Frequency Electronics Inc (FEIM) 2025 Q1 法說會逐字稿

Greetings, and welcome to the Frequency Electronics third quarter fiscal '25 earnings release conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加Frequency Electronics '25 財年第三季財報發布電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

Any statements made by the company during this conference call regarding the future constitute forward-looking statements pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements inherently involve uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences are included in the company's press releases and are further detailed in the company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the company undertakes no obligation to update these statements for revisions or changes after the date of this conference call.

根據 1995 年《私人證券訴訟改革法案》的安全港條款，本公司在本次電話會議期間發表的任何有關未來的聲明均構成前瞻性聲明。此類陳述本質上涉及不確定性，可能導致實際結果與前瞻性陳述有重大差異。導致或促成此類差異的因素包含在本公司的新聞稿中，並在本公司向美國證券交易委員會提交的定期報告中進一步詳細說明。透過做出這些前瞻性陳述，本公司不承擔在本次電話會議日期之後更新這些陳述以進行修訂或更改的義務。

It is now my pleasure to introduce your host, Thomas McClelland, President and Chief Executive Officer.

現在我很高興向大家介紹東道主托馬斯·麥克萊蘭 (Thomas McClelland)，他是總裁兼執行長。

Thank you. Good afternoon, everyone. I'm pleased to report our first quarter results, coming in very much in line with expectations, as articulated when we reported the fiscal year 2024 results.

謝謝。大家下午好。我很高興地報告我們第一季的業績，該業績非常符合我們在報告 2024 財年業績時所闡述的預期。

Revenue for the first quarter of fiscal year 2025 increased by 22% and operating income improved by 15% compared to the first quarter of previous year. We believe revenue, profits and margins should continue to increase going forward. The backlog of $70 million at the end of Q1 is down slightly from the high of $78 million at the end of the last fiscal year, but it's up substantially from previous years and represents a historically high value for the company.

2025財年第一季營收較上年第一季成長22%，營業收入成長15%。我們相信未來收入、利潤和利潤率將持續成長。第一季末的積壓金額為 7,000 萬美元，略低於上一財年末 7,800 萬美元的高點，但與往年相比大幅上升，代表了公司的歷史高值。

We continue to win significant production contracts in our primary end-markets of space, navigation, secure communication and timing, and anticipate healthy margins on these. This creates some breathing room to work on developing new technologies and also to participate in higher risk programs targeted at developing products for low-cost proliferated satellite systems.

我們繼續在空間、導航、安全通訊和授時等主要終端市場贏得重要的生產合同，並預計這些領域將獲得可觀的利潤。這為開發新技術以及參與旨在為低成本擴散衛星系統開發產品的高風險項目創造了一些喘息空間。

In fact, we're beginning to see some success in these endeavors in two primary areas that have much larger addressable markets than our core legacy offerings have historically enjoyed. First, we've won some initial contracts for developing low-cost synchronization systems for proliferated satellite programs. We've had a number of questions on prior earnings calls about our ability to participate in the market for so-called Small-Sat programs, which are generally lower cost and produced in higher numbers.

事實上，我們開始在兩個主要領域看到這些努力取得了一些成功，這兩個領域的潛在市場比我們歷史上的核心傳統產品大得多。首先，我們贏得了一些初步合同，為激增的衛星項目開發低成本同步系統。在先前的財報電話會議上，我們對我們參與所謂小型衛星專案市場的能力提出了許多問題，這些專案通常成本較低，產量較高。

These initial contracts are a good indication of our ability to successfully compete and win in this large and growing portion of the space market. Second, we're also attracting outside funding for quantum sensors. As one example, we're working on quantum magnetometer applications which utilize some of the physics building blocks of our core atomic clock technologies and can be utilized as sensors for navigation purposes in GPS-denied environments. This is just one of several new quantum applications, which have been developed in physics laboratories around the world in which our company is well positioned to transition from the laboratory into developed products (technical difficulty) participating in it.

這些初始合約很好地表明了我們在這個龐大且不斷增長的航太市場中成功競爭並獲勝的能力。其次，我們也為量子感測器吸引外部資金。舉一個例子，我們正在開發量子磁力計應用，該應用利用了我們核心原子鐘技術的一些物理構建模組，並且可以用作在 GPS 無法使用的環境中用於導航目的的傳感器。這只是在世界各地物理實驗室開發的幾個新的量子應用之一，我們公司有能力從實驗室過渡到參與其中的開發產品（技術難度）。

In order to stimulate further progress in quantum sensor technology, our company is sponsoring a Quantum Sensor Summit in New York City in early October. This scientific conference will bring together leaders from government, university, and private sector laboratories to discuss sensor technologies and how best to realize their potential and also to ensure that our country maintains a leadership role in this arena. We're excited about the enthusiasm which has developed around this event. Details related to the event are available at the Frequency Electronics website for anyone interested.

為了推動量子感測器技術的進一步進步，我公司將於 10 月初在紐約主辦量子感測器高峰會。這次科學會議將匯集來自政府、大學和私營部門實驗室的領導人，討論感測器技術以及如何最好地發揮其潛力，並確保我國在這一領域保持領導地位。我們對圍繞這次活動而產生的熱情感到興奮。任何有興趣的人都可以在Frequency Electronics 網站上找到與活動相關的詳細資訊。

All in all, this is an exciting time for our company. Combining the disciplined approach to our core business, which is growing with a studied approach to new technologies, which can sustain us and foster additional growth in the future, puts us on a solid positive trajectory as a company. The excitement is tangible as I engage with our employees on a daily basis. There is an enthusiasm and drive-apparent, which frankly, is unique in the 40 years I've been at FEI.

總而言之，這對我們公司來說是一個令人興奮的時刻。我們的核心業務不斷發展，而我們對新技術的研究方法不斷發展，將這種嚴格的方法結合起來，可以維持我們的發展並促進未來的進一步增長，使我們作為一家公司走上了堅實的積極軌道。當我每天與我們的員工接觸時，興奮是顯而易見的。坦白說，這裡充滿熱情和乾勁，這在我加入 FEI 的 40 年來是獨一無二的。

With the support of our Board, we've incentivized employees and fostered an environment where everyone benefits from the success of the company. There's plenty of hard work ahead of us but I'm personally energized and committed to the continued growth of our company.

在董事會的支持下，我們激勵了員工，創造了一個讓每個人都能從公司的成功中受益的環境。我們面前還有很多艱苦的工作，但我個人充滿活力並致力於我們公司的持續發展。

I'll now turn things over to our CFO, Steve Bernstein, who will fill you in on the financial details.

我現在將把事情交給我們的財務長史蒂夫·伯恩斯坦（Steve Bernstein），他將向您提供財務詳細資訊。

Thank you, Tom, and good afternoon. For the three months ended July 31, 2024, consolidated revenue was $15.1 million compared to $12.4 million for the same period of the prior fiscal year. The components of revenue are as follows. Revenue from commercial and US government satellite programs was approximately $8.3 million or 55%, compared to $4.9 million or 39% in the same period of the prior fiscal year. Revenues on satellite payload contracts are recognized primarily under the percentage of completion method and are recorded only in the FEI-New York segment.

謝謝你，湯姆，下午好。截至 2024 年 7 月 31 日的三個月，合併收入為 1,510 萬美元，而上一財年同期為 1,240 萬美元。收入構成如下。來自商業和美國政府衛星計畫的收入約為 830 萬美元，即 55%，而上一財年同期為 490 萬美元，即 39%。衛星有效載荷合約的收入主要根據完工百分比法確認，並且僅記錄在 FEI-紐約分部。

Revenues from non-space US government and DOD customers, which are recorded in both the FEI-New York and FEI-Zyfer segments, were $6.3 million compared to $6.9 million in the same period of the prior fiscal year and accounted for approximately 42% of consolidated revenue compared to 55% for the prior fiscal year. Other commercial and industrial revenues were approximately $544,000 compared to approximately $672,000 in the prior fiscal year. The significant increase in revenue for this quarter compared to the same quarter in the previous fiscal year was reflected in both segments and primarily related to increases in government space of approximately $3.4 million in sales, from space US government customers, offset by a decrease of approximately $0.5 million in sales from non-space US government customers.

來自 FEI-New York 和 FEI-Zyfer 部門的非航太美國政府和國防部客戶的收入為 630 萬美元，而上一財年同期為 690 萬美元，約佔總收入的 42%。相比，綜合收入成長了55%。其他商業和工業收入約為 544,000 美元，而上一財年約為 672,000 美元。與上一財年同季相比，本季營收大幅成長反映在這兩個部門，主要與美國政府航太客戶的政府航太銷售額增加約340 萬美元有關，但被約340 萬美元的銷售額下降所抵銷來自非太空美國政府客戶的銷售額為 50 萬美元。

For the three months ending July 31, 2024, gross margin and gross margin rate increased compared to the same period in the fiscal year -- prior fiscal year. The gross margin dollars increased mainly due to the increase in revenue and the gross margin rate increased due to the fact that many of the technical challenges faced in prior fiscal year have been resolved. And as a result, the related programs are now moving forward and running more efficiently.

截至 2024 年 7 月 31 日的三個月，毛利率和毛利率較本財政年度同期（上一財政年度）有所增加。毛利率的增加主要是由於收入的增加以及上一財政年度面臨的許多技術挑戰得到解決而導致毛利率的增加。因此，相關項目現在正在向前推進並更加高效地運行。

Additionally, there were many smaller jobs that were completed at higher margins. This is the highest gross margin the company has recorded on a consolidated business in the last 24 years, and while there will likely still be quarter-to-quarter variability, we believe this is indicative of a direction we can continue to move in when we are producing efficiently and solving engineering challenges in a timely manner.

此外，還有許多較小的工作以較高的利潤完成。這是該公司過去 24 年來在綜合業務上創下的最高毛利率，雖然可能仍存在季度與季度之間的變化，但我們相信這表明我們可以繼續前進的方向高效生產並及時解決工程挑戰。

For the three months ending July 31, '24 and '23, SG&A expenses were approximately 19% of consolidated revenues. The increase in SG&A expenses is related to an increase in payroll-related expense. R&D expense for the three months ending July 31, '24, increased to approximately $1.5 million from $506,000 for the three months ending July 31, '23, an increase of approximately $982,000 and were approximately 10% and 4%, respectively, of consolidated revenue. R&D increases for the three months ending July 31, '24 was primarily due to a focus on advances in modernization of products. The company plans to continue to invest in R&D in the future to keep its products at the state-of-the-art. However, we expect the actual quarterly spend to vary.

截至 2024 年 7 月 31 日及 2023 年 7 月 31 日止的三個月，SG&A 費用約佔合併收入的 19%。SG&A 費用的增加與工資相關費用的增加有關。截至2024年7月31日止三個月的研發費用從截至2023年7月31日止三個月的506,000美元增至約150萬美元，增加約982,000美元，分別佔合併收入約10%和4 % 。截至 2024 年 7 月 31 日止三個月的研發成長主要是由於對產品現代化進步的關注。公司計劃未來繼續投資研發，以維持產品處於最先進水準。然而，我們預計實際的季度支出會有所不同。

For the three months ending July 31, '24, the company recorded operating income of approximately $2.4 million compared to operating income of approximately $2.1 million in the prior fiscal year. Operating income increased due to higher revenue and gross margin percent, offset by higher R&D spends. Other income expense net is derived from various sources. The income can come from reclaiming of metal, refunds or sale of fixed assets, interest expenses related to deferred comp payments made to retired employees. The majority of the approximately $0.2 million of investment income for the three months ending July 31, '24 was from the assets in high-yield treasury funds.

截至 2024 年 7 月 31 日的三個月，該公司的營業收入約為 240 萬美元，而上一財年的營業收入約為 210 萬美元。由於收入和毛利率提高，營業收入增加，但被研發支出增加所抵銷。其他收入支出淨額來自多種來源。收入可以來自回收金屬、退款或出售固定資產、與向退休員工支付的遞延補償付款相關的利息支出。截至2024年7月31日的三個月，約20萬美元的投資收入大部分來自高收益國庫基金資產。

This yields a pretax income of approximately $2.5 million for the three months ending July 31, 2024, compared to approximately $2.1 million pretax income for the three months ending July 31, '23. For the three months ending July 31, '24, the company recorded a tax provision of $133,000, compared to $7,000 for the same period of the prior fiscal year. Consolidated income for the three months ending July 31, '24 was approximately $2.4 million or $0.25 per share compared to approximately $2 million or $0.22 per share for the same period of the previous fiscal year.

截至2024年7月31日的三個月的稅前收入約為250萬美元，而截至2023年7月31日的三個月的稅前收入約為210萬美元。截至 2024 年 7 月 31 日的三個月，該公司記錄的稅款準備金為 133,000 美元，而上一財年同期為 7,000 美元。截至2024年7月31日的三個月的合併收入約為240萬美元或每股0.25美元，而上一財年同期約為200萬美元或每股0.22美元。

Our fully funded backlog at the end of July '24 was approximately $70 million, compared to approximately $78 million for the previous fiscal year ended April 30, '24. The company's balance sheet continues to reflect a strong working capital position of approximately $21 million at July 31, '24 and a current ratio of approximately 1.5 to 1. Additionally, the company is debt-free. The company believes that its liquidity is adequate to meet its operating and investing needs for the next 12 months and the foreseeable future.

截至 2024 年 7 月末，我們的全額資金積壓約為 7,000 萬美元，而截至 2024 年 4 月 30 日的上一財年約為 7,800 萬美元。截至 2024 年 7 月 31 日，該公司的資產負債表繼續反映出約 2,100 萬美元的強勁營運資金狀況，流動比率約為 1.5 比 1。此外，該公司沒有債務。本公司認為其流動性足以滿足未來12個月及可預見的未來的營運和投資需求。

I will turn the call back to Tom, and we look forward to your questions shortly.

我會將電話轉回給湯姆，我們期待您盡快提出問題。

Thanks, Steve. We can now start the question session.

謝謝，史蒂夫。我們現在可以開始提問環節了。

(Operator Instructions) George Marema, Pareto Ventures.

（操作員說明）George Marema，Pareto Ventures。

Yeah. Hi. Thank you. Tom, the -- I want to ask a little bit more about this technology. Well, first, are you guys working on any MEMS technology instead of crystal oscillation technology?

是的。你好。謝謝。湯姆，我想多問一些關於這項技術的問題。好吧，首先，你們是否正在研究 MEMS 技術而不是晶體振盪技術？

We are not internally developing MEMS technology, but we do utilize MEMS technology in some of our products. Of course, the MEMS devices, MEMS resonators don't perform quite as well as the quartz -- the best quartz resonators. And of course, it's the high-performing applications that are our specialty. But there is definitely a place for the MEMS resonators in particular, they're very good in terms of high vibration environments. And so we are utilizing these devices in several of our newer products.

我們並未在內部開發 MEMS 技術，但我們確實在一些產品中採用了 MEMS 技術。當然，MEMS 裝置、MEMS 諧振器的性能不如石英——最好的石英諧振器。當然，高性能應用程式是我們的專長。但 MEMS 諧振器肯定有一席之地，它們在高振動環境中表現得非常好。因此，我們在一些新產品中使用了這些設備。

If you can say whether or not, do you have any involvement in the DARPA chip-scale atomic clock work?

如果您可以回答是否參與過 DARPA 晶片級原子鐘工作嗎？

We -- currently, we do not -- we're not directly involved in any chip-scale activities at DARPA, we have been in the past, we have participated on several of the efforts in the chip-scale atomic clock, this going back 5 to 10 years. But current (technical difficulty)

我們——目前，我們沒有——我們沒有直接參與 DARPA 的任何晶片級活動，我們過去曾參與過，我們參與了晶片級原子鐘的多項工作，這正在進行中回到5到10年前。但目前（技術難度）

Steve. But on the R&D expenses this quarter, can you illuminate some of that? It kind of went up, looks like about $1 million year over year. Is there any onetime aspects to that? Or is that a run-rate we should expect? Or can you give some commentary about the R&D line?

史蒂夫.但關於本季的研發費用，您能說明一下嗎？它有點上漲，看起來每年大約有 100 萬美元。這有什麼一次性的方面嗎？或者說這是我們應該期待的運行率嗎？或者您能對研發線發表一些評論嗎？

Yeah. I'd like to comment on that. I think that you should not extrapolate that out into the future. I think yeah, you do have to realize that something that's going to fluctuate from quarter to quarter. And I know it is a little bit higher this quarter. But yeah, we do not anticipate significant increase in overall R&D expenditures going forward.

是的。我想對此發表評論。我認為你不應該將其推斷到未來。我想是的，你確實必須意識到每個季度都會出現一些波動。我知道這個季度的價格要高一些。但是，我們預計未來整體研發支出不會大幅增加。

So it looks like this quarter was let's just call it, $1.5 million to round off. What would be sort of a -- well, how much of the $1.5 million would you say is more sort of nonsteady state of that? Just -- I guess the spirit of the question is to try to get some like for the full year anchoring of expectations there, roughly.

所以看起來這個季度我們就這麼稱呼它吧，150 萬美元就四捨五入了。嗯，你認為 150 萬美元中有多少是不穩定狀態？只是——我想這個問題的本質是試圖大致了解全年的預期錨定情況。

Yeah. I think a third to a half of that is probably unique. We have some development efforts, which have been partially funded by some of our customers and partially funded by us, and this happens to be a quarter where the activity, the funding from our customers is more limited. And so we're taking on a bigger part of the development effort. But I think that we anticipate overall R&D expenditures for the year.

是的。我認為其中三分之一到一半可能是獨一無二的。我們有一些開發工作，部分由我們的一些客戶資助，部分由我們自己資助，而這個季度的活動、來自我們客戶的資金都比較有限。因此，我們正在承擔更大的開發工作。但我認為我們預計今年的整體研發支出。

What have we planned, Steve, I think approximately $3 million?

史蒂夫，我們計劃了什麼，我想大約是 300 萬美元？

$3 million.

3 美元百萬。

Okay. That's helpful. This gives some idea. And then the same for selling and administrative, didn't go up that much, but it's up like $500,000 year over year. Is there anything unusual about the quarter? Or is that sort of a steady state now?

好的。這很有幫助。這給了一些想法。銷售和管理費用也是一樣，沒有上漲那麼多，但比去年同期上漲了 50 萬美元。本季有什麼異常狀況嗎？或者說現在已經是一種穩定狀態了？

Steve. That's the question --

史蒂夫.這就是問題所在--

No, I believe it's a steady state. Also, remember, it's a comparison last year. So the end result is things went up 3% to 5%, whatever some are a little higher, some are a little lower. But I think it's going to stay constant. It's not going to continually grow.

不，我相信這是一個穩定的狀態。另外，請記住，這是去年的比較。所以最後的結果是漲了3%到5%，不管有的高一點，有的低一點。但我認為它會保持不變。它不會持續增長。

Yeah. Okay. And the gross margins were really nice this quarter. I know you mentioned in the commentary, I think Steve mentioned that there were some smaller projects with some higher margin. And then in the press release, you talked about -- I forget the exact wording, but sort of higher margins and profits as the year went on.

是的。好的。本季的毛利率非常好。我知道你在評論中提到過，我想史蒂夫提到過有一些較小的項目，利潤率較高。然後在新聞稿中，你談到——我忘記了確切的措辭，但隨著時間的推移，利潤率和利潤有所提高。

I'm assuming you're not talking about gross margins increasing from here. Are you? This seems like a pretty high number.

我假設你不是在談論毛利率從這裡開始增加。你是？這看起來是一個相當高的數字。

No, I don't think it's fair to expect that the gross margins will be going up significantly, but we -- I think that we anticipate we'll continue to do that going forward. But some of the newer programs, we -- it's unrealistic to expect that we can get those high margins on all of those.

不，我認為期望毛利率大幅上升是不公平的，但我們——我認為我們預計未來將繼續這樣做。但對於一些較新的項目，我們期望能夠在所有這些項目上獲得高利潤是不切實際的。

Okay. And my last one before I go. The TAM on these new projects, the addressable markets are very large. If you doing, say, $60 million, $70 million run-rate of revenue these days, what sort of capacity do you guys have currently to grow into these addressable markets? A plant and equipment kind of standpoint?

好的。也是我走之前的最後一件事。TAM對這些新項目的潛在市場非常大。比如說，如果你現在的收入是 6,000 萬美元、7,000 萬美元，那麼你們目前有什麼能力進入這些潛在市場？工廠和設備的觀點？

Yeah. We -- from a plant and equipment point of view, I think we're in pretty good shape. We -- I think the bigger challenge is a people challenge. But plant and equipment, I think we've got plenty of capacity and room to expand. And of course, financially, we're in a good position to support that.

是的。我們——從工廠和設備的角度來看，我認為我們的狀況非常好。我們—我認為更大的挑戰是人員挑戰。但是廠房和設備，我認為我們有足夠的產能和擴展空間。當然，在財務上，我們有能力支持這一點。

But people, I think we're watching very carefully. We've talked about this previously. We need to make sure that we have enough people to get the work done. But not -- we don't want to get ahead of ourselves and end up with too many people. And it's a challenge because the way a lot of our work is government work. And the government is fairly unpredictable when things are going to start. So this is always a challenge for us. But we -- I think we don't see any major problems in this regard at this point in time.

但是各位，我認為我們正在非常仔細地觀察。我們之前已經討論過這個問題。我們需要確保有足夠的人員來完成工作。但事實並非如此——我們不想超越自己而最終招致太多人。這是一個挑戰，因為我們的許多工作都是政府工作。事情何時開始，政府是相當難以預測的。所以這對我們來說始終是個挑戰。但我認為目前我們在這方面沒有看到任何重大問題。

Okay. Thank you, Tom. I'm very excited about your direction. Thank you.

好的。謝謝你，湯姆。我對你的方向感到非常興奮。謝謝。

Jon Gruber, Gruber McBaine.

喬恩‧格魯伯，格魯伯‧麥克貝恩。

Good afternoon. Is there any large contracts you're expecting to win or being (technical difficulty) when are you going to be able to replenish that? And --

午安.您是否希望贏得任何大型合約或存在（技術困難）什麼時候能夠補充？和--

We do anticipate that we're going to replenish that. I think what you're observing is what I was just talking about, the unpredictability of the government in terms of starting contracts. We -- but we are definitely anticipating some additional significant new business in the current quarter, and also going forward after that. So we -- yeah, I think we're in good shape.

我們確實預計我們將對其進行補充。我想你所觀察到的就是我剛才所說的，政府在啟動合約方面的不可預測性。我們——但我們肯定預計本季會出現一些額外的重要新業務，並且在此之後也會繼續發展。所以我們——是的，我認為我們狀態良好。

Yeah, that's good news. Could you take us through what some of the projects you're hoping to win here over the next quarter, which will -- which are decent size, which will help the orders?

是的，這是個好消息。您能否向我們介紹您希望在下個季度贏得的一些項目，這些項目規模相當大，有助於訂單？

Well, there are several satellites -- very significant satellite programs that we are anticipating. And also, there are some non-satellite programs that we anticipate also at this point. I think we don't like to get too specific about these things, at least until we definitely are under contract. But yeah.

嗯，有幾顆衛星——我們期待著非常重要的衛星計畫。此外，我們目前預計還會有一些非衛星節目。我認為我們不喜歡對這些事情說得太具體，至少在我們確定簽訂合約之前是這樣。但是是的。

Okay. Thank you.

好的。謝謝。

(Operator Instructions) Frank Wisneski, private investor.

（操作員說明）Frank Wisneski，私人投資者。

Thanks. Tom, I'm really pleased with the direction you're taking the company in. And I have a couple of questions. The revenue mix between satellites and for one of a better word, non-satellite was pretty sharp compared to in the past, which is good. The satellite business is going well, but the other non-satellite business seemed to have a decline in the quarter. First is, is that part of the reason for the gross margin expansion?

謝謝。湯姆，我對你帶領公司前進的方向感到非常滿意。我有幾個問題。與過去相比，衛星和非衛星之間的收入組合相當明顯，這是一件好事。衛星業務進展順利，但其他非衛星業務本季似乎有所下滑。首先，這是毛利率上升的部分原因嗎？

And secondly, do you expect Zyfer in that part of the non-satellite business to continue a run-rate of a little over $6 million? Or can we expect some improvement in that for the remainder of the year?

其次，您是否預期 Zyfer 在非衛星業務部分的營運率將繼續略高於 600 萬美元？或者我們可以期待今年剩餘時間情況會有所改善嗎？

I think that you got to be really careful about trying to read too much into the numbers. A couple of questions there. I think I would not say that the gross margin went up because space is up and non-space is down a little bit. I think that's an incorrect interpretation. And I think we do anticipate -- I think that's really just a measure of the general lumpiness of our business.

我認為你必須非常小心，不要過度解讀這些數字。有幾個問題。我想我不會說毛利率上升是因為空間上升而非空間下降了一點。我認為這是一個不正確的解釋。我認為我們確實預計——我認為這實際上只是衡量我們業務整體混亂程度的一個指標。

And I think we do anticipate that the Zyfer piece of things will increase. And in fact, here in the New York area. We also anticipate some non-space activity. So yeah, I wouldn't read too much into those fluctuations.

我認為我們確實預計 Zyfer 的產品將會增加。事實上，就在紐約地區。我們也預計會出現一些非太空活動。所以是的，我不會過度解讀這些波動。

Okay. You answered the R&D question that came up previously. Did you mean to imply that opposed to the -- as opposed to the 10% there or so R&D rate of sales rate in this first quarter that for the year, it would be closer to 5%? I think --

好的。您回答了之前提出的研發問題。您的意思是否是在暗示，與第一季 10% 左右的研發率相比，今年的研發率會接近 5%？我認為--

Yeah, I think are those the exact numbers? Probably not, but I think that's the general trend, yeah.

是的，我想這些是確切的數字嗎？可能不是，但我認為這是大趨勢，是的。

Interesting. Okay. That's good. And the -- can you give us a feel for what the unfunded backlog is?

有趣的。好的。那挺好的。您能否讓我們了解一下沒有資金支持的積壓工作是什麼？

Steve, go ahead.

史蒂夫，繼續吧。

No, the unfunded -- we don't publish that number.

不，沒有資金的——我們不會公佈這個數字。

Would it be fair to assume that it's significantly larger than the $70 million, you have as a funded backlog?

假設它比你們的積壓資金 7000 萬美元大得多，公平嗎？

Yes. But the end result is, like I said, I can give you a number but if it's -- it never gets funded, or if it's offerings or other things like that. So we don't feel it's a valuable number to provide.

是的。但最終的結果是，就像我說的，我可以給你一個數字，但如果它是——它永遠不會得到資助，或者如果它是產品或其他類似的東西。因此，我們認為提供這個數字並不有價值。

It's a dangerous number.

這是一個危險的數字。

Okay. I want to stay out of the dangerous area. That's it for me. Thank you very much.

好的。我想遠離危險區域。對我來說就是這樣。非常感謝。

Okay. Bye.

好的。再見。

Michael Eisner, private investor.

麥可艾斯納，私人投資者。

Hi. Great gross margin there. I just had one question. In your annual report, it said new business, $70 million, regularly you never comment like that. I was wondering what you meant?

你好。那裡的毛利率很高。我只有一個問題。在你的年度報告中，它說新業務，7000萬美元，你通常不會這樣評論。我想知道你的意思是什麼？

I don't have it in front of me, I don't know. If you want to call me tomorrow, I can look at what line you're saying, and I can explain it to you. I don't have it in front of me.

我面前沒有，我不知道。如果你明天想給我打電話，我可以看看你說的是什麼台詞，然後我可以向你解釋。我面前沒有它。

Alright, that's fine. Thank you.

好吧，沒關係。謝謝。

George Marema, Pareto Ventures.

喬治‧馬雷瑪，帕累托創投公司。

Yeah. Thanks. Steve, I just have a little ticky-tacky question. For fiscal '25, what kind of tax rate are you thinking about?

是的。謝謝。史蒂夫，我只是有一個棘手的問題。對於 25 財年，您考慮的稅率是多少？

Well, it's a very interesting question, but I think it will be a very low tax rate. We do have NOLs, the only issue, and I'm not a tax expert, but I'll tell you is that California has very different rules on NOLs, and we do a bunch of business in California. So that's why you see the $133,000 tax provision. We -- most of our income will be covered by NOLs. However, there will be some that are not covered because of California tax rules. So I don't -- this year, I do not expect it to be anywhere near a normal 21%, 22%, whatever, it's not going to be.

嗯，這是一個非常有趣的問題，但我認為這將是一個非常低的稅率。我們確實有 NOL，這是唯一的問題，我不是稅務專家，但我會告訴你，加州對 NOL 有非常不同的規則，而且我們在加州開展了很多業務。這就是您看到 133,000 美元稅收撥備的原因。我們的大部分收入將由 NOL 承擔。然而，由於加州的稅收規定，有些不包括在內。所以我不認為——今年，我預計它不會接近正常的 21%、22%，無論如何，它不會是這樣。

Low single-digit percent?

低個位數百分比？

Yes.

是的。

Okay. Thanks, Steve.

好的。謝謝，史蒂夫。

No problem.

沒問題。

Tim Hasara, Sinnet Capital.

提姆·哈薩拉，光環新網資本。

Yes. Congratulations again on the gross margin. When I went over the last year's transcript, you called out a onetime contractual adjustment that benefited gross margins a year ago by 8%, which would have made that 31.1% or 31.2%, let's say. And even the operating income was about $1 million, about $0.10 or $0.11. Any particular reason why you didn't call that out today and mentioned that?

是的。再次恭喜毛利率上升。當我查看去年的成績單時，您提到了一項一次性合約調整，該調整使一年前的毛利率提高了 8%，假設現在可以達到 31.1% 或 31.2%。甚至營業收入也大約是100萬美元，大約是0.10美元或0.11美元。您今天沒有指出並提及這一點有什麼特殊原因嗎？

Do you want to address that, Steve? I'm -- that was --

你想解決這個問題嗎，史蒂夫？我是——那是--

That was, I think, happened in Q4, correct?

我認為那是在第四季發生的，對嗎？

That's Q4 -- no, that was Q1, I believe. A year ago.

那是第四季——不，我相信那是第一季。一年前。

No. I think that was Q3 and Q4. And those were kind of one-off issues. It's not really relevant at this point.

不。我認為那是第三季和第四季。這些都是一次性問題。目前這並不重要。

Yeah. Okay. And then the -- just with respect to the backlog, the three contracts you announced last November, I would assume that there'd be -- you're still sort of in the beginning stages of that, but that backlog should probably be funded over the next few quarters as well? I know that's what would be an unfunded backlog, but that's I would assume from the last call or so that, that would be coming through here shortly. Would that be accurate?

是的。好的。然後 - 就積壓而言，您去年 11 月宣布的三份合同，我認為您仍處於起步階段，但積壓的訂單可能應該得到資助未來幾個季度也是如此嗎？我知道這將是一個沒有資金支持的積壓，但我從上次通話中推測，很快就會到達這裡。這樣說準確嗎？

Yeah, it's absolutely correct. Those programs, those three programs you mentioned have different durations. But we're actively working on those. And yeah, we have still some unfunded backlog associated with those, but a very significant amount of that is funded at this point in time.

是的，這是絕對正確的。這些程序，你提到的這三個程序有不同的持續時間。但我們正在積極致力於這些工作。是的，我們仍然有一些與這些相關的未獲資助的積壓訂單，但其中很大一部分目前已獲得資助。

Sounds good. And then I guess with respect to -- you made a comment in the beginning of the press release about some of the newer programs being funded. Are you -- can you give a little bit more color on that? Are you referring to a government funding of a particular contract versus your own R&D?

聽起來不錯。然後我想，您在新聞稿的開頭對一些正在資助的新項目發表了評論。您能對此提供更多的資訊嗎？您指的是特定合約的政府資助還是您自己的研發？

Yeah. We -- for the satellite, the proliferated satellite systems, we have a significant government funding at this point in time. But the -- a number of these programs that we're seeing, they -- what's happening is nobody knows the best way to go up about these satellite systems. So the government is really looking for novel kind of approaches from a number of different suppliers.

是的。對於衛星、激增的衛星系統，我們目前擁有大量政府資金。但是，我們看到的許多項目，正在發生的事情是，沒有人知道提升這些衛星系統的最佳方法。因此，政府確實正在從許多不同的供應商那裡尋找新穎的方法。

And in particular, they don't want to just get the same old thing from the prime contractors that they deal with all of the time. So they're looking for newer satellite companies with different ideas. And so instead of creating just a single contract for a single company that goes through the development phase and then production, they're looking at initially funding multiple companies and then funneling this down as time goes on. So in the first phase, they may fund five companies, fine prime contractors, and then they go into a second phase where maybe they fund only two of those. And then the ideas that eventually they end up with perhaps one or two suppliers in the end.

特別是，他們不想從他們一直在打交道的主承包商那裡得到同樣的舊東西。因此，他們正在尋找具有不同想法的新衛星公司。因此，他們不是只為一家公司製定一份經歷開發階段和生產階段的單一合同，而是考慮首先為多家公司提供資金，然後隨著時間的推移將資金匯集到一起。因此，在第一階段，他們可能會資助五家公司、優秀的主承包商，然後進入第二階段，他們可能只會資助其中兩家。然後他們最終可能會選擇一兩個供應商。

So we, of course, are a supplier to the fine contractors and really, what happens is that we have to accept some risk in the beginning because in order to meet the kind of schedules that are being demanded, we have to work on things. We have to invest in inventory, et cetera, in the initial phases when we have no guarantee that our customer will make it through to the following phases.

因此，我們當然是優秀承包商的供應商，實際上，我們必須在一開始就接受一些風險，因為為了滿足所要求的時間表，我們必須努力工作。在初始階段，我們必須對庫存等進行投資，因為我們無法保證我們的客戶能夠進入接下來的階段。

We, of course -- we are approaching this as cautiously as we can. So we don't get involved where we think that the prime contractor is unlikely to proceed to the next phase, but we do not have any guarantees, and that's where the risk comes in. But initially, we are not funding any additional R&D. What we just have to account for is the risk that the programs don't continue into later phases. And we're left with some expenditures, which end up not being reimbursed ultimately.

當然，我們正在盡可能謹慎地處理這個問題。因此，當我們認為主承包商不太可能進入下一階段時，我們不會介入，但我們沒有任何保證，這就是風險所在。但最初，我們不會資助任何額外的研發。我們只需考慮這些計劃無法繼續到後期階段的風險。我們還剩下一些支出，但最終沒有得到報銷。

Okay. Understood. And I guess following up on my first comment about the gross margins. I'm reading from your first quarter '24 comments, you're saying there, the onetime month -- three months ended July 31, '23, there are onetime contractual and other adjustments that also benefited gross margin rate by approximately 8%. My only point is versus a year ago, you really did a -- on the year ago call but didn't spell it out here. So just to comment there.

好的。明白了。我想是在跟進我關於毛利率的第一個評論。我正在閱讀你們24 年第一季的評論，你們說的是，一次性的一個月——截至23 年7 月31 日的三個月，一次性的合約和其他調整也使毛利率提高了約8%。我唯一的觀點是，與一年前相比，你在一年前的電話會議上確實做了一次，但沒有在這裡詳細說明。所以只是在那裡發表評論。

Okay. Thank you.

好的。謝謝。

Thank you.

謝謝。

Richard Johns, private investor.

理查德·約翰斯，私人投資者。

Hi. I'm wondering if you set a date yet for the annual meeting?

你好。我想知道你是否確定了年會的日期？

Yes, we do have a date. I believe it's October 8.

是的，我們確實有約會。我相信今天是 10 月 8 日。

Okay. All right. Thank you.

好的。好的。謝謝。

Frank Wisneski, private investor.

弗蘭克·維斯涅斯基（Frank Wisneski），私人投資者。

Thank you. Just one follow-up to get a little more color on the proliferated satellite speech, is -- are those LEOs that you're talking about?

謝謝。為了讓衛星演講的激增有更多的色彩，接下來一個後續的行動是──你所說的那些是近地軌道嗎？

The what?

什麼？

The proliferate satellite clusters, are those are lower earth orbits?

激增的衛星群，那些是近地軌道嗎？

Many of them are lower earth orbits, but it's not exclusively lower earth orbit. I think the general concept going forward (technical difficulty).

其中許多是近地軌道，但並不完全是近地軌道。我認為未來的整體概念（技術難度）。

Okay. And you're beginning to get into that area now? You said you had a couple of contracts, smaller ones, I assume?

好的。現在您開始進入該領域了嗎？你說你有幾份合同，我猜是較小的合約？

Yes. Indeed, we are beginning. We do have some initial contracts in this arena. Yes.

是的。事實上，我們正​​在開始。我們在這個領域確實有一些初步合約。是的。

Would they be government or commercial?

他們是政府的還是商業的？

At this point in time, they're government.

此時此刻，他們是政府。

Okay Great. And it's totally speculation. But before you get any significant -- I imagine it'd be several quarters at least before you get significant revenues from that area, right?

好的，太好了。這完全是猜測。但在你獲得任何重大收入之前——我想至少需要幾個季度才能從該領域獲得可觀的收入，對嗎？

Yeah, I think that's a fair assumption.

是的，我認為這是一個合理的假設。

Okay. Thanks a lot. Bye.

好的。多謝。再見。

George Marema, Pareto Ventures.

喬治‧馬雷瑪，帕累托創投公司。

Yeah. Hi. Tom, I was wondering if you could talk a little bit more about this quantum sensor area. In terms of -- like do you currently have product? Or what's the product roadmap? And what sort of addressable market do you think there is on that and just sort of timing of that? Just a little more illumination on this area?

是的。你好。湯姆，我想知道你是否可以多談談這個量子感測器領域。就例如您目前有產品嗎？或者說產品路線圖是什麼？您認為這方面有什麼樣的潛在市場以及其時機？只是在這個區域多一點照明嗎？

Sure. I think a couple of questions, let me try to address each of them. First of all, currently, we do not have any products. We're not shipping for any military missions or anything of that sort at this point in time. But we do anticipate there is -- the whole goal of this effort from our point of view is to develop products.

當然。我想到了幾個問題，讓我試著逐一解決。首先，目前我們還沒有任何產品。目前我們不會運送任何軍事任務或類似的東西。但我們確實預期會有——從我們的角度來看，這項工作的整個目標是開發產品。

I think -- so what are we talking about, I mentioned the magnetometers, this is just one example. But there are a slew of sensor technologies that really utilize the same basic physics that we utilize in our atomic clocks. And so we -- because we are really expert in those technologies, and we have a lot of experience making practical products that work in the real world, we're in a really good position to take some of these more esoteric technologies, sensors like magnetometers from the laboratory and make them into real-world products.

我想——所以我們在談論什麼，我提到了磁力計，這只是一個例子。但有許多感測器技術真正利用了我們在原子鐘中使用的相同基本物理原理。因此，我們 - 因為我們確實是這些技術的專家，並且我們在製造可在現實世界中使用的實用產品方面擁有豐富的經驗，所以我們處於非常有利的位置，可以採用一些更深奧的技術，例如感測器實驗室的磁力計並將其製成現實世界的產品。

One of the difficulties with a lot of these technologies is there have been these exquisite demonstrations in laboratory environments of the sensitivity of some of these sensors and measuring things that people are really interested in, but getting them out of the laboratory and getting them to operate with that kind of sensitivity in the real world is always a challenge. And that's where we come in. And we're really excited. We have some activities which are just getting started with some of the major national laboratories where they develop some of these technologies. And we have developed really good working relationship with some of these labs because they recognize that they do not have the capabilities. Frankly, they don't have the interest either in developing practical products. And we understand the basic physics, but we also know how to make these into real-world products.

許多這些技術的困難之一是在實驗室環境中對其中一些感測器的靈敏度進行了精美的演示，並測量人們真正感興趣的東西，但是將它們帶出實驗室並讓它們運行在現實世界中具有這種敏感性始終是個挑戰。這就是我們的切入點。我們真的很興奮。我們的一些活動才剛開始，一些主要的國家實驗室正在開發其中一些技術。我們與其中一些實驗室建立了非常良好的合作關係，因為他們意識到自己不具備這種能力。坦白說，他們也沒有興趣開發實用的產品。我們了解基本物理學，但我們也知道如何將它們變成現實世界的產品。

So the magnetometers is one example. We talked about that. That's measuring the magnetic field of the earth. And there are multiple applications for that sort of thing. One of them is this alternate navigation when the GPS is not available. So it turns out that there exists really pretty good maps of the magnetic field around the surface of the earth. They're called magnetic anomaly maps because the whole point is that the magnetic field to a first approximation looks uniform. But when you look more closely, it varies at every point on the earth, then it turns out that by measuring the magnetic field at an unknown location and then correlating the exact details of the measurement at that location to these maps of the magnetic anomalies you can do a pretty good job of locating yourself, not necessarily within a couple of centimeters like as possible with GPS in a lot of applications. But certainly, within hundreds of feet and for a lot of applications, that's -- it's certainly better than not knowing anything about your location.

磁力計就是一個例子。我們討論過這個。那是測量地球的磁場。此類事情有多種應用程式。其中之一是 GPS 不可用時的替代導航。事實證明，地球表面周圍確實存在著非常好的磁場圖。它們被稱為磁異常圖，因為重點是第一個近似值的磁場看起來是均勻的。但當你更仔細地觀察時，你會發現地球上的每個點都有所不同，那麼事實證明，透過測量未知位置的磁場，然後將該位置的測量的確切細節與這些磁異常圖相關聯，你就可以得出結論。但當然，在數百英尺內並且對於許多應用程式來說，這肯定比不知道您的位置要好。

There are other applications that we're looking at one of the interesting areas is so-called Rydberg sensors. And these actually are sensors in which we look at Rydberg transitions in atoms which are very high energy levels of atoms where the atoms are almost but not quite ionized. And people have developed sensors that in such a way that it's possible to utilize a cell containing rubidium as a receiving antenna in -- for microwave frequencies. And these cells containing rubidium are exactly the same kind of cells that we used in our atomic clocks. And a lot of the techniques of measuring the microwave fields and utilizing this device as an antenna are exactly the same techniques that we use in our atomic clocks.

我們正在研究其他應用，其中一個有趣的領域是所謂的里德堡感測器。這些實際上是我們觀察原子中的里德伯躍遷的感測器，這些原子是非常高能階的原子，其中原子幾乎但沒有完全電離。人們已經開發出感測器，可以利用含有銣的電池作為微波頻率的接收天線。這些含有銣的電池與我們在原子鐘中使用的電池完全相同。許多測量微波場和利用該設備作為天線的技術與我們在原子鐘中使用的技術完全相同。

The interesting thing about the Rydberg sensors is that most antenna applications are really tied to the wavelength of the frequency of the signals that are being measured. So typically, for RF and microwave signals, these have wavelengths measured in meters, and so antennas need to be sized in several meters in diameter but these Rydberg sensors, even though the wavelengths are longer, they have a sensitivity, a cell that's 1 centimeter in diameter, can measure with the same sensitivity as a more conventional antenna that has dimensions of meters. So there's the potential to make very, very small antennas.

里德堡感測器的有趣之處在於，大多數天線應用實際上與被測量訊號的頻率波長相關。因此，通常情況下，對於射頻和微波訊號，它們的波長以米為單位測量，因此天線的直徑需要以幾米為單位，但這些里德堡感測器，即使波長更長，它們也具有靈敏度，即1厘米的單元直徑，可以以與具有米尺寸的更傳統的天線相同的靈敏度進行測量。因此有可能製造非常非常小的天線。

So these are just a couple of the kind of things that we're involved in and working, as I say, with some of the laboratories. And we are very much seeking external funding, and we're beginning to have some success in getting that external funding.

正如我所說，這些只是我們與一些實驗室參與和合作的一些事情。我們非常尋求外部資金，並且我們在獲得外部資金方面已經開始取得一些成功。

Okay. That's great. Thank you.

好的。那太棒了。謝謝。

Frank Wisneski, private investor.

弗蘭克·維斯涅斯基（Frank Wisneski），私人投資者。

Last question, I promise. The -- and it's governance more than anything. In most of the companies I've ever been involved with the Chief Executive Officer is on the Board of Directors. Is there any particular reason that you can give us? So that you are not on the Board of Directors?

最後一個問題，我保證。治理比什麼都重要。在我參與過的大多數公司中，執行長都是董事會成員。您能告訴我們什麼特別的理由嗎？所以你不在董事會？

Yeah, I don't think I'm in a good position to answer that question. I haven't been invited to the Board at this point in time.

是的，我認為我不適合回答這個問題。目前我還沒有被邀請加入董事會。

Okay. Thank you.

好的。謝謝。

Thank you very much. Well, we appear to have reached the end of the question-and-answer session and also the end of the conference. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful rest of the day. Thank you for your participation.

非常感謝。嗯，我們的問答環節似乎已經結束，會議也結束了。女士們先生們，今天的電話會議到此結束。此時您可以斷開電話線並享受一天的美好休息。感謝您的參與。