Fathom Digital Manufacturing Corp (FATH) 2023 Q2 法說會逐字稿

Hello. My name is Carla, and I will be your operator this morning. I would like to welcome everyone to the Fathom Digital Manufacturing earnings conference call. This call is being recorded, and a replay will be available later today. (Operator Instructions)

你好。我叫卡拉，今天早上我將擔任您的接線員。我歡迎大家參加 Fathom Digital Manufacturing 財報電話會議。此通話正在錄音，今天晚些時候將提供重播。 （操作員說明）

I would now like to turn the call over to Michael Cimini, Fathom's Director of Investor Relations.

我現在想將電話轉給 Fathom 投資者關係總監 Michael Cimini。

Thank you, Carla, and good morning, everyone. Welcome to Fathom's second-quarter 2023 earnings conference call. Before we begin, I'd like to mention that today's presentation and earnings press release are available on Fathom's website at fathommfg.com, where you'll also find links to our SEC filings along with other important information about our company.

謝謝你，卡拉，大家早上好。歡迎參加 Fathom 2023 年第二季度收益電話會議。在開始之前，我想提一下，今天的演示文稿和收益新聞稿可在Fathom 的網站fathommfg.com 上找到，您還可以在其中找到我們向SEC 提交的文件的鏈接以及有關我們公司的其他重要信息。

Turning to slide 2, we note this presentation contains forward-looking statements within the meaning of the Securities Exchange Act. We encourage you to read the risk factors contained in our filings with the SEC and understand that forward-looking statements are only estimates of future performance and should be taken as such.

轉向幻燈片 2，我們注意到本演示文稿包含《證券交易法》含義內的前瞻性陳述。我們鼓勵您閱讀我們向美國證券交易委員會提交的文件中包含的風險因素，並了解前瞻性陳述僅是對未來業績的估計，應如此對待。

We also note today's presentation includes non-GAAP financial measures to describe the way in which we manage and operate our business. We reconcile these measures to its comparable GAAP measures, and you are encouraged to examine those reconciliations, which are found in the appendix to our press release and presentation.

我們還注意到今天的演示包括非公認會計準則財務指標，以描述我們管理和運營業務的方式。我們將這些指標與其可比的公認會計原則指標進行了調節，我們鼓勵您檢查這些調節，這些調節可以在我們的新聞稿和演示文稿的附錄中找到。

With us today are Ryan Martin, Fathom's CEO; and Mark Frost, our CFO. I will now turn the call over to Ryan.

今天與我們在一起的有 Fathom 首席執行官 Ryan Martin；和我們的首席財務官馬克·弗羅斯特（Mark Frost）。我現在將把電話轉給瑞安。

Thanks, Michael, and welcome, everyone, to Fathom's second-quarter 2023 conference call. I'll begin my remarks on slide 3, where we provide our Q2 highlights. Our performance for the quarter was in line with management's expectations as we continue to benefit from the ongoing execution of our optimization plan while further building our orders momentum in a challenging macroenvironment.

謝謝邁克爾，歡迎大家參加 Fathom 的 2023 年第二季度電話會議。我將在幻燈片 3 上開始我的發言，其中我們提供了第二季度的亮點。我們本季度的業績符合管理層的預期，因為我們繼續受益於優化計劃的持續執行，同時在充滿挑戰的宏觀環境中進一步增強我們的訂單勢頭。

In Q2, we generated orders totaling $38 million, up approximately 10% on a sequential basis, contributing to revenue of $34.5 million and expanding our backlog of new business. As a reminder, shipments for new orders, especially on the production side of the business, often extend over several quarters, depending on the size and order type.

第二季度，我們產生的訂單總額為 3800 萬美元，環比增長約 10%，貢獻了 3450 萬美元的收入，並擴大了我們的新業務積壓。提醒一下，新訂單的發貨，尤其是業務生產方面的發貨，通常會持續幾個季度，具體取決於訂單大小和類型。

Additionally, our adjusted EBITDA totaled $4.8 million, representing a margin of 14%, a notable improvement on a sequential basis. We continue to work closely with enterprise-level customers seeking a unified digital manufacturing partner with comprehensive capabilities and deep technical expertise to help them iterate faster and reduce time to market while creating a more efficient and responsive supply chain.

此外，我們調整後的 EBITDA 總計 480 萬美元，利潤率為 14%，環比顯著改善。我們繼續與企業級客戶密切合作，尋求具有全面能力和深厚技術專長的統一數字製造合作夥伴，幫助他們更快地迭代並縮短上市時間，同時創建更高效​​、響應更快的供應鏈。

As discussed on our previous call, we have renewed our focus on strengthening our go-to-market efforts under new leadership. Our Vice President of Sales, Kurt Bork, has been fully onboarded after joining the company in Q1. And I'm excited how our commercial team has steadily ramped up their activities. We continue to focus our commercial efforts on two primary areas: new product innovation or NPI and production to help ensure greater alignment between our processes and resources and boost new orders through more effective and dedicated account teams.

正如我們在之前的電話會議中所討論的，我們在新領導層的領導下重新將重點放在加強我們的市場推廣工作上。我們的銷售副總裁 Kurt Bork 在第一季度加入公司後已全面入職。我很高興我們的商業團隊穩步加強他們的活動。我們繼續將商業努力集中在兩個主要領域：新產品創新或 NPI 和生產，以幫助確保我們的流程和資源之間更好的協調，並通過更有效和更專注的客戶團隊增加新訂單。

In furthering our commitment to build a proven and experienced management team to drive future results, we recently appointed Doug [Beaden] as Fathom's Chief Operating Officer effective September 5. Doug brings more than 25 years of leadership experience in the global industrials industry, having most recently served as the Chief Operating Officer at a capital equipment manufacturer with multiple businesses -- business units serving the medical, semiconductor, and aerospace markets. Doug also served in leadership capacities at Thermo Fisher Scientific, Danaher Corporation, and GE.

為了進一步履行我們建立一支經過驗證且經驗豐富的管理團隊以推動未來業績的承諾，我們最近任命Doug [Beaden] 為Fathom 的首席運營官，自9 月5 日起生效。Doug 在全球工業行業擁有超過25 年的領導經驗，擁有最近擔任一家資本設備製造商的首席運營官，該製造商擁有多個業務——服務於醫療、半導體和航空航天市場的業務部門。 Doug 還曾在 Thermo Fisher Scientific、Danaher Corporation 和 GE 擔任領導職務。

In this newly created position, Doug will serve as a key member of our leadership team responsible for the day-to-day operational aspects of Fathom's national manufacturing footprint and delivering operational excellence throughout the business. He'll play a critical role in supporting our profitable growth objectives. And we're thrilled to welcome someone with Doug's extensive operational expertise and proven track record of driving EBITDA growth while instilling a cohesive, high-performance operating culture.

在這個新設立的職位上，Doug 將作為我們領導團隊的關鍵成員，負責 Fathom 全國製造業務的日常運營事務，並在整個企業中實現卓越運營。他將在支持我們的盈利增長目標方面發揮關鍵作用。我們很高興地歡迎 Doug 擁有豐富的運營專業知識和在推動 EBITDA 增長同時灌輸有凝聚力的高性能運營文化方面的良好記錄。

On slide 4, we highlight some of our key business wins during the second quarter and year to date as we maintain our focus on accelerating customer engagement and increasing our orders momentum. The medical space has remained steady with a $1.8 million order from a new strategic customer that delivers innovative MRI technology for live diagnosis and treatment at the point of care. Additionally, our unique managed services business continues to outperform following a new $2.5 million order from an existing global technology customer.

在幻燈片 4 中，我們重點介紹了第二季度和今年迄今為止我們取得的一些關鍵業務成果，因為我們始終專注於加速客戶參與度和增加訂單動力。醫療領域保持穩定，新戰略客戶獲得了 180 萬美元的訂單，該客戶提供創新的 MRI 技術，用於現場診斷和護理治療。此外，在從現有全球技術客戶獲得 250 萬美元的新訂單後，我們獨特的託管服務業務繼續表現出色。

We also achieved new wins across a diverse range of other key end markets, including EV, semiconductor, and robotics, underscoring our differentiated approach, utilizing 25-plus manufacturing processes, vast engineering services, and support systems to meet our customers' specific needs. And while not on this slide, we secured an initial order of approximately $400,000 following the recent approval as a certified production supplier for a leading manufacturer of thermal solutions for the EV industry, providing an important competitive advantage for Fathom.

我們還在電動汽車、半導體和機器人等多個其他關鍵終端市場取得了新的勝利，凸顯了我們的差異化方法，利用25 多種製造工藝、廣泛的工程服務和支持系統來滿足客戶的特定需求。雖然這張幻燈片上沒有提及，但在最近被批准成為電動汽車行業熱解決方案領先製造商的認證生產供應商後，我們獲得了約 400,000 美元的初始訂單，為 Fathom 提供了重要的競爭優勢。

As a result, we believe this account has the opportunity to grow orders volumes into the multimillions over the long term. As we have mentioned in the past, a core strength of the Fathom platform is its entrenched relationships with enterprise-level customers, which provide attractive recurring revenue streams given our strong retention rate of approximately 90%. By partnering with Fortune 500 tier companies, working with them across multiple sites and developing multiple contacts within each company, we have shown a consistent ability to grow our revenues from strategic accounts since going public despite overall lower volumes.

因此，我們相信，從長遠來看，該賬戶有機會將訂單量增加到數百萬美元。正如我們過去提到的，Fathom 平台的核心優勢在於其與企業級客戶的牢固關係，鑑於我們約 90% 的強勁保留率，這提供了有吸引力的經常性收入流。通過與財富500 強公司合作，在多個地點與他們合作，並在每家公司內部建立多個聯繫，自上市以來，儘管總體銷量較低，但我們已經表現出了持續增加戰略客戶收入的能力。

During this time, we have also increased the number of strategic customers by approximately 8% as our performance among our strategic enterprise-level accounts continues to remain stable. As our commercial activities continued to gain traction based on these positive indicators, we held a customer event last month at our new Silicon Valley technology center, which opened in Q1. The event focused on our new Evolve STEP technology and was attended by approximately 20 existing and prospective customers, representing a premier group of the world's class companies in consumer electronics, technology, EV, autonomous vehicles, alternate energy, and more.

在此期間，我們的戰略客戶數量也增加了約8%，因為我們的戰略企業級客戶的業績繼續保持穩定。隨著我們的商業活動在這些積極指標的基礎上繼續獲得牽引力，我們上個月在第一季度開業的新矽谷技術中心舉辦了一次客戶活動。此次活動的重點是我們新的 Evolve STEP 技術，約有 20 名現有和潛在客戶參加，他們代表了消費電子、技術、電動汽車、自動駕駛汽車、替代能源等領域的世界一流公司。

Attendees were able to learn firsthand how this disruptive additive solution produces high-quality thermoplastic ABS parts with broad application from prototyping all through to production at high speeds, dramatically reducing lead times compared to traditional injection molding tools and parts. We're encouraged by the positive orders momentum from this event as we maintain our focus on expanding our share of wallet with strategic customers and aligning new corporate accounts.

與會者能夠親身了解這種顛覆性的添加劑解決方案如何生產高質量的熱塑性ABS 零件，該零件具有從原型設計到高速生產的廣泛應用，與傳統的注塑工具和零件相比，大大縮短了交貨時間。我們對此次活動帶來的積極訂單勢頭感到鼓舞，因為我們繼續專注於擴大戰略客戶的錢包份額並調整新的企業賬戶。

I will now turn the call over to Mark.

我現在將把電話轉給馬克。

Thank you, Ryan, and good morning, everyone. I'll begin my remarks for our quarter-two revenue results on slide 5. Our revenues for the fourth quarter totaled $34.5 million, which exceeded the high end of our forecast of $34 million, but down from $42 million in quarter two 2022.

謝謝瑞安，大家早上好。我將在幻燈片5 上開始介紹我們第二季度的收入結果。我們第四季度的收入總計3450 萬美元，超出了我們預測的3400 萬美元的上限，但低於2022 年第二季度的4200 萬美元。

Now, as Ryan mentioned earlier, we continue to make progress ramping our new commercial activities and strengthening our go-to-market strategies. However, near-term demand remains soft as the US manufacturing PMI index has remained in contraction territory for nine straight months and customer spending continues to be tightly managed.

現在，正如瑞安之前提到的，我們繼續在擴大新的商業活動和加強我們的市場戰略方面取得進展。然而，由於美國製造業 PMI 指數連續九個月保持在收縮區間，且客戶支出繼續受到嚴格管理，近期需求依然疲軟。

Our revenue by product line for the quarter was as follows: CNC machining totaled $13.2 million or 38.4% of revenue, reflecting the overall challenging macroenvironment. Precision sheet metal was $10.2 million or 29.5% of total revenue, as this business was essentially flat on a sequential basis but was the major source of our quarterly decline. Injection molding was $6.1 million or 17.6% of total revenue.

本季度我們按產品線劃分的收入如下：數控加工總計 1,320 萬美元，佔收入的 38.4%，反映了整體充滿挑戰的宏觀環境。精密鈑金業務為 1,020 萬美元，佔總收入的 29.5%，因為該業務與上一季度基本持平，但卻是我們季度下滑的主要來源。注塑業務收入為 610 萬美元，佔總收入的 17.6%。

Additive manufacturing totaled $3.3 million or 9.5% of total revenue. We believe our new technology center will strengthen our prospects in this segment as we continue to build a pipeline of new orders for Evolve. And finally, ancillary technology, our smallest product line increased year over year to $1.7 million, representing 5% of total revenue.

增材製造總計 330 萬美元，佔總收入的 9.5%。我們相信，隨著我們繼續為 Evolve 建立一系列新訂單，我們的新技術中心將增強我們在這一領域的前景。最後，輔助技術，我們最小的產品線逐年增加至 170 萬美元，佔總收入的 5%。

We continue to focus on growing our strategic accounts by fully leveraging our extensive prototyping and low- to mid-volume production capabilities, empowering our customers to accelerate and differentiate their new product development and production manufacturing.

我們繼續專注於通過充分利用我們廣泛的原型設計和中小批量生產能力來發展我們的戰略客戶，使我們的客戶能夠加速並差異化他們的新產品開發和生產製造。

Now turning to slide 6, we provide our adjusted EBITDA performance for the second quarter. In quarter two, our adjusted EBITDA totaled $4.8 million, representing a margin of 14%. This was toward the high end of our forecast of $4 million to $5 million.

現在轉向幻燈片 6，我們提供第二季度調整後的 EBITDA 業績。第二季度，我們調整後的 EBITDA 總計 480 萬美元，利潤率為 14%。這接近我們預測的 400 萬至 500 萬美元的上限。

In Q2 2022, we reported adjusted EBITDA of $9 million for a margin of 21.4%. On a sequential basis, adjusted EBITDA increased 17.5% with a margin improvement of 230 basis points. Now our performance reflects reduced volumes and the related impact from lower absorption. We remain focused on taking steps to ensure, though, a more efficient cost structure and generate significant operating leverage as revenue expands.

2022 年第二季度，我們報告調整後 EBITDA 為 900 萬美元，利潤率為 21.4%。調整後 EBITDA 環比增長 17.5%，利潤率提高 230 個基點。現在我們的業績反映了銷量的減少以及吸收率下降的相關影響。不過，我們仍然致力於採取措施，確保更有效的成本結構，並隨著收入的增長產生顯著的運營槓桿。

During the quarter, we realized additional cost savings of approximately $4.3 million from the continued execution of our optimization plan, up from $3.5 million in quarter one, bringing the cumulative amount to approximately $9.6 million. The recent consolidation of our facilities in Austin, Texas has further strength --streamlined our operations and increased economies of scale as this region remains a key driver for future growth.

在本季度，通過繼續執行優化計劃，我們實現了約 430 萬美元的額外成本節省，高於第一季度的 350 萬美元，累計金額達到約 960 萬美元。我們最近對德克薩斯州奧斯汀工廠的整合進一步增強了我們的實力——簡化了我們的運營並增加了規模經濟，因為該地區仍然是未來增長的關鍵驅動力。

For the second half of the year, we adjusted slightly the remaining expected savings to approximately $8.9 million for total savings of approximately $18.5 million under our current plan. Going forward, we will maintain our focus on identifying new productivity initiatives, ensuring our operational activities match our customer commitments.

對於今年下半年，我們將剩餘的預期節省小幅調整至約 890 萬美元，根據當前計劃，總節省額約為 1,850 萬美元。展望未來，我們將繼續專注於確定新的生產力計劃，確保我們的運營活動符合我們對客戶的承諾。

Now for quarter two, our SG&A totaled $9.4 million, a year-over-year decline of approximately 19% due to the impact of lower sales, combined with our restructuring efforts. Now as a percentage of revenue, SG&A decreased to 27.4% from 27.7% in quarter two 2022. Compared to the previous first quarter, SG&A declined approximately 12%, and SG&A as a percentage of revenue declined 340 basis points. Excluding stock compensation, our recurring public company expenses in quarter two decreased to approximately $1 million compared to $1.5 million in quarter one as these costs have now declined in each full quarter since going public.

現在第二季度，由於銷售額下降以及我們的重組工作的影響，我們的銷售、行政管理費用總計 940 萬美元，同比下降約 19%。目前，SG&A 佔收入的百分比從 2022 年第二季度的 27.7% 下降至 27.4%。與上一季度相比，SG&A 下降了約 12%，SG&A 佔收入的百分比下降了 340 個基點。不包括股票報酬，我們第二季度的經常性上市公司費用從第一季度的 150 萬美元減少到約 100 萬美元，因為這些成本自上市以來每個完整季度都有所下降。

Now on slide 7, we show our liquidity and cash flow. We ended the second quarter with available liquidity of $18.7 million. This includes $10.7 million in cash and cash equivalents and $8 million of undrawn commitments under our $50 million revolving credit facility. As of June 30, our total gross debt, excluding cash, was $160.8 million, and the net debt totaled $150.1 million with no debt maturities before December 2026.

現在在幻燈片 7 上，我們展示了我們的流動性和現金流。第二季度結束時，我們的可用流動資金為 1870 萬美元。這包括 1070 萬美元的現金和現金等價物以及我們 5000 萬美元循環信貸額度下的 800 萬美元未提取承諾。截至 6 月 30 日，我們的總債務（不包括現金）為 1.608 億美元，淨債務總額為 1.501 億美元，在 2026 年 12 月之前沒有債務到期。

Cash provided by operations in quarter two totaled $1.7 million, up from $0.5 million in quarter one reflecting continued improvement in our working capital management. In Q2, our CapEx was reduced to $1.1 million or 3.2% of revenue, which was consistent with our expectations as we limit nonessential capital expenditures to optimize our cash position and focus only on growth addition.

第二季度運營提供的現金總計 170 萬美元，高於第一季度的 50 萬美元，反映出我們營運資本管理的持續改善。第二季度，我們的資本支出減少至 110 萬美元，佔收入的 3.2%，這與我們的預期一致，因為我們限制非必要的資本支出以優化我們的現金狀況，並只關注增長的增加。

During the quarter, we successfully launched our cloud-based ERP system at our second site and intend to leverage our learnings to speed up the implementation at our remaining sites and further boost productivity. We also recently launched our first enterprise data platform or EDP to automate company-wide the collection and standardization of key performance indicators in real-time as we remain committed to upgrading the additional thread of our business.

本季度，我們在第二個站點成功推出了基於雲的 ERP 系統，並打算利用我們的經驗來加快其餘站點的實施速度並進一步提高生產力。我們最近還推出了第一個企業數據平台或 EDP，以在全公司範圍內實時自動化關鍵績效指標的收集和標準化，同時我們仍然致力於升級我們業務的附加線程。

Finally, on this slide, our free operating cash flow in quarter two totaled $0.6 million and was positive for the first time since we became public. We remain focused on maintaining this trend and generating positive free operating cash flow for the full year 2023.

最後，在這張幻燈片中，我們第二季度的自由運營現金流總計為 60 萬美元，這是自我們上市以來首次出現正值。我們仍然致力於維持這一趨勢，並在 2023 年全年產生正的自由運營現金流。

Now turning to slide 8, we provide our forecast for the third quarter of 2023. We expect continued benefits from our previous actions that consolidate our national footprint, lowered our expense base, increase the scalability of our broad on-demand platform. For the third quarter, we anticipate realized cost savings of approximately $4.8 million from our optimization plan, up from $4.3 million in quarter two.

現在轉向幻燈片8，我們提供對2023 年第三季度的預測。我們預計我們之前的行動將繼續帶來好處，這些行動鞏固了我們的全國足跡，降低了我們的費用基礎，提高了我們廣泛的按需平台的可擴展性。對於第三季度，我們預計優化計劃將實現約 480 萬美元的成本節省，高於第二季度的 430 萬美元。

Although we have taken steps to rightsize our business and achieve our growth objectives with greater efficiency, the near-term economic uncertainty has pushed out demand for our manufacturing services as customers in general remain cautious. We believe market conditions will improve as customer inventories return to more normalized levels.

儘管我們已採取措施調整業務規模並以更高的效率實現增長目標，但由於客戶普遍保持謹慎態度，近期的經濟不確定性已經降低了對我們製造服務的需求。我們相信，隨著客戶庫存恢復到更加正常的水平，市場狀況將會改善。

We're also seeing a trend with our orders taking longer to convert to revenue due to a relatively higher production contribution, which can lead to a conversion over two to three quarters. This has impacted our quarter three expectations. We currently expect quarter three revenue to range between $31.5 million and $33.5 million and adjusted EBITDA to range between $3.5 million and $4.5 million. This represents an implied adjusted EBITDA margin of 11.1% to 13.4%.

我們還看到了一種趨勢，由於產量貢獻相對較高，我們的訂單需要更長的時間才能轉化為收入，這可能會導致在兩到三個季度內實現轉化。這影響了我們第三季度的預期。我們目前預計第三季度收入將在 3150 萬美元至 3350 萬美元之間，調整後的 EBITDA 將在 350 萬美元至 450 萬美元之間。這意味著調整後的 EBITDA 利潤率為 11.1% 至 13.4%。

Now based on our current projections, we expect we will not be able to comply with our financial covenants under our amended credit agreement relating to year-to-date adjusted EBITDA for the nine months ending September 30, 2023. We expect to remain compliant with the current minimum liquidity requirements.

現在，根據我們目前的預測，我們預計我們將無法遵守修訂後的信貸協議中與截至 2023 年 9 月 30 日的九個月的年初至今調整後 EBITDA 相關的財務契約。我們預計將繼續遵守當前的最低流動性要求。

We are in active discussions with our lenders on an amendment and/or waiver to our credit facility to increase our financial flexibility. We are optimistic that a positive resolution can be reached in the coming weeks. And we'll provide an update regarding any changes to our credit agreement once finalized with our lending group.

我們正在與貸方積極討論修改和/或放棄我們的信貸安排，以提高我們的財務靈活性。我們對未來幾週內能夠達成積極的解決方案感到樂觀。一旦與我們的貸款團隊最終確定信貸協議，我們將提供有關信貸協議任何變更的最新信息。

I'll now turn the call back over to Ryan. Ryan?

我現在將把電話轉回給瑞安。瑞安？

Thank you, Mark. I will provide some closing comments on slide 9. Our results for the second quarter reflect continued progress in further solidifying the company's commercial and operational foundation while enhancing our position to drive sustainable and profitable growth over the long term.

謝謝你，馬克。我將在幻燈片 9 上提供一些結束語。我們第二季度的業績反映了在進一步鞏固公司的商業和運營基礎方面不斷取得的進展，同時增強了我們推動長期可持續和盈利增長的地位。

Our commercial actions continue to take hold under new leadership as demonstrated by the sequential growth in orders volume of approximately 10%. We remain focused on further strengthening the breadth of our leading offerings to meet the high-mix, low-volume production needs of blue-chip customers and accelerating Fathom's digital thread as the positive long-term fundamentals in our industry remain intact.

在新的領導層的領導下，我們的商業行動繼續紮根，訂單量環比增長約 10% 就證明了這一點。我們仍然專注於進一步加強我們領先產品的廣度，以滿足藍籌客戶的多品種、小批量生產需求，並加速 Fathom 的數字主線，因為我們行業的積極的長期基本面保持完好。

We also took steps to further bolster our executive team with the appointment of our first Chief Operating Officer, while further executing against our optimization plan, which contributed to a sequential improvement in our adjusted EBITDA and adjusted EBITDA margin. Although the macroenvironment remains challenging, Fathom is well positioned to capitalize on its increased scalability as market conditions improve. We are also committed to strengthening our financial flexibility and improving our company's capital structure.

我們還採取措施進一步加強我們的執行團隊，任命了第一位首席運營官，同時進一步執行我們的優化計劃，這有助於我們調整後 EBITDA 和調整後 EBITDA 利潤率的連續改善。儘管宏觀環境仍然充滿挑戰，但隨著市場狀況的改善，Fathom 已做好充分利用其增強的可擴展性的準備。我們還致力於加強財務靈活性並改善公司的資本結構。

I want to share my appreciation for our highly talented workforce, which has demonstrated tremendous resilience and dedication under trying conditions and remain confident the best is yet to come for Fathom. This concludes our prepared remarks, and we'll now open the call for questions.

我想對我們才華橫溢的員工隊伍表示感謝，他們在艱難的條件下表現出了巨大的韌性和奉獻精神，並對 Fathom 的最好的未來充滿信心。我們準備好的發言到此結束，現在我們將開始提問。

(Operator Instructions) Jim Ricchiuti, Needham & Co.

（操作員說明）Jim Ricchiuti，Needham & Co.

Hi. Thank you. Good morning. Just a question on gross margins. I'm sure mix underutilization and possibly pricing contributed to the sequential decline. But I'm wondering if you could give us a little bit more color on what's driving that and maybe how we should think about gross margins in the current quarter?

你好。謝謝。早上好。只是一個關於毛利率的問題。我確信利用率不足和可能的定價混合導致了連續下降。但我想知道您是否能為我們提供更多關於推動這一趨勢的因素，以及我們應該如何考慮本季度的毛利率？

Sure, Jim. It's a good question. We were hit with a couple issues related to freight and material on certain orders where the cost came in higher. Particularly, we had orders where we had a significant amount of freight. And when we price freight, usually, it's not -- there's no margin on the freight; it's a pass through. So that caused some dilution in the quarter.

當然，吉姆。這是一個好問題。我們遇到了一些與某些訂單的運費和材料相關的問題，這些訂單的成本較高。特別是，我們的訂單有大量貨運。當我們給運費定價時，通常情況下，運費沒有利潤；這是一個穿越。因此，這導致了本季度的一些稀釋。

We don't expect that to continue. We thought that was unusual. We -- actually, I should say we think that was unusual and expect that as we move forward, we will see further improvement in the gross margins. As we've discussed on previous calls that we get back into the mid-30s and high-30s as we enter into next year. So that's still our expectation.

我們預計這種情況不會持續下去。我們認為這很不尋常。事實上，我應該說我們認為這是不尋常的，並預計隨著我們的前進，我們將看到毛利率進一步改善。正如我們在之前的電話會議中討論的那樣，進入明年，我們將回到 30 多歲和 30 多歲。所以這仍然是我們的期望。

So we think it was a bit of an anomaly, Jim, and expect that should pass as we go into the second half.

所以我們認為這有點反常，吉姆，並預計隨著我們進入下半場，這種情況應該會過去。

Mark, is this a couple of hundred basis points impact? Or I'm just trying to get a sense what you just outlined --

馬克，這是幾百個基點的影響嗎？或者我只是想了解一下你剛才概述的內容——

Yeah. It was about a couple of hundred basis points of hit that we took in quarter two.

是的。我們在第二季度遭受的打擊大約是幾百個基點。

Okay. And Ryan, maybe a question for you, just curious about this other order you alluded to, called it out from EV customer. Can you -- you may have mentioned it, what service line does that relate to? And of how long have you been working with this customer? It sounds like you see potential to grow this over the intermediate to longer term.

好的。瑞安（Ryan），也許有個問題要問你，只是對你提到的另一個訂單感到好奇，這是電動汽車客戶提出的。您可能已經提到過，這與哪條服務線相關？您與該客戶合作多久了？聽起來您似乎看到了中長期發展的潛力。

Yeah. It's part of our -- it's a smaller customer that we've worked with on the prototyping side of things in the past. But this is a production opportunity in our sheet metal side of our business. And so they saw really some of the unique capabilities that we have within that high-mix, low-volume sheet metal production side of things. And so that's the area.

是的。它是我們的一部分——它是我們過去在原型設計方面合作過的一個較小的客戶。但這是我們業務鈑金方面的一個生產機會。因此，他們確實看到了我們在高混合、小批量鈑金生產方面擁有的一些獨特功能。這就是這個區域。

So we're taking on a couple of new products for them. But there's a lot of opportunity to further ramp with that. And so that would primarily go through our production of sheet metal facility in Denver.

因此，我們正在為他們推出一些新產品。但有很多機會可以進一步提升這一點。因此，這將主要通過我們在丹佛的鈑金工廠進行生產。

Got it. And the last question for me, just on that slide you had on some good new business wins. For the most part, are these existing customers? Any new customers you're calling out?

知道了。我的最後一個問題是，就在那張幻燈片上，您獲得了一些良好的新業務勝利。大多數情況下，這些是現有客戶嗎？您正在召喚任何新客戶嗎？

Yeah. The -- it's a combination of new and existing. The CNC, the sort of $1.2 million in nanotechnology, which is in the medical space, is actually a new customer for us. The rest of them are expansion of existing customers. But what's really intriguing for us is a lot of these are new contacts within larger existing customers.

是的。這是新的和現有的結合。 CNC 是一種價值 120 萬美元的納米技術，用於醫療領域，實際上是我們的新客戶。其餘的都是現有客戶的拓展。但真正讓我們感興趣的是，其中很多都是較大的現有客戶中的新聯繫人。

So although it's been a customer have worked with, it is new business lines, new product business units, segments within those, and new contacts within those accounts. So continuing to go a lot deeper and wider within our existing accounts, which we believe is real differentiator of the Fathom platform is our ability to serve these larger strategic customers and to really be able to leverage multiple manufacturing processes to help them from that product development all the way through to their low- to mid-volume production, Jim.

因此，儘管它是與客戶合作的，但它是新的業務線、新的產品業務單元、其中的細分市場以及這些客戶中的新聯繫人。因此，繼續在我們現有的客戶範圍內進行更深入、更廣泛的研究，我們認為Fathom 平台的真正區別在於我們有能力為這些更大的戰略客戶提供服務，並真正能夠利用多種製造流程來幫助他們進行產品開發一直到他們的中小批量生產，吉姆。

Got it. Thanks a lot.

知道了。多謝。

(Operator Instructions) Greg Palm, Craig-Hallum Capital Group.

（操作員說明）Greg Palm，Craig-Hallum Capital Group。

Thanks. Good morning, everyone. I just wanted to start by asking maybe the cadence of orders throughout the quarter. And if you can comment at all what you've seen quarter to date in just in terms of visibility levels. Have things now changed versus several months ago, better, worse, same? Just curious what your overall thoughts are there.

謝謝。大家，早安。我只是想首先詢問整個季度的訂單節奏。如果您能僅根據可見性級別對您本季度迄今為止所看到的內容進行評論。與幾個月前相比，現在的情況有變化嗎？更好，更糟，還是一樣？只是好奇你的總體想法是什麼。

Yes. As we talked about in our prepared remarks, there's still continues to remain some uncertainty from a macroenvironment, but we remain optimistic that the orders growth will continue. Right now, our orders in Q3 are trending near Q2 levels. We're continuing to maintain really a focus on the customer.

是的。正如我們在準備好的發言中談到的，宏觀環境仍然存在一些不確定性，但我們對訂單增長將繼續保持樂觀。目前，我們第三季度的訂單趨勢接近第二季度的水平。我們將繼續真正關注客戶。

I've spent over the last couple of months, a tremendous amount of time meeting with some of our largest strategic customers and really understanding where they see their business going and demand on that. I would say we continue to remain optimistic in the second half of this year.

在過去的幾個月裡，我花了大量的時間與我們一些最大的戰略客戶會面，並真正了解他們的業務發展方向和需求。我想說，我們對今年下半年繼續保持樂觀。

I would say, within the medical device, EV, consumer electronics defense, we still see the demand there to be really strong. I would say some of the capital goods industries where there's interest rate implications, we've seen a little bit of softness in some of those end markets that we serve as well some building supply.

我想說，在醫療設備、電動汽車、消費電子產品防禦領域，我們仍然看到那裡的需求非常強勁。我想說的是，在一些受到利率影響的資本貨物行業，我們看到我們所服務的一些終端市場以及一些建築供應出現了一些疲軟。

Semiconductor, we remain very, very optimistic long term on that, especially as the money from the CHIPS Act and AI continues to and become more integrated. We think we're really well positioned there. But there still is some short-term softness there that we've seen, although we've seen month over month with some of our key semiconductor industries, orders starting to pick back up, which has been a positive sign.

半導體方面，從長遠來看，我們對此保持非常非常樂觀，特別是隨著《芯片法案》和人工智能帶來的資金繼續變得更加一體化。我們認為我們在這方面處於有利位置。但我們仍然看到一些短期疲軟，儘管我們看到一些關鍵半導體行業的訂單逐月開始回升，這是一個積極的跡象。

So as I mentioned in the remarks, we feel really good about the leadership team that we have in place and Kurt Bork really now being fully integrated into the business and the momentum that we're starting to pick up from a commercial side of things, as you saw with the 10% orders growth versus Q1. And we anticipate at this point to see that continuing into Q3.

正如我在發言中提到的，我們對我們現有的領導團隊感到非常滿意，庫爾特·博克現在確實完全融入了業務，而且我們開始從商業方面獲得動力，正如您所看到的，與第一季度相比，訂單增長了10%。我們預計目前這種情況會持續到第三季度。

Yeah. Okay. And then just on the financial flexibility comment, you mentioned that based on what the guidance is, you're not going to be able to comply with the covenants. What would a -- it sounds like you're in active dialogue right now with the lender, but what sort of a good outcome look like in your opinion?

是的。好的。然後就財務靈活性評論而言，您提到根據指導內容，您將無法遵守契約。聽起來您現在正在與貸方進行積極對話，但您認為什麼樣的結果會是好的呢？

Sure, Greg. Now just to point out, we're obviously not in -- we're in compliance right now at June 30. So this is a forward view that we took. And we then -- as soon as we had seen that, we initiated discussions. We've had a good relationship with our lenders. We've been able in the past to agree amendments that did provide us more flexibility.

當然，格雷格。現在我想指出的是，我們顯然沒有在 6 月 30 日遵守規定。所以這是我們採取的前瞻性觀點。然後我們一看到這一點，就發起了討論。我們與貸方有著良好的關係。我們過去曾就修正案達成一致，這確實為我們提供了更大的靈活性。

Our hope -- our focus would be try to get an agreement that takes us through the end of 2024. So we're having this conversation not on a couple of quarter basis. That has happened in the past quarter. So we'll focus -- as I indicated in my comments, liquidity is fine. It's the EBITDA covenant where we need to work with our lending group to figure out on a better path forward on that subject. So that's where the focus would be, Greg, would be on the minimum EBITDA aspect of the covenant.

我們的希望——我們的重點是努力在 2024 年底前達成一項協議。因此，我們不是每隔幾個季度就進行一次對話。上個季度就發生了這種情況。因此，我們將重點關注——正如我在評論中指出的那樣，流動性很好。這是 EBITDA 契約，我們需要與我們的貸款團隊合作，找出在這個問題上更好的前進道路。因此，格雷格，焦點將集中在契約的最低 EBITDA 方面。

Understood. Okay. I'll leave it there. Thanks.

明白了。好的。我會把它留在那裡。謝謝。

Thanks, Greg. We have no further questions at this time. So with that, we can conclude today's call. Thank you for your participation. You may now disconnect your lines.

謝謝，格雷格。目前我們沒有進一步的問題。這樣，我們就可以結束今天的通話了。感謝您的參與。您現在可以斷開線路。