CPI Aerostructures Inc (CVU) 2020 Q4 法說會逐字稿

Good morning, and welcome to the Fourth Quarter 2020 CPI Aerostructures Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Ms. Jody Burfening, LHA Investor Relations Counsel. Please go ahead.

早安，歡迎參加 CPI Aerostructures 2020 年第四季財報電話會議。（操作說明）請注意，本次活動正在錄影。現在我將把會議交給 LHA 投資者關係顧問 Jody Burfening 女士。請繼續。

Thank you, Jason, and good morning, everyone. Welcome to CPI Aerostructures Fourth Quarter 2020 Earnings Conference Call. With me on the call this morning are Doug McCrosson, President and Chief Executive Officer; and Tom Powers, Acting Chief Financial Officer.

謝謝你，傑森，大家早安。歡迎參加 CPI Aerostructures 2020 年第四季財報電話會議。今天早上和我一起參加電話會議的有總裁兼執行長道格·麥克羅斯森，以及代理財務長湯姆·鮑爾斯。

The earnings press release, which was issued earlier this morning and a slide presentation, which management will refer to during their prepared remarks, are available in the Investor Relations section of the company's website at www.cpiaero.com. At the conclusion of their prepared remarks, management will hold a Q&A session.

該公司今天早上早些時候發布的盈利新聞稿和管理層將在準備好的發言中提及的幻燈片演示文稿，都可以在公司網站 www.cpiaero.com 的投資者關係部分找到。管理階層在發言結束後將進行問答環節。

As a reminder, this conference call will contain forward-looking statements that are based on current expectations of management and certain assumptions that are subject to risks and uncertainties. There can be no assurance that such risks and uncertainties will not affect the accuracy of the forward-looking statements or that actual results will not differ materially from the results anticipated in the forward-looking statements.

提醒各位，本次電話會議將包含基於管理層當前預期和某些假設的前瞻性陳述，這些陳述存在風險和不確定性。不能保證此類風險和不確定性不會影響前瞻性陳述的準確性，也不能保證實際結果不會與前瞻性陳述中預期的結果有重大差異。

Included in these risks are risks related to the restatement of the company's prior period consolidated financial statements and material weaknesses in the company's internal controls; any adverse developments in existing legal proceedings or the initiation of new legal proceedings; the company's continued compliance with New York Stock Exchange American listing rules; the effect of economic conditions in the industries and markets where the company operates, including the financial market conditions, the impact of COVID-19 pandemic, including its impact on global supply, demand and distribution capabilities as the outbreak continues; the financial condition of the company's customers and suppliers; the cyclicality of the aerospace market, the level of U.S. government defense spending, including changes or shifts in defense spending due to budgetary constraints; spending cuts resulting from sequestration; the allocation of funds to government responses to COVID-19 or changing political conditions and uncertain funding program; the ability of the government and the company's other customers to terminate contracts at any time; production rates for commercial and military aircraft programs; competitive pricing pressures; start-up costs for new programs, technology and product development risks and uncertainties; product performance and costs resulting from changes to and compliance with applicable regulatory requirements; level of indebtedness and cash flow from operations.

這些風險包括與公司前期合併財務報表重述相關的風險以及公司內部控制的重大缺陷；現有法律訴訟的任何不利進展或新法律訴訟的啟動；公司持續遵守紐約證券交易所美國上市規則的情況；公司運營所在行業和市場的經濟狀況的影響，包括金融市場狀況；COVID-19週期性航空供應商的影響，包括其對全球供應、航空供應商的影響、航空服務公司的影響和航空企業的影響國防開支水平，包括因預算限制導致的國防開支變化或轉移；因自動減支導致的支出削減；政府應對COVID-19疫情的資金分配或不斷變化的政治形勢以及不確定的資金計劃；政府和公司其他客戶隨時終止合約的能力；商用和軍用飛機專案的生產率；競爭性定價壓力；新專案的啟動成本、技術和產品開發風險和不確定性；因適用監管要求的變更和遵守而導致的產品性能和成本；負債水準和經營活動現金流。

Additional information concerning these and other risks can be found in the company's annual report on Form 10-K for the year ended December 31, 2020, and the company's other filings with the Securities and Exchange Commission.

有關這些風險和其他風險的更多信息，請參閱公司截至 2020 年 12 月 31 日止年度的 10-K 表格年度報告以及公司向美國證券交易委員會提交的其他文件。

Because the risks, assumptions and uncertainties referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. Listeners are cautioned not to place undue reliance on such forward-looking statements, each of which speaks only as of the date made. The company has no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

因為上述風險、假設和不確定性可能導致實際結果或績效與任何前瞻性聲明中表達的結果或績效有重大差異。聽眾請注意，不要過度依賴此類前瞻性陳述，這些陳述僅代表其作出之日的觀點。本公司沒有義務更新任何前瞻性聲明以反映本聲明發布日期之後的事件或情況。

With that, I would now like to turn the call over to Doug McCrosson, President and Chief Executive Officer. Good morning, Doug.

接下來，我將把電話交給總裁兼執行長道格·麥克羅斯森。早安，道格。

Good morning, and thank you, Jody, and good morning, everyone. Thank you all for joining us this morning for our fourth quarter and 2020 year-end earnings call.

早安，謝謝你，喬迪，大家早安。感謝各位今天上午參加我們的第四季及2020年終財報電話會議。

Before I begin, let me take a minute to recognize the effort of our accounting staff and other members of the team who are essential in closing the fiscal year and endured many personal challenges with COVID-19, especially during January and February.

在開始之前，請允許我花一分鐘時間來感謝我們的會計人員和團隊其他成員的努力，他們在完成財政年度方面發揮了至關重要的作用，並且克服了 COVID-19 帶來的諸多個人挑戰，尤其是在 1 月和 2 月期間。

For those of you that got ill, we are grateful for your recovery. And for those that had to pick up the workload during those trying times, we are appreciative of the extra effort.

對於那些生病的朋友，我們感謝你們的康復。對於那些在艱難時期必須承擔更多工作的人，我們感謝他們的額外付出。

The 10-K for the period ended December 31, 2020, was filed last night, and we expect to remain in compliance with regulatory requirements for the SEC and NYSE.

截至 2020 年 12 月 31 日的 10-K 表格已於昨晚提交，我們預計將繼續遵守美國證券交易委員會和紐約證券交易所的監管要求。

For our call today, I will start with a review of our performance for the fourth quarter and provide my perspective on the full year results. I will then turn the call over to Tom for a detailed review of our financial results for the fourth quarter. Then I will offer some concluding remarks before opening the line to questions.

在今天的電話會議上，我將首先回顧我們第四季度的業績，並展望全年業績。接下來，我將把電話交給湯姆，讓他詳細回顧我們第四季的財務表現。然後我將作一些總結性發言，之後開放提問環節。

For those of you who have been following CPI, you are no doubt familiar with the many challenges we faced in 2020. Not only were we managing through the operational complexities associated with the COVID-19 pandemic, but we also tackled the multi-period financial restatement and time-consuming legal challenges related to the restatement.

對於一直關注CPI的人來說，你們無疑熟悉我們在2020年面臨的許多挑戰。我們不僅要應對 COVID-19 疫情相關的營運複雜性，還要應對多期財務重述以及與重述相關的耗時法律挑戰。

Against this backdrop, we kept our nose to the grindstone. We focused on executing our defended -- our funded defense backlog, and the results we are reporting today testify to our achievements in the fourth quarter and full year 2020. By our, I mean, not only our dedicated and talented workforce, but also our very engaged and active Board of Directors, which provided much appreciated guidance to me during the most tumultuous time I can remember during my professional career.

在這種背景下，我們埋頭苦幹。我們專注於執行已獲資助的國防積壓項目，今天公佈的成果證明了我們在 2020 年第四季和全年的成就。我所說的“我們”，不僅指我們敬業且才華橫溢的員工隊伍，還指我們積極參與、充滿活力的董事會，他們在我職業生涯中最動蕩的時期給予了我極大的指導。

Back in early 2020, at the beginning of the pandemic, the Board created an Oversight Committee that reports to our Chairman and works closely with my executive staff and me. While created to help us manage our way to the other side of what we thought would be a short-term challenge, in actuality, the Oversight Committee is still functioning today and offering valuable counsel and encouragement while holding my executive team and me accountable for results. The Board and I are proud of our collective response to the events of 2020, and I am pleased to share the results with you all today.

早在 2020 年初，疫情爆發之初，董事會就成立了一個監督委員會，該委員會向董事長報告工作，並與我的執行團隊和我密切合作。雖然成立監督委員會的初衷是為了幫助我們度過我們認為的短期挑戰，但實際上，監督委員會至今仍在發揮作用，提供寶貴的建議和鼓勵，同時督促我和我的執行團隊對結果負責。董事會和我為我們共同應對 2020 年發生的事件感到自豪，我很高興今天與大家分享結果。

Turning to Slide 4. We delivered on our promise to end the year on a high note, driven by increased production tempo of newer defense programs and solid execution on our legacy programs. Total revenue in the quarter increased nearly 12%, and revenue from military programs increased nearly 13%.

翻到第 4 張投影片。我們兌現了承諾，以優異的成績結束了這一年，這得益於新國防項目生產速度的加快以及傳統項目的穩健執行。本季總收入成長近 12%，軍事項目收入成長近 13%。

Gross profit nearly doubled over last year's fourth quarter, and gross margin expanded 730 basis points to 18.2%. The bottom line improved to a $1.3 million net profit, a swing of $2.7 million from the $1.4 million net loss we reported last year. And we delivered solid fourth quarter earnings of $0.11 per diluted share compared to a loss of $0.12 per share last year.

毛利較去年第四季幾乎翻了一番，毛利率成長了 730 個基點，達到 18.2%。最終淨利潤改善至 130 萬美元，較去年報告的 140 萬美元淨虧損扭轉了 270 萬美元的局面。我們在第四季度實現了穩健的盈利，稀釋後每股收益為 0.11 美元，而去年同期每股虧損 0.12 美元。

In addition, as we did throughout 2020, we continued to prioritize liquidity over revenue. We saw continued improvements in our processes to shorten the cash flow cycles of our major programs through a setting of working capital management tools developed in 2020. These tools lean out the manufacturing process to compress build schedules and more closely manage the flow of inventory into the factory such that materials arrive now as close to the point of use as possible.

此外，正如我們在 2020 年所做的那樣，我們繼續優先考慮流動性而非收入。我們看到，透過在 2020 年開發的一系列營運資本管理工具，我們的流程不斷改進，從而縮短了主要專案的現金流週期。這些工具簡化了製造流程，縮短了生產週期，並更嚴格地管理了工廠的庫存流動，使材料盡可能地在最接近使用點的地方到達。

The result is a system that enables quick reaction to unplanned changes in supply of components, customer demand or both. This was critical given the uncertainties caused by COVID-19.

最終形成的系統能夠對零件供應、客戶需求或兩者之間的意外變化做出快速反應。鑑於新冠肺炎疫情帶來的不確定性，這一點至關重要。

Reflecting a priority given to liquidity, we deferred more than $1 million of material costs planned for the fourth quarter into early 2021. Under percentage of completion accounting rules, incurring less cost means recognizing less revenue and profit. We estimate that this decision had the effect of recognizing approximately $2 million less revenue and the related profit in the fourth quarter than we would have had we incurred those costs in 2020.

考慮到流動性問題，我們將原計劃在第四季度發生的超過 100 萬美元的材料成本推遲到 2021 年初。根據完工百分比會計準則，成本越少，確認的收入和利潤就越少。我們估計，這項決定導致我們在第四季度確認的收入和相關利潤比我們在 2020 年發生這些成本時少了約 200 萬美元。

You may be wondering why 2020 cash flow from operations was $1.2 million less than in 2019 despite our focus on working capital. As I have reported before, 2019 benefited from an approximately $3.2 million tailwind caused by a customer overpayment that was fully repaid during 2020, creating a headwind to reported 2020 cash generation.

您可能想知道，儘管我們專注於營運資本，但為什麼 2020 年的營運活動現金流比 2019 年減少了 120 萬美元。正如我之前報道的那樣，2019 年受益於客戶多付的款項，這筆款項在 2020 年全部償還，從而帶來了約 320 萬美元的順風，這對 2020 年報告的現金流產生了不利影響。

Our repayment to this customer was completed during the third quarter of 2020. Had this customer not overpaid us in 2019, reported results for that year would have been $3.6 million use of operating cash. And for 2020, we would have reported positive cash from operations of $1.6 million, a swing of about $5.2 million on essentially the same revenue.

我們已於 2020 年第三季完成對該客戶的還款。如果這位客戶在 2019 年沒有多付我們款項，那麼當年的報告結果將是營運現金使用 360 萬美元。2020 年，我們的營運活動現金流為正 160 萬美元，與前一年基本相同的收入相比，現金流減少了約 520 萬美元。

On Slide 5, I want to touch on a few points about our full year results. First, as you can see from the bridge chart on the left side of the slide, we grew revenue from military programs by $10.5 million, which was just slightly larger than the decline in revenue from commercial aviation programs.

在第 5 張投影片中，我想談談我們全年業績的幾個要點。首先，正如您在幻燈片左側的橋樑圖中看到的那樣，我們從軍事項目中獲得的收入增加了 1050 萬美元，這比商業航空項目的收入下降幅度略大。

As a result, revenue from military programs increased to 90% of total revenue from 79% of total revenue for 2019, a mix shift that points to the success of our strategy to focus on military contracts and our business development efforts. This mix shift also drove a significant increase in gross profit and a 340 basis point expansion in gross profit margin year-over-year, especially as we exited an unprofitable business aviation program and got a boost from some military work transitioning to full production rates. Reducing our exposure to commercial aviation programs has also helped reduce our upfront inventory investment and improve working capital management.

因此，軍事項目的收入佔總收入的比例從 2019 年的 79% 增加到 90%，這一結構轉變表明我們專注於軍事合約和業務發展努力的策略取得了成功。這種組合變化也推動了毛利的大幅增長，毛利率同比提高了 340 個基點，尤其是在我們退出不盈利的公務航空項目，以及一些軍事項目過渡到全面生產水平後，毛利得到了提振。減少我們對商業航空專案的投資也有助於減少我們的前期庫存投資並改善營運資金管理。

Second, turning to the chart on the right side of the slide. You can see that revenues surged in the second half of the year relative to the first half, as we had expected, based on the timing of ramping up production of newer military programs.

其次，請看投影片右側的圖表。正如我們根據新軍事項目增產的時間表所預期的那樣，下半年的收入相對於上半年大幅成長。

Turning to Slide 6. We ended the year with a total backlog of $476.2 million, down around 15% year-over-year due in large part to our exit from an unprofitable life of program business aviation contract. This program had been a drag on cash flow and earnings for several years, so it's very positive for the company despite the impact of total backlog, 96% of which now consists of multiyear contracts with our defense industry customers.

翻到第 6 張投影片。我們年底的總積壓訂單為 4.762 億美元，年減約 15%，這主要是由於我們退出了一項不盈利的公務航空專案合約。該專案多年來一直拖累著公司的現金流和收益，因此儘管積壓訂單總量（其中 96% 是與國防工業客戶簽訂的多年期合約）有所增加，但對公司而言仍然是非常積極的。

The strategic pivot toward a more defense-weighted program is more than 5 years in the making, and we believe we are now at an inflection point. We have earned a nationally recognized and award-winning reputation with defense OEMs for our capability to manufacture highly complex, sophisticated aerostructures and aerospace systems.

向更側重國防的計劃進行戰略調整已經進行了五年多，我們相信現在正處於一個轉折點。我們憑藉著製造高度複雜、精密的航空結構和航空航太系統的能力，在國防原始設備製造商中贏得了全國認可和屢獲殊榮的聲譽。

As a reminder, when we refer to total backlog, we mean the total potential value of all of our programs through their respective periods of performance. Funded backlog is the revenue yet to be recognized on firm purchase orders with customers.

再次提醒，當我們提到總積壓項目時，我們指的是我們所有項目在其各自執行期內的總潛在價值。已融資積壓訂單是指尚未在與客戶的正式採購訂單中確認的收入。

During 2020, funded backlog increased $21 million to $169.6 million, of which 98% is for defense markets. Approximately 56% of the funded backlog is expected to be recognized as revenue during 2021.

2020 年，已獲資助的積壓訂單增加了 2,100 萬美元，達到 1.696 億美元，其中 98% 用於國防市場。預計 2021 年將確認約 56% 的已獲資助積壓訂單為收入。

At year-end 2020, our funded defense backlog consisted primarily of orders with Northrop Grumman for the E-2D Outer Wing Panel Kits program; with Lockheed Martin for structural assemblies for the Black Hawk helicopter, F-35 and the F-16 fee; with Boeing for the A-10 rewing program; and direct orders with the U.S. Air Force for T-38 life extension program components.

截至 2020 年底，我們已獲資助的國防積壓訂單主要包括：諾斯羅普·格魯曼公司的 E-2D 外翼面板套件項目訂單；洛克希德·馬丁公司的黑鷹直升機、F-35 和 F-16 的結構組件訂單；波音公司的 A-10 機翼更換訂單；以及美國空軍的延壽項目。

Our book-to-bill ratio for the 12 months ended December 31 was 1.24, and this follows a very strong year in 2019 when book-to-bill was 1.29. For those who may be unfamiliar with the term book-to-bill, this ratio compares the value of orders received to the value of revenue recognized during the period. The higher the ratio, the stronger the demand for your product.

截至 12 月 31 日的 12 個月，我們的訂單出貨比為 1.24，而 2019 年的訂單出貨比為 1.29，表現非常強勁。對於可能不熟悉「訂單出貨比」這個術語的人來說，這個比率比較的是當期收到的訂單價值與確認的收入價值。該比率越高，表示對你的產品需求越強。

Ratios higher than 1 generally indicate that revenue is expected to grow in the future. In our case, for 2020, for every dollar of revenue we recorded, we booked $1.24 of new funded orders. In 2020, that translates to booking new funded orders totaling more than $108 million.

高於 1 的比率通常表示未來收入有望成長。就我們而言，2020 年，我們每獲得 1 美元的收入，就能獲得 1.24 美元的新融資訂單。2020 年，這意味著新增融資訂單總額超過 1.08 億美元。

Moving to Slide 7. Our business development team is hard at work building a pipeline of new opportunities to maintain our strong total backlog, and our proposal activity remains very strong as we head into 2021. Our pipeline consists of opportunities for follow-on awards to current programs as well as brand-new opportunities aligned with national security priorities, including electronic warfare, intelligence, surveillance and reconnaissance, advanced missile technologies and large-scale autonomous systems.

切換到第 7 張投影片。我們的業務發展團隊正在努力建立新的業務機會管道，以維持我們強勁的總訂單量，隨著我們進入 2021 年，我們的提案活動仍然非常強勁。我們的專案儲備包括現有專案的後續獎勵機會，以及與國家安全優先事項相符的全新機會，包括電子戰、情報、監視和偵察、先進飛彈技術和大型自主系統。

We have already submitted or will soon be submitting proposals for electronic warfare pods. Some of these are for follow-on contracts where CPI Aero was the incumbent, and one is for an entirely new system for which there is no incumbent. We believe that our customers will make awards on each of these competitions within the next few months.

我們已經提交或即將提交電子戰吊艙的方案。其中一些是後續合同，CPI Aero 是原供應商；還有一份是全新的系統合同，目前還沒有原供應商。我們相信，在接下來的幾個月裡，我們的客戶將在每項比賽中都獲得獎項。

We are also leveraging the subsystem integration and complex assembly experience gained from our pod manufacturing programs to bid on programs with OEMs of autonomous systems. We are currently responding to a couple of RFQs for work on unmanned systems. And if successful, this would represent our first order for product used on an unmanned system.

我們也利用從吊艙製造專案中獲得的子系統整合和複雜組裝經驗，參與自主系統原始設備製造商的專案競標。我們目前正在回覆幾份關於無人系統工作的詢價邀請書。如果成功，這將是我們首次為無人系統訂購產品。

Finally, we are leveraging our experience in advanced missile structure to determine how CPI Aero can play a role within the emerging military and commercial space market. While market conditions currently favor defense opportunities, we believe that our capabilities will be in strong demand by commercial aviation customers as the commercial market recovers, and we'll be ready to capitalize when that time comes.

最後，我們將利用我們在先進飛彈結構方面的經驗，來確定 CPI Aero 如何在新興的軍事和商業航太市場中發揮作用。雖然目前市場狀況有利於國防領域的機會，但我們相信，隨著商業市場的復甦，我們的能力將受到商業航空客戶的強烈需求，屆時我們將做好準備抓住機會。

I'll now turn the call over to Tom Powers, our acting CFO, who will walk you through our financial results for the quarter. Tom?

現在我將把電話交給我們的代理財務長湯姆鮑爾斯，他將為大家介紹我們本季的財務表現。湯姆？

Thank you, Doug. Please turn to Slide 9. Starting with the quarterly results on the left side of the slide, revenue for the fourth quarter of 2020 increased 11.9% to $25.4 million compared to $22.7 million for last year's fourth quarter. Revenue from military contracts increased by 12.9% to $23.4 million, while revenue from commercial aviation contracts was essentially flat from last year at just under $2 million.

謝謝你，道格。請翻到第 9 張投影片。從投影片左側的季度業績開始，2020 年第四季的營收成長了 11.9%，達到 2,540 萬美元，而去年第四季的營收為 2,270 萬美元。軍事合約收入成長 12.9%，達到 2,340 萬美元，而商業航空合約收入與去年基本持平，略低於 200 萬美元。

Gross profit nearly doubled to $4.6 million compared to $2.5 million due to higher revenue and a more favorable program mix. Gross profit margin expanded 730 basis points to 18.2%.

由於收入增加和節目組合更加有利，毛利幾乎翻了一番，從 250 萬美元增加到 460 萬美元。毛利率成長730個基點至18.2%。

On the strength of the gross profit gains, net income for the fourth quarter was approximately $1.3 million or $0.11 per share compared to a net loss of $1.4 million or $0.12 per share for the fourth quarter of 2019. This is an improvement of $2.7 million or $0.23 per share.

由於毛利潤的成長，第四季淨利潤約為 130 萬美元，即每股 0.11 美元，而 2019 年第四季淨虧損為 140 萬美元，即每股 0.12 美元。這意味著收益增加了 270 萬美元，即每股 0.23 美元。

Finally, cash flow from operations for the fourth quarter was $1.7 million compared to $3.7 million for the fourth quarter last year. Recall that 2019 benefited from a roughly $3.2 million tailwind due to a customer overpayment that became a headwind to cash during 2020 as we repaid the customer. The overpayment was fully paid back during 2020.

最後，第四季經營活動產生的現金流量為 170 萬美元，而去年同期為 370 萬美元。回想一下，2019 年我們受益於大約 320 萬美元的順風，這筆資金來自客戶的多付款項，但在 2020 年，隨著我們向客戶償還款項，這筆多付款項反而成了現金流的阻力。多付的款項已於 2020 年全部償還。

On the right side of this slide, we present the financial highlights for the full year of 2020 compared to audited figures for 2019. As Doug mentioned earlier, revenue for the year was essentially flat with gains in revenue from military contracts nearly offset by lower commercial aviation revenue.

在本投影片的右側，我們展示了 2020 年全年的財務亮點，並與 2019 年的經審計數據進行了比較。正如道格之前提到的，今年的收入基本上持平，軍方合約收入的成長幾乎被商業航空收入的下降所抵消。

Gross profit increased 30.5% to approximately $12 million. And the gross profit margin expanded 340 basis points, reflecting more favorable mix of military programs and our exit from unprofitable commercial programs, partially offset by lower volume on our Raytheon pod program. The net loss was narrowed to $1.3 million or $0.11 per share compared to a net loss of $4.5 million or $0.38 per share for 2019.

毛利成長30.5%，達到約1200萬美元。毛利率成長了 340 個基點，這反映出軍事項目組合更加有利，以及我們退出了不盈利的商業項目，但部分被雷神吊艙項目的銷量下降所抵消。淨虧損收窄至 130 萬美元，即每股虧損 0.11 美元，而 2019 年的淨虧損為 450 萬美元，即每股虧損 0.38 美元。

Turning to Slide 10. We present a few of our key balance sheet accounts at December 31, 2020, compared to December 31, 2019. Cash stood at $6 million compared to $5.4 million at December 31, 2019. 2019 balance sheet had $1.4 million in restricted cash, which was the amount held in escrow related to our 2018 acquisition of Welding Metallurgy. In December 2020, we entered into a settlement agreement with the seller of Welding Metallurgy, which resulted in the release to CPI Aero of the $1.4 million held in escrow as was received on December 28, 2020.

翻到第10張投影片。我們將 2020 年 12 月 31 日的一些主要資產負債表帳戶與 2019 年 12 月 31 日的資產負債表帳戶進行比較。截至 2019 年 12 月 31 日，現金餘額為 600 萬美元，而 2019 年 12 月 31 日為 540 萬美元。2019 年資產負債表上有 140 萬美元受限現金，這筆款項是與我們 2018 年收購 Welding Metallurgy 相關的託管款項。2020 年 12 月，我們與 Welding Metallurgy 的賣方達成和解協議，導致 CPI Aero 獲得了託管的 140 萬美元，該款項於 2020 年 12 月 28 日收到。

Net contract assets and liabilities stood at $18.1 million compared to $11.7 million at December 31, 2019. The increase reflects working capital growth to support our expected revenue growth in 2021 and the repayment of the customer overpayment during 2020.

截至 2019 年 12 月 31 日，淨合約資產和負債為 1,810 萬美元，而 2019 年 12 月 31 日為 1,170 萬美元。此次成長反映了營運資金的成長，以支持我們 2021 年的預期收入成長以及償還 2020 年客戶多付的款項。

Total debt stood at $28.7 million, excluding the $4.8 million loan we received under the Paycheck Protection Program provision of the CARES Act. During the year, we reduced our debt by $2.3 million. As of December 31, 2020, we were in compliance with all the covenants contained at our amended bank united credit facility.

總債務為 2,870 萬美元，不包括我們根據《新冠病毒援助、救濟和經濟安全法案》(CARES Act) 的薪資保護計畫條款獲得的 480 萬美元貸款。年內，我們減少了230萬美元的債務。截至 2020 年 12 月 31 日，我們遵守了經修訂的銀行聯合信貸協議中所包含的所有契約。

Now I'll turn the call back to Doug.

現在我把電話轉回給道格。

Thank you, Tom. Please now turn to Slide 12 for a review of our 2021 priorities and outlook. In 2021, we intend to maintain our focus on operational excellence as we execute on our funded backlog. Internally, we expect about 95% of revenue for 2021 will come from deliveries against the funded backlog we had at the end of 2020, with 20 defense programs each contributing more than $1 million in revenue.

謝謝你，湯姆。請翻到第 12 頁，了解我們 2021 年的優先事項和展望。2021年，我們將繼續專注於卓越運營，同時推進已獲資金支持的積壓項目。公司內部預計，2021 年約 95% 的收入將來自 2020 年底已獲資助的積壓訂單的交付，其中 20 個國防項目每個項目貢獻的收入都超過 100 萬美元。

For context, in 2019, just 13 military programs contributed more than $1 million in revenue. Several programs are expected to drive revenue growth in 2021. Some are growing because of ramping production rates such as, for example, the Next Generation Jammer Mid-Band pod we produce for Raytheon as we start production of the system development and test articles phase of the program.

作為參考，2019 年，僅有 13 個軍事項目貢獻了超過 100 萬美元的收入。預計多個項目將在 2021 年推動營收成長。有些產品由於生產速度加快而增長，例如，我們為雷神公司生產的下一代乾擾器中頻吊艙，隨著我們開始生產該項目的系統開發和測試樣品階段的產品，產品數量正在增長。

This project has the potential to be our largest growth program, and we are on plan to soon deliver the first of 16 SDTA pods we expect to deliver in 2021.

該項目有潛力成為我們最大的成長計劃，我們正按計劃推進，預計在 2021 年交付 16 個 SDTA 艙體中的第一個。

We also plan to reach first delivery milestones on several programs during 2021. We announced recently that we shipped our first assembly of F-16 Rudder Island and Drag Chute Canister assemblies to Lockheed. Later this year, our plan is to deliver the first main landing gear pod assemblies to Boeing against purchase orders totaling more than $20 million to support their A-10 rewing program.

我們也計劃在 2021 年實現多個專案的首次交付里程碑。我們最近宣布，我們已向洛克希德公司交付了首批 F-16 舵島和減速傘組件。今年晚些時候，我們的計劃是向波音公司交付首批主起落架吊艙組件，採購訂單總額超過 2000 萬美元，以支持他們的 A-10 換翼計劃。

Other programs that will contribute to revenue are new starts in 2021. For example, we expect to be commencing work this year on the undisclosed radar pod we announced in March as well as to begin work on a second as yet unannounced radar pod.

其他有助於增加收入的項目包括 2021 年新啟動的項目。例如，我們預計今年將開始研發我們在 3 月宣布的未公開的雷達吊艙，並開始研發第二個尚未公佈的雷達吊艙。

In addition, the contract we announced in January with Raytheon Missile Company is likewise expected to generate meaningful incremental revenue in 2021. We also intend to maintain our focus on improving liquidity by continuing to compress manufacturing cycles and converting contract assets and inventory into cash.

此外，我們在 1 月宣布與雷神飛彈公司簽訂的合約預計也將在 2021 年產生可觀的增量收入。我們還打算繼續專注於改善流動性，透過不斷縮短生產週期，並將合約資產和庫存轉化為現金來實現這一目標。

In 2021, we are especially focused on improving inventory turns for our welded products and our repair and overhaul product lines. In contrast to the bulk of our business that consists of long-lived complex programs, these product lines are typically quick-turn sales, and we generally do not receive customer contract financing on the material we purchase. We believe that we have ample opportunity to turn inventory into cash by streamlining the production process and increasing production output from these work sales.

2021年，我們將專注於提高焊接產品和維脩大修產品線的庫存週轉率。與我們大部分業務（由長期複雜的專案組成）不同，這些產品線通常是快速週轉的銷售，而且我們通常不會為購買的材料獲得客戶合約融資。我們相信，透過簡化生產流程和提高這些工作銷售的產量，我們有充足的機會將庫存轉化為現金。

Finally, as discussed on earnings calls last year, the steps we are taking to optimize our working capital requirements have the added benefit but generally leading to higher profit margins as products are manufactured more efficiently. We expect a reduction in overhead rates in 2021 as new contracts begin production and existing programs ramped to higher rates, causing an increase in the direct labor base.

最後，正如去年財報電話會議上所討論的那樣，我們為優化營運資金需求而採取的措施，除了帶來額外的好處外，通常還能提高利潤率，因為產品生產效率更高。我們預計 2021 年管理費用率將下降，因為新合約開始生產，現有項目也逐步提高費率，從而導致直接人工成本增加。

And remember, in 2020, we spent nearly $1 million in advisory fees and added audit fees directly related to the restatement of prior reported results that are not expected to occur again, providing further operating leverage that is expected to benefit the bottom line.

請記住，2020 年，我們花費了近 100 萬美元用於諮詢費，並增加了與重述先前報告結果直接相關的審計費，預計這些結果不會再次出現，這將進一步提高營運槓桿，有望改善盈利狀況。

Based on the momentum we will realize in the second half of 2020 and our confidence in our ability to deliver against the funded backlog, our goal is to deliver higher revenue, improved profitability and cash flow in 2021 compared to 2020. With cash flow generation governing our day-to-day operation decision-making, we have our sights set on improving our financial profile in 2021 and setting the stage for an even more improvement in 2022.

基於我們在 2020 年下半年將實現的成長動能以及我們對完成已獲資金支持的積壓訂單的能力的信心，我們的目標是在 2021 年實現比 2020 年更高的收入、更高的盈利能力和更好的現金流。現金流的產生是我們日常營運決策的依據，我們的目標是在 2021 年改善財務狀況，並為 2022 年的更大改善奠定基礎。

In closing, 2020 was a real gut check. A year like that test your ability to overcome obstacles and requires that you zero in on what is really important for your business.

總之，2020 年是真正的考驗。這樣的一年考驗你克服困難的能力，也要求你專注於對你的企業真正重要的事。

I've always been amazed at the talent, experience and dedication of our employees. Once the pandemic began, I knew that this group would step up, and step up, they did. I especially thank the men and women that were essential to keeping the production lines going.

我一直對我們員工的才華、經驗和敬業精神感到驚嘆。疫情爆發之初，我就知道這個團隊會挺身而出，而他們也確實做到了。我特別要感謝那些為維持生產線運作做出重要貢獻的男女。

Designated by our government as essential workers, they came to the factory every day and acted heroically and unselfishly so that our customers could keep producing the aircraft we need to defend our nation. We all owe them our respect and our thanks.

他們被政府指定為必要工作人員，每天都來工廠上班，表現得英勇無私，以便我們的客戶能夠繼續生產我們保衛國家所需的飛機。我們都應該對他們表示尊重和感謝。

Despite numerous challenges, we delivered significant improvements in our financial performance for the fourth quarter and full year 2020 compared to the same periods last year. During the second half of 2020, we began to see the fruits of our defense-centric business development strategy that we initiated in 2015, and we expect to sustain momentum in 2021.

儘管面臨諸多挑戰，但與去年同期相比，我們在 2020 年第四季和全年財務表現方面取得了顯著進步。2020 年下半年，我們開始看到 2015 年啟動的以國防為中心的業務發展策略的成果，我們預計 2021 年將保持這一勢頭。

We have worked hard to establish a reputation as a best-in-class supplier of complex assemblies and systems to defense contractors, earning their trust as sole suppliers in many cases and expanding our book of business with them. Our strategy is clear. Our priorities are defined. Our goals are lofty but achievable, and we are increasingly optimistic about the future.

我們努力打造了作為國防承包商複雜組件和系統一流供應商的聲譽，在許多情況下贏得了他們的信任，成為他們的唯一供應商，並擴大了與他們的業務範圍。我們的策略很明確。我們的工作重點已經明確。我們的目標遠大但可實現，我們對未來越來越樂觀。

Jason, you can open the line for questions now. Thank you.

傑森，現在可以開始接受提問了。謝謝。

(Operator Instructions) Our first question comes from Ken Herbert from Canaccord.

（操作說明）我們的第一個問題來自 Canaccord 公司的 Ken Herbert。

First, Doug, I just wanted to see if we could get a little more specific on the gross margin assumptions in '21. I know you're not giving a lot of detail on the guidance, but over 20 -- because of a lot of the unusual items and everything going on, you had a really nice sort of improvement in gross margins across the quarters. Is this 18.2% the appropriate launching point as we think about '21? Or how should we think about the cadence of gross margins through the year and how -- maybe where they start out and where they could end?

首先，Doug，我只是想看看我們能否更具體地說明 2021 年的毛利率假設。我知道您沒有給出太多關於業績指引的細節，但是，由於許多不尋常的項目和各種情況，您在2020年各季度的毛利率都取得了非常好的改善。當我們展望 2021 年時，18.2% 是否是一個合適的起點？或者我們應該如何看待全年毛利率的波動，以及它們的起始點和最終點會是什麼樣的？

Okay. So I would say that between the third and fourth quarter of 2020, that is from a top line perspective, kind of what a typical quarter might look like in 2021. On the margin side, I would have to say that we have a lot of new start programs. I mentioned a few of them in my prepared remarks. That might -- so we might be lower than at 18%, maybe not appreciably lower, but somewhere between where we ended now and 18% for 2021.

好的。所以我認為，從整體來看，2020 年第三季到第四季之間的情況，大概就是 2021 年一個典型季度的情況。從邊際效益來看，我們有許多新的創業項目。我在事先準備好的發言稿中提到了其中幾個。這可能——所以我們可能會低於 18%，也許不會明顯低於，但會在我們目前的水平和 2021 年的 18% 之間。

Okay. Okay. Great wide range there, but I appreciate that. And can you talk a little bit about -- so you just provided a little more detail on sort of the top line and how it shakes out for the year. Is there anything noticeable in terms of the cadence of the top line? I mean with some of these new program starts and the timing of the backlog that we see, perhaps an acceleration in the growth in the second half? Or how do we -- how should we think about the framework for the top line?

好的。好的。種類確實很豐富，我很欣賞這一點。您能否再詳細談談—您剛才提供了一些關於全年業績概況和最終結果的細節。主旋律的節奏有明顯變化嗎？我的意思是，隨著一些新項目的啟動以及我們看到的積壓訂單的處理時間，下半年的成長速度或許會加快？或者說，我們該如何──我們該如何思考頂層框架？

The way it appears now is that we don't necessarily see a similar pattern like last year, where we knew going into 2020 that the beginning half of the year was going to be much less active than the second half of the year. We're -- we've started '21 pretty strong, and I would say that it kind of stays like this for the rest of the year. I don't think we're going to have a lot of, I'll say, a back-ended year this year. And that's the way it's looking now anyway.

現在看來，我們未必會看到與去年類似的模式，去年我們進入 2020 年時就知道，上半年的業務量會比下半年少得多。2021 年我們開局非常強勁，我認為這種勢頭會一直維持到年底。我認為今年我們不會遇到很多，或者說，比較拖沓的年份。至少現在看來是這樣。

Okay. And in the guidance for an improvement in cash from operations in '21, is that looking at the revised '20 estimate when we back out the customer refund? Or what's the starting point for that comment on the cash flow?

好的。在 2021 年經營活動現金流改善的預期中，是否指扣除客戶退款後修訂的 2020 年預期？或者說，關於現金流的評論的出發點是什麼？

Well, the comment was really related to the GAAP results we just reported. But I would also envision it being stronger than the -- I'll say, the modified result I just presented.

嗯，這則評論其實與我們剛剛公佈的GAAP業績有關。但我認為它應該比——我剛才提出的修改後的結果更強。

Okay. Perfect. And just one final question. Can you quantify the backlog impact from the business jet program exit in the quarter?

好的。完美的。最後一個問題。你能量化一下本季公務機專案退出對訂單積壓的影響嗎？

It was roughly $30 million to $40 million. I don't have the exact number, but it was a significant number.

大約是3000萬到4000萬美元。我沒有確切的數字，但那是一個相當大的數字。

(Operator Instructions) This concludes our question-and-answer session. I would like to turn the conference back over to Doug McCrosson, CEO, for any closing remarks.

（操作說明）問答環節到此結束。我謹將會議交還給執行長道格·麥克羅斯森，請他作總結發言。

Okay. Thank you all for participating in today's call. And Tom and I look forward to speaking to you again when we report the results for the first quarter of '21. Thank you. Have a great day.

好的。感謝各位參加今天的電話會議。湯姆和我期待在公佈 2021 年第一季業績時再次與您交談。謝謝。祝你有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議已經結束。感謝各位參加今天的報告會。您現在可以斷開連線了。