Mercury Systems Inc (MRCY) 2023 Q1 法說會逐字稿

Good day, everyone, and welcome to the Mercury Systems First Quarter Fiscal 2023 Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to the company's Executive Vice President and Chief Financial Officer, Mike Ruppert. Please go ahead, sir.

大家好，歡迎參加 Mercury Systems 2023 財年第一季度電話會議。今天的通話正在錄音中。現在，關於開場白和介紹，我想把電話轉給公司的執行副總裁兼首席財務官 Mike Ruppert。請繼續，先生。

Good afternoon, and thank you for joining us. With me today is our President and Chief Executive Officer, Mark Aslett. If you've not received a copy of the earnings press release we issued earlier this afternoon, you can find it on our website at mrcy.com. The slide presentation that Mark and I will be referring to is posted on the Investor Relations section of the website under Events and Presentations. Please turn to Slide 2 in the presentation. Before we get started, I would like to remind you that today's presentation includes forward-looking statements, including information regarding Mercury's financial outlook, future plans, objectives, business prospects and anticipated financial performance.

下午好，感謝您加入我們。今天和我一起的是我們的總裁兼首席執行官 Mark Aslett。如果您還沒有收到我們今天下午早些時候發布的收益新聞稿的副本，您可以在我們的網站 mrcy.com 上找到它。馬克和我將要參考的幻燈片演示發佈在網站的“投資者關係”部分的“活動和演示”下。請轉到演示文稿中的幻燈片 2。在我們開始之前，我想提醒您，今天的演示文稿包含前瞻性陳述，包括有關 Mercury 的財務展望、未來計劃、目標、業務前景和預期財務業績的信息。

These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements on Slide 2, in the earnings press release and the risk factors included in Mercury's SEC filings. I'd also like to mention that in addition to reporting financial results in accordance with generally accepted accounting principles or GAAP, during our call, we will also discuss several non-GAAP financial measures, specifically adjusted income, adjusted earnings per share, adjusted EBITDA, free cash flow, organic revenue and acquired revenue.

這些前瞻性陳述受未來風險和不確定性的影響，這些風險和不確定性可能導致我們的實際結果或業績出現重大差異。所有前瞻性陳述都應與收益新聞稿中幻燈片 2 中的警示性陳述以及 Mercury 向美國證券交易委員會提交的文件中包含的風險因素一起考慮。我還想提一下，除了根據公認會計原則或 GAAP 報告財務結果外，在我們的電話會議期間，我們還將討論幾個非 GAAP 財務指標，具體調整後的收入、調整後的每股收益、調整後的 EBITDA 、自由現金流、有機收入和獲得的收入。

A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release. I'll now turn the call over to Mercury's President and CEO, Mark Aslett. Please turn to Slide 3.

這些非 GAAP 指標的對賬包含在今天的幻燈片演示和收益新聞稿的附錄中。我現在將電話轉給 Mercury 的總裁兼首席執行官 Mark Aslett。請轉到幻燈片 3。

Thanks, Mike. Good afternoon, everyone, and thanks for joining us. I'll begin with the business update. Mike will review the financials and guidance, and then we'll open it up for your questions. Mercury's bookings increased 34% year-over-year in the first quarter, following 27% growth in Q4 of fiscal '22. Actual results in the quarter exceeded the high end of our guidance across all metrics, and we're raising the low end of our full year outlook as a result. The largest bookings in the first quarter were LTAMDS, the SDA Tranche Tracking Layer and AMCS. We also received the F-18 and SEWIP Block 2 orders that moved through Q4.

謝謝，邁克。大家下午好，感謝您加入我們。我將從業務更新開始。邁克將審查財務和指導，然後我們將打開它來回答您的問題。繼 22 財年第四季度增長 27% 之後，水星的預訂量在第一季度同比增長 34%。本季度的實際結果超過了我們所有指標的指導上限，因此我們提高了全年展望的下限。第一季度最大的訂單是 LTAMDS、SDA Tranche Tracking Layer 和 AMCS。我們還收到了第四季度的 F-18 和 SEWIP Block 2 訂單。

Driven by strong Q1 bookings, our book-to-bill was 1.17 in Q1 and 1.14 over the last 12 months. Backlog grew 22% year-over-year. This backlog, combined with strong bookings expected in Q2 and for the remainder of the year, position us well to deliver increased revenue and EBITDA in Q2 and the second half of fiscal '23. Our results for the first quarter reflected the second half weighting of orders in fiscal '22. Together with continued order delays, long semiconductor lead times and other supply constraints.

在第一季度強勁預訂的推動下，我們第一季度的訂單出貨比為 1.17，過去 12 個月為 1.14。積壓訂單同比增長 22%。這種積壓，加上預計第二季度和今年剩餘時間的強勁預訂，使我們能夠在第二季度和 23 財年下半年實現更高的收入和 EBITDA。我們第一季度的業績反映了 22 財年下半年訂單的權重。再加上持續的訂單延遲、較長的半導體交貨時間和其他供應限制。

Q1 is also typically our seasonally weakest quarter. Total revenue increased 1% year-over-year. Organic revenue was down 4%, a far better result than Q1 last year. We expect organic growth to turn positive in the second quarter. Our largest revenue programs were F-35, LTAMDs, Aegis, F-18 and SEWIP. Q1 adjusted EBITDA was down 19% year-over-year as expected. This was driven primarily by the second half weighting of orders in fiscal '22 and program mix. We expect margins to increase in Q2 and as the year progresses.

第一季度通常也是我們季節性最弱的季度。總收入同比增長 1%。有機收入下降了 4%，遠好於去年第一季度的結果。我們預計第二季度有機增長將轉正。我們最大的收入項目是 F-35、LTAMD、宙斯盾、F-18 和 SEWIP。正如預期的那樣，第一季度調整後的 EBITDA 同比下降 19%。這主要是由下半年 22 財年訂單和項目組合的權重推動的。我們預計第二季度的利潤率會隨著時間的推移而增加。

Free cash was an outflow of $73 million, which we believe will be the low watermark for the year. This primarily reflected order delays and supply chain disruptions that affected the timing of collections in the quarter as well as purchase of raw materials to support future revenues. In addition, we saw customers unusually holding payments at the end of the quarter. We expect free cash flow to improve substantially in Q2 and grow through the second half of fiscal '23, resulting in positive free cash flow for the year. We continue to see high levels of new business activity. Design wins in Q1 totaled more than $135 million in estimated lifetime volume.

自由現金流出 7300 萬美元，我們認為這將是今年的低水位線。這主要反映了訂單延遲和供應鏈中斷影響了本季度的收款時間以及支持未來收入的原材料採購。此外，我們看到客戶在本季度末異常持有付款。我們預計自由現金流將在第二季度大幅改善，並在 23 財年下半年增長，從而導致今年的自由現金流為正。我們繼續看到高水平的新業務活動。第一季度的設計中標總計超過 1.35 億美元的估計生命週期數量。

Turning to Slide 4. Q1 marked the beginning of Mercury's fourth fiscal year dealing with the effects of the pandemic. In the near term, our business in the industry will continue to face challenging macro forces. However, it's clear that the issues impacting us today are not demand related. They're supply and timing related, they're short term and they're not unique to Mercury. We're executing our plan to control what we can, and we're optimistic about the future given our positioning.

轉到幻燈片 4。第一季度標誌著 Mercury 應對流行病影響的第四個財政年度的開始。在短期內，我們在行業中的業務將繼續面臨具有挑戰性的宏觀力量。然而，很明顯，今天影響我們的問題與需求無關。它們與供應和時間相關，它們是短期的，而且它們並不是水星獨有的。我們正在執行我們的計劃來控制我們能做的事情，並且我們對我們的定位對未來持樂觀態度。

After several years of COVID-related challenges, we believe that we've entered a multiyear period of accelerating growth and profitability similar to the period post sequestration in 2013. Reflecting back to the beginning of the pandemic, Mercury's fiscal '20 was in the health care crisis phase. We navigated this period well with minimal impacts on our employees, operations and financials. Bookings, revenue and adjusted EBITDA were up more than 20% year over the year. In fiscal '21, we saw a COVID-related slowdown in orders. Bookings didn't grow as much in the second half as we anticipated, declining nearly 8% for the year.

在經歷了與 COVID 相關的幾年挑戰之後，我們相信我們已經進入了一個多年加速增長和盈利的時期，類似於 2013 年封存後的時期。回顧大流行開始時，Mercury 的 20 財年狀況良好護理危機階段。我們順利度過了這段時期，對我們的員工、運營和財務的影響微乎其微。預訂量、收入和調整後的 EBITDA 同比增長超過 20%。在 21 財年，我們看到與 COVID 相關的訂單放緩。下半年的預訂量增長不如我們預期，全年下降近 8%。

Our book-to-bill fell to 0.95 from the prior year's 1.2, the lowest in more than a decade. Revenue still grew 16% year-over-year and adjusted EBITDA was up more than 14%. In fiscal '22, we saw the full effects of COVID beginning early in the year. The Delta variant reduced our manufacturing productivity and the defense budget was delayed 165 days. We experienced significant semiconductor supply chain disruptions and higher attrition as well as a inflation, all magnified by the prior year's order slowdown in the second half. As a result, total revenue grew 7% in fiscal '22, less than we had anticipated. Organic revenue declined 5%, and we ended the year with adjusted EBITDA margins roughly flat.

我們的訂單出貨比從去年的 1.2 降至 0.95，為十多年來的最低水平。收入仍同比增長 16%，調整後的 EBITDA 增長超過 14%。在 22 財年，我們從年初開始看到了 COVID 的全部影響。 Delta 型號降低了我們的製造效率，國防預算被推遲了 165 天。我們經歷了嚴重的半導體供應鏈中斷和更高的人員流失以及通貨膨脹，所有這些都因下半年前一年的訂單放緩而加劇。結果，22 財年的總收入增長了 7%，低於我們的預期。有機收入下降 5%，我們在年底調整後的 EBITDA 利潤率大致持平。

Supply chain disruptions had an outsized impact on H1, H2 linearity. Working capital investments increased as the year progressed, with free cash flow turning negative as a result. However, bookings rebounded strongly in FY '22, growing 21% year-over-year, leading to a 1.08 book-to-bill and crossing $1 billion for the first time. Most of this rebound occurred in the second half with bookings growing 33% versus H2 of the prior year. This order timing, coupled with dramatically longer semiconductor lead times is resulting in our fiscal '23 financial performance also being more back-end loaded than we experienced prepandemic.

供應鏈中斷對 H1、H2 線性度產生了巨大影響。營運資本投資隨著時間的推移而增加，結果自由現金流轉為負數。然而，22 財年的預訂量強勁反彈，同比增長 21%，訂單出貨比為 1.08，首次突破 10 億美元。大部分反彈發生在下半年，與去年下半年相比，預訂量增長了 33%。這種訂單時間，加上顯著延長的半導體交貨時間，導致我們 23 財年的財務業績也比我們在大流行前經歷的後端負載更多。

Unlike last year, however, bookings in fiscal '23 are off to a great start. We expect faster growth in the second quarter and the first half to be much improved versus H1 of fiscal '22. This sets the stage with strong full year bookings and a positive book to bill. We believe that Q1 marked the bottom in fiscal '23 for organic revenue growth, free cash flow and margins. Given the strong order flow, we anticipate a return to organic growth in the second quarter and for fiscal '23 as a whole. We expect to deliver stronger earnings and positive free cash flow as well as improved working capital efficiency over time as the supply chain headwind subside.

然而，與去年不同的是，23 財年的預訂有了一個良好的開端。我們預計第二季度和上半年的增長將比 22 財年上半年的增長更快。這為強勁的全年預訂和積極的帳單奠定了基礎。我們認為，第一季度標誌著 23 財年有機收入增長、自由現金流和利潤率的底部。鑑於強勁的訂單流，我們預計第二季度和整個 23 財年將恢復有機增長。隨著供應鏈逆風消退，我們預計將帶來更強勁的收益和正的自由現金流，並隨著時間的推移提高營運資本效率。

As I said earlier, what Mercury has experienced since the start of the pandemic is much the same as sequestration nearly a decade ago in terms of the multiyear impact on our financial results. The enhancements that we made in the business at that time led to accelerated growth and value creation over the next 5 years. For fiscal years '13 through '18, Mercury ranked second and first among our Tier 2 defense peers for compound annual growth in revenue and adjusted EBITDA, respectively. Similarly, through 1MPACT, we're strengthening our business fundamentals once again.

正如我之前所說，就對我們財務業績的多年影響而言，自大流行開始以來，Mercury 所經歷的情況與近十年前的封存大致相同。我們當時在業務中所做的改進導致了未來 5 年的加速增長和價值創造。在 13 至 18 財年，水星在我們的二級國防同行中分別在收入複合年增長率和調整後的 EBITDA 中排名第二和第一。同樣，通過 1MPACT，我們再次加強了我們的業務基礎。

Looking forward to fiscal '24, we believe that lead times for high-end semiconductors will begin to improve in the second half. We've already begun to see a shortening of semiconductor lead times on the low end. We expect stronger bookings and organic growth, continued margin expansion and greatly improved free cash flow as we release working capital, all of which should position us for further growth and value creation as we move forward.

展望 24 財年，我們相信高端半導體的交貨時間將在下半年開始改善。我們已經開始看到低端半導體交貨時間的縮短。隨著我們釋放營運資金，我們預計預訂量和有機增長將更加強勁，利潤率將繼續擴大，自由現金流將大大改善，所有這些都將使我們在前進的過程中進一步增長和創造價值。

Turning to Slide 5. We believe today's geopolitical environment is the most challenging since the cold war. The risks related to China and Taiwan are potentially more significant than what we're experiencing today with Russia and Ukraine, and the time line is moving to the left. The semiconductor industry and the defense industrial base in Europe and the U.S. are not what they need to be to build the military stockpiles and the new capabilities required in this threat environment.

轉到幻燈片 5。我們認為，當今的地緣政治環境是冷戰以來最具挑戰性的。與中國和台灣相關的風險可能比我們今天在俄羅斯和烏克蘭所經歷的風險更大，而且時間線正在向左移動。歐洲和美國的半導體工業和國防工業基地並不是建立這種威脅環境所需的軍事儲備和新能力所需要的。

We appear to be heading into a super cycle in U.S. and allied defense spending. The challenge, however, for both the government and the defense industry is clearly on the supply side, whether it be the availability of semiconductors and other materials, labor or now inflation. In the near term, the industry is dealing with an ongoing shortfall in government contracting personnel.

我們似乎正在進入美國和盟國國防開支的超級週期。然而，政府和國防工業面臨的挑戰顯然是在供應方面，無論是半導體和其他材料的可用性、勞動力還是現在的通貨膨脹。短期內，該行業正在應對政府合同人員持續短缺的問題。

We're also beginning the new fiscal year under a defense budget continuing resolution. This means the contracting environment will likely remain challenging in the short term. We're not expecting the Defense Appropriations Bill until after the midterm elections. On a positive note, once that bill is passed, the GFY '23 budget is currently expected to increase year-over-year.

我們還將根據國防預算持續決議開始新的財政年度。這意味著合同環境在短期內可能仍將充滿挑戰。直到中期選舉之後，我們才期待國防撥款法案。積極的一面是，一旦該法案獲得通過，GFY '23 預算目前預計將同比增長。

That said, given inflation, the real defense spending and buying power increases could be far less. So overall, the demand environment is strong and appears to be getting stronger. Although the industry is dealing with headwinds, we believe that they're temporary. We expect to see a shift to tailwinds as defense spending grows and supply chain conditions improve.

也就是說，考慮到通貨膨脹，實際國防開支和購買力的增長可能要少得多。因此，總體而言，需求環境強勁，而且似乎越來越強勁。儘管該行業正在應對逆風，但我們認為它們是暫時的。隨著國防開支的增長和供應鏈條件的改善，我們預計將看到順風轉向。

Turning to Slide 6. At the Mercury level, the supply chain environment remains challenging but stable. Although we're still seeing supply delays in isolated quality issues, we're experiencing fewer supply decommits compared with Q4. Lead times overall have not increased, but are extremely long for high-end semiconductors.

轉到幻燈片 6。在 Mercury 層面，供應鏈環境仍然充滿挑戰但穩定。儘管我們仍然看到孤立的質量問題導致供應延遲，但與第四季度相比，我們的供應退役情況有所減少。交貨時間總體上沒有增加，但對於高端半導體來說卻非常長。

Mercury's sophisticated end-to-end processing platform powers some of the most critical A&D missions. High-end processing represents about 70% of our business, and it's where Mercury likely has the largest opportunity to grow over the next 5 years. It's also where the global supply chain has been most disrupted. High-end semiconductors are at the heart of many of our offensive and defensive weapon systems and have rapidly become the long lead time for defense development and production.

Mercury 先進的端到端處理平台為一些最關鍵的 A&D 任務提供支持。高端加工約占我們業務的 70%，這也是 Mercury 在未來 5 年內可能擁有最大增長機會的領域。這也是全球供應鏈中斷最嚴重的地方。高端半導體是我們許多進攻性和防禦性武器系統的核心，並迅速成為國防開發和生產的長期交付週期。

Prior to the pandemic, semiconductor processor lead times were 10 to 12 weeks. They increased rapidly in the second half of fiscal '21 and now range from 52 to 99 weeks. Putting this in perspective, this means that high-end semiconductor material orders that we're placing today, support revenues in our third and fourth quarters of fiscal '24. It's not until this point that we believe that lead times and availability will begin to improve.

在大流行之前，半導體處理器的交貨時間為 10 到 12 週。它們在 21 財年下半年迅速增加，現在從 52 周到 99 週不等。從這個角度來看，這意味著我們今天下達的高端半導體材料訂單將支持我們 24 財年第三和第四季度的收入。直到此時，我們才相信交貨時間和可用性將開始改善。

Throughout this multiyear period, we've used the strength of our balance sheet to invest in working capital to mitigate supply chain risk as best we can, positioning Mercury to deliver stronger and more consistent results over time. When the supply chain conditions normalize, we expect a significant release of cash related to inventory and unbilled receivables from our balance sheet.

在這多年的時間裡，我們利用資產負債表的實力投資於營運資金，以盡最大努力降低供應鏈風險，使 Mercury 能夠隨著時間的推移提供更強大、更一致的結果。當供應鏈狀況正常化時，我們預計與庫存和未開票應收賬款相關的現金將從我們的資產負債表中釋放出來。

We also continue to deal with semiconductor-related inflationary pressures. Semiconductors equate to 38% of our direct supply spend far more than our peers', we believe. We've taken aggressive steps to maintain the strongest possible margins in this environment, and they're working. These include repricing standard products and incorporating price adjustment mechanisms in our rates-based businesses and multiyear proposals.

我們還繼續應對與半導體相關的通脹壓力。我們相信，半導體占我們直接供應支出的 38%，遠遠超過我們的同行。我們已採取積極措施在這種環境下保持盡可能高的利潤率，並且它們正在發揮作用。其中包括重新定價標準產品，並將價格調整機制納入我們基於利率的業務和多年期提案。

We've also shortened the validity of our quotes to capture any near-term inflationary effects. Given the short-cycle nature of our model, it's likely that the impacts of supply chain inflation will begin to diminish over time as these actions result in more of the business being priced at market rates. We're making good progress in managing the industry headwinds through our 1MPACT program. Much like our approach to sequestration, we're laying the foundation for Mercury to achieve its full growth and profit potential over the next 5 years.

我們還縮短了報價的有效性，以捕捉任何近期的通脹影響。鑑於我們模型的短週期性質，供應鏈通脹的影響很可能會隨著時間的推移而開始減弱，因為這些行動導致更多的業務按市場價格定價。通過我們的 1MPACT 計劃，我們在管理行業逆風方面取得了良好進展。就像我們的封存方法一樣，我們正在為 Mercury 在未來 5 年內實現其全面增長和盈利潛力奠定基礎。

We've seen tremendous changes since we launched 1MPACT at the beginning of fiscal '22. We began by simplifying and streamlining our organizational structure and strengthening the leadership team, and we continue to do so. Mitch Stevison, our former Chief Growth Officer, who joined us from Raytheon 12 months ago, recently took the helm as President of our Processing division, which accounts for approximately 70% of total company revenue. Mitch knows Mercury well and has hit the ground running in his new role.

自從我們在 22 財年開始推出 1MPACT 以來，我們已經看到了巨大的變化。我們從簡化和精簡我們的組織結構和加強領導團隊開始，並將繼續這樣做。我們的前首席增長官 Mitch Stevison 於 12 個月前從雷神公司加入我們，最近擔任我們加工部門的總裁，該部門約占公司總收入的 70%。 Mitch 非常了解 Mercury，並且在他的新角色中已經開始運作。

We also have focused 1MPACT on margin expansion initiatives in fiscal '22, and we're now pushing that execution deeper into the business. Effective October 3, Allen Couture joined us to accelerate these efforts as our Senior VP of Execution Excellence. Allen was previously at Raytheon in their Missiles and Defense division. He'll be responsible for supply chain, operations, engineering and program Management reporting to me. We're pleased to welcome Allen to the team.

我們還將 1MPACT 的重點放在 22 財年的利潤擴張計劃上，我們現在正在將該執行推向更深入的業務。自 10 月 3 日起，Allen Couture 作為我們的卓越執行高級副總裁加入我們，以加速這些努力。艾倫之前在雷神公司的導彈和防禦部門工作。他將負責向我匯報的供應鏈、運營、工程和項目管理。我們很高興歡迎 Allen 加入我們的團隊。

As the environment became more challenging in fiscal '22, we pivoted 1MPACT towards those areas that could help mitigate risk and deliver the most immediate financial benefits. This year, in addition to pricing, we continue to focus on supply chain risk mitigation, working capital burn down and accelerated cash release. Another initiative is R&D investment efficiency and returns, building on the progress last year.

隨著 22 財年環境變得更具挑戰性，我們將 1MPACT 轉向那些可以幫助降低風險並提供最直接的經濟利益的領域。今年，除了定價外，我們繼續關注供應鏈風險緩解、營運資金消耗和加速現金釋放。另一項舉措是在去年取得進展的基礎上，研發投資效率和回報。

Our digital transformation initiatives and engineering operations will help improve our cost structure and performance over the long term as well. We're also making good progress in our facility footprint strategy. In Q1, we consolidated 2 engineering teams and a new Center of Excellence in Fremont, California. We're on track to consolidate our Mesa, Arizona facility into the Phoenix site in the second quarter, and we expect to release 2 additional buildings in California by the end of fiscal '23.

我們的數字化轉型計劃和工程運營也將有助於改善我們的長期成本結構和績效。我們在設施足跡戰略方面也取得了良好進展。在第一季度，我們在加利福尼亞州弗里蒙特整合了 2 個工程團隊和一個新的卓越中心。我們有望在第二季度將我們位於亞利桑那州梅薩的工廠整合到鳳凰城，我們預計到 23 財年末將在加利福尼亞州推出 2 座額外的建築。

As it relates to M&A, 1MPACT is about leveraging our proven ability to integrate and grow acquired businesses, but at a greater scale going forward. The environment continues to be active and will remain focused on our existing M&A themes. With that, I'd like to turn the call over to Mike. Mike?

就併購而言，1MPACT 是關於利用我們經過驗證的能力來整合和發展被收購的業務，但未來的規模會更大。環境繼續活躍，並將繼續關注我們現有的併購主題。有了這個，我想把電話轉給邁克。麥克風？

Thank you, Mark, and good afternoon, again, everyone. As usual, I'll start with our first quarter results and then move to our Q2 and fiscal '23 guidance. As Mark has discussed, Mercury's first quarter results exceeded our guidance across all metrics, despite the supply chain and inflationary headwinds. Exiting Q1, from a demand perspective, we have excellent visibility into Q2 and the second half. As a result, we're raising the low end of our fiscal '23 guidance and expecting a cash flow positive year.

謝謝馬克，大家下午好。像往常一樣，我將從我們的第一季度業績開始，然後轉向我們的第二季度和 23 財年指導。正如 Mark 所討論的那樣，儘管存在供應鍊和通脹逆風，但 Mercury 第一季度的業績在所有指標上都超出了我們的指導。退出第一季度，從需求的角度來看，我們對第二季度和下半年有很好的了解。因此，我們提高了 23 財年指導的下限，並預計現金流為正的一年。

Turning to our Q1 results on Slide 7. Bookings were $267 million, up 34% compared to Q1 '22. Our book-to-bill was 1.17 compared to 0.89 in Q1 '22. For the last 12 months ended Q1 '23, our book-to-bill was 1.14. The rebound in our book-to-bill indicates the positive demand environment. Our backlog at the end of the quarter was a record $1.08 billion, up 22% from Q1 '22. Our 12-month backlog was up 25% compared to last year and up 7% compared to last quarter, providing us good visibility into the remainder of fiscal '23.

轉向我們在幻燈片 7 上的第一季度結果。預訂量為 2.67 億美元，與 22 年第一季度相比增長 34%。我們的訂單出貨比為 1.17，而 22 年第一季度為 0.89。在截至 23 年第一季度的過去 12 個月中，我們的訂單出貨比為 1.14。我們的訂單出貨比反彈表明需求環境良好。我們在本季度末的積壓訂單達到創紀錄的 10.8 億美元，比 22 年第一季度增長 22%。與去年相比，我們 12 個月的積壓訂單增加了 25%，與上一季度相比增加了 7%，這讓我們能夠很好地了解 23 財年的剩餘時間。

Coupled with bookings on key programs that we expect to receive in Q2, we're optimistic about our results for H2 and the full year. Revenue in Q1 increased 1% year-over-year to $228 million, exceeding the top end of our guidance of $215 million to $225 million. Organic revenue was [$216] million, and acquired revenue, which included Avalex and Atlanta Micro was $12 million. Gross margins for Q1 were down approximately 500 basis points year-over-year. As expected, we had a smaller proportion of higher-margin production revenue in the quarter. Q1 gross margins also reflected material and labor inflation.

加上我們預計在第二季度收到的關鍵項目的預訂，我們對下半年和全年的業績持樂觀態度。第一季度的收入同比增長 1% 至 2.28 億美元，超過了我們 2.15 億美元至 2.25 億美元的指導上限。有機收入為 [2.16 億美元]，收購收入為 1200 萬美元，其中包括 Avalex 和 Atlanta Micro。第一季度的毛利率同比下降約 500 個基點。正如預期的那樣，我們在本季度的高利潤生產收入中所佔比例較小。第一季度的毛利率也反映了材料和勞動力的通脹。

As we move through fiscal '23, we expect to see higher gross margins as a result of program mix and a gradually stabilizing macroeconomic environment. Adjusted EBITDA for Q1 was $31.2 million, above our guidance of $27 million to $30 million. Our adjusted EBITDA margins were 13.7% for the quarter, down 330 basis points from 17% in Q1 fiscal '22 and primarily driven by gross margins. Adjusted EBITDA margins exceeded our Q1 guidance range. As I'll discuss shortly, free cash flow for the first quarter was an outflow of approximately $73 million. This was primarily due to award timing and continued supply chain disruption. We also observed delayed payment behavior across our customer base.

隨著我們進入 23 財年，我們預計由於項目組合和逐漸穩定的宏觀經濟環境，毛利率會更高。第一季度調整後的 EBITDA 為 3120 萬美元，高於我們 2700 萬至 3000 萬美元的指導。本季度我們調整後的 EBITDA 利潤率為 13.7%，比 22 財年第一季度的 17% 下降了 330 個基點，主要受毛利率的推動。調整後的 EBITDA 利潤率超出了我們的第一季度指導範圍。正如我稍後將討論的那樣，第一季度的自由現金流流出大約 7300 萬美元。這主要是由於授標時間和持續的供應鏈中斷。我們還觀察到我們客戶群中的延遲付款行為。

Slide 8 presents Mercury's balance sheet for the last 5 quarters. Our balance sheet remains strong with significant capacity under our $1.1 billion revolving credit facility. Driven by the anticipated strong cash flow generation in H2, we expect to be well positioned to delever the balance sheet while continuing to invest in the business. We ended Q1 with cash and cash equivalents of $52 million and approximately $512 million of debt funded under our revolver. The sequential increase was primarily related to the free cash outflow.

幻燈片 8 展示了 Mercury 過去 5 個季度的資產負債表。我們的資產負債表依然強勁，在我們 11 億美元的循環信貸額度下擁有巨大的能力。在下半年預期強勁的現金流產生的推動下，我們預計在繼續投資該業務的同時，能夠很好地去槓桿化資產負債表。第一季度結束時，我們的現金和現金等價物為 5200 萬美元，我們的循環貸款資助的債務約為 5.12 億美元。環比增長主要與自由現金流出有關。

During the quarter, we swapped $300 million of our floating rate debt to fixed rate. We now have fixed SOFR at 3.79%. At our current leverage levels, that implies approximately 5% interest on a majority of our funded debt, which positions us to continue to allocate capital at attractive rates. As a result of the macroeconomic environment, over the last 5 quarters, we've invested approximately $250 million in working capital to support performance obligations to our customers and ensure delivery on critical programs. This investment primarily consists of accelerated material purchases to mitigate the risks associated with the supply chain volatility and contracting delays that Mark discussed.

本季度，我們將 3 億美元的浮動利率債務轉換為固定利率債務。我們現在將 SOFR 固定為 3.79%。在我們目前的槓桿水平下，這意味著我們大部分融資債務的利息約為 5%，這使我們能夠繼續以有吸引力的利率配置資本。由於宏觀經濟環境，在過去 5 個季度中，我們投入了大約 2.5 億美元的營運資金，以支持對客戶的履約義務並確保關鍵項目的交付。這項投資主要包括加速材料採購，以減輕與 Mark 討論的供應鏈波動和合同延遲相關的風險。

This has resulted in increased unbilled receivables and inventory. The majority of these material purchases are for programs that are aligned with the DoD's strategic priorities and on which Mercury is a sole source supplier. As supply chain conditions normalize and our customer performance obligations are completed, we expect unbilled receivables and inventory to convert to cash and decrease substantially as a percentage of annualized sales.

這導致未開票的應收賬款和存貨增加。這些材料採購中的大部分用於符合國防部戰略優先事項的項目，並且 Mercury 是這些項目的唯一來源供應商。隨著供應鏈狀況正常化和我們的客戶履約義務的完成，我們預計未開票的應收賬款和庫存將轉換為現金，並大幅下降佔年銷售額的百分比。

Turning to the specifics. Accounts receivable in Q1 were $495 million, a $47 million increase from Q4 '22. Within that increase, billed receivables were up approximately $20 million primarily as a result of customer payment behavior. Unbilled receivables increased approximately $27 million with our intentional strategic shift to more integrated subsystems, which meet the criteria of over time revenue recognition, our unbilled receivables have naturally increased.

轉向細節。第一季度的應收賬款為 4.95 億美元，比 22 年第四季度增加了 4700 萬美元。在這一增長中，應收帳款增加了約 2000 萬美元，這主要是由於客戶的付款行為。未開票應收賬款增加了約 2700 萬美元，我們有意將戰略轉移到更集成的子系統，隨著時間的推移符合收入確認標準，我們的未開票應收賬款自然增加。

At the same time, macroeconomic conditions across the contracting environment, supply chain and to a lesser extent, labor market are impacting our ability to complete program building milestones and putting further pressure on unbilled receivables. We continue to take a disciplined and proactive approach to unlocking unbilled receivables, including negotiating legacy contract terms to incorporate progress or performance-based payments.

與此同時，整個承包環境、供應鏈以及較小程度上的勞動力市場的宏觀經濟狀況正在影響我們完成項目建設里程碑的能力，並對未開票的應收賬款施加進一步壓力。我們繼續採取有紀律和積極主動的方法來解鎖未開票的應收賬款，包括談判遺留合同條款以納入進度或基於績效的付款。

We're including these payment structures in all new contract awards. We expect these actions to drive unbilled receivables down as a percentage of annualized overtime revenue throughout fiscal '23 and fiscal '24. Inventory increased approximately $17 million in Q1 '23 compared to Q4 '22. High-end semiconductor lead times range from 52 to 99 weeks as Mark discussed.

我們將這些支付結構納入所有新合同授予中。我們預計這些行動將推動未開票應收賬款在整個 23 財年和 24 財年的年化加班收入中所佔的百分比下降。與 22 年第四季度相比，23 年第一季度的庫存增加了約 1700 萬美元。正如 Mark 所討論的那樣，高端半導體的交貨時間從 52 周到 99 週不等。

We continue to lean forward on accelerating raw material purchases to support customer delivery schedules and mitigate supply chain risk in future quarters. Additionally, as with unbilled receivables, shortages in key parts have hindered our ability to deliver finished goods to our customers. We're working with our supply partners to accelerate deliveries of key components in order to deliver finished goods to our customers.

我們繼續傾向於加快原材料採購，以支持客戶交付計劃並降低未來幾個季度的供應鏈風險。此外，與未開票的應收賬款一樣，關鍵部件的短缺阻礙了我們向客戶交付成品的能力。我們正在與我們的供應合作夥伴合作，以加快關鍵部件的交付，以便將成品交付給我們的客戶。

Turning to cash flow on Slide 9. Last quarter, we forecasted a free cash outflow in Q1, driven by lower net income, onetime payments as well as working capital build associated with continued supply chain constraints. However, the outflow was larger than expected at $73 million, primarily due to customer contracting delays within the quarter. Reflecting the proximity of award receipts to quarter end, expected billings and cash collections in the quarter were lower than expected.

關於幻燈片 9 的現金流。上個季度，我們預測第一季度將出現自由現金流出，原因是淨收入下降、一次性付款以及與持續供應鏈限制相關的營運資本建設。然而，流出量為 7300 萬美元，高於預期，這主要是由於本季度客戶合同延遲。反映獎勵收據接近季度末，本季度的預期賬單和現金收款低於預期。

We expect the majority of these Q1 delays to result in billings or cash collections in Q2. We also observed delayed payment behavior across our customer base in Q1, with payments due as of quarter end, not being paid until the first weeks of Q2, resulting in an increase in billed receivables. Although it wasn't used in Q1, we've put an accounts receivable factoring facility in place to address this in the future, if necessary.

我們預計第一季度的大部分延誤將導致第二季度的賬單或現金收款。我們還觀察到第一季度我們客戶群中的延遲付款行為，付款在季度末到期，直到第二季度的前幾週才支付，導致應收賬款增加。雖然它在第一季度沒有使用，但我們已經建立了一個應收賬款保理機制，以便在未來必要時解決這個問題。

As Mark said, we believe Q1 was the low point of fiscal '23 free cash flow. We expect free cash flow to improve in Q2 and grow through the second half, leading to positive free cash flow for the year. Looking forward, we believe that our financial results for fiscal '23 will reflect the early impacts of a potentially substantial longer-term release of working capital from our balance sheet especially as the supply chain headwinds subside.

正如馬克所說，我們認為第一季度是 23 財年自由現金流的低點。我們預計自由現金流將在第二季度改善並在下半年增長，從而導致今年的自由現金流為正。展望未來，我們相信我們 23 財年的財務業績將反映我們資產負債表中可能大量長期釋放營運資金的早期影響，尤其是在供應鏈逆風消退的情況下。

I'll now turn to our financial guidance, starting with Q2 on Slide 10. Forecasting the current environment remains challenging. Our guidance incorporates to the extent we can, potential impacts associated with ongoing supply chain constraints and material and labor inflation as well as a continuing resolution in a midterm election year. For Q2, we currently expect revenue in the range of $225 million to $240 million. This is approximately 6% growth at the midpoint compared to the second quarter last year. We currently expect gross margins to increase from Q1, so we continue to be cautious with regard to supply chain variability and material inflation.

我現在轉向我們的財務指導，從幻燈片 10 的第二季度開始。預測當前環境仍然具有挑戰性。我們的指南盡我們所能納入了與持續的供應鏈限制、材料和勞動力通脹以及中期選舉年的持續解決方案相關的潛在影響。對於第二季度，我們目前預計收入在 2.25 億美元至 2.4 億美元之間。與去年第二季度相比，中點增長率約為 6%。我們目前預計毛利率將從第一季度開始增加，因此我們繼續對供應鏈可變性和材料通脹持謹慎態度。

In the second half of fiscal '23, we expect gross margins to increase as we complete several of our lower-margin development contracts. The revenue growth in H2 is expected to be driven by higher-margin production programs. We expect adjusted EBITDA for Q2 to be $38 million to $42 million, representing 17.2% of revenue at the midpoint. This is approximately 350 basis points higher than Q1 and in line with Q2 fiscal '22 actual margin. For Q2, we currently expect free cash flow to be near breakeven to slightly positive with Q1 marking the low point in fiscal '23.

在 23 財年下半年，我們預計毛利率會隨著我們完成幾個利潤率較低的開發合同而增加。預計下半年的收入增長將受到利潤率更高的生產項目的推動。我們預計第二季度調整後的 EBITDA 為 3800 萬至 4200 萬美元，佔中點收入的 17.2%。這比第一季度高出約 350 個基點，與第二季度 22 財年的實際利潤率一致。對於第二季度，我們目前預計自由現金流將接近盈虧平衡至略為正，第一季度標誌著 23 財年的低點。

I'll now turn to our guidance for full year fiscal '23 on Slide 11. In Q1, the team worked to mitigate risks within our control, resulting in Mercury exceeding the high end of guidance. Our updated full year guidance builds on the Q1 overperformance, but remains cautious based on our risk outlook for the remainder of the year. The near-term outlook for the industry in the macroeconomic environment remains far from certain. However, the demand environment continues to improve, and we believe our strong Q1 will be, in retrospect, Mercury's low point for organic growth and margins in fiscal '23.

我現在將轉向我們在幻燈片 11 上對 23 財年全年的指導。在第一季度，團隊努力降低我們控制範圍內的風險，導致 Mercury 超過了指導的高端。我們更新的全年指引建立在第一季度的超常表現之上，但基於我們對今年剩餘時間的風險展望仍然保持謹慎。在宏觀經濟環境下，該行業的近期前景仍遠未確定。然而，需求環境繼續改善，我們認為，回想起來，我們強勁的第一季度將是 Mercury 在 23 財年實現有機增長和利潤率的低點。

As a result, we're raising the low end of our previous guidance for revenue and adjusted EBITDA for the year. Driven by 34% year-over-year bookings growth, we ended Q1 with a 12-month book-to-bill of 1.14 in record backlog. For fiscal '23, we expect double-digit growth in bookings and improved bookings linearity, leading to continued growth in our backlog and greater visibility to our forecasted revenues. We also expect a positive book-to-bill for the year.

因此，我們提高了之前對今年收入和調整後 EBITDA 指引的下限。在預訂量同比增長 34% 的推動下，我們在第一季度末的 12 個月訂單出貨比為 1.14，創下了創紀錄的積壓記錄。對於 23 財年，我們預計預訂量將實現兩位數增長並改善預訂線性度，從而導致我們的積壓訂單持續增長並提高我們預測收入的可見度。我們還預計今年的訂單出貨比為正。

From a revenue perspective, we now expect total company revenue of $1.01 billion to $1.05 billion in fiscal '23. This represents 2% to 6% growth year-over-year and approximately flat to 4% organic growth. While this organic revenue guidance is still below our target business model, we're beginning to see the rebound driven by the strong bookings momentum over the last 12 months. We continue to expect fiscal '23 to be second half weighted.

從收入的角度來看，我們現在預計 23 財年公司總收入為 10.1 億美元至 10.5 億美元。這表示同比增長 2% 至 6%，有機增長大致持平至 4%。雖然這種有機收入指引仍低於我們的目標商業模式，但我們開始看到過去 12 個月強勁的預訂勢頭推動的反彈。我們繼續預計 23 財年將在下半年加權。

Based on the midpoint of our guidance ranges, we expect approximately 45% of revenue in H1 and 55% in H2, with organic growth accelerating in H2 and into fiscal '24. As I mentioned, our current backlog and expected Q2 bookings should provide strong visibility and backlog coverage as we enter H2. Adjusted EBITDA for fiscal '23 is expected to be in the range of $202.5 million to $215 million, up 1% to 7% from fiscal '22.

根據我們指導範圍的中點，我們預計上半年收入約為 45%，下半年收入約為 55%，下半年和 24 財年的有機增長將加速。正如我所提到的，我們當前的積壓訂單和預期的第二季度預訂應該會在我們進入下半年時提供強大的可見性和積壓覆蓋率。 23 財年調整後的 EBITDA 預計在 2.025 億美元至 2.15 億美元之間，比 22 財年增長 1% 至 7%。

Adjusted EBITDA margins are expected to be approximately 20% to 20.5%. The increase in our EBITDA guidance for fiscal '23 is driven by Mercury's outperformance in Q1. Like revenue, we expect adjusted EBITDA and EBITDA margins to be heavily weighted towards the second half. As revenue ramps through the year, we expect an increase in gross margins and operating leverage to lead to adjusted EBITDA margin expansion. From a free cash flow perspective, we're targeting approximately 30% of adjusted EBITDA in fiscal '23.

調整後的 EBITDA 利潤率預計約為 20% 至 20.5%。我們對 23 財年 EBITDA 指引的增加是由 Mercury 在第一季度的出色表現推動的。與收入一樣，我們預計調整後的 EBITDA 和 EBITDA 利潤率將在下半年佔很大比重。隨著今年收入的增加，我們預計毛利率和經營槓桿的增加將導致調整後的 EBITDA 利潤率擴大。從自由現金流的角度來看，我們的目標是 23 財年調整後 EBITDA 的大約 30%。

This estimate assumes the current R&D capitalization tax laws delayed or repealed. As I've said, we expect cash flow to begin to normalize in H2, driving improved conversion for the full year. With that, I'll now turn the call back over to Mark.

該估計假設當前的研發資本化稅法被推遲或廢除。正如我所說，我們預計現金流將在下半年開始正常化，從而推動全年轉化率的提高。有了這個，我現在將把電話轉回給馬克。

Thanks, Mike. Turning now to Slide 12. We believe that Mercury couldn't be better positioned strategically. We entered fiscal '23 with a record backlog and strong new business momentum. We anticipate strong bookings, a positive book-to-bill and a return to organic growth, with revenue reflecting $1 billion for the first time. We expect to deliver improved margins, better working capital efficiency and positive free cash flow. This should lead to improved fiscal '23 results, positioning us for a stronger year in fiscal '24 as the supply chain headwinds begin to recede.

謝謝，邁克。現在轉到幻燈片 12。我們認為 Mercury 的戰略定位再好不過了。我們以創紀錄的積壓和強勁的新業務勢頭進入了 23 財年。我們預計會有強勁的預訂量、積極的訂單出貨比和恢復有機增長，收入首次達到 10 億美元。我們期望提供更高的利潤率、更好的營運資本效率和正的自由現金流。這應該會改善 23 財年的業績，隨著供應鏈逆風開始消退，我們將在 24 財年取得更好的成績。

Looking further ahead, our plan for the next 5 years remains intact. Mercury's fundamentals are strong and with 1MPACT should improve over time. Defense budgets domestically and internationally are poised for rapid growth. We believe that we're well positioned to continue benefiting from industry trends, including supply chain delayering and reshoring as well as increased outsourcing at the subsystem level. We anticipate that a greater percentage of the value associated with future defense platforms will be driven by electronic systems content where Mercury participates.

展望未來，我們對未來 5 年的計劃保持不變。 Mercury 的基本面很強，1MPACT 應該會隨著時間的推移而改善。國內外的國防預算將快速增長。我們相信，我們有能力繼續受益於行業趨勢，包括供應鏈延遲和回流以及子系統級別外包的增加。我們預計與未來防禦平台相關的更大比例的價值將由 Mercury 參與的電子系統內容驅動。

We're building the company we set out to create from a capability perspective, and our addressable market continues to expand as a result. This has been driven in large part by our strategic move into mission systems and the potential to deliver innovative processing solutions at chip scale. Our model simply at the intersection of high tech and defense positions us well. We believe that Mercury can and will continue to grow at high single-digit to low double-digit rates organically as the current headwinds diminish.

我們正在從能力的角度建設我們打算創建的公司，因此我們的潛在市場不斷擴大。這在很大程度上是由我們向任務系統的戰略轉移以及提供芯片級創新處理解決方案的潛力所推動的。我們的模型正好處於高科技和國防的交叉點，使我們處於有利地位。我們相信，隨著當前逆風的減弱，Mercury 能夠並且將繼續以高個位數到低兩位數的速度有機增長。

In addition to organic and M&A-related growth, our 5-year plan includes continued margin expansion driven by 1MPACT, leading to stronger adjusted EBITDA as well as improved working capital efficiency and cash conversion. Executing on our long-term strategy over the past decade, we've improved margins by growing the business organically, supplemented with disciplined M&A and full integration. As a result, we created significant value for our shareholders and expect to continue doing so.

除了有機增長和併購相關增長外，我們的 5 年計劃還包括在 1MPACT 的推動下繼續擴大利潤率，從而實現更強勁的調整後 EBITDA 以及提高營運資本效率和現金轉換。在過去十年中執行我們的長期戰略，我們通過有機地發展業務，輔之以有紀律的併購和全面整合，提高了利潤率。因此，我們為股東創造了可觀的價值，並期望繼續這樣做。

In closing, I'd like to recognize the entire Mercury team for a tremendous effort during these challenging times, my sincere thanks to all of you. With that, operator, please proceed with the Q&A.

最後，我想感謝整個 Mercury 團隊在這些充滿挑戰的時期所做的巨大努力，我衷心感謝你們所有人。那麼，接線員，請繼續進行問答。

(Operator Instructions) Your first question today comes from the line of Jonathan Ho with William Blair.

（操作員說明）您今天的第一個問題來自 Jonathan Ho 與 William Blair 的對話。

One thing I wanted to understand a little bit better is, can you maybe help us understand how your pricing actions maybe flow through for the balance of the year? And what that could mean in terms of either improvements to gross margins or on the cash flow side?

我想更好地理解一件事是，你能不能幫助我們了解你的定價行為在今年餘下的時間裡是如何流動的？這對提高毛利率或現金流方面意味著什麼？

Sure. So we've done a fair bit, Jonathan. As part of 1MPACT, we had 2 major initiatives: one, related to procurement, where we stood up a procurement organization and seeking to purchase things more efficiently; and then the second is that we stood up a pricing team to initially be able to price our products more in line with the value that we provided. Both of those areas have actually ended up really helping to offset some of the inflationary pressures that we're seeing. And I think we're actually being pretty successful doing that.

當然。所以我們做了很多，喬納森。作為 1MPACT 的一部分，我們有 2 個主要舉措：一個是與採購相關的，我們建立了一個採購組織並尋求更有效地採購東西；其次是我們成立了一個定價團隊，最初能夠根據我們提供的價值為我們的產品定價。這兩個領域實際上最終都真正幫助抵消了我們所看到的一些通脹壓力。我認為我們在這方面做得非常成功。

So in the -- in our microelectronics business, at the very start of the year, we actually did pretty much an across-the-board price increase associated with our commercial products. And then in our noncommercial business, we have also pretty aggressively looked at passing on the costs associated with the inflationary pressures to all of our customers as well as actually addressing contracts going forward to make sure that we're capturing the inflationary pressures on a go-forward basis as well. So Mike, I don't know if you'd like to maybe comment further from a financial perspective.

所以在 - 在我們的微電子業務中，在今年年初，我們實際上做了與我們的商業產品相關的全面價格上漲。然後在我們的非商業業務中，我們還非常積極地考慮將與通貨膨脹壓力相關的成本轉嫁給我們所有的客戶，並實際處理未來的合同以確保我們能夠隨時應對通貨膨脹壓力- 遠期基礎也是如此。所以邁克，我不知道你是否願意從財務角度進一步發表評論。

No, I think you hit it, Mark. Jonathan, the only thing I would add is that as you look at our guidance, we do have some inflation pressure embedded in our guidance. But at the same time, as Mark said, we're working to offset that through pricing. So there is some in there, but we're mitigating the piece of it in our guidance as well.

不，我想你成功了，馬克。喬納森，我唯一要補充的是，當您查看我們的指南時，我們的指南中確實存在一些通脹壓力。但與此同時，正如馬克所說，我們正在努力通過定價來抵消這一點。所以那裡有一些，但我們也在我們的指南中減輕了它的一部分。

Great. And then just as a quick follow-up. When it comes to some of the customer behavior around payments, do you have any concerns at all around collections, quality or receivables? And when does that sort of maybe start to normalize in terms of the cash conversion?

偉大的。然後作為快速跟進。當涉及到與付款有關的一些客戶行為時，您是否對收款、質量或應收賬款有任何顧慮？就現金轉換而言，這種情況何時可能開始正常化？

Yes. So I'll take that one. So Jonathan, we feel very good about the quality of the assets that are on the balance sheet and the collectability of both the unbilled receivables to billed receivables as well as the inventory. Because if you step back, the majority of that is material purchases that we've made for programs that are aligned with the DoD's strategic priorities that were designed in on. And so it really is just a matter of time as the balance sheet unwinds once we deliver on those final performance obligations to our customers.

是的。所以我會拿那個。所以喬納森，我們對資產負債表上資產的質量以及未開票應收賬款到已開票應收賬款以及庫存的可回收性感到非常滿意。因為如果你退後一步，其中大部分是我們為符合國防部設計的戰略重點的項目進行的材料採購。因此，一旦我們向客戶履行這些最終履約義務，資產負債表就會展開，這真的只是時間問題。

Mike, let me jump in there because I think it's important to just kind of step back and really maybe delve into this in a little bit more detail. So most of the challenges that we've had from both a working capital perspective and cash flow are clearly due to the very challenging supply chain environment. And we expect that those challenges are actually going to continue throughout 2023. Yes, And we've seen some improvement. I think the in-quarter supply decommits have improved somewhat versus the fourth quarter, which we're grateful for.

邁克，讓我跳進去，因為我認為退後一步很重要，真的可能會更詳細地研究這個問題。因此，我們在營運資本和現金流方面遇到的大部分挑戰顯然是由於極具挑戰性的供應鏈環境造成的。我們預計這些挑戰實際上將持續到 2023 年。是的，我們已經看到了一些改善。我認為與第四季度相比，本季度供應退役有所改善，我們對此表示感謝。

However, I think the challenge is still very much related to extremely long semiconductor lead times, particularly on the high end and the general scarcity of those devices overall. I think we're seeing more -- also seeing more rapid and frequent end-of-life older devices, which is particularly a challenge in the defense industry given life cycles as well as now both material and labor inflation. And it hit us probably more than most because 70% of our business is related to processing. So as the reminder, in fiscal '22, 45% of our business is actually recognized as point-in-time revenue recognition.

然而，我認為挑戰仍然與極長的半導體交貨時間密切相關，特別是在高端和這些設備總體上普遍稀缺的情況下。我認為我們正在看到更多 - 也看到更快速和更頻繁地報廢舊設備，考慮到生命週期以及現在的材料和勞動力通脹，這在國防工業中尤其是一個挑戰。它對我們的打擊可能比大多數人都大，因為我們 70% 的業務與加工有關。因此提醒一下，在 22 財年，我們 45% 的業務實際上被確認為時間點收入確認。

Or put another way, when we recognize revenue when we actually deliver the product, that's actually a much larger percentage than other companies in the industry. The remainder of the revenue recognition is really over time. And unfortunately, we don't get to choose what type of revenue recognition we use, it's really due down to the accounting rules that dictate that. So let me talk a little bit about the business model and why cash flow is being impacted. So you really get a better understanding of what's going on and why in particular working capital has begun -- is built and why we believe our cash flows have been impacted, but really on a temporary basis.

或者換句話說，當我們在實際交付產品時確認收入時，這實際上比業內其他公司大得多。收入確認的其餘部分實際上是隨著時間的推移。不幸的是，我們無法選擇使用哪種類型的收入確認，這實際上取決於規定這一點的會計規則。那麼讓我談談商業模式以及現金流量受到影響的原因。因此，您真的可以更好地了解正在發生的事情，以及為什麼特別是營運資金已經開始——已經建立，以及為什麼我們認為我們的現金流受到了影響，但實際上是暫時的。

So in point-in-time revenue, we typically purchase inventory to support future customer deliveries, and we get orders largely based on our manufacturing lead times, which for products have historically been quite short. The models actually worked really well in the past and given us tremendous flexibility to deal with mix changes and quarter-to-quarter revenue volatility. And it's also a reason why actually our guidance track record historically has been so strong over many years because we've been able to actually absorb some of the bumps in the road from period to period.

因此，在時間點收入方面，我們通常購買庫存以支持未來的客戶交付，並且我們主要根據我們的製造交貨時間獲得訂單，這對於產品來說歷來都很短。這些模型實際上在過去非常有效，並為我們提供了極大的靈活性來應對組合變化和季度收入波動。這也是為什麼實際上我們的指導記錄在歷史上多年來一直如此強勁的原因，因為我們已經能夠實際吸收各個時期道路上的一些顛簸。

If I look back into 2021, 2021 is when semiconductor lead times quite suddenly and dramatically lengthened, which really disrupted our model as well as actually the whole industry. And unlike our customers and given our position in the industry, we typically don't receive multiyear rewards. So this became -- these lead times became a challenge for the industry last quarter, and it's clearly continued into this quarter as well. And it's a major reason that many of our customers' top and bottom lines have suddenly been impacted.

如果我回顧 2021 年，2021 年是半導體交貨時間突然大幅延長的時候，這確實擾亂了我們的模式以及整個行業。與我們的客戶不同，鑑於我們在行業中的地位，我們通常不會獲得多年獎勵。所以這變成了 - 這些交貨時間成為上個季度行業面臨的挑戰，而且顯然也持續到本季度。這是我們許多客戶的收入和利潤突然受到影響的主要原因。

The truth is, however, if you look at the -- what's actually happened, the seeds of this were sown many quarters ago, likely back in 2021 itself. It's just taken a little bit of time for it to actually show up at the prime contractor level. So the approach of short-term duration contracts, the lower tiers in the defense and industrial base is really an artifact of Defense Industrial Policy. And it's pretty clear that it needs to change if we're actually to build a resilient supply chain an industrial basis, the industry moves more towards a war production footing.

然而，事實是，如果你看看 - 實際發生的事情，它的種子是在很多季度前播下的，很可能早在 2021 年就播下了。它只需要一點時間就可以真正出現在總承包商級別。因此，短期合同的做法，國防和工業基地的較低層級確實是國防工業政策的產物。很明顯，如果我們真的要在工業基礎上建立一個有彈性的供應鏈，那麼它就需要改變，這個行業將更多地朝著戰爭生產的方向發展。

So back to Mercury. The programs that we're buying inventory for are typically defense programs of record where we've designed in and typically of sole-source positions. These programs are usually an LRIP or full rate production. And for these types of programs and products, we've definitely seen a build in inventory, semiconductor lead times, dramatically lengthen during the pandemic.

所以回到水星。我們為其購買庫存的程序通常是我們設計的記錄防禦程序，通常是單一來源位置。這些節目通常是 LRIP 或全速率製作。對於這些類型的程序和產品，我們肯定已經看到庫存增加，半導體交貨時間在大流行期間大大延長。

And we needed to purchase additional inventory way sooner than we normally would have to support our customer as well as our financial commitments. In addition, the semi industry more rapidly ended life to older legacy components, which meant we had to stock up on those too.

而且我們需要比通常需要更快地購買額外的庫存來支持我們的客戶以及我們的財務承諾。此外，半導體行業更快地結束了舊舊組件的使用壽命，這意味著我們也必須儲備這些組件。

As others have commented this earnings season, semiconductor part charges also held up planned product deliveries, which created more WIP -- inventory WIP. So the cash consumption has largely been in raw materials and WIP precipitated by the change in the semi industry. Now we view it as an investment in our future and that of our customers, but it's absolutely consumed cash.

正如其他人在本財報季評論的那樣，半導體零件費用也阻礙了計劃的產品交付，從而產生了更多的 WIP——庫存 WIP。因此，現金消耗主要集中在原材料和半導體行業變化所沉澱的 WIP 上。現在我們將其視為對我們和客戶未來的投資，但它絕對是消耗現金。

On the other side, related to unbilled or overtime revenue recognition, that's the remainder of how we recognize revenue. This is by far the most common type revenue recognition in the industry and the default for many of our customers.

另一方面，與未開票或加班收入確認有關，這是我們如何確認收入的其餘部分。這是迄今為止業內最常見的收入確認類型，也是我們許多客戶的默認設置。

Now we've used this model. It's been the correct accounting treatment as we success -- been successful in winning larger subsystems business, which has really been a significant driver of growth in the business. And in this area, we're buying inventory, but we're pegging it to a specific program. The challenge here, again, is really being supply related, including challenging supply quality, labor shortages and the dramatically longer semiconductor lead times, as I just mentioned.

現在我們已經使用了這個模型。這是我們成功的正確會計處理——成功贏得了更大的子系統業務，這確實是業務增長的重要推動力。在這個領域，我們正在購買庫存，但我們將其與特定程序掛鉤。正如我剛才提到的，這裡的挑戰再次真正與供應相關，包括具有挑戰性的供應質量、勞動力短缺和顯著延長的半導體交貨時間。

Also, certain of our legacy contracts meant that we couldn't collect cash until we actually ship the final units. And with the part shortages, we've ended up with partially built units that have also tied up working capital. So we believe that the cash tied up in inventory and unbilled receivables should start to release over time you're dramatically improving our cash flow and conversion rates. But we thought it was pretty important to really kind of dig down a level and just help people understand what's going on. So thanks for the question, Jonathan.

此外，我們的某些遺留合同意味著我們在實際運送最終產品之前無法收取現金。由於零件短缺，我們最終得到了部分建成的單位，這些單位也佔用了營運資金。因此，我們認為，隨著時間的推移，庫存和未開票應收賬款中佔用的現金應該開始釋放，您正在顯著改善我們的現金流和轉化率。但我們認為真正深入挖掘一個層次並幫助人們了解正在發生的事情是非常重要的。喬納森，謝謝你的提問。

Your next question comes from the line of Sheila Kahyaoglu with Jefferies.

你的下一個問題來自 Sheila Kahyaoglu 與 Jefferies 的合作。

It's actually Scott on for Sheila. But Mark, you talked about some of the importance of M&A for kind of 1MPACT initiative. I mean given the movement in rates we've seen year-to-date, how is the M&A environment shifted? And how are you kind of thinking about any change to the return profile you're looking at?

實際上是斯科特替希拉上場。但是馬克，你談到了併購對於 1MPACT 計劃的一些重要性。我的意思是，鑑於我們今年迄今看到的利率變動，併購環境發生了怎樣的變化？您如何看待您正在查看的退貨資料的任何變化？

Mike, do you want to take that one?

邁克，你要拿那個嗎？

Yes. Sure, Scott. I think that -- listen, we've definitely seen a move in rates over the last couple of weeks, months and quarters, and it's impacted the industry. I think that when you look at valuations in the industry just definitionally, based on higher discount rates, those could come down. That having been said, there are scarcity of assets out there. And for good assets, I think that they're going to continue to garner good multiples. And we've seen some of that recently. I think from our perspective, we're just going to keep doing what we've been doing, we're pretty disciplined in our M&A approach.

是的。當然，斯科特。我認為——聽著，在過去的幾週、幾個月和幾個季度裡，我們肯定看到了利率的變化，這影響了整個行業。我認為，當你從定義上看這個行業的估值時，基於更高的貼現率，這些估值可能會下降。話雖如此，那裡的資產稀缺。對於優質資產，我認為它們將繼續獲得良好的倍數。我們最近看到了其中的一些。我認為從我們的角度來看，我們將繼續做我們一直在做的事情，我們在併購方法上非常有紀律。

We're very careful with the cases where we're underwriting when we're doing our valuations, especially in the environment that we're in right now with a lot of uncertainty. So I think that from our perspective, we've got a good capability when it comes to M&A. And as I mentioned in my prepared remarks, when you look at the revolver we have, the $1.1 billion revolver, it does give us a lot of capacity to focus on M&A at attractive rates when the time is right.

在進行估值時，我們對承保的情況非常謹慎，尤其是在我們目前所處的環境中存在很多不確定性的情況下。所以我認為，從我們的角度來看，我們在併購方面有很好的能力。正如我在準備好的發言中提到的那樣，當你看看我們擁有的左輪手槍時，價值 11 億美元的左輪手槍，它確實讓我們有很大的能力在適當的時候以有吸引力的利率專注於併購。

And then maybe just a quick follow-up on 1MPACT. I mean, you're over a year into it now. I mean, what successes have you really been able to point to? And are there any areas where it's maybe been a little more challenging than you had previously expected?

然後可能只是對 1MPACT 的快速跟進。我的意思是，你現在已經一年多了。我的意思是，您真正能夠指出哪些成功？是否有任何領域比您之前預期的更具挑戰性？

Yes. So good question. So I think we've actually achieved a lot, right? So it began by us really simplifying and streamlining the business into the structure that we have today, we've dramatically strengthened the leadership team. And then we set about really focusing on some key areas, one was procurement. We stood up a direct -- or a procurement -- centralized procurement organization to help us actually take advantage of the scale that we have today. We put in place an AI and machine learning-based procurement tool. This has actually paid huge dividends in this supply -- challenging supply chain environment.

是的。好問題。所以我認為我們實際上取得了很多成就，對嗎？因此，我們真正開始將業務簡化和精簡為我們今天擁有的結構，我們已經大大加強了領導團隊。然後我們開始真正關註一些關鍵領域，一個是採購。我們建立了一個直接的——或採購的——集中採購組織來幫助我們真正利用我們今天擁有的規模。我們實施了基於人工智能和機器學習的採購工具。這實際上已經在這種供應 - 具有挑戰性的供應鏈環境中支付了巨大的紅利。

We still have a pricing organization inside of the business as well to be able to price our products more appropriately.

我們在業務內部仍然有一個定價組織，以便能夠更適當地為我們的產品定價。

Now those 2 items in the short term really helped to mitigate the 10% to 20% increases that we're seeing in semiconductor inflationary pressure. So we've been able to mitigate that a fair bit. We've also, I think, done a fair amount of work looking at R&D investment efficiency kind of going through project by project, eliminating any low-return projects to be able to ensure that we're focusing on the right areas.

現在，短期內這兩項確實有助於減輕我們在半導體通脹壓力中看到的 10% 至 20% 的增長。所以我們已經能夠在一定程度上減輕這種影響。我認為，我們還做了相當多的工作來研究研發投資效率，逐個項目進行，消除任何低迴報項目，以確保我們專注於正確的領域。

We've done a good job from an employee engagement and from a retention perspective. As you know, the labor market is very, very challenging right now with the Great Resignation. And I think we've done a good job retaining our employees as well as being able to hire the people that we need to continue to grow the business. We've also made substantial progress looking at our facility footprint. We wrapped off just a few of the reductions in terms of the number of facilities that we've already done over the course of the last 12 months. And we've got several others that we expect to complete by the end of this fiscal year.

從員工敬業度和保留的角度來看，我們做得很好。如您所知，由於大辭職，勞動力市場現在非常非常具有挑戰性。而且我認為我們在留住員工方面做得很好，並且能夠僱用我們繼續發展業務所需的人員。我們在設施足跡方面也取得了實質性進展。在過去 12 個月的過程中，我們已經完成了一些設施數量的減少。我們還有其他幾項預計將在本財年末完成。

Over and above that, I would say that we've done a tremendous amount of work on the digital transformation. We're just completing the rollout of a new digital manufacturing execution system. We are in the process of migrating our engineering tools to the Amazon Gulf high Cloud, which is going to give us better productivity and scalability and efficiency over time.

除此之外，我想說我們在數字化轉型方面做了大量工作。我們剛剛完成了新的數字製造執行系統的推出。我們正在將我們的工程工具遷移到 Amazon Gulf high Cloud，這將隨著時間的推移為我們提供更好的生產力、可擴展性和效率。

And so we've actually done a lot. Unfortunately, I think we're not really seeing the benefits of what we've done, just given the challenges that we've seen around productivity and the supply chain, which are linked. But over the course of the next 5 years, we do believe that we're going to see substantial margin expansion as well as substantially improved cash flow generation and yield.

所以我們實際上做了很多。不幸的是，我認為我們並沒有真正看到我們所做的事情帶來的好處，只是考慮到我們在生產力和供應鏈方面看到的挑戰，這些挑戰是相互關聯的。但在接下來的 5 年裡，我們確實相信我們將看到利潤率大幅增長以及現金流量產生和收益率大幅提高。

Your next question comes from the line of Michael Ciarmoli with Truist Securities.

你的下一個問題來自 Truist Securities 的 Michael Ciarmoli。

Mark, I know you've spent a ton of time here on the free cash flow. But just -- I mean, you've got customers holding back payments. And I mean when I hear customers, I mean, are we thinking the prime contractors? I mean I'm just trying to better understand what that dynamic is, like they're holding back payment and simultaneously, you're investing in inventory and working capital to support these programs, yet you're taking all the risk on your balance sheet with your cash flow while they're all basically buying back stock? I mean just how is that dynamic working among the customers?

馬克，我知道你在這里花了很多時間研究自由現金流。但只是——我的意思是，你有客戶拖欠付款。我的意思是，當我聽到客戶時，我的意思是，我們是否在考慮主要承包商？我的意思是我只是想更好地理解這種動態是什麼，就像他們在拖延付款一樣，同時，您正在投資庫存和營運資金來支持這些計劃，但您正在承擔所有風險當他們基本上都在回購股票時，你的現金流量表？我的意思是這種動態在客戶中是如何運作的？

Yes, it's a good question. Let me kind of maybe touch on it at a high level, and I'm sure Mike will contribute. So we did see some holdbacks at the end of the quarter. So I'll give you an example, right? One particular customer paid us for 2 things. And then the third, which was also due, we got paid on the first day of the new quarter, right? So it's not like that we're holding for long periods of time, but we definitely saw some holdbacks at the end of the quarter. The other thing that affected us, Mike, was also just the timing of specific orders. And in particular, our 3 largest orders in the first quarter all ended up moving to the right and taking the revenue and the cash associated with those outside of the cash window.

是的，這是個好問題。讓我稍微談談它，我相信邁克會做出貢獻。因此，我們確實在本季度末看到了一些阻礙。那我給你舉個例子，對吧？一位特定的客戶向我們支付了兩件事。然後是第三個，也是到期的，我們在新季度的第一天拿到了工資，對吧？所以這並不是說我們持有很長時間，但我們在本季度末肯定看到了一些阻礙。影響我們的另一件事，邁克，也只是具體訂單的時間安排。特別是，我們在第一季度的 3 個最大訂單最終都向右移動，並佔用了與現金窗口之外的訂單相關的收入和現金。

So it's a number of things that's going on. But look, I think the last 2 quarters, at an industry level, Mike, in terms of revenue and top and bottom line have been challenging overall. And I think we're seeing some changes in behaviors associated with that. So Mike, I don't know if you would like to maybe add to that.

所以有很多事情正在發生。但是，我認為過去兩個季度，在行業層面上，邁克，就收入、收入和利潤而言，總體上一直具有挑戰性。我認為我們正在看到與此相關的一些行為變化。邁克，我不知道你是否願意補充一點。

Yes. No, I think you hit on it. I mean, Mike, the only thing I would add is that the business models and market spend a good bit of time going through it between us and our prime customers are different, and he just talked about that. We are doing things to change the dynamic, especially around unbilled receivables. So we're negotiating with customers now to get more favorable milestones and progress payments on new and existing programs. We've got updated processes internally. So we're trying to change the way we contract with customers. So it's not all of our balance sheet being used to support these programs. And so that's why we think we're going to see some unwinding of the working capital going forward.

是的。不，我想你中招了。我的意思是，邁克，我唯一要補充的是，我們和我們的主要客戶之間的商業模式和市場花費了大量時間是不同的，他剛剛談到了這一點。我們正在做一些事情來改變動態，尤其是圍繞未開票的應收賬款。因此，我們現在正在與客戶談判，以獲得更有利的里程碑和新項目和現有項目的進度付款。我們已經在內部更新了流程。所以我們正在努力改變我們與客戶簽訂合同的方式。因此，並不是我們所有的資產負債表都被用來支持這些項目。因此，這就是為什麼我們認為我們將看到未來營運資金有所減少的原因。

I mean if -- yes. If you think of what we've done from a cash thing, there's 5 things that we're focused on, right? We're obviously looking to drive the cash conversion, burning down the unbilled receivables and inventory. But doing it in a way in which it doesn't put revenue execution and on-time delivery at risk, right? So for every action there is usually a reaction. We have absolutely enhanced our demand planning processes as part of 1MPACT. We've put in place leverageable and scalable tools to drive the demand signal accuracy and much earlier identification of the commitments that we need to make on materials or to focus in on those part shortages given the unprecedented lead times.

我的意思是如果——是的。如果你想想我們在現金方面所做的事情，我們會專注於 5 件事，對嗎？我們顯然希望推動現金轉換，燒掉未開票的應收賬款和庫存。但這樣做不會危及收入執行和準時交付，對吧？所以對於每一個動作通常都有一個反應。作為 1MPACT 的一部分，我們絕對增強了我們的需求規劃流程。我們已經部署了可利用和可擴展的工具來提高需求信號的準確性，並更早地確定我們需要在材料上做出的承諾，或者在前所未有的交貨時間內專注於那些零件短缺。

The third thing that we've got a major focus on is on negotiating milestones with customers. And as part of the issue that we've had on some of the legacy contracts is when we shifted towards the subsystems revenue, we didn't necessarily have milestone or performance or progress payments. We're now going back and making sure that we got those all in the commercial side of the business, we're actually getting cash up front.

我們主要關注的第三件事是與客戶協商里程碑。作為我們在一些遺留合同上遇到的問題的一部分，當我們轉向子系統收入時，我們不一定有里程碑或績效或進度付款。我們現在要回去確保我們在業務的商業方面得到了所有這些，我們實際上是在預付現金。

We're also prioritizing the labor resources to make sure that we can actually liquidate those unbilled balances as well. Labor is critically important, right? So I think we're very much, as I mentioned, as part of the 1MPACT conversation, focused on retention and resourcing to ensure that we're actually mitigating any execution challenges related to shortages and staffing.

我們還在優先考慮勞動力資源，以確保我們也可以實際清算那些未開票的餘額。勞動力至關重要，對吧？所以我認為，正如我提到的，作為 1MPACT 對話的一部分，我們非常關注保留和資源配置，以確保我們實際上正在減輕與短缺和人員配置相關的任何執行挑戰。

And then finally, I think over the longer term, as we're moving up the industry and the value chain and going after much larger proposals that we've done in the past, we're very much focused on strengthening our bid proposal and capture processes to drive better terms and protections for Mercury in the future. So we're all over it. And I think, as Mike said, we think that the cash flow is bottoming in Q1, should improve in Q2 and as the year progresses.

最後，我認為從長遠來看，隨著我們在行業和價值鏈中向上移動，並追求我們過去所做的更大的提案，我們非常專注於加強我們的投標提案和捕獲流程以在未來為 Mercury 提供更好的條款和保護。所以我們都結束了。而且我認為，正如邁克所說，我們認為現金流在第一季度觸底，第二季度和隨著時間的推移應該會有所改善。

Got it. That's helpful. And just one quick follow-up on related. On the budget dynamic and the continuing resolution, do you guys -- your kind of internal planning, do you think we get a full bill before year-end or based on midterm, if we see a complete turnover either red wave or blue wave, do you think any signing of the bill we'll have to wait for new Congress to get seated? So we run through maybe end of January, February time frame?

知道了。這很有幫助。並且只是對相關的快速跟進。關於預算動態和持續解決方案，你們 - 你們的內部計劃，如果我們看到完整的營業額，無論是紅色波浪還是藍色波浪，你認為我們是在年底前還是在中期得到完整的賬單，您是否認為我們必須等待新國會就座才能簽署該法案？所以我們可能會在 1 月底、2 月的時間框架內運行？

I think our operative assumption right now is that we get the bill before year-end, but your guess is as good as mine, Mike, right, on the -- what the election results are going to be and how that might affect things. So yes, we're expecting a relatively short [CR] which we've obviously taken into account in terms of our guidance.

我認為我們現在的操作假設是我們在年底前得到該法案，但邁克，你的猜測和我的一樣好——選舉結果將是什麼以及這可能會如何影響事情。所以是的，我們期待一個相對較短的 [CR]，我們在指導方面顯然已經考慮到了這一點。

Your next question comes from the line of Austin Moeller with Canaccord.

您的下一個問題來自 Austin Moeller 與 Canaccord 的合作。

Just my first question here. Do you expect that pressure on some of the NATO European allies due to the economy and inflation could delay new orders for modernization programs by maybe a year or more relative the U.S.?

這只是我的第一個問題。您認為經濟和通貨膨脹對一些北約歐洲盟國造成的壓力是否會使現代化計劃的新訂單相對於美國推遲一年或更長時間？

Yes, it's a good question. I think my gut would say probably not. The -- clearly, with what's happening over in the Ukraine, the threat environment that usually kind of dictates both the altitude and the timing of defense spending. And clearly, 9 months into this, the situation is not great. So my gut is, is that we're going to continue to see increased spending in Europe. And whether it's immediate or it takes a little bit longer, time will tell. But I think they're acting with a sense of urgency, Austin.

是的，這是個好問題。我想我的直覺可能不會。很明顯，隨著烏克蘭正在發生的事情，威脅環境通常會決定國防開支的高度和時間。很明顯，進入這 9 個月後，情況並不好。所以我的直覺是，我們將繼續看到歐洲支出的增加。無論是立即的還是需要更長的時間，時間都會證明一切。但我認為他們是帶著緊迫感行事的，奧斯汀。

Okay. That makes sense. And can you call out any specific key program deliveries in the second half that you anticipate will support the step-up in free cash flow?

好的。這就說得通了。您能否在下半年提出您預計將支持自由現金流增加的任何具體關鍵項目交付？

So in the second half, I think we've got some pretty significant programs. Just kind of rattling through a few off the top of my head, we've got Filthy Buzzard. That is beginning to ramp again. We're expecting a very large IDIQ this quarter as well as delivery orders ramping up as the year progresses. I think F-16 will be a significant contributor. The large new EO/IR program, the large microelectronics program. So there's a number of programs that we expect to ramp in the second half of the year.

所以在下半年，我認為我們有一些非常重要的計劃。只是在我的腦海中匆匆忙忙地翻了幾下，我們就有了 Filthy Buzzard。那又開始上升了。我們預計本季度的 IDIQ 將非常大，而且隨著時間的推移，交付訂單也會增加。我認為 F-16 將是一個重要的貢獻者。大型新 EO/IR 計劃，大型微電子計劃。因此，我們預計將在今年下半年推出許多計劃。

Yes. And Austin, the only thing I would add on that too is from a working capital release perspective, while there's orders that we need to drive revenue and bookings. There's other things that we're working on from a release of working capital perspective. And we've seen unbilled and programs being delayed because of supply chain delays because of contract definitization. And as we work through those in the second half, that will also help the working capital in addition to the growth programs that Mark just described.

是的。奧斯汀，我唯一要補充的是，從營運資金釋放的角度來看，我們需要一些訂單來推動收入和預訂。從釋放營運資金的角度來看，我們還在做其他事情。而且我們已經看到由於合同定義化導致供應鏈延遲而導致未開票和計劃被延遲。當我們在下半年完成這些工作時，除了馬克剛才描述的增長計劃之外，這也將有助於營運資金。

Mr. Aslett, it appears there are no further questions. Therefore, I would like to turn the call back over to you for any closing remarks.

Aslett 先生，看來沒有其他問題了。因此，我想將電話轉回給您，請您作任何結束語。

Okay. Well, thank you very much, everyone, for joining us here this evening. We look forward to speaking to you again next quarter. Thank you.

好的。好吧，非常感謝大家今晚加入我們。我們期待下個季度再次與您交談。謝謝你。

This concludes today's conference call. Thank you for attending. You may now disconnect.

今天的電話會議到此結束。感謝您的出席。您現在可以斷開連接。