Fabrinet (FN) 2013 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to Fabrinet's third quarter 2013 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions following at that time.

女士們先生們，美好的一天。歡迎參加 Fabrinet 2013 年第三季度財務業績電話會議。此時，所有參與者都處於只聽模式。稍後，我們將進行問答環節，屆時將進行說明。

(Operator Instructions)

（操作員說明）

As a reminder, this conference is being recorded. Now I'll turn the conference over to your host, Chief Administrative Officer and General Counsel, Paul Kalivas. Please begin.

提醒一下，這次會議正在錄製中。現在，我將把會議交給您的主持人、首席行政官兼總法律顧問保羅·卡利瓦斯 (Paul Kalivas)。請開始。

Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the third quarter of fiscal year 2013, which ended March 29, 2013. With us on the call today are Tom Mitchell, Chief Executive Officer and Chairman of the Board of Directors of Fabrinet; TS Ng, our Chief Financial Officer; and John Marchetti, our Chief Strategy Officer. This call is being webcast and a replay will be available on the Investor section of our website located at investor.fabrinet.com. During this afternoon's discussion we will be presenting both GAAP and non-GAAP numbers. Our GAAP results and reconciliation of our GAAP to non-GAAP results are attached to our earnings Press Release, which is also posted on our website. I would like to remind you that today's discussions may contain forward-looking statements about the future financial performance of the Company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this preparation, and we undertake no obligation to revise them in light of new information or future events, except as required by law. For a description of the risk factors that may affect our results, please refer to our recent SEC filings, in particular the section captioned Risk Factors in our Form 10-Q filed on February 5, 2013. We will begin the call with brief remarks by Tom, John, and TS, followed by time for questions. I would now like to turn the call over to Fabrinet's CEO and Chairman, Tom Mitchell.

感謝您參加今天的電話會議，討論 Fabrinet 截至 2013 年 3 月 29 日的 2013 財年第三季度的財務和運營業績。今天與我們通話的有首席執行官兼董事會主席 Tom Mitchell Fabrinet 的董事； TS Ng，我們的首席財務官；以及我們的首席戰略官 John Marchetti。此電話會議正在進行網絡直播，重播將在我們網站 investor.fabrinet.com 的投資者部分提供。在今天下午的討論中，我們將介紹 GAAP 和非 GAAP 數據。我們的 GAAP 結果以及我們的 GAAP 與非 GAAP 結果的調節附在我們的收益新聞稿中，該新聞稿也發佈在我們的網站上。我想提醒您，今天的討論可能包含有關公司未來財務業績的前瞻性陳述。前瞻性陳述受風險和不確定因素的影響，這些風險和不確定因素可能導致實際結果與管理層當前的預期存在重大差異。這些陳述僅反映我們截至本文編制之日的意見，除法律要求外，我們不承擔根據新信息或未來事件修改這些陳述的義務。有關可能影響我們結果的風險因素的描述，請參閱我們最近提交給美國證券交易委員會的文件，特別是我們於 2013 年 2 月 5 日提交的 10-Q 表格中標題為“風險因素”的部分。我們將通過簡短的評論開始電話會議Tom、John 和 TS，接下來是提問時間。我現在想把電話轉給 Fabrinet 的首席執行官兼董事長湯姆米切爾。

Thank you, Paul, and good afternoon, everyone. I am pleased with our third quarter results. Both revenue and earnings per share were above our guidance range, demonstrating the consistency of our operating model. We are optimistic about the long-term opportunities for growth, which include new business from existing customers, potential business from new customers and our efforts to further diversify our revenue and customer base. As always, I want to thank our employees for their hard work and all of our customers for their continued trust and support in Fabrinet. I will now turn the call over to John Marchetti, Fabrinet's Chief Strategy Officer, for a further discussion of the markets we serve.

謝謝保羅，大家下午好。我對我們第三季度的業績感到滿意。收入和每股收益均高於我們的指導範圍，證明了我們運營模式的一致性。我們對長期增長機會持樂觀態度，其中包括來自現有客戶的新業務、來自新客戶的潛在業務以及我們為進一步實現收入和客戶群多元化所做的努力。一如既往，我要感謝我們員工的辛勤工作，感謝所有客戶對 Fabrinet 的持續信任和支持。我現在將把電話轉給 Fabrinet 的首席戰略官 John Marchetti，以進一步討論我們所服務的市場。

Thanks, Tom, and thanks everyone for joining us today. In terms of overall demand trends, not much has changed over the last several quarters. Quarters are for the most part stable, but being stubbornly flattish. These demand trends are prevalent across several of our lines of business and are not attributable to any one customer or end-market vertical, suggesting to us that demand continues to be adversely affected by sluggish spending trends in multiple markets. Near term we expect these current demand challenges to continue. In optical communications, we experienced increased stability relative to the order cuts that we experienced in the December quarter. However, we did not see a material increase to orders that we were hoping would materialize toward the end of the quarter. That continues to be a great deal of focus and effort in some of the most advanced components and modules which we believe is encouraging, and we expect that these trends to continue. It is this activity that gives us confidence that the underlying fundamentals of our optical business remain strong, and we expect to benefit through our customers when spending on optical equipment begins to accelerate. Our Laser, Sensor and Other business, while flat quarter-over-quarter, remains an important avenue of growth for us and we will continue to explore ways to accelerate our diversification efforts in these and potentially other new markets.

謝謝，湯姆，感謝大家今天加入我們。就總體需求趨勢而言，過去幾個季度沒有太大變化。宿舍大部分是穩定的，但頑固地平坦。這些需求趨勢在我們的多個業務線中普遍存在，並且不歸因於任何一個客戶或垂直終端市場，這表明我們的需求繼續受到多個市場低迷消費趨勢的不利影響。短期內，我們預計這些當前的需求挑戰將繼續存在。在光通信方面，相對於我們在 12 月季度經歷的訂單削減，我們的穩定性有所提高。但是，我們沒有看到我們希望在本季度末實現的訂單出現實質性增長。這仍然是一些最先進的組件和模塊的大量關注和努力，我們認為這是令人鼓舞的，我們預計這些趨勢將繼續下去。正是這項活動讓我們相信，我們光學業務的基本面仍然強勁，我們希望在光學設備支出開始加速時通過我們的客戶受益。我們的激光、傳感器和其他業務雖然環比持平，但仍然是我們增長的重要途徑，我們將繼續探索加速我們在這些市場和其他潛在新市場的多元化努力的方法。

The laser market appears to have stabilized somewhat. As some of the weakness that we saw in the government and research markets over the last couple of quarters appear to flatten out while the industrial market remains mixed. We expect that over the near term our laser business may continue to experience some sluggishness. However, we continue to believe that the overall Laser Market is in the early stages of outsourcing and represents a significant opportunity for growth over the next several years. The demand and visibility in our automotive segment remains solid and we are encouraged that signs point to this continuing. We continue to win new business in this segment and are excited about the opportunities for growth in the coming quarters. Overall we remain confident that our Laser, Sensor and Other segment will be a critical driver of our top-line growth for the next several years. Taking a longer term view, we remain encouraged by the overall growth prospects for our business. We continue to have success in new customer acquisition and in winning new programs from existing customers. And while these new wins always take time to generate meaningful revenue, we believe the pipeline for both of these growth avenues is strong. With that, I would now like to turn the call over to TS, our Chief Financial Officer, for a report on our financial results. TS?

激光市場似乎有所穩定。由於過去幾個季度我們在政府和研究市場看到的一些弱點似乎趨於平緩，而工業市場仍然喜憂參半。我們預計，在短期內，我們的激光業務可能會繼續低迷。然而，我們仍然相信整個激光市場處於外包的早期階段，代表著未來幾年的重要增長機會。我們汽車領域的需求和知名度保持穩定，我們感到鼓舞的是，有跡象表明這種情況仍在繼續。我們繼續在這一領域贏得新業務，並對未來幾個季度的增長機會感到興奮。總體而言，我們仍然相信我們的激光、傳感器和其他部門將成為未來幾年收入增長的關鍵驅動力。從長遠來看，我們仍然對我們業務的整體增長前景感到鼓舞。我們在贏得新客戶和贏得現有客戶的新計劃方面繼續取得成功。雖然這些新的勝利總是需要時間來產生有意義的收入，但我們相信這兩種增長途徑的管道都很強大。有了這個，我現在想把電話轉給我們的首席財務官 TS，以獲得我們的財務業績報告。 TS？

Thanks, John. Good afternoon, everyone. I'm pleased to report that Fabrinet delivered fiscal quarter three results above our guidance range. I would like to start with an update on the insurance recovery status, then we'll do a reviews of the results for the third quarter and end with our outlook for fiscal quarter four. As a reminder, we continue to expect our financial results to be impacted due for multiple quarters due to the timings of approval and payments of insurance proceeds. Claims for all losses related to equipment, inventory, property and different interactions has been submitted and we continue to work with our insurance syndicate to settle these claims. In the third quarter, we received an insurance payment through our own inventory claims in the amount of approximately $11.4 million. This is the fifth consecutive quarter where we have received insurance payments against our claims and we will continue to aggressively pursue the balance. We will disclose additional information on the timings and payments of our insurance claims as it becomes available. Now to review the results for the third quarter. Please note that all numbers are GAAP unless otherwise stated.

謝謝，約翰。大家下午好。我很高興地報告，Fabrinet 的第三財季業績超出了我們的指導範圍。我想從保險恢復狀態的最新情況開始，然後我們將對第三季度的結果進行審查，並以我們對第四財季的展望結束。提醒一下，由於批准和支付保險收益的時間安排，我們繼續預計我們的財務業績將受到多個季度的影響。與設備、庫存、財產和其他交互相關的所有損失的索賠已經提交，我們將繼續與我們的保險集團合作解決這些索賠。在第三季度，我們通過自己的庫存索賠收到了大約 1140 萬美元的保險金。這是我們連續第五個季度收到針對我們索賠的保險金，我們將繼續積極尋求平衡。我們將在可用時披露有關我們保險索賠的時間和付款的更多信息。現在回顧第三季度的結果。請注意，除非另有說明，否則所有數字均為 GAAP。

Our total revenue for the third quarter of fiscal 2013 was $155.6 million, a decrease of 12% sequentially and an increase of 12% compared to the third quarters of fiscal 2012. Please remember that the third quarter of 2012 was still impacted by our [pratt] recovery efforts. On an end-market basis, revenue from Optical Communications was $108 million or 70% of total revenues for the quarter, while Laser, Sensors, and Other revenue was $47 million, the remaining 30%. As Tom indicated in his prepared remarks, we will continue to look for ways to further diversify our revenue base. Our share-based compensation expenses for the quarter were $1.3 million, of which roughly $1.1 million was included in SG&A. This compares to share-based compensations of $1.4 million last quarter and $1.3 million in the March quarters of fiscal 2012. Our (Inaudible) for the quarter was [in counsel] $11.4 million, which represents an income payment on our inventory [staying] for Fabrinet's own inventory. This amount is included in our results as Other Income and is excluded from our non-GAAP results. We intend to [float] the gains on insurance (Inaudible) in future periods as those amounts become reasonably certain. Our effective tax rate for the quarter was 4.2%, including the effect of [flattened liquor] insurance [salary] as well as the release of (Inaudible) tax provisions. Without this item, our normalized tax rate would have been 5.3%, within our expected range of 5% to 6%. On a non-GAAP basis, net income totaled $11.5 million for the quarter or $0.33 per share, [calculated] from a base of roughly 35 million fully [balances] share.

我們 2013 財年第三季度的總收入為 1.556 億美元，環比下降 12%，與 2012 財年第三季度相比增長 12%。請記住，2012 年第三季度仍然受到我們 [pratt ] 恢復努力。在終端市場基礎上，光通信收入為 1.08 億美元，佔本季度總收入的 70%，而激光、傳感器和其他收入為 4700 萬美元，佔其餘 30%。正如湯姆在準備好的發言中所指出的那樣，我們將繼續尋找進一步使我們的收入基礎多樣化的方法。本季度我們基於股份的薪酬支出為 130 萬美元，其中約 110 萬美元包含在 SG&A 中。相比之下，上個季度的股票薪酬為 140 萬美元，2012 財年 3 月季度的股票薪酬為 130 萬美元。我們本季度的（聽不清）[在法律顧問中]為 1140 萬美元，這代表我們庫存的收入支付 [staying] Fabrinet 自己的庫存。這筆金額作為其他收入包含在我們的結果中，不包括在我們的非公認會計原則結果中。我們打算在未來期間 [浮動] 保險收益（聽不清），因為這些金額變得相當確定。我們本季度的有效稅率為 4.2%，包括 [扁平酒] 保險 [工資] 的影響以及（聽不清）稅收規定的發布。如果沒有這個項目，我們的標準化稅率應該是 5.3%，在我們 5% 到 6% 的預期範圍內。在非 GAAP 基礎上，本季度淨收入總計 1150 萬美元或每股 0.33 美元，[計算]基於大約 3500 萬的完全 [餘額] 份額。

Non-GAAP net income decreased 17% sequentially compared to non-GAAP net income of $13.8 million last quarter and increased 17% compared to non-GAAP net incomes of $9.9 million in the same period last year. On a GAAP basis, including [flat]-related income, share-based compensation (unintelligible) and [follow on] operating expenses, our net income was $31.3 million or $0.61 per share. In the near term we expect that our GAAP results may continue to fluctuate due to the size and timings of future insurance recovery. Moving on to the balance sheet and cash ell] payments. We ended the quarter with a cash balance of more than $157 million. The (unintelligible) sequential increase was primarily due to [costly] operating cash flow and [associate] from the income insurance payments. Please note that (Inaudible) any proceeds from the [foreign offerings] that was completed in March. I would now like to discuss guidance for next quarter. As both Tom and John discussed, we are yet to see signs of a sustained increase in orders from our customers. As a result we are being conservative in our outlook for fiscal quarter four. We expect revenues of between $148 million and $152 million. We anticipate non-GAAP net income of $0.27 per share based on a fully diluted share offering and (unintelligible) share. GAAP net income [remains affected] in timings of insurance recovery. That concludes our prepared remarks. At this time, I would like to turn the call over for questions. Operator?

非 GAAP 淨收入與上一季度 1380 萬美元的非 GAAP 淨收入相比環比下降 17%，與去年同期的 990 萬美元非 GAAP 淨收入相比增長 17%。根據 GAAP，包括[固定]相關收入、基於股份的薪酬（難以理解）和[後續]運營費用，我們的淨收入為 3130 萬美元或每股 0.61 美元。在短期內，我們預計我們的 GAAP 結果可能會由於未來保險恢復的規模和時間而繼續波動。轉到資產負債表和現金支付。本季度結束時，我們的現金餘額超過 1.57 億美元。 （難以理解的）連續增長主要是由於[昂貴的]經營現金流和來自收入保險支付的[關聯]。請注意，（聽不清）3 月份完成的 [外國產品] 的任何收益。我現在想討論下一季度的指導。正如湯姆和約翰所討論的那樣，我們尚未看到客戶訂單持續增長的跡象。因此，我們對第四財季的展望持保守態度。我們預計收入在 1.48 億美元至 1.52 億美元之間。根據完全稀釋的股票發行和（難以理解的）股票，我們預計每股非 GAAP 淨收入為 0.27 美元。 GAAP 淨收入 [仍然受到影響] 在保險恢復時間。我們準備好的發言到此結束。這時候想把電話轉過來提問。操作員？

(Operator Instructions)

（操作員說明）

Patrick Newton of Stifel.

Stifel 的帕特里克牛頓。

On the revenue, I wanted to dig down a little bit into that. The crux of my question is I would love for you to extrapolate what is driving you to guide down sequentially. I look back at June and from a seasonal basis it is typically at worse flat. You discuss demand trends being flat throughout the quarter and you've beaten the high end of your guidance for two consecutive quarters now. Given that we do not think you are losing share because of competitive positioning, should we just view it as conservative?

關於收入，我想深入研究一下。我的問題的癥結在於，我希望你能推斷出是什麼驅使你按順序向下引導。我回顧 6 月，從季節性的角度來看，它通常處於更糟糕的平穩狀態。您討論了整個季度的需求趨勢持平，並且您現在已經連續兩個季度超過了指導的高端。鑑於我們認為您不會因為競爭定位而失去份額，我們是否應該將其視為保守？

Hi, Patrick. It's John. If you really look at it, right, while we did come in above our guidance this quarter, if you are look at our guidance that we're giving for June relative to the guidance that we gave for March, it's essentially the same guidance. But it is flat on a sequential basis if you look at the guidance. And essentially that's what we're seeing out there. We're always a little bit conservative so maybe we are erring a little bit more on the side of caution, but when you really look at it from a guidance perspective, the guidance for June is essentially flat with the guidance we gave for March. And that I think is reflective at least right now of what we are seeing from the bulk of our core-- from the bulk of our customers.

嗨，帕特里克。是約翰。如果你真的看它，對，雖然我們本季度確實超出了我們的指導，但如果你看看我們對 6 月給出的指導相對於我們對 3 月給出的指導，它基本上是相同的指導。但如果你看一下指導，它在連續的基礎上是持平的。從本質上講，這就是我們在那裡看到的。我們總是有點保守，所以也許我們在謹慎方面犯了更多的錯誤，但當你真正從指導的角度來看它時，6 月的指導基本上與我們為 3 月給出的指導持平。我認為這至少反映了我們現在從我們的大部分核心客戶那裡看到的情況。

Okay. If we think about what drove the beats in the March quarter, if I recall, you talked about orders accelerating a little bit exiting December and I believe had picked up some momentum in the month of January. As we proceeded through the quarter, how did that linearity look and then I would assume that we have flat-lined into April thus far but would love your thoughts there.

好的。如果我們考慮是什麼推動了 3 月季度的節拍，如果我記得，你談到訂單在 12 月份略有加速，我相信在 1 月份已經獲得了一些勢頭。隨著我們整個季度的進行，這種線性看起來如何，然後我假設到目前為止我們已經持平到 4 月，但會喜歡你的想法。

Sure. I think you touched on it. We essentially flat-lined. We saw that little bit of an uptick and I think that we talked a little bit about some of the cuts that we saw in the month of December. I think we picked up maybe a little bit more of that in the end of January into early February, and then really it has been pretty consistent, quite frankly, since then.

當然。我想你觸及了它。我們基本上持平。我們看到了一點點上升，我認為我們討論了一些我們在 12 月份看到的一些削減。我認為我們在 1 月底到 2 月初可能會獲得更多的信息，然後坦率地說，從那以後它一直非常穩定。

On the gross margin front, I think you are little bit softer than I would have expected and I'm backing into out of 10.6% pro forma rate, which is the lowest outside of flooding our recessionary periods, so I would love if you could extrapolate on some of the impacts on -- what impacted gross margin this quarter. Was it a mix issue? Did FX have an impact. Was [Kasiks] soft? I assume, based on some commentary for some peers, that Kasiks was soft. What was impacting that margin profile?

在毛利率方面，我認為你比我預期的要軟一點，我正在退出 10.6% 的備考利率，這是我們經濟衰退期以外的最低水平，所以如果你能的話，我會很高興推斷一些影響——什麼影響了本季度的毛利率。是混合問題嗎？外匯有影響嗎？ [Kasiks] 軟嗎？根據一些同行的評論，我認為 Kasiks 很軟弱。是什麼影響了利潤率？

Patrick, this is TS. I think that [malaise fall on the chin] [you will see that we discussed about a hitting from the] HIGHbar. I don't know if you followed that. But HIGHbar is at 16-year high recently. And we discussed [always a factor in our risk] [factor in the same thing] when we talk about our operating margin is susceptible to the non-US dollar changing fluctuation. And again this coming quarter, this FQ4, we even feel a stronger headwind. So the non-GAAP EPS guidance is down essentially all because of the foreign exchange.

帕特里克，這是 TS。我認為 [不適落在下巴上] [你會看到我們討論了來自] HIGHbar 的打擊。我不知道你是否遵循了這一點。但 HIGHbar 最近處於 16 年高位。當我們談論我們的營業利潤率容易受到非美元變化波動的影響時，我們討論了 [always a factor in our risk] [factor in the same thing]。在即將到來的這個季度，這個 FQ4，我們甚至感受到了更強勁的逆風。因此，非 GAAP 每股收益指引基本上都是因為外匯而下降。

One own question is on a sequential basis I think you should have had some benefit to your gross margin from the lower insurance costs, so if we striped out of the effect of the Thai baht, would that have been the case?

一個自己的問題是在連續的基礎上，我認為你應該從較低的保險成本中獲得一些毛利率的好處，所以如果我們排除泰銖的影響，情況會是這樣嗎？

A small impact, okay, because as you go into the year, we might realize more, because we still have some we found from last year and we also -- essentially our insurance for last year ended March 31. So there will be some spillover this quarter. But I would say in the second quarter you might see some impact on that -- any impact on that.

影響很小，好吧，因為當你進入這一年時，我們可能會意識到更多，因為我們仍然有一些去年的發現，而且我們——基本上是我們截至 3 月 31 日的去年的保險。所以會有一些溢出效應這個季度。但我會說在第二季度你可能會看到一些影響——任何影響。

Sherri Scribner of Deutsche Bank.

德意志銀行的 Sherri Scribner。

I just wanted to follow-up on the previous question. Thinking about the SG&A, it was up this quarter despite the fact that revenue was down. And it's a bit higher than it's been in a while. Was that primarily related to the Thai baht or were there other things that drove the SG&A up?

我只是想跟進上一個問題。考慮到 SG&A，儘管收入下降，但本季度 SG&A 有所上升。而且它比一段時間以來要高一點。這主要與泰銖有關，還是有其他因素推動了 SG&A 的上漲？

In SG&A we also included, Sherri, the follow-on offering -- secondary offer expenses there, and we found comparable non-GAAP EPS. So if you look at a non-GAAP to GAAP EPS, the [constellation], you see that about -- to $0.5 million spend on the secondary offer.

在 SG&A 中，我們還包括，Sherri，後續發行——那裡的二次發行費用，我們發現了可比的非 GAAP 每股收益。因此，如果您查看非 GAAP 到 GAAP 每股收益，[星座]，您會看到約有 50 萬美元用於二次報價。

Right, but if you strip that out, it still looks like it was higher in terms of sequentially versus December, even though the revenue was down.

是的，但如果你把它去掉，它看起來仍然比 12 月的順序更高，即使收入下降了。

Yes. So I think it is about $6.2 million value if you took that out and we are basically saying that around $6 million, we'll [tax] between $6 million and $6.5 million, so we do that -- allow the range.

是的。所以我認為如果你把它拿出來，它的價值約為 620 萬美元，我們基本上是說大約 600 萬美元，我們將 [徵稅] 在 600 萬到 650 萬美元之間，所以我們這樣做 - 允許範圍。

So going forward, you expect it to be $6 million to $6.5 million?

那麼展望未來，您預計它會達到 600 萬至 650 萬美元？

Yes. But some of this also will change because we have SG&A, the local spending there too. So a change impacts getting into gross margin and SG&A too.

是的。但其中一些也會改變，因為我們有 SG&A，那裡也有當地支出。因此，變化也會影響毛利率和 SG&A。

And did you give the magnitude of the impact from the FX this quarter?

您是否給出了本季度外匯影響的大小？

No.

不。

And then just thinking about the gross margins in terms of the guidance, the gross margin is down sequentially. What type of contribution margin do you guys think about for the business? I know the revenue is expected to be down. But just trying to understand how much leverage is there and how much fixed cost is in the [COGs] number, thanks.

然後就指導而言考慮毛利率，毛利率連續下降。你們認為企業的貢獻率是多少？我知道收入預計會下降。但只是想了解有多少槓桿作用以及 [COG] 數字中有多少固定成本，謝謝。

Yes, Sherri, the volume of leverage is [commender] here. Even though that's a mention about gross margin, 7% [block] and so on, but our contribution margin I would say at least double that amount. So actually [through this you say that] you could get to 190 and you could look at the way we [got one to peet one], there's $40 million there. If we can get that $40 million [up sight] commender leverage on the fixed overhead and that's for the margin.

是的，Sherri，這裡的槓桿量是 [commender]。儘管這提到了毛利率、7% [block] 等等，但我認為我們的貢獻率至少是這個數額的兩倍。所以實際上 [through this you say that] 你可以達到 190，你可以看看我們 [get one to peet one] 的方式，那裡有 4000 萬美元。如果我們能在固定間接費用上獲得 4000 萬美元的 [up sight] 表揚槓桿，那就是利潤。

Subu Subrahmanyan of the Juda Group.

Juda Group 的 Subu Subrahmanyan。

Could you talk about what mix of things which led to the upside in the quarter. Were there any particular products, areas, geographies or customers that led to that? And similarly, in the tone of the orders and forecast customers -- are your customers indicating they are still expecting a second-half improvement though they do not have visibility for that and I'm just wondering how that is coming down in your forecast [at the June] quarter?

您能否談談導致本季度上漲的因素組合。是否有任何特定的產品、地區、地區或客戶導致了這種情況？同樣，在訂單和預測客戶的語氣中——你的客戶是否表示他們仍然期待下半年的改善，儘管他們對此並不了解，我只是想知道你的預測是如何下降的[在六月]季度？

Sure. Subu, this is John. I think, to the first part of your question, I don't think there is anything or anyone in particular that we would call out as the upside relative to the guidance. We are a little bit stronger I think on both sides of the house, if you will, relative to our plan going into the quarter. But it was nothing that I think I could really point a finger to and say it was one or two specific items. In terms of looking out to June, I think our guidance reflects certainly the orders that we have coming in, but I do think, to your point, there still remains a bit of an expectation that things are going to get better, it is just I think similar to what we've been talking about for a little while, it is a question of when. And quite frankly we're as hopeful for it as anyone. But until we really start to see it, we're not going to certainly factor any of that into a forecast or any kind of guidance that we give.

當然。蘇布，這是約翰。我認為，對於你問題的第一部分，我認為沒有任何東西或任何人特別值得我們稱為相對於指導的好處。如果你願意的話，相對於我們進入本季度的計劃，我認為我們在房子的兩邊都更強一些。但我認為我真的不能指指點點地說它是一兩個特定的項目。就展望 6 月而言，我認為我們的指導意見肯定反映了我們收到的訂單，但我確實認為，就你的觀點而言，仍然存在一些情況會好轉的預期，只是我認為與我們已經討論了一段時間的內容類似，這是一個時間問題。坦率地說，我們和任何人一樣對此抱有希望。但在我們真正開始看到它之前，我們肯定不會將其中任何一個因素納入我們提供的預測或任何類型的指導中。

I understand that. And then to follow-up. TS, is it fair to assume that with slightly lower revenues, gross margin can be input in the numbers you've implied. It's like you're going into the June quarter?

我明白那個。然後進行跟進。 TS，假設收入略低，毛利率可以輸入您暗示的數字是否公平？好像你要進入六月季度？

Yes, all because of the foreign exchange impact. That's correct.

是的，都是因為外匯影響。這是正確的。

Ehud Gelblum from Morgan Stanley.

來自摩根士丹利的 Ehud Gelblum。

I apologize for my voice. Let's stick on the FX issue for on quick moment just to make sure I understand. Your revenue is not impacted because it's -- all of your revenue contracts are in US dollars, is that correct?

我為我的聲音道歉。讓我們暫時關注外匯問題，以確保我理解。你的收入沒有受到影響，因為它 - 你所有的收入合同都是美元，對嗎？

That is correct.

那是對的。

So on the COGs and OpEx lines, what was the average Baht rate that you saw in the quarter and what was the Baht rate in the prior quarter so we can compare an actual and calculate the next [real] impact?

那麼在 COG 和 OpEx 線上，您在本季度看到的平均泰銖匯率是多少，上一季度的泰銖匯率是多少，以便我們可以比較實際併計算下一個 [real] 影響？

Okay, if you look at actually where the hedging policy in place, right. So if you tried the spot rate, not necessarily that we are close at that spot rate because we hedge about three months ahead of the operation. So I can tell you that between last quarter, at Q3, versus the coming quarter Q4, the [photo has changed] up by about 1.13 Thai Baht per US dollar. So currently baht is running about 38.5, 39, around that range. And you can imagine previous quarter we are using about 20 to -- 30 to 39 baht per US dollar. So one quarter alone, the baht does about $1.13 million -- excuse me, 1.2 baht per US dollar. That created about $0.03 impact and that is why we guided down $0.03. Other than that, everything else comes flat (unintelligible) from the (unintelligible) from the [SU 3] last quarter's guidance.

好的，如果您實際查看對沖政策的實施位置，對。因此，如果您嘗試使用即期匯率，不一定是我們以該即期匯率收盤，因為我們在操作前大約三個月進行了對沖。所以我可以告訴你，在上個季度的第三季度與即將到來的第四季度之間，[照片發生變化] 美元兌泰銖上漲了約 1.13 泰銖。因此，目前泰銖在該範圍內運行約 38.5、39。你可以想像上一季度我們每美元使用大約 20 至 - 30 至 39 泰銖。因此，僅一個季度，泰銖就產生了大約 113 萬美元——對不起，1 美元兌 1.2 泰銖。這造成了大約 0.03 美元的影響，這就是我們指導下調 0.03 美元的原因。除此之外，其他一切都與 [SU 3] 上一季度的指導（無法理解）持平（無法理解）。

So if I can just make sure I understood you correctly, you hedged three months in advance and the change from last quarter to this quarter was a move of about 2 baht, from 31 to 29?

所以如果我能確定我理解正確的話，你提前三個月進行了對沖，從上一季度到本季度的變化是大約 2 泰銖，從 31 到 29？

Yes. You can think about 3%, 3% to 10.5% baht we did in one quarter. It moved downward, appreciated by 3 and --

是的。你可以想想我們在一個季度裡做了 3%、3% 到 10.5% 的泰銖。它向下移動，升值 3 和 -

So the impact was only one back from one quarter to the next?

所以影響只是從一個季度到下一個季度？

Yes.

是的。

What are you assuming for your guidance going forward? Another one --

您對未來的指導有何假設？另一個 -

The guidance is about, yes, $0.36 to $0.38, right. If you think of the midpoint in (unintelligible), we guided about 29 to 31, if you think of midpoint, about $0.30. So it was about $0.03 quarter-over-quarter.

是的，指導大約是 0.36 美元到 0.38 美元，對吧。如果你想到中點（聽不清），我們指導大約 29 到 31，如果你想到中點，大約 0.30 美元。因此，季度環比約為 0.03 美元。

But the revenue is also lower. Or the revenue is the same in terms of the two guidances?

但收入也較低。還是兩種指導的收入相同？

Correct.

正確的。

Okay. So we should assume -- and what are the absolute number for the baht. Is it 29 that you are assuming now? It was 30 last quarter?

好的。所以我們應該假設——泰銖的絕對數量是多少。您現在假設是 29 歲嗎？上個季度是30？

Yes. Going into the quarter we assumed 29.5 because we had the contract [to we divert that] baht at that price.

是的。進入本季度，我們假設為 29.5，因為我們有合同以該價格 [轉移] 泰銖。

Okay. We should assume it is now one less at 28.5?

好的。我們應該假設它現在是 28.5 少了一個？

And the spot, as of today, is 28.5. That's correct.

截至今天，現貨價格為 28.5。這是正確的。

That is where you are hedged in for this quarter, 28.5?

這就是您本季度對沖的地方，28.5？

We are still buying. We haven't concluded this quarter yet. Usually we go out and buy almost [any way] and buy enough for the following quarter.

我們還在買。我們還沒有結束這個季度。通常我們幾乎[以任何方式]出去購買，並為下一季度購買足夠的東西。

When you look at the trends that you were talking about, the laser sensors was flat, as you said. When you gave guidance last quarter is that what you expected? So was all of the upside in the com side?

正如您所說，當您查看您所談論的趨勢時，激光傳感器是平坦的。當你上個季度給出指導時，這是你的預期嗎？那麼所有的好處都在 com 方面嗎？

I wouldn't say that it was all in the com side. I think that we were roughly expecting that group to be relatively flat and that's the way it came in. So relative to our guidance there is probably a little bit more upside in coms than we expected. But again I don't think it's anything that was terribly surprising to us given what the ultimate number wound up being.

我不會說這一切都在 com 方面。我認為我們大致預計該組將相對持平，這就是它進來的方式。因此，相對於我們的指導，com 的上行空間可能比我們預期的要多一些。但我再次認為，考慮到最終的數字是多少，這對我們來說並不是什麼特別令人驚訝的事情。

And again what was the -- did it come from certain vendors that were stronger than you thought but their orders tailed off. Why isn't the strength that you saw continued into your optimism for next quarter?

又是什麼——它是否來自某些比你想像的更強大但他們的訂單減少的供應商。為什麼你看到的力量沒有延續到你對下個季度的樂觀情緒中？

But again, it was across a few different customers. Each one of them was a little bit higher than planned, but I don't think that that is something that is -- again it is not terribly shocking. It is not like it all came from one customer to where I could say, boy, that either dropped off or something along those lines.

但同樣，它涉及幾個不同的客戶。他們每個人都比計劃的要高一點，但我不認為那是什麼——再說一次，這並不是非常令人震驚。這並不是說這一切都來自一位顧客，我可以說，男孩，要么掉下來了，要么沿著這些路線走。

Were there restarts of certain programs that were still on hold from the floods? Is that -- I'm just trying to. Still, Tom, I know you gave some answers and I'm still trying to correlate why things were stronger and tended a little bit better this quarter and yet you have no confidence in the continuing into next quarter.

是否重新啟動了某些因洪水而暫停的項目？那是——我只是想。不過，湯姆，我知道你給出了一些答案，我仍在嘗試關聯爲什麼本季度情況更強勁並且趨於好轉，但你對下個季度的持續情況沒有信心。

Well, again, I think the reality of it is we came in a little bit better than we hoped or that we planned for last quarter. And as we are looking at this quarter, we are trying to be conservative in the same way we were last quarter. We haven't seen a sustained sign of an uptick in orders to where we feel overly comfortable giving a -- an aggressive growth target. So and we are being careful here. We are certainly hopeful that the order patterns will turn, but until they do, we're certainly not get out in front of our skis.

好吧，我認為現實情況是我們的表現比我們希望的或我們上個季度的計劃要好一點。在我們審視本季度時，我們正試圖以與上一季度相同的方式保持保守。我們還沒有看到訂單持續上升的跡象，以至於我們感到過於自在地給出了一個積極的增長目標。所以我們在這裡要小心。我們當然希望訂單模式會轉變，但在他們轉變之前，我們肯定不會在我們的滑雪板前脫身。

I'm perfectly fine with you staying on your skis. That is a comfortable place to be. The commentary though sounded pretty negative as well though. Flattish demand, not seeing a pickup, and all kinds of things. Those do not sound to be all that -- in correlation with the other information that you're giving. I'm just trying to feel as to where we are supposed to be reading into this? Are trends really -- the new trend that you're seeing this quarter, they weren't as -- weren't quite so muted as it sounds as though there is a possibility that things could get a little bit better, you're just not totally seeing them yet. Is that one way to characterize it?

我完全同意你繼續滑雪。那是一個舒適的地方。不過，評論聽起來也很消極。平淡的需求，沒有看到皮卡，以及各種各樣的事情。這些聽起來並不完全——與您提供的其他信息相關。我只是想感受一下我們應該從哪裡讀到這個？趨勢真的是——你在本季度看到的新趨勢，它們不是——沒有那麼平靜，因為聽起來好像事情有可能變得更好一點，你是只是還沒有完全看到他們。這是描述它的一種方式嗎？

I think that is a fair characteristic. I think that when we talked back in February on our earning call, the hope quite frankly is that we would start to see a -- some of the early signs that we saw continue to grow. And they didn't. They flat-lined out. I think we're here now still on that flattish order pattern and we're still hopeful there could be upside as we continue to move forward through the quarter. But we are not seeing it yet.

我認為這是一個公平的特徵。我認為，當我們在 2 月份回顧我們的收益電話時，坦率地說，希望我們會開始看到——我們看到的一些早期跡象繼續增長。他們沒有。他們排成一行。我認為我們現在仍然處於那種平穩的訂單模式，我們仍然希望隨著我們在本季度繼續前進而有上行空間。但我們還沒有看到它。

One last question on the laser sensor side. You didn't give a split, I believe, between government and commercial types of lasers, saying that government was more flattish and commercial was weaker? Did I get that description correctly?

關於激光傳感器方面的最後一個問題。我相信，您沒有在政府和商業類型的激光器之間進行拆分，說政府更平坦而商業更弱？我的描述正確嗎？

I don't think we called it out specifically. Government I think continues to be one of the areas in laser that has been under the most strain, just given some of the things that have gone on with the sequester and prior to that even some of the budget debate that was happening. So that continues to be a market. I think if you listen to the public commentary from some of our customers, that would certainly reflect that, whereas some of the other end markets I think are a little bit more mixed. But to be blunt, my customers can answer that question better than I can.

我不認為我們特別指出了這一點。我認為政府仍然是激光領域中承受最大壓力的領域之一，只是考慮到隔離中發生的一些事情，甚至在此之前發生的一些預算辯論。所以這仍然是一個市場。我認為，如果您聽取我們一些客戶的公開評論，那肯定會反映出這一點，而我認為其他一些終端市場則更加複雜。但坦率地說，我的客戶比我能更好地回答這個問題。

Paul Coster from JPMorgan.

摩根大通的保羅·科斯特。

Did you talk about the 10% customer this is quarter and if not can you share with us the numbers there?

您是否談到了本季度 10% 的客戶，如果沒有，您能否與我們分享那裡的數字？

I would just say they are the same that we disclosed in our K historically and there is no real change to any overall percentage or anything like that, Paul.

我只想說它們與我們歷史上在 K 中披露的相同，並且任何總體百分比或類似的東西都沒有真正的變化，保羅。

You talked about the auto opportunity. Can you just tell us what exactly the product is inside autos?

你談到了汽車機會。您能告訴我們汽車內部的產品到底是什麼嗎？

We work with some of the sub-assembly system vendors. We do a number of programs, from anti-lock brake sensors to airbag deployment sensors to a few others. So we primarily are in the safety and control functions.

我們與一些子裝配系統供應商合作。我們做了很多項目，從防抱死制動傳感器到安全氣囊展開傳感器等等。所以我們主要是在安全和控制功能方面。

And why should we be interested in what is happening there?

為什麼我們應該對那裡發生的事情感興趣？

Well, for us, it represents a real nice opportunity. It takes a long time to get yourself qualified and prove yourself to those types of customers and once you are designed in with those guys, you tend to have a very long life cycle with them. And so we have opportunities to grow both within those customers, as they look to award new programs, we are certainly able to bid for some of those, as well as we continue to obviously look for ways to expand on the relationships we have today now that we have proved ourself in that market to bring some new customer in over time. So we think that is obviously another diversification avenue for us. It's one that we're certainly hopeful about over the longer term. As we continue to mine for a few others, hopefully all of those in aggregate can continue to help us diversify our revenue stream. I mean ultimately, we've stated this before, we would love to get to a point some number of years down the road where we are at a 50/50 split between optical and non-optical, if you will.

好吧，對我們來說，這代表了一個真正的好機會。使自己合格並向這些類型的客戶證明自己需要很長時間，一旦您被設計為與這些人合作，您往往會與他們有很長的生命週期。因此，我們有機會在這些客戶中發展，因為他們希望授予新計劃，我們當然能夠競標其中一些，而且我們顯然會繼續尋找擴大我們今天關係的方法隨著時間的推移，我們已經在那個市場上證明了自己可以帶來一些新客戶。所以我們認為這顯然是我們的另一種多元化途徑。從長遠來看，我們當然對此充滿希望。隨著我們繼續挖掘其他一些人，希望所有這些人能夠繼續幫助我們實現收入來源的多元化。我的意思是，最終，我們之前已經說過，如果您願意的話，我們很樂意在幾年後達到光學和非光學之間 50/50 的比例。

In other words you think the auto segment can be material contributor to total revenues?

換句話說，您認為汽車部門可以對總收入做出重大貢獻嗎？

Absolutely.

絕對地。

Finally, you talked about advanced products being a growing proportion of your network, the optical communications business. What are we exactly referring to and are we talking about the actual revenues or the orders that are coming in now?

最後，您談到高級產品在您的網絡、光通信業務中所佔的比例越來越大。我們到底指的是什麼？我們是在談論實際收入還是現在收到的訂單？

No, I think if you just look at what is going on in the industry right now, there certainly is more of a focus on some of the higher speed components and modules. Customers are certainly I think focused on the 100-gig upgrade cycle and a lot the pieces of that as they continue to look at their portfolios. And so the comment there was just, I think, really trying to indicate that, regardless of what the slope of the curve might look like, it is clear that customers are certainly focused on that end of the optical market.

不，我想如果你看看現在這個行業正在發生什麼，肯定會更關註一些更高速的組件和模塊。我認為客戶肯定會關注 100 兆升級週期以及其中的很多部分，因為他們會繼續關注他們的產品組合。因此，我認為那裡的評論只是試圖表明，無論曲線的斜率看起來如何，很明顯客戶肯定專注於光學市場的那一端。

It doesn't have any impact on gross margins and it doesn't seem to be yielding revenue growth through higher ASPs at the moment.

它對毛利率沒有任何影響，目前似乎沒有通過更高的平均售價產生收入增長。

Paul, not really, because in the past we say that is always a cost [graft] model. So, yes.

保羅，不是真的，因為過去我們說這始終是一種成本 [嫁接] 模型。所以，是的。

A follow-up question from Patrick Newton of Stifel.

來自 Stifel 的 Patrick Newton 的後續問題。

Just kind of sticking around the FX question. Your Other Income had $1 million gain on FX that was about $0.03 net of tax. That kind of nets out the impact of high baht through the year SG&A. I'm curious, is there something buried in that Other Income line that is a natural offset or hedge to the Thai baht or is that some kind of hedging game -- gain or is that something that can continue on a go-forward basis?

只是圍繞外匯問題。您的其他收入有 100 萬美元的外匯收益，稅後淨額約為 0.03 美元。這種方式消除了全年 SG&A 的高泰銖影響。我很好奇，其他收入線中是否隱藏了一些東西，可以自然抵消或對沖泰銖，或者是某種對沖遊戲——收益，或者是可以在前進的基礎上繼續的東西？

Okay, Patrick That is a good catch. Now, we receive insurance proceeds in Thai bahts, and during the flood at that time about one and a half years ago, the Thai baht was running at 31 baht per US dollar. But all the claim is [domented] in US dollars and [in converse it] at 31 baht because there was baht prevailing at that time. So when I received this BAHT315 million, which you saw $11.6 million US dollars, I had to remit that to Cayman Islands, because some of this inventory belonged to Cayman Islands. So when I receive the baht, we book it at whatever [for] rate, P&L rate we use. And then when we send it out, because of the baht appreciated, so we send it out using the spot rate so that's how we create the gain there. And also I had forward contract -- a whole bunch of forward contracts and I mark to market. At the end of the quarter, Thai baht is appreciating, the trend is appreciating. So month to month, that is how we created about close to $900,000 for the (unintelligible).

好吧，帕特里克這是一個很好的收穫。現在，我們以泰銖收取保險收益，在大約一年半前的洪水期間，泰銖兌美元匯率為 31 泰銖。但所有的索賠都是以美元 [domented] 和 [converse it] 31 泰銖，因為當時泰銖盛行。因此，當我收到這 3.15 億泰銖（您看到的是 1160 萬美元）時，我不得不將其匯至開曼群島，因為其中一些存貨屬於開曼群島。因此，當我收到泰銖時，我們會以我們使用的任何 [for] 匯率、損益匯率進行預訂。然後當我們發送它時，由於泰銖升值，所以我們使用即期匯率發送它，這就是我們在那裡創造收益的方式。而且我還有遠期合同——一大堆遠期合同，我按市值計價。季末泰銖升值，走勢呈升值態勢。所以每個月，這就是我們為（無法理解的）創造近 900,000 美元的方式。

So I guess in the June quarter, based on mark-to-market and based on the insurance proceeds, should we see any type of similar benefit? It sounds like not to the level of $980,000, but should we anticipate some type of benefit?

所以我想在 6 月季度，基於按市值計價和基於保險收益，我們應該看到任何類型的類似收益嗎？這聽起來不像是 980,000 美元的水平，但我們應該期待某種類型的收益嗎？

Yes. Only the small portion, only the mark-to-market portion [might revert]. And again we do not forecast foreign exchange going forward. So that might go out into the P&L but I would say it is not (unintelligible).

是的。只有一小部分，只有按市值計價的部分[可能會恢復]。同樣，我們不預測未來的外匯。所以這可能會進入損益表，但我會說它不是（難以理解）。

Thank you. And there are no further questions at this time. I would like to turn the call over to John Marchetti for any closing results.

謝謝。目前沒有其他問題。我想將電話轉給 John Marchetti 以獲取任何結束結果。

Great. Thank you, everybody, for joining us today. We look forward to speaking with you all soon. Thanks very much

偉大的。謝謝大家今天加入我們。我們期待很快與大家交談。非常感謝

Operator. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.

操作員。女士們，先生們，感謝你們參加今天的會議。程序到此結束。您現在可以斷開連接。祝你有美好的一天。