Key Tronic Corp (KTCC) 2024 Q1 法說會逐字稿

Good day, and welcome to the Key Tronic first quarter fiscal 2024 conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Brett Larsen. Please go ahead.

美好的一天，歡迎參加 Key Tronic 2024 財年第一季電話會議。今天的會議正在錄製中。現在，我想把會議交給布雷特·拉森先生。請繼續。

Thank you. Good afternoon, everyone. I am Brett Larsen, Chief Financial Officer of Key Tronic. I would like to thank everyone for joining us today for today's conference call. Joining me here in our Spokane Valley headquarters is Craig Gates, our President and Chief Executive Officer.

謝謝。大家下午好。我是 Key Tronic 財務長 Brett Larsen。我要感謝大家今天加入我們今天的電話會議。與我一起來到斯波坎谷總部的是我們的總裁兼執行長克雷格蓋茲 (Craig Gates)。

As always, I would like to remind you that during the course of this call, we might make projections or other forward-looking statements regarding future events or the company's future financial performance. Please remember that such statements are only predictions. Actual events or results may differ materially. For more information, you may review the Risk Factors outlined in the documents the company has filed with the SEC, specifically our latest 10-K, quarterly 10-Qs, and 8-Ks.

像往常一樣，我想提醒您，在本次電話會議期間，我們可能會對未來事件或公司未來財務表現做出預測或其他前瞻性陳述。請記住，此類陳述僅是預測。實際事件或結果可能有重大差異。如需了解更多信息，您可以查看公司向 SEC 提交的文件中概述的風險因素，特別是我們最新的 10-K、季度 10-Q 和 8-K。

Please note that on this call we will discuss historical financial and other statistical information regarding our business and operations. Some of this information is included in today's press release and a recorded version of this call will be available on our website.

請注意，在這次電話會議上，我們將討論有關我們業務和營運的歷史財務和其他統計資料。其中一些資訊包含在今天的新聞稿中，並且我們的網站上將提供本次電話會議的錄音版本。

Today, we released results for the three months ended September 30, 2023. For the first quarter of fiscal 2024, we reported revenue of approximately $147.8 million, up 8% from $137.3 million in the same period of fiscal 2023. The increase in revenue reflects the continued ramp in production for new programs, particularly those produced in our US facilities.

今天，我們發布了截至 2023 年 9 月 30 日的三個月業績。2024 財年第一季的收入約為 1.478 億美元，比 2023 財年同期的 1.373 億美元增長 8%。收入的增長反映了新節目的製作持續增加，特別是在我們美國工廠製作的節目。

Revenue is down sequentially from the fourth quarter of fiscal 2023 due to the customer's redesign of a large outdoor power equipment program. But we estimate that program to come back online later in fiscal 2025. The company's gross margin for the first quarter of 2024 was 7.4% and operating margin was 2.2%, compared to a gross margin of 7.6% and an operating margin of 2.4% in the same period of fiscal 2023.

由於客戶重新設計大型戶外動力設備計劃，收入較 2023 財年第四季環比下降。但我們預計該計劃將在2025 財年稍後恢復上線。該公司2024 年第一季的毛利率為7.4%，營業利潤率為2.2%，而2024 年第一季的毛利率為7.6%，營業利益率為2.4%。2023 財年同期。

Margins in the first quarter of fiscal 2024 included severance costs of about $0.6 million as we reduced our workforce by over 100 employees in Mexico and in the US. The workforce reduction reflects some softening demand for a number of different programs for the first -- for the next few quarters in Mexico and is expected to reduce operating expenses by more than $5 million on an annualized basis. Excluding these severance costs, in the first quarter of fiscal 2024 gross margins and operating margins would have been approximately 7.8% and 2.6%, respectively.

2024 財年第一季的利潤包括約 60 萬美元的遣散費，因為我們在墨西哥和美國裁減了 100 多名員工。勞動力減少反映出墨西哥未來幾季對許多不同項目的需求有所減弱，預計年化營運費用將減少超過 500 萬美元。排除這些遣散費，2024 財年第一季的毛利率和營業利潤率將分別約為 7.8% 和 2.6%。

Our recent production efficiencies, strategic labor cost reductions, and the gradual stabilization in the supply chain and labor markets has been largely offset by the strengthening of the Mexican peso relative to the US dollar in recent months. However, in the second quarter of fiscal 2024, we are beginning to see the peso weaken to the USD, which may translate into improving conditions moving forward.

我們最近的生產效率、策略性勞動成本削減以及供應鏈和勞動力市場的逐步穩定在很大程度上被近幾個月墨西哥比索相對於美元的走強所抵消。然而，在 2024 財年第二季度，我們開始看到比索兌美元走弱，這可能會轉化為未來狀況的改善。

For the first quarter of fiscal 2024, net income was $0.3 million or $0.03 per share, compared to $1.2 million or $0.11 per share for the same period of fiscal 2023. The year over year decline in earnings was primarily due to a $1.1 million increase in interest expense on higher interest rates and an unanticipated severance cost of $0.6 million, or approximately $0.04 to $0.05 per diluted share. Net income continued to be adversely impacted by the strength of the Mexican pesos.

2024 財年第一季度，淨利潤為 30 萬美元，即每股 0.03 美元，而 2023 財年同期為 120 萬美元，即每股 0.11 美元。收益同比下降主要是由於淨利潤增加了 110 萬美元。較高利率帶來的利息支出以及60 萬美元的意外遣散費，即攤薄後每股約0.04 至0.05 美元。淨利潤持續受到墨西哥比索走強的不利影響。

Turning to the balance sheet, we ended up the first quarter of fiscal 2024 with reducing inventory by approximately $43 million or roughly 25% from the same time a year ago, primarily reflecting increased shipments and a concerted effort to drive inventory reductions.

轉向資產負債表，我們在 2024 財年第一季結束時庫存減少了約 4,300 萬美元，比去年同期減少了約 25%，這主要反映了出貨量的增加以及推動庫存減少的共同努力。

Total inventory turns increased to 4 times in the first quarter of fiscal 2024, up from 3.1 turns a year ago. We are pleased to see our inventory levels start to become in line with our current revenue. At the same time, the state of the worldwide supply chain still requires that we look out much further in the future than in historical periods.

2024 財年第一季的總庫存週轉率從一年前的 3.1 倍增加到 4 倍。我們很高興看到我們的庫存水準開始與我們目前的收入保持一致。同時，全球供應鏈的狀況仍然要求我們對未來的目光比歷史時期看得更遠。

We are still recovering from the COVID supply chain chaos as our customers have revamped their forecasting methodologies, and we have significantly modified and improved our material resource planning algorithms. As a result, we should see a better equipped -- we should be better equipped for future disruptions in the supply chain even as we continue to drive inventory down.

我們仍在從新冠肺炎供應鏈混亂中恢復過來，因為我們的客戶已經改進了他們的預測方法，並且我們已經大幅修改和改進了我們的材料資源規劃演算法。因此，我們應該看到更好的裝備——即使我們繼續降低庫存，我們也應該為未來供應鏈的中斷做好更好的準備。

During the first quarter, we also reduced accounts payable, leasing obligations, and overall debt by a combined amount of $22.7 million during the quarter. At the same time, accounts receivable remained relatively flat on increased revenues year over year with DSOs at 81 days, down from 91 days a year ago, which we believe reflects some improvement of certain customers with respect to disruptions from supply chain issues.

在第一季度，我們還減少了應付帳款、租賃義務和總債務，總計減少了 2,270 萬美元。同時，由於收入同比增長，應收帳款保持相對平穩，DSO 週期為81 天，低於一年前的91 天，我們認為這反映了某些客戶在供應鏈問題造成的中斷方面有所改善。

Total capital expenditures were about $0.4 million for the first quarter of fiscal 2024, and we expect total CapEx for the full fiscal year to be around $8 million. While we're carefully keeping an eye out on capital expenditures, we plan to continue to invest selectively in our production equipment, SMT equipment and plastic molding capabilities, utilize leasing facilities, as well as make efficiency improvements to prepare for growth and add capacity.

2024 財年第一季的總資本支出約為 40 萬美元，我們預計整個財年的總資本支出約為 800 萬美元。在我們密切關注資本支出的同時，我們計劃繼續有選擇地投資於我們的生產設備、SMT 設備和塑膠成型能力，利用租賃設施，並提高效率，為成長和增加產能做好準備。

For the second quarter of fiscal 2024, we're seeing a continued increase in demand for programs based in our US facilities and some softening of customer demand for our Mexico-based programs. As previously announced, the large program with a leading power equipment company is now expected to resume materially in fiscal 2025 rather than 2024 with a customer redesign product.

2024 財年第二季度，我們發現對美國設施項目的需求持續增加，而客戶對墨西哥項目的需求則減弱。正如先前宣布的那樣，與領先電力設備公司合作的大型專案預計將在 2025 財年實質恢復，而不是 2024 年，並為客戶重新設計產品。

For the second quarter of fiscal 2024, we expect to report revenue in the range of $135 million to $145 million, and earnings in the range of $0.05 to $0.10 per diluted share. In the second half of fiscal 2024, we expect increased demand for our Mexico-based programs and continued growth in the US and Vietnam.

對於 2024 財年第二季度，我們預計營收將在 1.35 億美元至 1.45 億美元之間，攤薄後每股收益將在 0.05 美元至 0.10 美元之間。 2024 財年下半年，我們預期墨西哥計畫的需求將會增加，美國和越南的需求也將持續成長。

We also have a strong pipeline of potential new business. Over the longer term, we believe that we are increasingly well positioned to win new EMS programs and continue to profitably expand our business. So that's it for me. Craig?

我們也擁有強大的潛在新業務管道。從長遠來看，我們相信我們越來越有能力贏得新的 EMS 項目，並繼續以盈利方式擴展我們的業務。我就是這樣。克雷格？

Thanks, Brett. During the first quarter of fiscal 2024, we continued to ramp many new programs produced in our US facilities and remain profitable despite a temporary softening of customer demand for our Mexico based programs. We're also pleased to see our inventories be more in line with current revenue levels and other improvements made on the balance sheet.

謝謝，布雷特。在 2024 財年第一季度，我們繼續增加在美國工廠生產的許多新項目，儘管客戶對墨西哥項目的需求暫時疲軟，但仍保持盈利。我們也很高興看到我們的庫存更加符合當前的收入水平以及資產負債表上的其他改進。

Over the past four years, we have seen a 9.4% CAGR of revenue, largely driven by an increase in new programs predominantly in North America. During those same four years, we have seen our total number of new customer programs grow by approximately 100% from the number in fiscal 2020. Our revenues increased by 31% over the same period.

在過去的四年裡，我們的收入複合年增長率為 9.4%，這主要是由主要在北美的新項目的增加所推動的。在這四年裡，我們的新客戶計畫總數比 2020 財年成長了約 100%。我們的營收同期成長了 31%。

This has led to less concentration in any single customer and has enabled us to be less financially dependent on any single program. During fiscal 2023, we had only one customer that represented over 10% of revenues, and they represented only 12%. Meanwhile, our US sites have added over $60 million in new program wins in the past 12 months as a direct result of continued onshoring.

這導致對任何單一客戶的集中度降低，並使我們在財務上減少對任何單一計劃的依賴。 2023 財年，我們只有一個客戶佔收入的 10% 以上，而他們只佔 12%。同時，由於持續的本地外包，我們的美國網站在過去 12 個月內贏得了超過 6000 萬美元的新項目。

Moving in to fiscal 2024, we continue to see the favorable trend of contract manufacturing returning to North America. As a result, we continued to expand our customer base and won new programs involving security equipment, sporting goods, environmental solutions, and industrial control systems.

進入 2024 財年，我們繼續看到合約製造重返北美的有利趨勢。因此，我們不斷擴大客戶群，並贏得了涉及安全設備、體育用品、環境解決方案和工業控制系統的新項目。

Global logistics problems and China-US geopolitical tensions continue to drive OEMs to examine their traditional outsourcing strategies. We believe these customers increasingly realized that they have become overly dependent on their China-based contract manufacturers for not only product but also for design and logistics services.

全球物流問題和中美地緣政治緊張局勢繼續促使整車廠審視其傳統的外包策略。我們相信，這些客戶越來越意識到，他們不僅在產品方面，而且在設計和物流服務方面，都變得過度依賴中國的合約製造商。

Over time, the decision to onshore or near-shore production is becoming more widely accepted as a smart long-term strategy. As a result, we see opportunities for continued growth. Moreover, a growing number of potential customers are actively evaluating the migration of their China-based manufacturing to our facility in Vietnam. In the coming years, we expect our Vietnam facility to play a major role in our growth.

隨著時間的推移，陸上或近岸生產的決定被越來越廣泛地接受為明智的長期策略。因此，我們看到了持續成長的機會。此外，越來越多的潛在客戶正在積極評估將其中國製造業務遷移到我們在越南的工廠。未來幾年，我們預計越南工廠將在我們的成長中發揮重要作用。

While China growth has slowed and many companies have decided to take risk mitigation steps with their China manufacturers, the fact remains that many components must be sourced from China. Our procurement group in Shanghai, which serves the entire corporation, remains important for managing the China component supply chain on an ongoing basis.

儘管中國經濟成長放緩，許多公司已決定與其中國製造商採取風險緩解措施，但事實仍然是許多零件必須從中國採購。我們位於上海的採購團隊為整個公司服務，對於持續管理中國零件供應鏈仍然很重要。

The combination of our global footprint and our expansive design capabilities is proving to be extremely effective in capturing new business. Many of our large and medium-sized manufacturing program wins are predicated on Key Tronic's deep and broad design services. And once we have completed the design and ramp it into production, we believe our knowledge of a program specific design challenges makes that business extremely sticky.

事實證明，我們的全球足跡與廣泛的設計能力相結合，在獲取新業務方面極為有效。我們許多大中型製造專案的勝利都依賴 Key Tronic 深入而廣泛的設計服務。一旦我們完成了設計並將其投入生產，我們相信我們對專案特定設計挑戰的了解將使該業務極具黏性。

We also invested in vertical integration and manufacturing process knowledge, including a wide range of plastic molding, injection blow, gas-assist multi shot, as well as PCB assembly, metal forming, painting and coating, complex high-volume automated assembly, and the design, construction and operation of complicated test equipment. This expertise may set us apart from our competitors of the similar size.

我們也投資於垂直整合和製造流程知識，包括各種塑膠成型、注射吹塑、氣體輔助多次注射，以及 PCB 組裝、金屬成型、噴漆和塗層、複雜的大批量自動化組裝以及複雜測試設備的設計、建造和操作。這種專業知識可能使我們在同等規模的競爭對手中脫穎而出。

As a result, a customer looking to leave their contract manufacturer will find a one-stop shop in Key Tronic, which is expected to make the transition to our facilities much less risky and cobbling together a group of providers each limited to a portion of the value chain. In fact, most of the new customers we have onboarded take advantage of this one-stop shop capability that we provide.

因此，想要離開合約製造商的客戶將在 Key Tronic 找到一站式服務，預計這將大大降低向我們工廠過渡的風險，並將一組供應商拼湊在一起，每個供應商都僅限於部分業務價值鏈。事實上，我們新加入的大多數客戶都利用了我們提供的一站式服務能力。

We believe global logistics problems, China-US political tensions, and heightened concerns about supply chains will continue to drive a favorable trend of contract manufacturing returning to North America, as well as to our Vietnam facilities. We continue to see improvement across the metrics associated with business development, including a significant increase in a number of active quotes with prospective customers.

我們相信，全球物流問題、中美政治緊張局勢以及對供應鏈的擔憂加劇將繼續推動合約製造返回北美以及我們的越南工廠的有利趨勢。我們繼續看到與業務發展相關的指標有所改善，包括潛在客戶的活躍報價數量顯著增加。

This unprecedented increase in demand for our unique mix of skills, location, and people has enabled us to negotiate more favorable pricing terms and business parameters than in the past, as well as to be much more selective in the new customers we bring on. While this shift in leverage will not manifest in the short term, its effect on our long-term performance should be profound.

對我們獨特的技能、地點和人員組合的需求空前增長，使我們能夠談判比過去更優惠的定價條款和業務參數，並且在我們引入的新客戶中更加挑剔。雖然槓桿的這種轉變不會在短期內顯現出來，但它對我們的長期業績的影響應該是深遠的。

We move into fiscal 2024 with a strong pipeline of potential new business, and we're seeing some improvement in our gross margins. Production delays and softness in demand in Q2, and higher interest rates and a strong peso will continue to dampen our growth and profitability in the near term. Nevertheless, we're very encouraged by our progress and potential for growth in fiscal 2024 and beyond.

進入 2024 財年，我們擁有大量潛在新業務，並且我們的毛利率有所改善。第二季的生產延遲和需求疲軟，以及利率上升和比索堅挺將繼續抑制我們短期內的成長和獲利能力。儘管如此，我們對 2024 財年及以後的進展和成長潛力感到非常鼓舞。

This concludes the formal portion of our presentation. Brett and I will now be pleased to answer your questions.

我們演講的正式部分到此結束。布雷特和我現在很高興回答您的問題。

Thank you. (Operator Instructions) Bill Dezellem, Tieton Capital.

謝謝。 （操作員指令）Bill Dezellem，Tieton Capital。

Thank you. First of all, let's start with the normal. You had four wins, what was the size of each of them, please? And then any commentary and discussion around each of them would be appreciated.

謝謝。首先，讓我們從正常開始。您贏了四場勝利，請問每場的規模是多少？然後，任何圍繞它們的評論和討論都將受到讚賞。

I would say, security equipment, about $12 million; sporting goods, $10 million, and then [hopefully another] 14.37 $8 million, environmental solutions, $4 million; industrial control systems, $3 million.

我想說，安全設備，大約1200萬美元；體育用品，1000 萬美元，然後[希望是另一個] 14.37 800 萬美元，環境解決方案，400 萬美元；工業控制系統，300萬美元。

And would you walk through each of those for us just in terms of whatever additional information you can share besides the industry that they're in?

除了他們所在的行業之外，您能否為我們介紹您可以分享的任何其他資訊？

Sure. All of them take advantage of multiple capabilities that we have. So they're not just board stuffing. All of those are actually in the US sites rather than in Mexico. And three of them are return quote opportunities from a couple of years ago, which is interesting. I'm not sure if I can draw a conclusion from that, but we call them boomerang accounts. Boomerang quotes. And all of them, four out of the five are PCBs and final box build and some mechanics along with it.

當然。它們都利用了我們擁有的多種功能。所以它們不僅僅是木板填料。所有這些實際上都在美國網站而不是墨西哥。其中三個是幾年前的回報報價機會，這很有趣。我不確定是否可以從中得出結論，但我們稱它們為迴旋鏢帳戶。迴旋鏢報價。所有這些，五分之四是 PCB 和最終的整機組裝以及一些機械裝置。

And so talk a little bit about those, I like the term boomerang, the boomerang quotes and wins, the dynamics there. Is it your understanding they went somewhere else, and another CM failed? Or is that they kept with their current situation and finally decided to make a change? What happened?

所以談談這些，我喜歡迴力鏢這個詞，迴力鏢的報價和勝利，那裡的動態。您是否理解他們去了其他地方，而另一位 CM 卻失敗了？還是他們堅持現狀並最終決定做出改變？發生了什麼事？

Well, that's why it's a little bit hard for me to draw a conclusion because there's a whole bunch of different stories behind each of them. So a couple of them we've been talking to for years and the programs we quoted on for our new development programs, they never went anywhere. And the other one awarded the business to somebody else, it didn't work out well and they came back.

好吧，這就是為什麼我很難下結論，因為每個人背後都有一大堆不同的故事。因此，我們多年來一直與他們中的一些人以及我們為新開發計劃引用的計劃，他們從未去任何地方。另一位則將業務授予了其他人，但效果不佳，他們又回來了。

Thank you. And then, Craig, in your opening remarks, you referenced that the number of customers versus four years ago has doubled or is up 100%. How do you think about that? Because there's this trade-off between less customer concentration and yet the challenges of managing the smaller pieces of business, what are the dynamics around that as you think about it?

謝謝。然後，克雷格，在您的開場白中，您提到客戶數量與四年前相比增加了一倍或增加了 100%。您對此有何看法？因為在客戶集中度較低和管理較小業務的挑戰之間存在這種權衡，所以當您思考這個問題時，圍繞這一點的動態是什麼？

Well, there's a lot of different aspects for that situation. And it's hard to draw a real generalized conclusion other than the ones I've stated that it does tend to improve our leverage with the customer in negotiations when the customer knows they're not 15% of our business. We don't see a big delta in cost between running a $5 million program and a $40 million program in terms of support costs and overhead.

嗯，這種情況有很多不同的面向。除了我所說的之外，很難得出真正普遍的結論，即當客戶知道他們不占我們業務的 15% 時，它確實會提高我們在談判中與客戶的籌碼。就支援成本和管理費用而言，我們認為運行 500 萬美元的計劃和運行 4000 萬美元的計劃之間的成本差異並不大。

It's actually a little bit easier to manage when it's on the smaller side, because you don't have such massive amounts of parts that you're trying to keep your arms around. And it's also easier and that many times these programs were not part of a -- our business is not part of a big corporation that we can't get to somebody who we'll listen to the situation at hand and respond logically.

實際上，當它在較小的一側時，管理起來會更容易一些，因為你沒有那麼多的零件，以至於你試圖把它抱在懷裡。而且這也更容易，很多時候這些計劃不屬於——我們的業務不屬於一家大公司，我們無法找到一個能夠傾聽當前情況並做出邏輯回應的人。

So even though it seems like with a $50 million program, you should have a lot more ability to talk to people who have the power to make decisions. Oftentimes that $50 million program is part of some billion dollars corporation, and you can't get to somebody who you need to talk to, to make logical sense out of what's going on. So we don't see what's classically thought in the business schools that have smaller programs are less profitable.

因此，儘管看起來像是一個 5000 萬美元的項目，但你應該有更多的能力與有權做出決定的人交談。通常，價值 5000 萬美元的項目是價值數十億美元的公司的一部分，而您無法聯繫到需要與之交談的人，以從邏輯上理解正在發生的事情。因此，我們不認為商學院的傳統觀點認為，開設規模較小的課程利潤較低。

We probably see at least parity between them and probably an advantage going to the $10 million to $20 million program compared to a $50 million to $80 million program. That doesn't mean we're not always looking for the $50 million, $80 million program. But if you look back in history, other than a couple of them that have been long-standing, they tend to be more flash in the pan than you would hope. So we are happy with the fact that we're growing in $5 million to $20 million programs on a steady basis and much faster in that realm than we were three, four years ago.

我們可能至少會看到它們之間的平等，與 5000 萬至 8000 萬美元的計劃相比，1000 萬至 2000 萬美元的計劃可能具有優勢。這並不意味著我們並不總是尋找 5000 萬美元、8000 萬美元的計劃。但如果你回顧歷史，除了幾個長期存在的事件之外，它們往往比你希望的更曇花一現。因此，我們很高興看到我們在 500 萬美元至 2000 萬美元的專案上穩步增長，而且比三、四年前的速度要快得多。

That's helpful. Thank you, Craig. And then you referenced a couple of times, I think you both did that the US based customers -- I'll phrase that different, the customers with that you are manufacturing for in your US facilities are showing strength, whereas the customers that are in your Mexico facilities are showing some weakness. Is there any conclusion to draw from the location at which you are manufacturing and the relative strength?

這很有幫助。謝謝你，克雷格。然後你提到了幾次，我想你們都這樣做了，美國的客戶——我會說不同的話，你們在美國工廠生產的客戶正在表現出實力，而在美國的客戶則表現出了實力。你們的墨西哥工廠顯示出一些弱點。從你們的生產地點和相對實力可以得到什麼結論嗎？

I'm struggling to do so. I would like to be able to give you a Earth-shattering revelation on why at this point, Mexico is down and US is up. I think it has to do with the fact that there's so much growth in new programs coming into the US sites that although, they have seen downturns in some of their customers, those downturns have been swamped by all the new business coming on board.

我正在努力這樣做。我希望能夠給你們一個驚天動地的啟示，解釋為什麼在這一點上，墨西哥正在衰落，而美國正在崛起。我認為這與進入美國網站的新專案成長如此之快有關，儘管他們看到一些客戶的下滑，但這些下滑已經被所有新業務的加入所淹沒。

The business in more was unexpectedly dampened by the power equipment business having to go on hiatus while the customer redesign the product. And so what should have been new business that was swapping out other small decreases in the other business and or as is not there right now. So I think that sort just individual circumstances is the driver rather than any kind of market or business overarching trend that you can point to or at least that I can point to.

由於電力設備業務在客戶重新設計產品時不得不暫停，因此 more 業務意外受到抑制。因此，本應是新業務，以取代其他業務中的其他小幅下降，或現在不存在。因此，我認為這種個人情況才是驅動因素，而不是您可以指出的或至少我可以指出的任何類型的市場或業務整體趨勢。

That's -- commentary is appreciated, even though it's not the revelation that you had hoped you'd be able to share. I did hear or we heard of another company that saw weakness right after Labor Day, curiously, it did correspond with Hamas attacking Israel and then things, two or three weeks later, returning to normal. Have you seen anything similar to that peculiar -- peculiarity that that company saw?

那就是——評論是值得讚賞的，即使這不是你希望能夠分享的啟示。我確實聽說過，或者我們聽說過另一家公司在勞動節後就出現了疲軟，奇怪的是，這確實與哈馬斯襲擊以色列相對應，然後兩三週後，情況又恢復正常。您是否見過與該公司所看到的奇特之處類似的東西？

So when we talk about the positive, the negative phone calls we get from our customers and the ratio of those, we had a little bit of a dip four, five months back that we thought -- we were worried was the signal for a broader based oncoming recessionary freight drain, then that ratio flattened out. And we started to get hopeful. And then a couple of months ago, the ratio went bad again, but it has now once again flattened out. So if you look at it, it was a small step down, a medium step down, but now it's flat again. So I can't give you any -- we're typically a front end predictor of what's going to happen in right now, I can't give you any good indication that it's going to continue to get worse, it's going to stabilize or it's going to get better.

因此，當我們談論從客戶那裡接到的積極的、消極的電話以及這些電話的比例時，我們在四、五個月前就曾認為，我們的電話水平略有下降——我們擔心這是一個更廣泛的訊號。基於即將到來的衰退貨運流失，該比率趨於平緩。我們開始充滿希望。幾個月前，該比率再次惡化，但現在再次趨於平穩。所以如果你看一下，它是一個小台階，一個中等台階，但現在又是平的。所以我不能給你任何資訊——我們通常是現在將要發生的事情的前端預測者，我不能給你任何好的跡象表明情況會繼續變得更糟，它會穩定下來或一切都會好起來的。

All right, Craig, thank you. I will step back in queue and reenter, so others have an opportunity.

好的，克雷格，謝謝你。我將退後一步並重新進入，以便其他人有機會。

Okay.

好的。

Sheldon Grodsky, Grodsky Associates.

謝爾登·格羅茨基，格羅茨基合夥人。

Good afternoon, everybody.

大家下午好。

Hi.

你好。

I have two questions that are unrelated. I will start off with the power equipment manufacturing problem. That sounds like a pretty big disaster. It's going to be kind of a held in abeyance for a year. Does that relationship look like it is intact? I mean, what -- I know you're not supposed to say bad things about your customer on these calls, but what was the -- did they handle all the design or do you in it together?

我有兩個不相關的問題。我將從電力設備製造問題開始。這聽起來像是一場相當大的災難。這將被擱置一年。這種關係看起來完好無損嗎？我的意思是，我知道你不應該在這些電話中說你的客戶的壞話，但是什麼是他們處理所有的設計還是你一起參與？

The way that many of our programs work is that we contract to provide design services and that was the case with this customer. And in that situation, the customer will say, I would like you to design this bracket, it needs to be this strong, and it needs to withstand this many flexes. And we say, okay, and our engineers sit down at the CAD station, and we design that bracket to meet that load and that number flexes, and we put it on our test equipment, and we prove that it meets that load and that many flexes, and customer approves the design, and we go out and we buy tooling, and we manufacture it.

我們許多專案的運作方式是我們簽訂合約來提供設計服務，該客戶就是這種情況。在這種情況下，客戶會說，我希望你設計這個支架，它需要這麼堅固，並且需要承受這麼多的彎曲。我們說，好吧，我們的工程師坐在 CAD 站，我們設計支架以滿足該負載和彎曲次數，然後將其放在測試設備上，我們證明它可以滿足該負載和彎曲次數。彎曲，客戶批准設計，我們出去購買工具，然後製造它。

When the product hits the market, and it turns out that the performance specifications that our customer gave us were underrated in some way and the part begins to fail. Usually, the situation is clear enough that we remain friends with our customer and the business goes on. And in many cases, the relationship is strengthened because as we go through the troubleshooting, we determine what the problem has been and why our engineering team approves its metal under challenging and time constrained conditions.

當產品推出市場時，結果發現客戶給我們的性能規格在某種程度上被低估了，而該零件開始出現故障。通常，情況已經夠清楚，我們與客戶保持朋友關係，業務也能繼續進行。在許多情況下，這種關係得到了加強，因為當我們進行故障排除時，我們可以確定問題是什麼，以及為什麼我們的工程團隊在充滿挑戰和時間有限的條件下批准其金屬。

And that's the situation that we're in with this customer today. I believe we are in a better position from a relationship standpoint than we were previously, and things are moving forward, and we are actually continuing to design next-generation product while this current generation product is being tweaked.

這就是我們今天與這位客戶遇到的情況。我相信，從關係的角度來看，我們比以前處於更好的位置，而且事情正在向前發展，我們實際上正在繼續設計下一代產品，同時對當前世代產品進行調整。

I have an unrelated question.

我有一個不相關的問題。

I wanted to tell you Sheldon that I never did that -- I wanted to tell you, I never explained it that way before, and I'm pretty proud of that.

我想告訴你謝爾頓，我從來沒有這樣做過——我想告訴你，我以前從來沒有這樣解釋過，我對此感到非常自豪。

That was pretty good.

那是相當不錯了。

That was pretty good, so I hope that helps.

這非常好，所以我希望有所幫助。

It did. with regard to China, one little company that I follow is having interesting problems, suddenly getting for export licenses, which kind of leads me to believe that the trade war between was the -- because of the cold war between the United States and China is heating up. How have your people some situations where they either can't export to fulfill orders because of new requirements coming from the local communist officials or anything like that, where that is becoming a significant impediment to operations?

它做了。關於中國，我關注的一家小公司遇到了有趣的問題，突然獲得出口許可證，這讓我相信之間的貿易戰是——因為美國和中國之間的冷戰是加熱。您的員工是否遇到過因當地共產黨官員提出的新要求或類似原因而無法出口以滿足訂單的情況，而這正成為營運的重大障礙？

The reason that many of our new customers are new customers is that they have run into exactly that type of problem. So the trade war, you can read about what our President has said to their President and all those kinds of things, but what really matters is what's happening to our current and prospective customers as they try to source product and do business overall. And that means get new designs, design get ramps either up or down, send engineers in there to help, all that has gotten dramatically harder in the last three, four years and continues to get worse.

我們的許多新客戶之所以是新客戶，是因為他們遇到了這類問題。因此，在貿易戰中，您可以閱讀我們的總統對他們的總統所說的話以及諸如此類的事情，但真正重要的是我們當前和潛在的客戶在嘗試採購產品和開展整體業務時所發生的情況。這意味著要獲得新的設計，設計要向上或向下傾斜，派工程師去那裡提供幫助，所有這一切在過去的三、四年裡變得更加困難，並且繼續變得更糟。

It's not static. It's actually continuing to get worse. And it's making -- what's interesting to us is that it's making the people that were more or less on the fringes of should we be in China or not, the people who don't have big money to throw at a problem when suddenly they can't get parts out of there for a day or a week or a month, it's making those people changed their approach earlier than the folks who are bigger and have the wherewithal to kind of withstand the buffeting of the cold was, as you call it.

它不是靜態的。事實上，情況還在持續惡化。對我們來說有趣的是，它正在讓那些或多或少處於我們是否應該在中國的邊緣的人，這些人沒有大筆資金來解決問題，但突然他們可以一天、一周或一個月都無法從在那裡取出零件，這使得那些人比那些體格更大、有足夠資金承受寒冷的人更早改變他們的方法，正如你們所說的那樣。

So that's why we see a lot of these $8 million to $10 million, $20 million wins that are happening for us, because those are the people that are on the fringes and are the most severely impacted without their financial wherewithal to manage those impacts on a timely basis.

因此，這就是為什麼我們看到很多 800 萬至 1000 萬美元、2000 萬美元的勝利發生在我們身上，因為這些人處於邊緣，受到最嚴重的影響，而沒有足夠的財力來管理這些影響。及時依據。

Okay, thank you.

好的謝謝。

Yeah.

是的。

(Operator Instructions) George Melas, MKH Management.

（操作員說明）George Melas，MKH 管理階層。

Thank you, Hi, Craig. Hi, Brett. How are you?

謝謝你，嗨，克雷格。嗨，布雷特。你好嗎？

Pretty good.

不錯。

We are okay.

我們沒事。

Okay. A follow up to Bill's questions on the smaller customers. You are suggesting or telling us that you think that from a management perspective, that -- maybe let's think about it from a numbers perspective. I think you're suggesting that from a gross margin perspective, they might be a little bit better because you have a little bit more leverage. And from an SG&A perspective, that may be that they are equal to their larger peers from a -- as a percentage of revenue. So first of all. Is that correct? Is that the right way to interpret that?

好的。比爾關於小客戶的問題的後續行動。您建議或告訴我們，您認為從管理角度來看，也許讓我們從數字角度來考慮。我認為你建議從毛利率的角度來看，它們可能會更好一點，因為你有更多的槓桿。從SG&A的角度來看，從佔收入的百分比來看，他們可能與規模較大的同業持平。首先。那是對的嗎？這是正確的解釋方式嗎？

Yeah. Additionally, customers that are on the very small end that have proven not to fit that model, we have been actively disengaging with. So there's been a --

是的。此外，我們一直在積極脫離那些已被證明不適合該模式的小型客戶。所以有一個——

Okay.

好的。

There's been a trade of customers specifically in our US sites, where those sites were struggling to maintain the revenue base that they had, where those sites are now struggling to service the new growing revenue base that they now see, and as a result, we've been circling around and taking the bottom of our list of customers. And some of them we parted ways with because they're just small and they have a much worse ratio of listings and overhead, compared to the revenue base that we're enjoying with them.

特別是在我們的美國網站上，有一個客戶交易，這些網站正在努力維持他們擁有的收入基礎，而這些網站現在正在努力為他們現在看到的新的不斷增長的收入基礎提供服務，因此，我們我們一直在兜圈子，把我們的客戶名單排在最後。我們與其中一些公司分道揚鑣，因為它們規模很小，而且與我們享受的收入基礎相比，它們的清單和管理費用比例要差得多。

Some of them we walk away from, because they have proven to be untrustworthy, and we don't have to deal with it anymore. And some of them we walk away from, because we don't see any type of future and we're concerned about their financial health. But that's a change.

其中一些我們會離開，因為它們已被證明是不值得信任的，我們不必再與之打交道。其中一些我們會離開，因為我們看不到任何類型的未來，而且我們擔心他們的財務狀況。但這是一個改變。

Okay.

好的。

We haven't done any systemic pruning of our customer base since I've been with the company. We've done some, a little bit here and there, but nothing as overt and as -- what's the right word, I don't know. Anyway, we have --

自從我加入公司以來，我們還沒有對我們的客戶群進行任何系統性的修剪。我們已經做了一些，到處做了一點，但沒有像這樣公開的——我不知道正確的詞是什麼。無論如何，我們有——

It's like purposeful, like -- so you really sort of have -- that is part of your strategy now. And it's not occasional opportunistic or because somebody really pisses you off. It's just a process of pruning.

這就像是有目的的，就像——所以你確實有點——這是你現在戰略的一部分。這並不是偶然的機會主義，也不是因為有人真的惹惱你了。這只是一個修剪的過程。

George, I would never make a decision based upon how pissed of I am.

喬治，我永遠不會根據自己有多生氣來做決定。

I wouldn't want you to, because I think we can be pretty tough. So I don't know. Okay, all right.

我不希望你這樣做，因為我認為我們可能會非常強硬。所以我不知道。好吧，好吧。

Okay. From a working capital perspective, these small customers, you tend to do a lot for them. So you do take advantage of a lot of your capabilities, basically, it means a lot of parts. How does that impact you from an inventory perspective? And also from an ARR perspective, these small customers, are you able to give like a better term?

好的。從營運資金的角度來看，這些小客戶，你往往會為他們做很多事。所以你確實利用了很多你的能力，基本上，這意味著很多部分。從庫存角度來看，這對您有何影響？而且從ARR的角度來看，這些小客戶，你能給出一個更好的術語嗎？

Well, that's the interesting part of it or interesting aspect of it. I didn't want to say parts, because parts are coming into here. Yeah, if you've got a customer who represents 15% of your business and that customer starts pushing around in the sense of dumping a big forecast on us, demanding that we buy to that forecast and then misses that forecast, and then forces us to spend six months to a year and negotiating whether or not they're actually going to conform to the contract they signed, and pay for those aged parts, that's a lot different than a $10 million customer who knows that they are $10 million customer and are going to behave as out of necessity, as if they are in this together with us rather than taking advantage of our neediness.

嗯，這就是它有趣的部分或有趣的方面。我不想說零件，因為零件正在進入這裡。是的，如果你有一個客戶佔你業務的 15%，並且該客戶開始向我們推銷一個大的預測，要求我們按照該預測購買，然後錯過了該預測，然後強迫我們花六個月到一年的時間來談判他們是否真的要遵守他們簽署的合同，並支付那些老化零件的費用，這與一個價值1000 萬美元的客戶知道自己是價值1000 萬美元的客戶並且知道自己是價值1000 萬美元的客戶有很大不同。他們的行為將是出於必要，就好像他們與我們一起參與，而不是利用我們的需要。

So even though more smaller customers results in a bigger parts catalog, it results in a lot more rational behavior in how we are forced to buy parts and how we can react when those parts do end up being excess for some time period. We have a lot more of ability to enforce, and I'm not saying that we're egregiously mean to the smaller customers.

因此，即使更多的小客戶導致了更大的零件目錄，它也會導致我們如何被迫購買零件以及當這些零件最終在一段時間內過剩時我們如何反應方面產生更加理性的行為。我們有更多的執行能力，我並不是說我們對小客戶非常刻薄。

I am just saying that we're in a lot better position to keep the relationship on a even fair and as anticipated in the contract basis. And we sometimes are with a customer that's 10%, 20% of our business. So I think that's part of why we made the dramatic improvements in inventory that we see and we expect to continue to see.

我只是說，我們處於更有利的地位，可以按照合約的預期，維持公平公平的關係。有時我們的客戶占我們業務的 10%、20%。因此，我認為這就是我們在庫存方面取得顯著改善的部分原因，我們看到並期望繼續看到這種情況。

And the other part of it is that as COVID came and went, as the supply chain got horrible and it's just kind of horrible, a lot of the standard behavior amongst our customers was challenged, and they -- a large number of them have made great improvements in how they think about forecasting and inventory, because the sequence went along the lines of, now we're just going to keep driving, keep trying to buy parts, because we know we're going to do a lot more. And then parts became available. Demand started to shrink after COVID. And the response was well, we're just going to not pay Key Tronic, because we can't -- they can't make us.

另一部分是，隨著新冠疫情來來去去，隨著供應鏈變得可怕，這有點可怕，我們客戶中的許多標準行為都受到了挑戰，他們中的許多人已經做出了一些改變。他們對預測和庫存的看法有了很大的改進，因為順序是這樣的，現在我們要繼續前進，繼續嘗試購買零件，因為我們知道我們要做更多的事情。然後零件就可用了。新冠疫情之後，需求開始萎縮。反應很好，我們只是不會向 Key Tronic 付款，因為我們不能——他們不能讓我們這麼做。

And then when it turned into that well, Key Tronic isn't going to be quiet, we're going to have to pay them, that drove some of these customers to look at their processes and say well, wait a minute, if we're going to have to actually live up to the provisions in our contracts, we need to be a lot more mindful about how we forecast an order.

然後當情況變得那麼好時，Key Tronic 不會安靜，我們將不得不付錢給他們，這驅使其中一些客戶查看他們的流程並說好吧，等一下，如果我們我們必須真正遵守合約中的條款，我們需要更加註意如何預測訂單。

So that has changed for the better in a number of our customers. And then at the same time, I've talked about how we have dramatically improved our material resource planning based upon what happened, which was out of the norm for the past 20 years during COVID. So those two factors, I think, are going to continue to drive our inventories down, down, down to where we get to some pretty decent turns, which is massively important when money is no longer free like it isn't today.

因此，我們的許多客戶的情況已經變得更好。同時，我談到了我們如何根據發生的事情極大地改進了我們的物質資源規劃，這在過去 20 年的新冠疫情期間是不尋常的。因此，我認為，這兩個因素將繼續推動我們的庫存下降、下降、下降，直到我們達到相當不錯的水平，當金錢不再像今天一樣免費時，這一點非常重要。

Right. So maybe can we try to put a number to that? Would you think your inventory turns? What would be your goal in the next 12 months?

正確的。那麼也許我們可以嘗試給出一個數字？您認為您的庫存週轉嗎？您未來 12 個月的目標是什麼？

I have a goal, but I'm not making you a promise. So I rarely give you any kind of a forward-looking number, but I'm going to under that proviso. So I'm taking a note, George. So a year from now, if you start badjering me about this, I may say, it was only a note.

我有一個目標，但我不會向你做出承諾。所以我很少給你任何前瞻性的數字，但我會根據這個附帶條件。所以我要記下來，喬治。所以一年後，如果你開始為此辱罵我，我可能會說，這只是一張紙條。

Okay.

好的。

Yeah, I want to get us to over six turns.

是的，我想讓我們轉過六圈以上。

Wow.

哇。

We're four now. We went from three to four. And I'm -- that's my goal.

我們現在四歲了。我們從三點變成了四點。我——這就是我的目標。

And I don't know much about how you manage in working the inventory turns. But what would enable you to get there? We're talking by better forecasting from your customers, better MRP algos on your part. But what could -- because that would be really an improvement from the model than dramatic.

我不太了解你們如何管理庫存週轉。但什麼能讓你到達那裡呢？我們透過您的客戶更好的預測以及您更好的 MRP 演算法來進行討論。但能做什麼呢——因為這對模型來說確實是一個巨大的改進。

Yeah. And I think both of those things are dramatic. So everything I laid out in the past 10 minutes of me talking, when you add all that up, that is a dramatic change in how all of this works. And we've just started to see it really drive things down from January through today. And our projections are that it's going to continue to do that. There may be some bumps and hiccups as we go. But overall, we continue to see that -- I mean, there are programs. We've got programs, George, big programs, that we've got running so well, they're turning over 20 times a year.

是的。我認為這兩件事都是戲劇性的。所以我在過去 10 分鐘的演講中列出的所有內容，當你把所有這些加起來時，這就是所有這些運作方式的巨大變化。我們剛開始看到它確實使一月份到今天的情況有所下降。我們的預測是它將繼續這樣做。我們前進的過程中可能會遇到一些坎坷和小問題。但總的來說，我們繼續看到——我的意思是，有一些計劃。我們有一些項目，喬治，大型項目，我們運作得很好，它們每年翻轉 20 次。

Okay.

好的。

So mathematically, you should be able to get somewhere better than four, if you can just keep all the inventories kind of a story of one damn thing after another. You can look at the top-25 customers and everyone that's not turned on at six, there's some damn reason why it's not. And it's not demand and it's not the process, it's something that happened.

所以從數學上來說，如果你能把所有的庫存都保存成一個又一個該死的事情的故事，你應該能夠得到比四個更好的地方。你可以看看前 25 名的顧客，以及所有在六點鐘還沒有開機的顧客，這其中有一些該死的原因。這不是需求，也不是過程，而是發生的事情。

And so beyond the math and the process, there's the institutional disciplined to look at every one of those damn things that happened and, say, all right, we will never let this happen again on any of our customers, not just this one customer. And as you start to drive the policing of making sure those one offs never happen again, that starts to add up as well as all the process changes.

因此，除了數學和流程之外，還有機構自律地審視發生的每一件該死的事情，並且說，好吧，我們永遠不會讓這種情況再次發生在我們的任何客戶身上，而不僅僅是這一位客戶。當你開始推動監管以確保這些一次性事件不再發生時，這種情況就會開始增加，所有流程也會改變。

And might I add that at the point in time, one of those customer programs continue to be on the list of those that are turning at far less than six turns. That's also the point in time when we are purposely looking at, is this a good fit for Key Tronic.

我是否可以補充一點，在那個時間點，其中一個客戶計劃仍然位於那些轉動速度遠低於六圈的計劃的列表中。這也是我們刻意考慮的時間點，這是否適合 Key Tronic。

Right. So we're going back to customers and saying, you are turning to 2 times, that either changes or you need to find somebody different.

正確的。因此，我們會回去找客戶並告訴他們，您將求助兩次，要么改變，要么您需要尋找不同的人。

And that is also, again, drastically different than how we've operated in the past --

這也與我們過去的運作方式截然不同——

and how we could operate in the past.

以及我們過去如何運作。

Correct.

正確的。

They were -- we were too desperate to keep every customer we had.

他們——我們太絕望了，無法留住我們擁有的每一位客戶。

Okay. So I think that that's some dramatic changes. It feels like always you have done so much with the customer, you have such -- so much such breadth of capability, you spend a lot in CapEx to be able to do a lot different things. There are never were quiet comped enough by the customer for all that you could do. So maybe now things are changing somewhat.

好的。所以我認為這是一些戲劇性的變化。感覺就像你總是與客戶一起做了很多事情，你擁有如此廣泛的能力，你在資本支出上花費了大量資金來做很多不同的事情。對於您所能做的一切，客戶從來沒有足夠的安靜補償。所以也許現在情況正在發生一些變化。

I think that's true.

我認為這是真的。

Okay. Another quick question. You said on the -- you're right that you see gross margin gradually improving, what you mean by that? Because in this quarter, they didn't. And so I just want to understand what you mean by that.

好的。另一個快速問題。您說，您是對的，您看到毛利率逐漸提高，這是什麼意思？因為在本季度，他們沒有這樣做。所以我只是想了解你的意思。

Well, in this quarter, we didn't, because we got hit by -- there was a triple whammy. So we got hit by the sudden hack of the power equipment program. We got hit by the peso suddenly getting a lot stronger, because our government keeps printing money, and we got hit by the fact that interest rates have gone up dramatically, because our customer keep dripping money.

好吧，在這個季度，我們沒有，因為我們受到了三重打擊。所以我們受到了電力設備程式突然被駭客攻擊的打擊。我們受到比索突然變得更強的打擊，因為我們的政府不斷印鈔，我們受到利率急劇上升的事實的打擊，因為我們的客戶不斷滴錢。

So those three unexpected events -- no, not unexpected, events that are out of our control mode drove the gross margin this quarter down lower to where we wanted it to be, that's -- we had to respond quickly with the layoffs. And we took quite a bit of charge or inefficiencies as we had extra people around, beyond just the severance costs. So this quarter was a bit of an anomaly in that three things combined without a lot of warning to hammer us.

因此，這三個意外事件 - 不，不是意外，超出我們控制模式的事件導致本季度的毛利率下降到我們想要的水平，也就是說 - 我們必須透過裁員迅速做出反應。我們承擔了相當多的費用或效率低下，因為我們周圍有額外的人員，不僅僅是遣散費。因此，這個季度有點反常，三件事結合在一起，沒有太多警告來打擊我們。

Okay. So where do you see gross margin going in, I don't know, let's think far in the future of fiscal '25, what do you think they could be in terms of gross margin, I mean?

好的。那麼，你認為毛利率會怎樣，我不知道，讓我們考慮一下 25 財年的未來，我的意思是，你認為毛利率會是多少？

So we've always said we could be at 9%, we've been there every now and then, but again, it's one damn thing after another. But we believe 9% is achievable and should be able to get there.

所以我們總是說我們可以達到 9%，我們時不時地就達到了這個水平，但同樣，這是一件該死的事情發生了。但我們相信 9% 是可以實現的，而且應該能夠實現。

Okay. And then Brett, quick question on OpEx. Opex is pretty low this quarter. Is there some explanation for that or?

好的。然後是 Brett，關於營運支出的快速問題。本季的營運支出相當低。對此有什麼解釋嗎？

There was a small gain on insurance, I think it was $300,000 or $400,000, George, which dropped raw OpEx. My expectation is OpEx should be fairly flat in our second quarter.

喬治，保險方面有小幅收益，我認為是 30 萬或 40 萬美元，這降低了原始營運支出。我的預期是第二季的營運支出應該相當穩定。

Okay. But if we can adjust SG&A to simplify, to make it easier to think about it. It was [5.8] this quarter. Is that your run rate?

好的。但如果我們可以調整 SG&A 來簡化，讓我們更容易思考。本季為[5.8]。這是你的運行率嗎？

Let's see here. So you've got SG&A of [5.8] last year, it was roughly [5.7] Sequentially, It's down quite a bit down in our Q4. As we had mentioned there, there was some bonus calculation that went through the quarter that propped up Q4. But my expectation is that Q2 should be flat to Q1, and a slight increase in Q3 and Q4 of G&A.

讓我們看看這裡。因此，去年的 SG&A 為 [5.8]，大約是 [5.7]，按順序計算，第四季下降了很多。正如我們在那裡提到的，支撐第四季度的季度進行了一些獎金計算。但我的預期是，第二季應與第一季持平，第三季和第四季的 G&A 略有成長。

Okay, great. Okay, thanks a lot, guys. Appreciate it.

好的，太好了。好的，非常感謝，夥計們。欣賞它。

Thank you.

謝謝。

Bill Dezellem, Tieton Capital.

比爾·德澤勒姆，泰頓資本。

Thank you. I want to come back to the inventory turns for just a moment. If we roll the clock back a decade, back in 2013, inventory turns were up north of that -- north of six times even up into the sevens. What is -- pardon me for lack of memory here, what is different or what was different back in 2013?

謝謝。我想稍微回顧一下庫存週轉率。如果我們把時間倒退十年，回到 2013 年，庫存週轉率就高出這個水準——六倍甚至七倍以上。抱歉，我記不清了，有什麼不同或 2013 年有什麼不同？

Fewer customers, and we had an infinite supply of parts.

客戶減少了，我們的零件供應無限。

Whereas now the supply chain and the challenge of getting parts in the doors has created havoc?

然而現在供應鏈和將零件送進門的挑戰已經造成了嚴重破壞？

Yeah. And we're suffering from -- the company's inventory position has kind of got long COVID and that, what happened during COVID is taken almost until now, in fact, we still have some parts around that are a result of COVID. So what happened during COVID, we're still working our way through. And that was -- we've talked about this before is that back in the teens, you could get just about a part you wanted in six weeks. So the MRP systems were all designed to run with that as one of the variables. And then when COVID hit, it was the opposite of that. And none of the MRP systems actually had that as their governing variable.

是的。我們正遭受著——公司的庫存狀況在新冠疫情期間已經持續很長時間了，而在新冠疫情期間發生的事情幾乎到現在為止，事實上，我們仍然有一些零件是新冠疫情造成的。所以，新冠疫情期間發生的事情，我們仍在努力解決。那就是——我們之前討論過這一點，在十幾歲的時候，你可以在六週內得到你想要的部分。因此，MRP 系統都被設計為將其作為變數之一來運作。但當新冠疫情襲來時，情況卻恰恰相反。實際上，沒有一個 MRP 系統將其作為控制變數。

I shouldn't say none, I'm sure there were some somewhere, but ours certainly didn't and a lot of our customers' didn't. And so that's what drove our inventory turns down as low as they went. And that's why we're thinking we can get it back up to six, even with more customers and longer lead times for parts.

我不應該說沒有，我確信某個地方有一些，但我們的肯定沒有，我們的許多客戶也沒有。這就是推動我們的庫存週轉率降至最低水準的原因。這就是為什麼我們認為我們可以將其恢復到六個，即使有更多的客戶和更長的零件交貨時間。

And Craig, you may have just touched on something that you had mentioned much earlier in the call relative to system upgrades. And I think you referenced your system upgrades and maybe even customer's system upgrades. Does this all tie into what you're talking about right now or are those two totally different things?

克雷格，您可能剛剛談到了您在電話會議中早些時候提到的與系統升級相關的事情。我認為您參考了您的系統升級，甚至可能參考了客戶的系統升級。這一切是否與您現在談論的內容相關，或者是完全不同的兩件事？

No, that's exactly the same thing.

不，那是完全一樣的事情。

And so the upgrades that took place in the systems that our planning out inventory is making the lead time actually a very variable rather than a constant?

因此，我們計劃庫存的系統中發生的升級使交貨時間實際上變得非常可變，而不是常數？

The lead time always was a variable, but it wasn't driving the algorithms as if it was a constraint as much as it should have been.

交付週期始終是一個變量，但它並沒有像應有的那樣驅動演算法，就好像它是一個約束一樣。

All right. That's it --

好的。就是這樣 -

More importantly, the way people understood the system and manage those lead times, we're not driving the system the way it should be working. So I'm not going to go into that, you can call me later, and I'll give you an MRP lesson if you want. But the bottom line is that the way we use the system and the way we've configured the system is much different than it was before we went into COVID, and the way our -- many of our customers configure and use their system now is much different than it was before we went into COVID.

更重要的是，人們理解系統和管理交付週期的方式，我們並沒有以應有的方式驅動系統。所以我不打算討論這個，你可以稍後給我打電話，如果你願意的話我會給你上一堂 MRP 課。但最重要的是，我們使用系統的方式和我們配置系統的方式與我們進入新冠疫情之前有很大不同，我們的許多客戶現在配置和使用他們的系統的方式是與我們進入新冠疫情之前有很大不同。

And do you --

而你——

I will try to give you an example. So when we were in the midst of COVID, it took almost a year for many of our customers to actually revamp their thinking and realize that it wasn't a possibility to call us up and threaten, and yell, and abuse, and become the squeaky wheel and get their parts, that used to work. And so it was a big eye-opener for many customers that there was actually nothing that could fix this other than time. And no amount of yelling or degrading or threats or payments, some type of speed up payment, none of that was going to work.

我會嘗試給你一個例子。因此，當我們處於新冠疫情期間時，我們的許多客戶花了近一年的時間才真正改變了他們的想法，並意識到不可能給我們打電話、威脅、大喊大叫、辱罵我們，並成為他們的受害者。吱吱作響的輪子並得到他們的零件，這些零件曾經可以工作。因此，讓許多客戶大開眼界的是，除了時間之外，實際上沒有什麼可以解決這個問題。無論再多的喊叫、侮辱、威脅或付款，某種類型的加速付款，這些都不會起作用。

And that was a massive realization for everybody in the industry that has spent most -- many of them, their entire careers, operating under the assumption that you could always get your parts in at least most eight weeks if you made enough noise. And so if you then take the ramifications of that and spread them back through the planning process and the algorithms that you use in your planning process, that's a profound change in thinking.

對於這個行業中的每個人來說，這是一個巨大的認識，他們中的許多人，他們的整個職業生涯，都在這樣的假設下運作：如果你發出足夠的聲音，你總能在至少八週內得到你的零件。因此，如果您隨後考慮到其後果並將其傳播到規劃過程以及您在規劃過程中使用的演算法，那麼這將是思維上的深刻變化。

That's helpful. And then you referenced the customer systems. Is it your sense that the customer systems, generally speaking, have now taken this into account, and so has that heavy lifting is done?

這很有幫助。然後你提到了客戶系統。您是否認為客戶系統一般來說已經考慮到了這一點，因此繁重的工作已經完成？

Yeah. Many, many of our customers are now investing money in having us stockpile some of the troublesome components for them. That was -- people used to give that lip service before COVID. But I can't think of anybody that actually did that before COVID, even though we would talk about it every time there was an event when they couldn't get a product and they needed it, and there would be this kind of relationship, challenging situation and we'd yelling each other on the phone, we'd be fine not to see each other, and we'd talk about, you know, God damn, if we would just take the scary parts. I remember the title, we had a scary parts list.

是的。現在，我們的許多客戶正在投資讓我們為他們儲備一些麻煩的組件。那是——在新冠疫情爆發之前，人們常常口頭上說這樣的話。但我想不出在新冠疫情之前有誰真正做到了這一點，儘管每次發生事件時他們無法獲得產品而他們需要它時我們都會談論它，並且會有這種關係，在充滿挑戰的情況下，我們會在電話裡互相大喊大叫，我們不見面也沒關係，我們會談論，你知道，該死的，如果我們只接受可怕的部分。我記得標題，我們有一個可怕的零件清單。

If we just take the scary parts that are on this list and you guys would invest $100,000 out of your $40 million spend, if you put $100,000 into this, you guys wouldn't have the situation crop up again and again, and again. And the response was ours was we're not going to do it, you do it. And we always say, well, we can't afford to do it, you do it, and then it would never get done. That has changed.

如果我們只考慮這個清單上的可怕部分，你們會從 4000 萬美元的支出中投資 10 萬美元，如果你們投入 10 萬美元，你們就不會一次又一次地遇到這種情況。我們的反應是我們不會這樣做，你來做。我們總是說，好吧，我們負擔不起，你去做，然後它就永遠完成不了。現在情況已經改變了。

We've probably got 30%, 40% of our customers who are in some type of standby inventory situation with us, where they have realized that in order to ensure their supply chain, they need to invest wisely in one, two, three or four parts that are their customary problem parts on their bill of materials. That's a really big change.

我們可能有 30%、40% 的客戶在我們這裡處於某種類型的備用庫存狀況，他們意識到為了確保他們的供應鏈，他們需要明智地投資於一種、兩種、三種或四個部分是他們物料清單上常見的問題部分。這確實是一個很大的改變。

And they're paying for those parts?

他們支付這些零件的費用嗎？

Yeah.

是的。

Great. May I ask one more question completely unrelated to this. You made reference to the strength in the pipeline of business for the Vietnam facility. Would you talk around that a little more? And is the actual number of programs potentially moving to Vietnam from China higher than it was three months ago?

偉大的。我可以再問一個與此完全無關的問題嗎？您提到了越南工廠的業務實力。您能再談談這個嗎？可能從中國轉移到越南的實際計畫數量是否比三個月前增加？

No, it's actually the potential programs moving from the States to Vietnam and skipping Mexico.

不，實際上是潛在的項目從美國轉移到越南並跳過墨西哥。

So talk a little bit more about that and your comment, I think that you see Vietnam as part of the future growth of the company.

因此，請多談談這一點和您的評論，我認為您將越南視為公司未來成長的一部分。

Yeah. So Vietnam is less expensive than China and less expensive than Mexico. And Mexico continues to legislate higher and higher wages. And as they do that, more customers that we're looking solely at Mexico as a way out of China are now willing to look at Vietnam and India. We're not -- we haven't made a decision on India as of yet, but Vietnam is pretty close to India pricing and far ahead of the various supply chain issues that you see in India.

是的。所以越南比中國便宜，比墨西哥便宜。墨西哥繼續立法提高工資。當他們這樣做時，更多的客戶（我們只將墨西哥視為離開中國的出路）現在願意將目光投向越南和印度。我們還沒有——到目前為止，我們還沒有對印度做出決定，但越南的定價非常接近印度，並且遠遠領先印度的各種供應鏈問題。

So we have a number of big opportunities cooking for Vietnam. Vietnam got stalled out during COVID and is restarting in terms of business acquisition. So this is on the front end of it. But we're predicting that a year from now, there'll be a couple three big wins to increase the size of what's going on in Vietnam for us.

因此，我們有很多為越南烹飪的好機會。越南在新冠疫情期間陷入停滯，但在業務收購方面正在重新啟動。所以這是在它的前端。但我們預測，一年後，將會有三場重大勝利，以擴大我們在越南所發生的事情的規模。

And these would be new customers to you, Craig?

這些對你來說會是新客戶嗎，克雷格？

Yeah.

是的。

And how about the business moving from China to Vietnam? What are you seeing there?

業務從中國轉移到越南怎麼樣？你在那裡看到什麼？

Our business or business in total?

我們的業務還是整個業務？

Business in total.

業務總計。

We don't see as much of that as you would think, because people tend to think of, it's all Asia, we need to get out of Asia.

我們沒有看到像你想像的那麼多，因為人們傾向於認為，這都是亞洲，我們需要離開亞洲。

Interesting. Okay. Thank you, both for the time today.

有趣的。好的。謝謝你們今天抽出時間。

Yeah.

是的。

And that does conclude the question-and-answer session. I'll now hand the call back over to Mr. Craig Gates.

問答環節到此結束。我現在將把電話轉回給克雷格蓋茲先生。

Okay. Thank you, everybody, for participating in our conference call today. Brett and I look forward to speaking to you again next quarter.

好的。感謝大家今天參加我們的電話會議。布雷特和我期待下個季度再次與您交談。

Well, thank you. And that does conclude today's conference. We do thank you for your participation and have an excellent day.

嗯，謝謝。今天的會議到此結束。我們非常感謝您的參與並祝您有個愉快的一天。