CPS Technologies Corp (CPSH) 2024 Q3 法說會逐字稿

Good day, everyone and welcome to the CPS Technologies third quarter earnings call.

大家好，歡迎參加 CPS Technologies 第三季財報電話會議。

At this time, all participants have been placed on a listen-only mode.

此時，所有參與者均已置於僅聽模式。

If you have any questions or comments during the presentation, you may press star one on your phone to answer the question queue at any time and we will open the floor for your questions and comments after the presentation.

如果您在演示過程中有任何問題或意見，您可以隨時按手機上的星一號回答問題隊列，我們將在演示結束後開放您的問題和意見。

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

現在我很高興將發言權交給東道主 CPS Technologies 財務長 Chuck Griffith。

The floor is yours.

地板是你的。

Thank you, Matthew and good morning, everyone.

謝謝你，馬修，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 third quarter results with you, but first Chris Witty, our investor relations adviser will provide a brief safe harbor statement.

我們期待與您討論我們的第三季業績，但首先我們的投資者關係顧問 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 1,995 and should be considered as subject to the many uncertainties that exist in cps' operations.

在我們開始今天電話會議的業務部分之前，我想指出，本次電話會議中的陳述並非嚴格意義上的歷史陳述，而是1,995 年《私人證券訴訟改革法案》含義內的前瞻性陳述，應被視為受到 cps 營運中存在的許多不確定因素的影響。

And environment.

和環境。

These uncertainties include but are not limited to the wars in Ukraine and Israel.

這些不確定因素包括但不限於烏克蘭和以色列的戰爭。

Other geopolitical events, economic conditions, market demands and competitive factors.

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 extra results to differ materially from those in any forward-looking statement.

這些因素可能導致額外的結果與任何前瞻性聲明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。

I will now turn the call over to Brian to offer his perspective on the third quarter.

我現在會把電話轉給布萊恩，提出他對第三季的看法。

Highlights after which Chuck will review the financial results in greater detail, Brian.

重點介紹之後，查克將更詳細地審查財務業績，布萊恩。

Thank you, Chris.

謝謝你，克里斯。

Good morning.

早安.

Third quarter revenue was $4.2 million with an operating loss of approximately $1.5 million revenue declined year over year, primarily due to the end of our US Navy Armor contract with Kinetic Protection as we previously discussed.

第三季營收為 420 萬美元，營運虧損約 150 萬美元營收年減。

While another major customer also purchased significantly less year over year as it worked through some excess inventory.

而另一家主要客戶的採購量也比去年同期大幅減少，因為它處理了一些過剩的庫存。

Chuck will review this further in a moment while the quarter's results were negatively impacted by such factors as well as third shift startup costs and supply chain issues.

查克將在稍後進一步審查這一點，而該季度的業績受到這些因素以及三班啟動成本和供應鏈問題的負面影響。

We have recently improved product throughput and with recent wins under our belt are much more optimistic about the fourth quarter and beyond.

我們最近提高了產品吞吐量，並且隨著最近的勝利，我們對第四季度及以後的情況更加樂觀。

I'll now turn the call over to Chuck to provide further details about our financial results.

我現在將把電話轉給查克，以提供有關我們財務業績的更多詳細資訊。

After which I'll provide some additional perspective.

之後我將提供一些額外的觀點。

Thanks Brian.

謝謝布萊恩。

As as was just mentioned, the company's revenue totaled $4.2 million in the third quarter compared with $6.3 million last year.

正如剛才所提到的，該公司第三季的收入總計為 420 萬美元，而去年為 630 萬美元。

Most of the year over year change was due to the end of our contract with kinetic protection as expected related to the armor shipments for the US navy fleet of aircraft carriers.

年比變化大部分是由於我們與美國海軍航空母艦艦隊的裝甲運輸相關的動能防護合約的終止。

We previously announced that the completion of this program would negatively impact results by approximately $2 million in revenue per quarter.

我們先前宣布，該計劃的完成將對每季收入約 200 萬美元的業績產生負面影響。

Kinetic protection does remain cautiously optimistic about landing additional work for other naval ship classes in the coming year and is focused on bringing advanced ballistic shielding to the remainder of the surface fleet.

動能防護對於來年為其他海軍艦艇類別開展額外工作仍然持謹慎樂觀態度，並專注於為水面艦隊的其餘部分提供先進的彈道防護。

We reported a gross loss in the third quarter of one of one half million dollars or approximately negative 12% of sales compared with a gross profit of $1.2 million or 20% of sales last year.

我們報告稱，第三季的毛虧損為 50 萬美元之一，約佔銷售額的 12%，而去年的毛利為 120 萬美元，佔銷售額的 20%。

This decrease was due to lower overall revenue and reduced manufacturing efficiencies along with costs associated with hiring and training.

這一下降是由於總體收入下降、製造效率降低以及招聘和培訓相關成本造成的。

The third shift that began operating last week of August, as I just mentioned during the quarter, this new staff worked alongside other workers for training, impacting overall cost of goods sold with virtually no corresponding topline revenue component in the quarter.

正如我剛剛在本季度提到的，第三班從八月上週開始運營，這些新員工與其他員工一起接受培訓，影響了銷售商品的總體成本，而本季度幾乎沒有相應的營收組成部分。

We anticipate that gross margins will improve as volumes climb in the fourth quarter in fiscal 2025.

我們預計，隨著 2025 財年第四季銷售的攀升，毛利率將有所改善。

As previously discussed, we did incur the expense of hiring and training.

如前所述，我們確實產生了招募和培訓費用。

Our third shift but only very limited impact on the revenue in Q3.

我們的第三次轉變對第三季的營收影響非常有限。

However, our first four weeks of Q4 are off to a solid start, especially relative to the first four weeks of Q3.

然而，我們第四季的前四週有一個良好的開端，特別是相對於第三季的前四週而言。

This is attributable both to the addition of a third shift as well as abnormally low shipments early in Q3.

這歸因於增加了第三班以及第三季初期出貨量異常低。

Given our expanding manufacturing capability and recent new contracts.

鑑於我們不斷擴大的製造能力和最近的新合約。

We're optimistic about further growth in fiscal 2025 along with the operating leverage and improved margins that that should bring while we'll continue to work to stabilize the support, stabilize and support our increased manufacturing operations.

我們對 2025 財年的進一步成長以及由此帶來的營運槓桿和利潤率改善持樂觀態度，同時我們將繼續努力穩定支持，穩定和支持我們增加的製造業務。

Many of the initiatives necessary to increase output are showing results selling general and administrate administrative expenses.

許多增加產出所需的措施都在銷售一般和行政管理費用方面取得了成果。

G&A totaled $1 million in the third quarter versus $1.1 million in the prior year period.

第三季的一般管理費用總額為 100 萬美元，而去年同期為 110 萬美元。

As we did remain focused on controlling costs even while investing in new business development initiatives aimed to accelerate long term growth.

我們確實仍然專注於控製成本，同時投資於旨在加速長期成長的新業務開發計劃。

The company posted an operating loss of $1.5 million in the third quarter compared with operating income of approximately $0.1 million last year and we reported a net loss of $1.0 million or 7¢ per share versus net income of $0.2 million or 1¢ per diluted share in Q3 of fiscal 2023.

該公司第三季的營業虧損為150 萬美元，而去年的營業收入約為10 萬美元，我們報告的淨虧損為100 萬美元，即每股7 美分，而2019 年第三季的淨利潤為20 萬美元，即每股攤薄收益1 美分。

Turning to the balance sheet, we ended the quarter with $4.7 million of cash and $1 million in marketable securities versus$ 8.8 million in cash and no marketable securities at the end or sorry at the start of 2024 trade accounts receivable as of September 28th totaled$ 3.7 million versus $4.4 million at the end of December 2023 inventories also totaled $4.4 million at the end of the third quarter compared with$ 4.6 million at the start of the fiscal year.

轉向資產負債表，本季結束時，我們有470 萬美元的現金和100 萬美元的有價證券，而截至9 月28 日，截至2024 年年底或年初，我們有880 萬美元的現金，沒有有價證券，應收帳款總額為 $截至2023 年12 月末，庫存為370 萬美元，而截至2023 年12 月底為440 萬美元。 460 萬美元。

Turning to the liability side payables and accruals totaled $3.3 million at the end of the third quarter versus $3.6 million as of December 31st 2023.

說到負債方，第三季末的應付帳款和應計費用總計為 330 萬美元，而截至 2023 年 12 月 31 日為 360 萬美元。

Now I'll turn the call back over to Brian and he will provide more in depth discussion of the period.

現在我將把電話轉回給布萊恩，他將提供有關該時期的更深入的討論。

Thanks.

謝謝。

Sure.

當然。

While the third quarter saw lower revenue both year over year and sequentially versus Q2, we are now optimistic about the outlook for CPS.

儘管第三季的營收年比和季比均低於第二季度，但我們現在對 CPS 的前景持樂觀態度。

Obviously, the completion of the armor contract with kinetic protection will continue to be a headwind while we continue to pursue a follow on order from the United States Navy.

顯然，當我們繼續尋求美國海軍的後續訂單時，具有動能防護的裝甲合約的完成將繼續是一個阻力。

However, there were certain challenges that are now largely behind us.

然而，某些挑戰現在基本上已經過去了。

First, as previously mentioned, one customer was holding off on additional purchases as it worked through existing inventory orders have now resumed and we anticipate growth in the coming months and quarters.

首先，如前所述，一位客戶推遲了額外採購，因為現有庫存訂單現已恢復，我們預計未來幾個月和幾季將出現成長。

At the same time, we've successfully trained a third shift of operators and are now able to successfully turn orders into shipments at an increased rate.

同時，我們成功地培訓了第三班操作員，現在能夠以更高的速度成功地將訂單轉化為發貨。

Something that has constrained us the past few quarters while our manufacturing operations remain lean and efficient.

在過去幾個季度中，我們的製造業務仍然保持精簡和高效，但某些因素限制了我們。

We have a greater ability to improve our capacity utilization and at the same time have recently won several orders that position us well, for the remainder of this year and beyond specifically, I'm referring to the phase two Sbir Award with the Department of Energy, which we've discussed in the past the new $12 million contract with our existing semiconductor customer and a new development contract with the navy that was secured very recently.

我們有更大的能力提高產能利用率，同時最近贏得了幾份訂單，這些訂單使我們處於有利地位，在今年剩餘時間及以後，具體而言，我指的是與能源部的第二階段Sbir獎，我們過去討論過與我們現有的半導體客戶簽訂的價值 1200 萬美元的新合同，以及最近與海軍簽訂的新開發合同。

The deal we face two award provides funding of $1.1 million over 24 months for CPS to continue its development effort for modular radiation shielding for transportation and use of micro reactors.

我們面臨的兩項合約為 CPS 提供了 24 個月內 110 萬美元的資金，以繼續開髮用於運輸和使用微型反應器的模組化輻射屏蔽。

This is the second phase two award since June and a great recognition for our team as it acknowledges our ability to develop and deliver novel yet practical solutions in response to well-defined requirements.

這是自 6 月以來第二個第二階段獎項，也是對我們團隊的極大認可，因為它認可了我們開發和提供新穎而實用的解決方案以滿足明確要求的能力。

We're committed to addressing critical customer needs.

我們致力於滿足關鍵的客戶需求。

In this case, lightweight shielding for nuclear radiation for a host of agencies and their mission critical programs.

在這種情況下，為許多機構及其關鍵任務項目提供輕質核輻射屏蔽。

With regard to the semiconductor customer.

關於半導體客戶。

The new contract represents a larger agreement than we've had in recent years and it is expected to significantly boost revenue in fiscal 2025 as we announced concurrently with earnings.

新合約代表著比我們近年來簽訂的協議更大的協議，正如我們在公佈收益的同時宣布的那樣，預計將顯著增加 2025 財年的收入。

The contract for power module components is cancelable by either party in light of the ongoing negotiations and the manufacturing ramp up that is required today.

鑑於正在進行的談判和目前所需的產量增加，任何一方都可以取消電源模組組件的合約。

The signed contract enables us to continue these discussions about future volume and pricing requirements.

簽署的合約使我們能夠繼續討論未來的數量和定價要求。

Even as we meet the near term production requirements of our long term customer.

即使我們滿足長期客戶的近期生產要求。

Under the contract deliveries are scheduled to take place over a 12 month period starting now with components to be utilized primarily in high speed rail wind turbines and EV or HEV applications.

根據合同，從現在開始，預計將在 12 個月內交付組件，主要用於高鐵風力渦輪機和電動車或混合動力汽車應用。

This is a very positive development for CPS technologies as we work out final details on pricing and delivery to ensure the best outcome for us and our shareholders as well as our customers.

這對 CPS 技術來說是一個非常積極的發展，因為我們正在製定定價和交付的最終細節，以確保我們、我們的股東以及我們的客戶獲得最佳結果。

Recently, we've also received a new contract from the US Navy for further application of our mail matrix composite solutions.

最近，我們也收到了美國海軍的一份新合同，進一步應用我們的郵件矩陣複合解決方案。

This contract valued at $200,000 provides funding for development work at CPS.

這份價值 20 萬美元的合約為 CPS 的開發工作提供資金。

Over the next 12 months, our research will focus on addressing the requirements of the Naval Air Systems command or NAV Air specifically by providing lightweight high strength materials CPs' M MC solutions.

在接下來的 12 個月中，我們的研究將專注於滿足海軍航空系統司令部或 NAV Air 的要求，特別是透過提供輕質高強度材料 CP 的 M MC 解決方案。

In this case, fibrous materials infiltrated with aluminum, provide higher strength than neat aluminum without the increased weight of steel.

在這種情況下，滲透鋁的纖維材料可提供比純鋁更高的強度，而不會增加鋼的重量。

We also remain cautiously optimistic about the likelihood of kinetic protection winning new armor orders for additional classes of naval vessels in fiscal 2025.

我們也對動能防護在 2025 財年贏得更多級別海軍艦艇新裝甲訂單的可能性保持謹慎樂觀。

As our ballistic solutions address a large market across various types of ships as well as other military applications.

我們的彈道解決方案面向各種類型船舶以及其他軍事應用的龐大市場。

We continue to be actively involved in seeking out other SB I opportunities as well as bidding on new applications with an expanding array of customers and we are awaiting word on proposals submitted to us agencies including several within the dod as well as with NASA.

我們繼續積極參與尋找其他 SB I 機會，並與越來越多的客戶競標新應用，我們正在等待向美國機構（包括國防部和 NASA 的幾個機構）提交的提案的消息。

We're also optimistic about our expanded product line that now includes fiber reinforced aluminum or FR A composite manufacturing trials have been going well and we'll we're continuing to speak with customers in the aerospace and defense industry about FR A capabilities for stronger, more durable and lighter weight applications comprised of high strength aluminum alloys, this continuously reinforced with short ceramic fibers.

我們也對我們擴大的產品線感到樂觀，該產品線現在包括纖維增強鋁或FR A 複合材料製造試驗，進展順利，我們將繼續與航空航天和國防行業的客戶討論FR A 能力，以實現更強大的能力，由高強度鋁合金組成的更耐用、重量更輕的應用，並用短陶瓷纖維不斷增強。

We expect to begin the commercialization of FR A in fiscal 2025.

我們預計 FR A 將於 2025 財政年度開始商業化。

In addition to the SBIR phase two on radiation shielding, we've been in discussions with other potential customers regarding our capabilities in this area.

除了有關輻射屏蔽的 SBIR 第二階段之外，我們也一直在與其他潛在客戶討論我們在該領域的能力。

These discussions could lead to the generation of additional revenue in 2025 over and above our sbir funding for this part of the portfolio.

這些討論可能會在 2025 年為這部分投資組合帶來超出我們 sbir 資金的額外收入。

Finally, with our new five AC and C machine up and running, we're ready for higher production of hermetic packaging and other products in Q4 and beyond.

最後，隨著我們新的五台 AC 和 C 機器的啟動和運行，我們已準備好在第四季度及以後提高密封包裝和其他產品的產量。

Overall.

全面的。

Given our expanded manufacturing capabilities, third shift being up and running and with several significant contract wins under our belt, the company is better positioned for growth and improved results than at any time within the past 12 months.

鑑於我們擴大的製造能力、第三班制的啟動和運行以及我們贏得的幾項重大合同，該公司比過去 12 個月內的任何時候都更有能力實現增長和改善業績。

We're moving into a new era of expansion and are optimistic about the quarters to come.

我們正在進入一個新的擴張時代，並對未來幾季感到樂觀。

We appreciate our investors', patience and passion as we've navigated this year and the many challenges that entail many of which have now largely been addressed.

我們感謝投資者的耐心和熱情，因為我們今年已經度過了難關，其中許多挑戰現在已基本解決。

We look forward to the future and the many opportunities that 2025 will bring.

我們展望未來，展望 2025 年將帶來的眾多機會。

We can now open the call up for questions.

我們現在可以開始提問。

Matthew.

馬修.

Certainly everyone at this time will be conducting a question and answer session. (Operator Instructions)

當然這時候大家都會進行問答環節。 （操作員說明）

Thank you.

謝謝。

That concludes our Q&A session.

我們的問答環節到此結束。

I'll now hand the conference back to Brian Mackey for her closing remarks.

現在我將把會議交還給布萊恩·麥基，讓她作閉幕詞。

Please go ahead.

請繼續。

Thank you for joining us today for your ongoing interest in CPS technologies.

感謝您今天加入我們，因為您對 CPS 技術一直感興趣。

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

我們期待在第四季度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。

Thank you.

謝謝。

Thank you, everyone.

謝謝大家。

This concludes today's event.

今天的活動到此結束。

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

此時您可能會斷開連接並度過美好的一天。

Thank you for your participation.

感謝您的參與。