Daktronics Inc (DAKT) 2023 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Daktronics' Fiscal Year 2023 Second Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded today, Monday, December 12 and is available on the company's website at www.daktronics.com. (Operator Instructions)

女士們先生們，美好的一天，歡迎來到 Daktronics 2023 財年第二季度收益結果電話會議。提醒一下，今天，即 12 月 12 日，星期一，將錄製本次會議，並可在公司網站 www.daktronics.com 上查閱。 （操作員說明）

And I would now like to turn the conference over to Mr. Kevin McDermott, Daktronics' Lead Independent Director. Please go ahead, Kevin.

現在，我想將會議轉交給達科首席獨立董事 Kevin McDermott 先生。請繼續，凱文。

Thank you, and good morning. My name is Kevin McDermott. I am the Lead Independent Director on the Daktronics Board and the Audit Committee Chair. I joined the Board in June 2015. Prior to my retirement in 2013, I was with the accounting firm at KPMG for 33 years. I served in various capacities at KP, the majority of which involved auditing the financial statements of publicly held companies.

謝謝，早上好。我的名字是凱文·麥克德莫特。我是 Daktronics 董事會的首席獨立董事和審計委員會主席。我於 2015 年 6 月加入董事會。在 2013 年退休之前，我在畢馬威會計師事務所工作了 33 年。我曾在 KP 擔任過各種職務，其中大部分涉及審計上市公司的財務報表。

This morning, before passing the microphone to Reece and Sheila, I wanted to join you to acknowledge the concerns reflected in the stock price reaction to announcements made last week and to give you some background.

今天早上，在將麥克風交給 Reece 和 Sheila 之前，我想和你們一起承認股價對上周公告的反應所反映的擔憂，並向你們介紹一些背景情況。

Daktronics announced the going concern conclusion, the postponement of the second quarter earnings release and call and the delay in the filing of the company's second quarter Form 10-Q. Daktronics was unable to provide further information at that time because there were still related accounting and disclosure matters that had to be resolved.

達科宣布持續經營結論、推遲第二季度財報發布和電話會議以及推遲提交公司第二季度 10-Q 表格。達科當時無法提供進一步的信息，因為還有相關的會計和披露事宜需要解決。

My presence today is also meant to underline to you that in addition to focusing on liquidity enhancement, your Board is prioritizing engagement with shareholders. Our goals today are to explain the substance of that going concern conclusion, share with you the exciting order pipeline, backlog and revenue update that might otherwise be overshadowed and give some specific detail on the plan and activity already underway to improve our liquidity situation and the cash flow generation from operations that has been hampered due to the necessary inventory buildup, given supply chain issues in order to serve this historic level of customer demand.

我今天出席會議也是為了向您強調，除了關注流動性增強外，您的董事會還優先考慮與股東的接觸。我們今天的目標是解釋持續經營結論的實質內容，與您分享令人興奮的訂單管道、積壓訂單和收入更新，否則這些可能會被掩蓋，並提供一些關於已經在進行的計劃和活動的具體細節，以改善我們的流動性狀況和考慮到供應鏈問題，為了滿足這一歷史水平的客戶需求，由於必要的庫存積累而阻礙了運營產生的現金流量。

Before Reece and Sheila take you through the earnings release and the related commentary, I want to explain the going concern disclosure conclusion. generally accepted accounting principles in the U.S. require a reporting company to consider at each annual and interim reporting date, whether there are conditions and events considered in the aggregate that raise substantial doubt about the company's ability to continue as a going concern for the 12-month period from the issuance date of the financial statements.

在 Reece 和 Sheila 為您介紹收益發布和相關評論之前，我想解釋一下持續經營披露的結論。美國公認的會計原則要求報告公司在每個年度和中期報告日考慮，是否存在綜合考慮的條件和事件，導致對公司在 12 個月內持續經營的能力產生重大懷疑自財務報表報出日起計算。

If such condition exists, management then must evaluate whether its plan sufficiently alleviate that substantial doubt. Management's assessment is then considered by the company's independent auditors. As discussed in this morning's release and to a greater extent in the Form 10-Q, Daktronics intends to file tomorrow.

如果存在這種情況，管理層則必須評估其計劃是否足以消除這種重大疑慮。管理層的評估隨後由公司的獨立審計師考慮。正如今天上午的新聞稿以及 10-Q 表格中所討論的，達科打算明天提交文件。

The company's order and backlog coming out of the pandemic has been very strong. However, Daktronics had to manage through significant pandemic-induced supply chain issues. These supply line constraints led to the decision to increase inventory levels in order to improve the predictability in the production cycle, which has absorbed much of the company's customary levels of liquidity.

該公司因大流行而產生的訂單和積壓訂單非常強勁。但是，Daktronics 必須應對由大流行引起的重大供應鏈問題。這些供應線限制導致決定增加庫存水平，以提高生產週期的可預測性，這吸收了公司慣常水平的流動性。

In addition, global economic and geopolitical conditions have introduced increased risk to our cash flow forecasts and our ability to predict the radar backlog will convert to cash over the next 12 months. While Daktronics Bank previously increased the company's borrowing capacity from $35 million to $45 million, the incremental $10 million is subject to a renewal every 90 days.

此外，全球經濟和地緣政治狀況給我們的現金流預測帶來了更大的風險，我們預測雷達積壓訂單將在未來 12 個月內轉化為現金的能力。雖然 Daktronics Bank 此前將公司的借貸能力從 3500 萬美元增加到 4500 萬美元，但增加的 1000 萬美元每 90 天更新一次。

Further, as plans for additional financing have not been finalized and are subject to market conditions that are not within Daktronics control. U.S. GAAP does not allow the company to consider such plans in this going concern evaluation. As a result, we unfortunately had to conclude the substantial doubt as defined under U.S. GAAP accounting framework did exist.

此外，由於額外融資計劃尚未最終確定，並且受達科控制之外的市場條件影響。美國公認會計原則不允許公司在本次持續經營評估中考慮此類計劃。因此，不幸的是，我們不得不得出結論，美國公認會計原則會計框架下所定義的實質性懷疑確實存在。

I will now hand the call over to Reece and Sheila, but will be available during the Q&A session, and we'll be happy to respond to questions at that time. Thank you. Now I'll turn the call over to Reece.

我現在將把電話轉給 Reece 和 Sheila，但在問答環節有空，屆時我們很樂意回答問題。謝謝你。現在我將把電話轉給 Reece。

Thank you, Kevin. Good morning, everyone. Thank you for participating in our second quarter earnings conference call. I would like to review our disclosure cautioning investors and participants that in addition to statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans about our future financial performance and future business opportunities.

謝謝你，凱文。大家，早安。感謝您參加我們的第二季度收益電話會議。我想回顧一下我們的披露，提醒投資者和參與者，除了歷史事實陳述外，我們還將討論反映我們對未來財務業績和未來商業機會的預期和計劃的前瞻性陳述。

All forward-looking statements involve risks and uncertainties, which may be out of our control and may cause actual results to differ materially. Such risks include changes in economic conditions, changes in the competitive and market landscape, including impacts of global trade discussions and policies, the impact of governmental laws, regulations and orders, including those resulting from pandemics, disruptions to our business caused by geopolitical events, military actions, work stoppages, natural disasters or other international health emergencies such as the COVID-19 pandemic, management of growth, timing and magnitude of future contracts, fluctuations of margins, availability of raw materials and components and shipping services, the introduction of new products and technology and other important factors.

所有前瞻性陳述都涉及風險和不確定性，這些風險和不確定性可能超出我們的控制範圍，並可能導致實際結果出現重大差異。此類風險包括經濟狀況的變化、競爭和市場格局的變化，包括全球貿易討論和政策的影響、政府法律、法規和命令的影響，包括流行病引起的影響、地緣政治事件對我們業務造成的干擾、軍事行動、停工、自然災害或其他國際衛生緊急情況（例如 COVID-19 大流行）、增長管理、未來合同的時間和規模、利潤率波動、原材料和組件的可用性以及航運服務、新產品的引入產品和技術等重要因素。

These identified important factors could cause actual results to differ materially from those disclosed in this call in the company's second quarter 2023 earnings release and its most recent annual report on Form 10-K, we refer you to these documents.

這些確定的重要因素可能導致實際結果與公司 2023 年第二季度收益發布中披露的結果及其最新的 10-K 表格年度報告中披露的結果存在重大差異，我們建議您參考這些文件。

Our second quarter 2023 earnings release contain certain non-GAAP financial measures and was furnished to the SEC on the Form 10 -- excuse me, 8-K this morning and is available on the Investors section at Daktronics website at www.daktronics.com.

我們的 2023 年第二季度收益發布包含某些非 GAAP 財務指標，並已通過 Form 10 提交給美國證券交易委員會——不好意思，今天早上 8-K，可在 Daktronics 網站 www.daktronics.com 的投資者部分獲取。

I'll now turn the call over to Reece Kurtenbach for additional comments.

我現在將電話轉給 Reece Kurtenbach 以徵求更多意見。

Thank you, Sheila. Thank you, Kevin, for your remarks. In the first half of fiscal 2023, we achieved sales increases even when our capacity was constrained due to significant unusual part shortages, a challenging labor environment, operating disruptions from COVID-19-related absences and the first quarter COVID-19 mandated shutdown of our Shanghai production facilities.

謝謝你，希拉。凱文，謝謝你的發言。在 2023 財年上半年，即使我們的產能因嚴重異常零件短缺、充滿挑戰的勞動力環境、因 COVID-19 相關缺勤導致的運營中斷以及第一季度 COVID-19 強制關閉我們的工廠而受到限制，我們仍實現了銷售額增長上海生產基地。

I am proud of our team's ability to increase our sales output during the second quarter and through the first half of the year under these conditions. The unprecedented and persistent supply chain conditions caused lower gross profits through fulfillment as well as higher costs for materials, labor and freight that were not all able to be passed on to our customers.

我為我們的團隊在這種情況下能夠在第二季度和上半年增加銷售量而感到自豪。史無前例且持續存在的供應鏈狀況導致履約毛利下降，以及無法全部轉嫁給客戶的材料、人工和運費成本上升。

We made the strategic decision to keep delivery windows for our customers as close as possible to the originally committed date as supply chain and manufacturing constraints would allow. Even though this sometimes added additional cost to fulfill a project.

我們做出了戰略決策，在供應鍊和製造限制允許的情況下，使我們客戶的交付窗口盡可能接近最初承諾的日期。儘管這有時會增加完成項目的額外成本。

To address supply chain volatility, we aggressively secured inventory to fulfill orders for our customers consuming cash while increasing predictability of our operations. We did all this because Daktronics has distinguished itself for 54 years for meeting our customer commitments on delivery dates, product quality and customer support.

為了解決供應鏈的波動性問題，我們積極確保庫存以完成消耗現金的客戶的訂單，同時提高我們運營的可預測性。我們之所以這樣做，是因為 Daktronics 54 年來一直以履行我們在交貨日期、產品質量和客戶支持方面的客戶承諾而著稱。

Our people displayed enormous strength, adaptability and resiliency over the past 1.5 years to maintain that reputation, securing supplies of critical components and responding to customers when demand came rushing back. So through the first 6 months of fiscal 2023, cash was used for strategic growth in inventory stocking and to add stability in our production, growth in accounts receivable due to continued growth in orders and sales, and capital investments to increase manufacturing capacity.

在過去的 1.5 年裡，我們的員工表現出了巨大的實力、適應性和彈性，以保持這一聲譽，確保關鍵部件的供應，並在需求急速恢復時響應客戶。因此，在 2023 財年的前 6 個月，現金被用於庫存庫存的戰略增長並增加我們生產的穩定性，由於訂單和銷售的持續增長導致應收賬款增長，以及用於提高製造能力的資本投資。

Today, our production and fulfillment operations continue to adapt and recover from the enduring implications of the pandemic. Supply chain disruptions have started to ease, and we expect our inventory levels to peak in the current quarter, Q3 of '23 and continue to decline to more normalized levels through production usage and reductions in purchases.

今天，我們的生產和履行業務繼續適應並從大流行的持久影響中恢復過來。供應鏈中斷已經開始緩解，我們預計我們的庫存水平將在本季度，即 23 年第三季度達到頂峰，並通過生產使用和採購減少繼續下降到更正常的水平。

Most important is how we are managing the cash implications of these supply -- strategic supply chain and production decisions. So I'd like to share more about that now. In our 54-year history, we have not been faced with the perfect storm that these last 2 years represent. Beginning with the immediate implications of the economy shutting down in the spring of 2020 followed by the sudden rebound in activity, while supply chains remain delayed, snarled, and often display closed.

最重要的是我們如何管理這些供應的現金影響——戰略供應鍊和生產決策。所以我現在想分享更多。在我們 54 年的歷史中，我們還沒有遇到過最近兩年所代表的完美風暴。從 2020 年春季經濟停擺的直接影響開始，隨後活動突然反彈，而供應鏈仍然延遲、混亂，並且經常顯示關閉。

These times have stressed our liquidity beyond levels that we have ever seen, and our financial resources have not been sufficiently flexible. Our priority for today is to restore our balance sheet to appropriate levels of liquidity. Our entire organization is focused on 4 critical drivers of our liquidity enhancement plan.

這些時期對我們的流動性造成了前所未有的壓力，我們的財務資源也不夠靈活。我們今天的首要任務是將我們的資產負債表恢復到適當的流動性水平。我們整個組織都專注於流動性增強計劃的 4 個關鍵驅動因素。

First is cash generation focused through proactively completing and fulfilling orders in our $463 million backlog. We will do this through productivity improvements from previous investments in factory capacity and capital equipment and hiring only critical production and service personnel to increase output.

首先是通過主動完成和履行我們 4.63 億美元積壓訂單中的訂單來產生現金。我們將通過之前對工廠產能和資本設備的投資提高生產率，並僅僱用關鍵的生產和服務人員來增加產量，從而實現這一目標。

We will focus on market, operating margin improvement through pricing actions, product mix adjustments and prudent management of operating expenses. We will reengineer designs for supply chain resiliency, and we will normalize inventory levels as supply chain challenges continue to ease.

我們將專注於市場，通過定價行動、產品組合調整和審慎管理運營費用來提高運營利潤率。我們將重新設計供應鏈的彈性，隨著供應鏈挑戰的持續緩解，我們將規範庫存水平。

A second driver will be the aggressive management of working capital. Our third will be concentrating capital investments on maximizing asset returns and the fourth will be to obtain additional sources of liquidity with the consent of our lead banking partner.

第二個驅動因素是對營運資金的積極管理。我們的第三個目標是將資本投資集中在最大化資產回報上，第四個目標是在我們的主要銀行合作夥伴的同意下獲得額外的流動性來源。

To summarize where we are under the plan, we have already taken steps to move from a period of cash investment to cash generation to improve our liquidity and better position us for profitable growth. We are pursuing avenues to strengthen our financing flexibility by adding liquidity and diversifying our funding sources.

總結一下我們在計劃中所處的位置，我們已經採取措施從現金投資期轉向現金生成期，以改善我們的流動性並更好地為我們實現盈利增長做好準備。我們正在尋求途徑，通過增加流動性和多元化我們的資金來源來加強我們的融資靈活性。

Additionally, since last year at this time, we have successfully increased prices and have focused on selling and fulfillment resources on the most profitable opportunities and have turned away price-driven business. We have taken steps with a specific goal of improving profitability and cash flow over the coming quarters and beyond as our backlog increasingly contains work booked using current pricing methodologies.

此外，自去年這個時候以來，我們成功地提高了價格，並將重點放在最有利可圖的機會上銷售和履行資源，並拒絕了價格驅動的業務。我們已採取措施，具體目標是在未來幾個季度及以後提高盈利能力和現金流，因為我們的積壓工作越來越多地包含使用當前定價方法預訂的工作。

We are aware of the stress that the liquidity implications of the rapid re-expansion of our order book and backlog have placed on our employees, customers, communities and of course, our investors. In the last few days, we have had employee town hall meetings and talked with hundreds of customers to reassure them and address any questions or concerns.

我們意識到，我們的訂單和積壓的快速重新擴張對流動性的影響給我們的員工、客戶、社區，當然還有我們的投資者帶來了壓力。在過去的幾天裡，我們召開了員工市政廳會議，並與數百名客戶進行了交談，以消除他們的疑慮並解決任何問題或疑慮。

Importantly, we have not seen order cancellations or retractions and are still booking new orders. I look forward to the opportunity this morning to engage with all of our investors who have taken the time to attend this call.

重要的是，我們沒有看到訂單取消或撤回，並且仍在預訂新訂單。我期待著今天早上有機會與所有花時間參加此次電話會議的投資者進行交流。

I will now hand the call to Sheila to recap the financial results for the second quarter and first half.

我現在將電話轉給希拉，讓她回顧一下第二季度和上半年的財務業績。

Thanks, Reece. With that, I'll move on to our financial comments. Orders for the second quarter of fiscal 2023 increased 11.7% as compared to the second quarter of fiscal 2022 and increased by 2.2% on a year-to-date basis.

謝謝，里斯。有了這個，我將繼續我們的財務評論。與 2022 財年第二季度相比，2023 財年第二季度的訂單增長 11.7%，同比增長 2.2%。

Order increases for the year were driven by live events bookings for replacement and upgrades. These increases were offset by order volume declines in other areas, primarily as the market demand levels are normalizing after a record number of orders in fiscal 2022, driven up from pent-up demand after the COVID-19 pandemic.

這一年的訂單增長是由更換和升級的現場活動預訂推動的。這些增長被其他領域的訂單量下降所抵消，這主要是因為市場需求水平在 2022 財年創紀錄數量的訂單之後正在正常化，這是由 COVID-19 大流行後被壓抑的需求推動的。

In particular, orders have softened in international due to the weakening economic outlook related to geopolitical events and currency headwinds. Net sales for the second quarter of fiscal 2023 increased by 14% as compared to the second quarter of fiscal 2022 and by 16.2% on a year-to-date basis.

特別是，由於與地緣政治事件和貨幣逆風相關的經濟前景疲軟，國際訂單有所減少。與 2022 財年第二季度相比，2023 財年第二季度的淨銷售額增長了 14%，年初至今增長了 16.2%。

Sales growth was driven by fulfilling orders and backlog, even while we experienced multiple material supply chain disruptions and labor shortages.

銷售增長是由完成訂單和積壓推動的，即使我們經歷了多次材料供應鏈中斷和勞動力短缺。

As Reece conveyed, supply chain disruptions created an increase in lead times by extending the timing of converting orders to sales. This, coupled with strong demand, contributed to a larger than typical backlog and inventory levels.

正如 Reece 所傳達的那樣，供應鏈中斷通過延長將訂單轉換為銷售的時間來增加交貨時間。這一點，加上強勁的需求，導致比典型的積壓和庫存水平更高。

As a result of this relationship between the past order bookings and realization of sales, product order backlog remains at a historically high level of $463.1 million at the end of the quarter and was approximately $441 million as of the end of November.

由於過去訂單預訂與銷售實現之間的這種關係，產品訂單積壓在本季度末保持在 4.631 億美元的歷史高位，截至 11 月底約為 4.41 億美元。

Gross profit as a percentage of net sales was 16.9% for the second quarter of fiscal 2023 as compared to 19.6% a year earlier and 16% for the 6 months ended October 29, 2022, as compared to 20.8% for the same fiscal 6 months a year earlier.

2023 財年第二季度毛利潤占淨銷售額的百分比為 16.9%，而去年同期為 19.6%；截至 2022 年 10 月 29 日止 6 個月的毛利潤為 16%，而同期 6 個月為 20.8%一年前。

This comparative decline in gross profit percentage was caused by inflation in materials, freight and personnel related costs that were not able to be passed on fully to customers. In addition, extraordinary supply chain disruptions created instrumented work stoppages and factory inefficiencies having additional costs to meet our customer commitments.

毛利率的這一相對下降是由於無法完全轉嫁給客戶的材料、運費和人員相關成本的上漲所致。此外，異常的供應鏈中斷造成了儀表化的停工和工廠效率低下，從而產生了額外的成本來滿足我們對客戶的承諾。

However, to reflect the realities of these inflationary costs, prices were increased in late calendar 2021 and throughout 2022. These price changes are just beginning to be realized through sales and gross profit margins as we work through the prior backlog. We expect sales price increases to be realized and reflected through the remaining 2023 fiscal year.

然而，為了反映這些通貨膨脹成本的現實，價格在 2021 年末和整個 2022 年上漲。在我們處理之前的積壓訂單時，這些價格變化才剛剛開始通過銷售額和毛利率實現。我們預計銷售價格上漲將在剩餘的 2023 財年實現並反映出來。

We are carefully managing our operating expense as well. Operating expenses grew 13% to $61.5 million for the first half of 2023, as compared to $54.4 million for fiscal 2022, a slower rate than the rate of sales, enabling some operating leverage.

我們也在謹慎地管理我們的運營費用。與 2022 財年的 5440 萬美元相比，2023 年上半年的運營費用增長了 13%，達到 6150 萬美元，增速低於銷售增速，從而實現了一定的運營槓桿。

The $14 million of tax expense for the second quarter of fiscal 2023 was primarily a result of the valuation allowance against our net deferred tax assets and the reversal of fiscal 2023 tax benefits previously recognized to comply with the accounting regulations related to our going concern assessment.

2023 財年第二季度的 1,400 萬美元稅收支出主要是由於我們的淨遞延稅資產的估值準備金和先前確認的 2023 財年稅收優惠的逆轉，以符合與我們的持續經營評估相關的會計法規。

Of course, our balance sheet, likewise, reflected the change in business levels and strategies we pursued in managing supply chain and growing our capacity to meet customer commitments.

當然，我們的資產負債表同樣反映了我們在管理供應鍊和提高滿足客戶承諾的能力方面所追求的業務水平和戰略的變化。

For the first half of the year, we used $21.9 million in cash primarily to grow working capital, especially in inventory. Supply chain disruptions have started to ease, and we expect our inventory levels to peak now in the third quarter and then to decline to more normalized levels through increased production and reductions in purchases.

今年上半年，我們使用了 2190 萬美元的現金，主要用於增加營運資金，尤其是庫存。供應鏈中斷已經開始緩解，我們預計我們的庫存水平將在第三季度達到峰值，然後通過增加產量和減少採購量下降到更正常的水平。

We have invested $16.2 million in capital expenditures during the first 6 months of fiscal 2023, primarily focused on expanding manufacturing capacity, automation, and productivity. To fund working capital and capital asset additions, we have borrowed $26.4 million on our credit facility.

在 2023 財年的前 6 個月，我們已投資 1620 萬美元用於資本支出，主要側重於擴大製造能力、自動化和生產力。為了為營運資金和資本資產的增加提供資金，我們藉了 2640 萬美元的信貸額度。

As of October 1, 2022, we amended our credit facility to temporarily increase the commitment by $10 million to $45 million until January 31, 2023. As part of the liquidity enhancement program Reece detailed, the finance team is focused on accounts receivable collections, cash generation and accessing additional sources of liquidity.

自 2022 年 10 月 1 日起，我們修改了信貸額度，將承諾額暫時增加 1000 萬美元至 4500 萬美元，直至 2023 年 1 月 31 日。作為 Reece 詳述的流動性增強計劃的一部分，財務團隊專注於應收賬款催收、現金生成和獲取額外的流動性來源。

I'll turn it back over to Reece.

我會把它轉回 Reece。

Thank you, Sheila. To our investors and stakeholders, I would say that management understands the concern and uncertainty generated by last week's required announcement. As both Sheila and I described earlier, as a key component of our liquidity enhancement program, we are pursuing other additional sources of liquidity and are focusing on reducing inventory levels.

謝謝你，希拉。對於我們的投資者和利益相關者，我想說管理層理解上週要求的公告所產生的擔憂和不確定性。正如 Sheila 和我之前所描述的，作為我們流動性增強計劃的一個關鍵組成部分，我們正在尋求其他額外的流動性來源，並專注於降低庫存水平。

Our goal is to be able to remove this qualifying language as soon as it is practical. The world has seen a lot of change over the past 2 years and Daktronics has navigated this as the ongoing industry leader in quality, technology and reliability. Customers continue to choose Daktronics as demonstrated by our historically strong order volume and backlog.

我們的目標是能夠在可行時盡快刪除這種限定語言。在過去的 2 年裡，世界發生了很多變化，而 Daktronics 作為質量、技術和可靠性方面的持續行業領導者，已經駕馭了這一過程。客戶繼續選擇 Daktronics，我們歷史上強勁的訂單量和積壓訂單就證明了這一點。

We appreciate our customers' belief in the Daktronics brand, and we thank all of you for your commitment to what our products represent. Even with our recent going concern challenges, we believe our strategy to emerge from this time of the pandemic, healthy and profitable by stabilizing our fulfillment performance through increased purchasing of critical components and increasing production levels through selected equipment investments and production staffing has reinforced the reasons why customers choose Daktronics.

我們感謝客戶對 Daktronics 品牌的信任，我們感謝你們所有人對我們產品所代表的承諾。即使我們最近面臨持續經營的挑戰，我們相信我們的戰略是通過增加關鍵部件的採購和通過選定的設備投資和生產人員來提高生產水平來穩定我們的履行績效，從而從大流行時期健康和盈利中脫穎而出，這加強了原因為什麼客戶選擇達科。

We have delivered many of the orders quoted with previous pricing structures and our backlog now mainly consists of orders booked under new pricing methodologies. We see signs of supply chain stabilizing, which will allow reduced inventory levels in the coming months as our production levels continue to increase.

我們已經交付了許多使用以前的定價結構報價的訂單，我們現在的積壓訂單主要包括根據新定價方法預訂的訂單。我們看到供應鏈穩定的跡象，隨著我們的生產水平繼續提高，這將在未來幾個月內降低庫存水平。

We do not believe that the geopolitical situation is back to normal or however, this would be defined, but we do believe that the levels of uncertainty and volatility will not be as great in the coming months and will continue to stabilize in the coming calendar year.

我們不相信地緣政治局勢會恢復正常，或者這將是確定的，但我們確實相信未來幾個月的不確定性和波動性水平不會那麼大，並將在下一個日曆年繼續穩定.

While macroeconomic factors continue to make it difficult to forecast the future, over the coming years, we currently see signs on the following: our High School Park and Recreation business unit will continue to grow through adoption of video displays for sporting and educational use.

雖然宏觀經濟因素繼續使預測未來變得困難，但在未來幾年，我們目前看到以下跡象：我們的高中公園和娛樂業務部門將通過採用用於體育和教育的視頻顯示器繼續增長。

This trend toward deploying what used to be professional-grade technology in new markets drove the total addressable market. In addition, video displays also have a higher average selling price than the messaging and scoring equipment traditionally purchased in this segment.

這種在新市場部署專業級技術的趨勢推動了整個潛在市場的發展。此外，視頻顯示器的平均售價也高於該細分市場傳統上購買的消息傳遞和評分設備。

Commercial business unit, out-of-home advertising customers continue to buy after the pandemic-related economic contraction. This is somewhat an effect of their natural replacement cycle. Our on-premise business also remains strong as customers continued their purchase and use of digital messaging systems.

商業業務部門、戶外廣告客戶在與大流行相關的經濟收縮後繼續購買。這在某種程度上是它們自然更替週期的影響。隨著客戶繼續購買和使用數字消息系統，我們的本地業務也保持強勁。

We are also focused on increasing sales channels with audiovisual integrators, for end use in government, military, health care and corporate applications. Transportation order levels continue to be strong worldwide as project planning and approval activities resume to more pre-pandemic levels and our customers move forward in purchasing displays used for intelligent transportation systems and for mass transit venues.

我們還專注於增加與視聽集成商的銷售渠道，最終用於政府、軍隊、醫療保健和企業應用。隨著項目規劃和審批活動恢復到大流行前的水平，我們的客戶繼續採購用於智能交通系統和公共交通場所的顯示器，全球交通訂單水平繼續保持強勁。

Infrastructure spending should continue to benefit this segment as digital signage is often used in these projects. Importantly, selling costs are lower in this sector as procurements over multiyear periods are often handled through master agreements. In the International business unit, we naturally are seeing some softening in the European market due to macroeconomic factors as well as the impact of the current strengthening of the dollar.

基礎設施支出應該會繼續使這一細分市場受益，因為這些項目中經常使用數字標牌。重要的是，該行業的銷售成本較低，因為多年期的採購通常通過主協議進行處理。在國際業務部門，由於宏觀經濟因素以及當前美元走強的影響，我們自然會看到歐洲市場有所疲軟。

We will watch developments closely and adjust resources and commitments accordingly. Our flagship business, complex Live Events segment outlook remains strong due to large stadium renovations, continued replacement cycles and expansion of sales efforts beyond sports areas.

我們將密切關注事態發展，並相應調整資源和承諾。由於大型體育場的翻新、持續的更換週期以及將銷售工作擴展到體育領域以外，我們的旗艦業務、複雜的現場活動分部前景依然強勁。

Recent installations include college football displays at Clemson and Tennessee, and we previously announced recent wins of a new super system for the LA Clippers new arena. Having said that, as part of the gross profit improvement pillar of our liquidity enhancement plan, we are being very mindful about the profitability of this segment through pricing and contract terms.

最近的安裝包括在克萊姆森和田納西州的大學橄欖球展示，我們之前宣布最近贏得了洛杉磯快船隊新球館的新超級系統。話雖如此，作為我們流動性增強計劃的毛利改善支柱的一部分，我們非常關注通過定價和合同條款該部門的盈利能力。

Thank you to our Daktronics team for increasing our capacity, adjusting to the uncertain and volatile supply chain conditions and continuing to serve our customers. We appreciate our suppliers and vendors for also helping us through these challenging times, and thank you to our investors for your patience and support. These are unprecedented times that we are working through, and our management teams and employees are focused on long-term profitable growth and cash generation that we believe will create value for our shareholders now and into the future.

感謝我們的 Daktronics 團隊提高我們的產能，適應不確定和多變的供應鏈條件並繼續為我們的客戶提供服務。我們感謝我們的供應商和供應商也幫助我們度過了這些充滿挑戰的時期，並感謝我們的投資者的耐心和支持。這是我們正在經歷的前所未有的時期，我們的管理團隊和員工專注於長期盈利增長和現金產生，我們相信這將為我們的股東現在和未來創造價值。

With that, I would ask the operator to please open the line for any questions.

有了這個，我會請接線員打開任何問題的線路。

(Operator Instructions) One moment for our first question, please it is from BJ Cook with Singular Research.

（操作員說明）請稍等一下我們的第一個問題，來自 Singular Research 的 BJ Cook。

Excellent. You mentioned investing in manufacturing capacity upgrades. A lot of those projects finished? Do you guys expect to execute on your order back -- order book faster going forward? Or if so, how much quicker do you guys plan to execute?

出色的。你提到投資於製造能力升級。很多項目都完成了嗎？你們是否希望更快地執行您的訂單 - 訂單簿？或者如果是這樣，你們計劃執行多快？

We have invested a lot in automation in our different factories. And many of those projects have been completed and are being used. Equipment manufacturers are having their own supply chain challenges. So some of the equipment that we've ordered has not arrived yet and will be implemented in the coming months and maybe even early next fiscal year.

我們在不同工廠的自動化方面投入了大量資金。其中許多項目已經完成並正在使用。設備製造商面臨著自己的供應鏈挑戰。因此，我們訂購的一些設備尚未到貨，將在未來幾個月甚至下個財政年度年初實施。

Okay. Just one more quick one. Given the short-term nature of the bump in the line of credit, are you guys expecting to realize cash from your elevated accounts receivable over the next 1.5 months or so or even since the end of the quarter?

好的。再快一點。鑑於信貸額度增加的短期性質，你們是否期望在接下來的 1.5 個月左右甚至自本季度末以來從增加的應收賬款中變現？

Yes, maybe I'd say 2 things. Our banking facility has been very open and flexible with us. But of course, it's only guaranteed to the end of the quarter. And we believe as our business is continuing to be increasing our production levels are increasing. We will convert more of our backlog more quickly into invoiced orders.

是的，也許我會說兩件事。我們的銀行設施對我們來說非常開放和靈活。但當然，只能保證到本季度末。我們相信，隨著我們的業務持續增長，我們的生產水平也在提高。我們將更快地將更多積壓訂單轉化為開具發票的訂單。

(Operator Instructions) Ladies and gentlemen, we'll turn it back to Mr. Reece for final remarks.

（操作員說明）女士們先生們，我們將把它轉回 Reece 先生進行最後的評論。

I'd like to thank everybody for joining us on this morning's call. We are taking the going concern situation very seriously, and we are working hard to remove that qualifying language as soon as is possible.

我要感謝大家參加今天上午的電話會議。我們非常重視持續經營情況，我們正在努力盡快刪除符合條件的語言。

And to update the group on those activities, we are planning to have our next conference call at the end of our Q3. Thank you, everyone, and have a good day. Bye-bye.

為了向小組更新這些活動，我們計劃在第三季度末召開下一次電話會議。謝謝大家，祝你有美好的一天。再見。

And with that, we thank you, ladies and gentlemen. Today we concluded with that, and thank you for participating. You may now disconnect.

女士們，先生們，我們感謝你們。今天我們就此結束，感謝您的參與。您現在可以斷開連接。