，新的海軍訂單可能會在 2024 年稍後發布。

We continue to believe these ballistic solutions have a large potential market across different types of ship classes as well as other military markets.

我們仍然相信這些彈道解決方案在不同類型的艦艇以及其他軍事市場中擁有巨大的潛在市場。

We also continue to work with another customer on providing ballistic protection against higher threat levels.

我們也繼續與另一家客戶合作，提供針對更高威脅等級的彈道防護。

At the same time, we know that further SBIR opportunities, including follow-on contracts are possible in the weeks and months to come.

同時，我們知道未來幾週和幾個月內可能會出現更多 SBIR 機會，包括後續合約。

At the moment, we have six submitted proposals awaiting funding decisions from the DOE, DOD and NASA including four Phase 1s and two Phase 2s.

目前，我們已提交六項提案，等待美國能源部、國防部和美國太空總署做出資助決定，其中包括四個第一階段和兩項第二階段。

These ongoing R&D efforts are enabling us to directly address clearly defined market requirements.

這些持續的研發工作使我們能夠直接滿足明確定義的市場需求。

I'd like to share some details from our most recently completed SBIR program, which effectively demonstrates our ability to address problems identified by our customers, in this case, the Department of Energy.

我想分享我們最近完成的 SBIR 計劃的一些細節，該計劃有效地展示了我們解決客戶（在本例中為能源部）發現的問題的能力。

CPS was initially funded $200,000 by the DOE in response to our proposal entitled Modular Radiation Shielding for transportation and use of micro reactors.

CPS 最初由 DOE 資助 200,000 美元，以回應我們題為「用於微型反應器運輸和使用的模組化輻射屏蔽」的提案。

The problem statement focused on the ability to produce lightweight and low complexity radiation shielding that would be of paramount importance to the deployment of advanced nuclear microreactors.

問題陳述的重點是生產輕質和低複雜性輻射屏蔽的能力，這對於先進核微反應器的部署至關重要。

Lower shielding density promotes higher power density during transit for power, remote or mobile applications, including mining operations, disaster relief efforts, shipping and defense.

較低的屏蔽密度可在電力、遠端或行動應用（包括採礦作業、救災工作、運輸和國防）運輸過程中提高功率密度。

During the nine-month Phase 1 period, which ended just last week, CPS successfully incorporated its proprietary techniques related to both injection molding and Metal Matrix composites or MFCs.

在上週剛結束的為期九個月的第一階段期間，CPS 成功整合了與射出成型和金屬基複合材料或 MFC 相關的專有技術。

We designed, fabricated and evaluated a novel MMC consisting of an aluminum matrix with both tungsten and born carbide reinforcement particles.

我們設計、製造並評估了一種新型 MMC，由鋁基體、鎢和碳化物增強顆粒組成。

The resulting composite offers both Neutron and gamma radiation shielding in an elegant compact solution as opposed to relying on multiple layers of dissimilar materials.

由此產生的複合材料以優雅的緊湊解決方案提供中子和伽馬輻射屏蔽，而不是依賴多層不同的材料。

Although further optimization is necessary, our baseline composite material demonstrated the capacity for new tranche shielding and was highly effective at shielding gamma radiation at much lower mass compared to traditional materials.

儘管需要進一步優化，但我們的基準複合材料展示了新的屏蔽能力，並且與傳統材料相比，能夠以更低的質量有效屏蔽伽馬輻射。

In fact, as a barrier to gamma radiation, our composite demonstrated performance similar to lead or tungsten, but with a reduction in mass of more than 55%.

事實上，作為伽馬輻射屏障，我們的複合材料表現出與鉛或鎢類似的性能，但質量減少了 55% 以上。

Our MFC design to be easily modified to suit different protection needs with variable volumes of both gamma and neutronic overs.

我們的 MFC 設計可以輕鬆修改，以適應不同的保護需求，並具有可變的伽馬和中子超量。

Our proposed solution will greatly reduce the massive material needed while being highly customizable in size, shape and composition.

我們提出的解決方案將大大減少所需的大量材料，同時在尺寸、形狀和成分上高度可自訂。

The novel CPS process improves upon existing research to fabricate integrated radiation fields by achieving greater reinforcement loading with a robust, cost-effective and mature processing technology.

新穎的 CPS 製程在現有研究的基礎上進行了改進，透過穩健、經濟高效且成熟的加工技術實現更大的加固負載，從而製造整合輻射場。

It's a great accomplishment, especially for just a Phase 1 program.

這是一項偉大的成就，尤其是對於第一階段專案而言。

Our technical team was invited to present its results just last week at the National Reactor Innovation Center Program Review at Idaho National Laboratory.

上週，我們的技術團隊受邀在愛達荷國家實驗室的國家反應器創新中心專案審查中展示了其結果。

We're now following up on several leads was developed from that event.

我們現在正在跟進從該事件中獲得的幾條線索。

The feedback that our presentation received also highlighted the value of our approach for stationary applications, i.e., building construction due to the dramatically reduced weight requirements.

我們的演示收到的回饋也強調了我們的方法對於固定應用（即建築施工）的價值，因為重量要求大幅降低。

We are also awaiting DOE's response to our Phase 2 proposal, which, if awarded, would provide an additional $1.1 million in funding over a 24-month period.

我們也正在等待能源部對我們的第二階段提案的回應，如果該提案獲得批准，將在 24 個月內額外提供 110 萬美元的資金。

It should come as no surprise, we're very pleased with the results of this to date, which has already generated meaningful dialogue related to near-term opportunities for fielding our solution.

這應該不足為奇，我們對迄今為止的結果感到非常滿意，這已經產生了與部署我們的解決方案的近期機會相關的有意義的對話。

DoD initiatives like Project Pele, which is working to demonstrate a mobile nuclear reactor for US military applications, again demonstrate the potential dual uses for our novel material solutions.

國防部的一些舉措，例如 Pele 項目，致力於展示美國軍事應用的移動核反應器，再次證明了我們的新型材料解決方案的潛在雙重用途。

Although we do not control the timing of when our proprietary offerings will enter the market, we continue to build our portfolio and service to our customers.

儘管我們無法控制我們的專有產品進入市場的時間，但我們將繼續為客戶建立我們的產品組合和服務。

Within the last few years, CPS has redoubled efforts to expand its product to meet new technology-based requirements.

在過去幾年中，CPS 加倍努力擴展其產品以滿足基於新技術的要求。

One key element of this has been our participation in the SBIR programs of various federal agencies.

其中一個關鍵要素是我們參與各聯邦機構的 SBIR 計劃。

Within the past three years, 5 of our 14 Phase 1 proposals have been selected for award.

在過去三年內，我們的 14 項第一階段提案中有 5 項獲獎。

Historically, the government's rate of funding Phase 1 proposals for all applicants has been about 20%, and this has been even more competitive in recent years, perhaps down to 15%.

從歷史上看，政府對所有申請人的第一階段提案的資助比例約為 20%，近年來這一比例甚至更具競爭力，可能降至 15%。

So we're very pleased with our award rate so far, which is over 35%.

因此，我們對迄今為止超過 35% 的獎勵率感到非常滿意。

This speaks volumes as to the capabilities of our team and our existing intellectual property.

這充分說明了我們團隊的能力和我們現有的智慧財產權。

But more importantly, we see these awards as the affirmation that we are addressing the problem statements of our customers as they define them within the context of the SBIR format.

但更重要的是，我們將這些獎項視為對我們正在解決客戶在 SBIR 格式背景下定義的問題陳述的肯定。

We know that providing such technical solutions will provide real growth opportunities going forward, many of which have potential applications with both commercial and military customers.

我們知道，提供此類技術解決方案將提供未來真正的成長機會，其中許多對商業和軍事客戶都有潛在的應用。

In the meantime, we continue to fulfill the long-term supply agreement announced last year, providing power module components and systems for a variety of rail and other applications to a multinational semiconductor manufacturer.

同時，我們繼續履行去年宣布的長期供應協議，為一家跨國半導體製造商提供用於各種鐵路和其他應用的功率模組組件和系統。

We remain on track for the shipment of product under this contract over the course of 2024.

我們仍按計劃在 2024 年按照該合約發貨。

As I said earlier, we are actively bidding on opportunities to accelerate growth in the future, while mitigating the negative impact this year due to the completion of our current Naval Armor contract.

正如我之前所說，我們正在積極尋找未來加速成長的機會，同時減輕今年因完成當前海軍裝甲合約而帶來的負面影響。

We continue to believe that expansion across other product lines should cover roughly half of the $2 million quarterly revenue shortfall in 2024 related to Armor, setting the stage for growth next year and beyond.

我們仍然認為，其他產品線的擴張應該可以彌補 2024 年與 Armor 相關的 200 萬美元季度收入缺口的大約一半，為明年及以後的成長奠定基礎。

We'd now like to open the call up for questions.

我們現在想開始提問。

Operator?

操作員？

(Operator Instructions) Your first question is coming from

（操作員說明）您的第一個問題來自

[Davis Marcie].

[戴維斯·馬西]​​。

Based on your presentation is on, it sounds like you have a lot going for the company.

根據您的演示，聽起來您對公司有很多貢獻。

What do you think will be the first product that you should be able to order?

您認為您應該訂購的第一個產品是什麼？

What kind of revenues do you think you'd be able to generate from in this current year?

您認為今年能夠產生什麼樣的收入？

Well, I think probably the most straightforward is the 5-axis particularly for hermetic packaging because that's been a request of customers over a period of time that we've been producing hermetic package products to begin with.

嗯，我認為最直接的可能是 5 軸，特別是對於密封包裝，因為在我們開始生產密封包裝產品的一段時間內，這是客戶的要求。

So in the past, we've been not cost competitive on those because we don't have that 5-axis capability in-house.

因此，過去我們在這些方面沒有成本競爭力，因為我們內部沒有 5 軸能力。

So that's a low-risk, near-term execution opportunity once we have that machining capability in-house, we'll be able to offer those products at a cost competitive pricing.

因此，一旦我們擁有內部加工能力，這是一個低風險、短期執行的機會，我們將能夠以具有成本競爭力的價格提供這些產品。

Now that will be first articles, and there'll be customer engagement of that, that will then turn around further down the calendar into volume orders.

現在這將是第一篇文章，並且會有客戶參與，然後將在日曆中進一步轉化為大量訂單。

But that's the most direct answer to your questions.

但這是對你的問題最直接的答案。

Other things like the fiber reinforced aluminum, we're setting up manufacturing this quarter to begin trials and then we'll be replicating the performance results that are known to be attributed to FRA materials.

其他東西，例如纖維增強鋁，我們將在本季度開始生產並開始試驗，然後我們將複製已知歸因於 FRA 材料的性能結果。

And from there, we'll be working with these customers on playing that forward, and that will also have a timeline to it where we validate the performance characteristics against standardized testing criteria for various material performance properties and then translating that into products for a given application starting in probably the nearest on the time line with those aerial applications, whether it's bearing liners for rotary aircraft and similar applications.

從那時起，我們將與這些客戶合作，推動這一進程，並且還將有一個時間表，我們根據各種材料性能屬性的標準化測試標準來驗證性能特徵，然後將其轉化為給定的產品應用程式可能是在時間線上最接近這些航空應用程式開始的，無論是旋翼飛機的軸承襯套還是類似的應用程式。

What companies do you think would be the most interesting to these products, you have a feeling for that type of distribution?

您認為哪些公司對這些產品最感興趣，您對這種類型的分銷有感覺嗎？

Well, on the hermetic packaging, we certainly -- it's customers that we're currently servicing today are the nearest opportunity.

嗯，在密封包裝方面，我們當然——我們今天服務的客戶是最近的機會。

They're very familiar with us.

他們對我們非常熟悉。

We're familiar with them.

我們對他們很熟悉。

We know which products are interested in getting quotes on with components that include 5-axis machining.

我們知道哪些產品有興趣獲得包含 5 軸加工的組件的報價。

To come back to the FRA, it's the OEMs out there that you could list that are in the business of aerial vehicles, whether it's helicopters or even drones and related aircraft like that, where lightweight but high strength and durability have value.

回到法蘭克福機場，您可以列出從事飛行器業務的原始設備製造商，無論是直升機還是無人機和類似的相關飛機，在這些飛行器中，輕質但高強度和耐用性具有價值。

Okay.

好的。

One last thing based on the comments on the conversation, it seems as though maybe you should put out some type of material to the street, I fully understand what the company is all about and what the potential is not going excessively, but going within about proper constraints by making people aware of the potential.

最後一件事是基於對話中的評論，似乎也許你應該向街上發布某種類型的材料，我完全理解公司的全部內容以及潛力，不會過度發展，而是在大約範圍內通過讓人們意識到潛力來進行適當的限制。

Right.

正確的。

Yes, that makes sense.

是的，這是有道理的。

(Operator Instructions) And our next question is coming from

（操作員說明）我們的下一個問題來自

[Steven Fossey].

[史蒂文‧福西]。

So I'm wondering if you could provide a little bit more information or color, whatever you want to call it, about the labor situation.

所以我想知道你是否可以提供更多關於勞動力狀況的資訊或顏色，無論你怎麼稱呼它。

Do you see that as a temporary situation, more of a long-term availability problem that might translate into higher costs?

您是否認為這是暫時的情況，更多的是可能轉化為更高成本的長期可用性問題？

Sure, Steven.

當然，史蒂文。

So actually, I think it was more of a temporary during Q1 problem.

所以實際上，我認為這在第一季的問題中更多是暫時的。

We believe that we are now currently fully staffed for purposes of our business that we're going to be -- our production that's going to be going on in Q2, the second half of Q2 and Q3 and on.

我們相信，目前我們的人員配備齊全，足以滿足我們即將開展的業務——我們的生產將在第二季、第二季下半年和第三季等進行。

So I think that was more temporary.

所以我認為這只是暫時的。

If we get to the point where we have to add a whole bunch of people that might rear its head again.

如果我們到了必須增加一大堆人的地步，他們可能會再次抬頭。

But I think for now, we were just talking about it the other day that we're probably fully staffed, or we are fully staffed, and we should be in much better shape going forward.

但我認為，就目前而言，我們前幾天剛剛討論過，我們可能已經配備齊全，或者我們已經配備齊全，我們應該處於更好的狀態。

Okay.

好的。

Great.

偉大的。

And if I could ask one more quick question.

如果我能再問一個簡單的問題嗎？

On the shielding work, you've highlighted it.

關於屏蔽工作，您已經強調了這一點。

So you're obviously excited about that.

所以你顯然對此感到興奮。

How does that compare in a -- obviously, it's just a Phase 1, but in terms of cost versus current solutions, I mean, do you save cost in the assembled system versus multilayer system?

顯然，這只是第一階段，但就成本與當前解決方案而言，我的意思是，與多層系統相比，組裝系統是否節省了成本？

Or is it more of a -- this is a great elegant solution for applications that are more narrow driven by weight.

或者它更像是——對於重量驅動的更窄的應用來說，這是一個非常優雅的解決方案。

Yes.

是的。

The first application, which we initially responded to was for the mobility of these micro reactors.

我們最初回應的第一個應用是這些微型反應器的移動性。

So you're trying to transit these things to places where either the military might have a setup or there might be disaster relief going on and that kind of thing.

所以你試圖將這些東西運送到可能有軍隊的地方或可能正在進行救災之類的地方。

And obviously, the more weight that you have in the protection aspect of that truck, the less weight availability you have for the actual reactor itself.

顯然，卡車保護方面的重量越大，實際反應器本身的可用重量就越少。

So you're able to increase the power density of the product that's being carried, which has a very real benefit for the user, the customer.

因此，您可以提高所攜帶產品的功率密度，這對使用者、客戶來說是非常實際的好處。

And as we mentioned, what quickly became very apparent was even for nonmobile applications, the construction costs related to massive amounts of concrete have a very real cost factor to the structure of that building, the concrete pad that is built upon and those other things in the crane that's used to move pieces around.

正如我們所提到的，很快就變得非常明顯的是，即使對於非移動應用程序，與大量混凝土相關的建築成本對於該建築物的結構、建造的混凝土墊板以及其中的其他東西也具有非常實際的成本因素。

So being able to make a less dense, more adaptable piece of material that's uniform, so you can attach to it, you can modify it to suit the shape and the needs of that construction is also more valuable.

因此，能夠製造出一種密度較小、適應性更強的均勻材料，這樣你就可以附著在它上面，你可以修改它以適應形狀和結構的需要，這也更有價值。

Now concrete is not particularly expensive, but when you go to a tremendous amount of it, and it's limiting your ability to build the structure that you want and move things in and out of it for testing and things like that. those are some of the conversations that we're already having.

現在混凝土並不是特別昂貴，但是當你使用大量混凝土時，它會限制你建造你想要的結構以及將東西移入移出以進行測試等的能力。這些是我們已經進行的一些對話。

And we don't have details about that cost comparison, but we can tell from the reaction we've had to it that it's intriguing to the users.

我們沒有有關成本比較的詳細信息，但從我們對此的反應可以看出，它對用戶很有趣。

So those are the things that we're going to continue to explore further.

這些是我們將繼續進一步探索的事情。

Great.

偉大的。

And if you can indulge me in just one more.

如果你能再讓我再享受一次的話。

The deal with Triton, how much of that is an application hole versus a technology push?

與 Triton 的交易，其中有多少是應用漏洞與技術推動？

Is it a case of here's an application.

這是一個應用程式的情況嗎？

We know we can do it.

我們知道我們能做到。

Does the market versus this is a cool thing which expands on our capabilities and as possible markets?

市場與這是否是一件很酷的事情，可以擴展我們的能力和可能的市場？

The appeal of FRA to the market is fairly obvious.

FRA對市場的吸引力是相當明顯的。

And one of the benefits of where we stand today is that the properties of the material were well evaluated and tested by the Triton team.

我們今天所處的好處之一是 Triton 團隊對材料的特性進行了充分的評估和測試。

So the appeal of those the material performance is known to the market and is of interest.

因此，那些材料性能的吸引力是為市場所知並引起興趣的。

And what we're able now to do is indicate that we're a reliable, dependable element of their supply chain.

我們現在能夠做的是表明我們是他們供應鏈中可靠、可靠的組成部分。

If you're a helicopter OEM and you're interested in that material because of its performance benefits, you're not going to take it on unless you're sure that, that supplier is going to be around for a long time.

如果您是直升機原始設備製造商，並且由於該材料的性能優勢而對該材料感興趣，那麼除非您確定該供應商將長期存在，否則您不會接受它。

So we're able to do that and address these market requirements by offering this material that is already of interest to them. because they need lightweight.

因此，我們能夠做到這一點，並透過提供他們已經感興趣的材料來滿足這些市場需求。因為他們需要輕量化。

They need durability, and that's what this material provides.

他們需要耐用性，而這正是這種材料所提供的。

So it's driven by what these aerial applications, first of all, require, but we also expect there will be other applications as well as we play this forward.

因此，它首先是由這些空中應用程式的需求所驅動的，但我們也預計會有其他應用程序，以及我們的發展。

Your next question is coming from

您的下一個問題來自

[Wolf Check].

[狼檢查]。

Historically, you've had a 40-40-20 split between departments.

從歷史上看，部門之間的分配比例是 40-40-20。

Do you see that remaining consistent?

您認為這保持一致嗎？

And which kind of product lines are you seeing the most demand for going forward in growth capacity?

您認為哪一種產品線對未來成長能力的需求最大？

Yes.

是的。

So I think, obviously, for the short term, with the completion of the Connect Protection Armor order for the aircraft carriers, that 20 piece is going to make it more like 50-50 with the other two, maybe 48, 48 or whatever with the others.

所以我認為，顯然，從短期來看，隨著航空母艦連接防護裝甲訂單的完成，這20 件將使其與另外兩件的數量更像是50-50 件，也許是48 件、48 件或其他什麼其他人。

But I think that we do have -- we're very optimistic that there will be something more coming down the Armor pipe, either with Kinetic protection or as we continue to work on other Armor applications with other possible customers.

但我認為我們確實有 - 我們非常樂觀地認為，Armor 管道中將會有更多的東西，無論是具有動能保護，還是隨著我們繼續與其他可能的客戶一起開發其他 Armor 應用程式。

But I think in terms of the rest of it, I think hermetic packaging certainly has the opportunity for more growth.

但我認為，就其他方面而言，我認為密封包裝肯定有更多成長的機會。

It's a bigger market.

這是一個更大的市場。

And we have -- as Brian mentioned earlier, we have, I think, seven of the eight FAIs come in the -- or first articles that we did in the first quarter come from the hermetic packaging side of the business.

正如布萊恩之前提到的，我認為，我們在第一季所做的第一篇文章中的八個 FAI 中有七個來自業務的密封包裝方面。

So that certainly has the potential for more near-term growth.

因此，這肯定有短期成長的潛力。

I think the other aspects are probably more in the long term more in the long-term area in terms of growth the FRA, the shielding those certainly, the FRA, we may see some small, small amount of revenue before the end of the year, but it's really not going to be material until we get into '25, ‘26, that kind of thing.

我認為其他方面可能更多的是從長遠來看，在長期領域，在成長方面，FRA，當然，FRA，我們可能會在年底前看到一些小額收入，但在我們進入25 年、26 年在之類的事情之前，它實際上不會變得重要。

Yes.

是的。

And the armor opportunity is ahead of us could quickly bring that back to the historic ratios.

我們面前的裝甲機會可以很快將其恢復到歷史比率。

So as we wrap up this order, we have ongoing conversations in that direction.

因此，當我們完成該訂單時，我們正在朝這個方向進行對話。

Unfortunately, it's lumpy, and we have this current situation, but very real opportunities that could bring that ratio back to the original number that you mentioned in that range, plus or minus.

不幸的是，它是不穩定的，我們目前的情況是，但非常現實的機會可以使該比率回到您在該範圍內提到的原始數字（加或減）。

Got it.

知道了。

And then what kind of capital requirements you're expecting this year?

那麼您預計今年會有什麼樣的資本要求呢？

And do you expect to reach profitability for full year 2024?

您預計 2024 年全年能夠獲利嗎？

So I think in terms of the capital requirements, we're in good shape with that.

所以我認為就資本要求而言，我們的狀況良好。

The 5-axis machine, basically, that money has already been allocated.

5軸機，基本上，那筆錢已經分配了。

As you can see from our balance sheet, we're in very good shape from a cash standpoint.

正如您從我們的資產負債表中看到的那樣，從現金角度來看，我們的狀況非常好。

So even if, God willing, somebody came and said, hey, we need you to start making FRA for us at a really high volume, and we needed to go out and buy a new infill trader for $1 million, that wouldn't be a stumbling block.

因此，即使上帝保佑，有人過來說，嘿，我們需要你開始為我們大量生產 FRA，而且我們需要花 100 萬美元購買新的填充交易員，但這也不會絆腳石。

We could easily handle that.

我們可以輕鬆處理這個問題。

But I think in terms of just generally speaking, we're in good shape on the capital requirement side.

但我認為，總體而言，我們在資本要求方面處於良好狀態。

We're able to get what we need to get when we get it, and that's not a problem.

當我們得到我們需要的東西時，我們就能得到它，這不是問題。

Regarding your second question about profitability, that's good question.

關於你關於獲利能力的第二個問題，這是個好問題。

At this point in time, I'm not sure.

目前，我還不確定。

We certainly are expecting -- we projected profitability over the last three quarters in total.

我們當然預計 - 我們預計過去三個季度的整體獲利能力。

But it's not going to be like two years ago where we had $2 million of profit at the end of the year.

但這不會像兩年前那樣，年底我們有 200 萬美元的利潤。

It's going to be much more narrow.

它將變得更加狹窄。

And certainly, if things go poorly, it could shift to the other side and could be nonprofitable year, but we're hoping that we can get profitable for the last three quarters anyway.

當然，如果情況不順利，它可能會轉向另一邊，並且可能是無利可圖的一年，但我們希望無論如何都能在過去三個季度實現盈利。

But it will be tight.

但會很緊。

Your next question is coming from Greg Weaver.

您的下一個問題來自格雷格·韋弗。

Brian, Chuck, just a quick question.

布萊恩、查克，只是一個簡單的問題。

So the 5-axis tool, the press release has it as an award.

因此，5 軸工具，新聞稿將其作為獎勵。

So that money was an award, not a loan, right?

所以這筆錢是獎勵，不是貸款，對嗎？

Correct.

正確的。

And where basically they're covering -- we have to cover what they're awarding us.

基本上他們所報道的——我們必須報道他們獎勵給我們的東西。

So basically, we're talking about a $400,000 piece of equipment, including installation blah, blah, blah -- you got half of it, yes.

所以基本上，我們談論的是價值 40 萬美元的設備，包括安裝等等，等等——你得到了一半，是的。

It's a dollar per dollar math requirement, so we are receiving the 200,000 for Massachusetts with the commitment to spend that much.

這是每美元一美元的數學要求，因此我們收到了馬薩諸塞州的 20 萬美元，並承諾花這麼多錢。

A portion of that is on labor and other things.

其中一部分用於勞動力和其他方面。

So in aggregate, it's a $400,000 spend, but it's not a loan.

所以總的來說，這是一筆 40 萬美元的支出，但這不是貸款。

There's no obligation to return it or anything like that.

沒有義務歸還它或類似的東西。

It's putting it to good use to add jobs to the manufacturing community of Massachusetts.

它充分利用了這一點，為馬薩諸塞州的製造業增加了就業機會。

Okay.

好的。

Great.

偉大的。

That's great.

那太棒了。

And on the testing constraints you referenced, right, you're trying to make sure the parts are good before you ship them out -- is that a temporary situation?

根據您提到的測試限制，對吧，您正在努力確保零件在發貨之前完好無損 - 這是暫時的情況嗎？

Or is that an ongoing thing now just in line just to be sure?

或者這是一個正在進行的事情，現在只是為了確定？

And are you buying more equipment to help use the bottleneck there?

您是否會購買更多設備來幫助克服那裡的瓶頸？

It sounds like it's a bottleneck.

聽起來好像遇到瓶頸了。

Yes.

是的。

So it is a temporary situation.

所以這是暫時的情況。

We basically what it's requiring is that some of our production equipment is going to make, in this case, base plates for further testing.

基本上，我們的要求是我們的一些生產設備將製造用於進一步測試的基板。

So instead of making them and selling for the customer, we're making them and then we're testing them.

因此，我們不是製造它們並銷售給客戶，而是先製造它們，然後測試它們。

And during the initial part of the problem where we're trying to find the solutions, we would do like 50 pieces at a time.

在問題的最初階段，我們試圖尋找解決方案，我們一次會處理 50 件。

In the first quarter, we made a decision, we've got to start getting -- we think we know where we're going.

在第一季度，我們做出了一個決定，我們必須開始——我們認為我們知道我們要去哪裡。

Now we need to start getting statistically significant runs.

現在我們需要開始獲得統計上顯著的運行。

So instead of 50 pieces, we're looking at 500 pieces and 500 more 500 more.

因此，我們關注的不是 50 件，而是 500 件，以及 500 件以上，500 件以上。

So that's a significant amount of production that would otherwise have gone to a customer at a pretty good pretty good amount.

因此，這是一個相當大的產量，否則的話，這些產量會以相當不錯的數量交付給客戶。

So we do feel we're getting to the end of that.

所以我們確實覺得我們已經結束了。

There is additional testing being done this quarter.

本季正在進行額外的測試。

But I think the expectation is that, as Brian likes to say, we're not ready to spike the football yet, but we're getting very close to the goal line.

但我認為，正如布萊恩喜歡說的那樣，我們的期望是，我們還沒有準備好突破足球，但我們已經非常接近球門線了。

So I think, hopefully, we'll be able to put that behind us relatively soon.

所以我認為，希望我們能夠相對較快地把這個問題拋在腦後。

Okay.

好的。

Great.

偉大的。

And in the just reported quarter, how large was the Armor revenue -- roughly, the Armor revenue was between -- it was $1.7 million, maybe something like that.

在剛剛報告的季度中，Armor 的收入有多大——大致來說，Armor 的收入介於——170 萬美元，也許是這樣。

Okay.

好的。

And that's basically 0 in the current quarter?

而當季基本為 0？

No, no.

不，不。

There's been some -- we've definitely shipped stuff in Q2 as well.

有一些 - 我們肯定也在第二季度發貨了。

It's down, but it's not gone yet.

它已經下降了，但還沒有消失。

Okay.

好的。

We'll be gone by Q3.

我們將在第三季消失。

So what should I think about then in terms of gross margin because as I recollect the Armor business was a nice adder, but you had tier with $1.7 million of ARM or you had 15% gross margin, right?

那麼，在毛利率方面我應該考慮什麼，因為我記得 Armor 業務是一個不錯的加法器，但你有 170 萬美元的 ARM 層，或者你有 15% 的毛利率，對嗎？

I mean, we expect the margin to go up.

我的意思是，我們預期利潤率會上升。

As I said, I think there was a significant expense that goes through the testing process, and that becomes part of our cost of sales.

正如我所說，我認為測試過程會產生大量費用，這將成為我們銷售成本的一部分。

So that's definitely had a negative impact on margin.

所以這肯定對利潤率產生了負面影響。

The other thing is, Brian had mentioned that we have three more engineers now than we did a year ago.

另一件事是，布萊恩提到我們現在比一年前多了三名工程師。

I think that we're viewing this as an investment.

我認為我們將其視為一項投資。

Unfortunately, GAAP says, that's not an investment.

不幸的是，根據公認會計原則，這不是一項投資。

You have to expense those people immediately.

你必須立即消耗這些人的費用。

So I think that I don't expect we're going to be getting back to the levels that we were at a year ago when we were in the high 20s, even I think one quarter, we were at 30%.

因此，我認為我們不會回到一年前 20 多歲的水平，即使我認為有一個季度，我們的成長率也達到了 30%。

But I do think that we should be improving over what we had in the first quarter because of a number of these other expenses that we won't have going forward.

但我確實認為我們應該比第一季的情況有所改善，因為我們未來不會再有許多其他費用。

Even at a lower run rate.

即使運轉速度較低。

Yes.

是的。

Yes.

是的。

I think my fingers crossed, God willing that this quarter had the lowest that it's going to be, but yes.

我想我祈禱，上帝保佑這個季度的業績是最低的，但是是的。

But I think it should go up a bit more.

但我認為應該再漲一點。

Okay.

好的。

That will do it for me now hopefully, you can catch up the next week at the Siduri.

希望這對我來說已經足夠了，下週你可以在 Siduri 趕上。

Bye.

再見。

Well, we appear to be at the end of our question-and-answer session.

好吧，我們的問答環節似乎已經結束了。

I will now hand back over to Brian for any closing comments.

我現在將把任何結束語交還給布萊恩。

Great.

偉大的。

Thanks, everyone, for joining us today and for your ongoing interest in CPS Technologies.

感謝大家今天加入我們以及對 CPS 技術的持續關注。

We look forward to speaking with you again after the end of the second quarter.

我們期待在第二季結束後再次與您交談。

If you have any questions in the interim, please reach out to our Investor Relations adviser.

如果您在此期間有任何疑問，請聯絡我們的投資者關係顧問。

Thanks.

謝謝。

Thank you very much, everyone.

非常感謝大家。

This does conclude today's conference call.

今天的電話會議到此結束。

You may disconnect your phone lines at this time and have a wonderful day.

此時您可以斷開電話線並度過美好的一天。

Thank you for your participation.

感謝您的參與。