Mercury Systems Inc (MRCY) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to the Mercury Systems Second 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 財年第二季度電話會議。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. I hope you've had the chance to review the press releases we issued earlier this afternoon. If not, you can find them 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 Presentation.

下午好，感謝您加入我們。我希望您有機會閱讀我們今天下午早些時候發布的新聞稿。如果沒有，您可以在我們的網站 mrcy.com 上找到它們。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“事件和演示”下。

With me today is our President and Chief Executive Officer, Mark Aslett. I'm also very pleased to welcome Michelle McCarthy to the call. Serving as Mercury's Senior Vice President and Chief Accounting Officer for the past 5 years, Michelle has been an active and valuable member of our leadership team. I'm looking forward to working closely with Michelle in her new position as interim Chief Financial Officer, to ensure a seamless transition prior to my departure in February.

今天和我一起的是我們的總裁兼首席執行官 Mark Aslett。我也非常高興地歡迎 Michelle McCarthy 加入電話會議。在過去 5 年擔任 Mercury 的高級副總裁兼首席會計官期間，Michelle 一直是我們領導團隊中活躍且有價值的成員。我期待著在米歇爾擔任臨時首席財務官的新職位上與她密切合作，以確保在我 2 月離職之前順利過渡。

Turning to Slide 2 in the presentation, I'd 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. 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.

轉到演示文稿中的幻燈片 2，我想提醒您，今天的演示文稿包含前瞻性陳述，包括有關 Mercury 的財務前景、未來計劃、目標、業務前景和預期財務業績的信息。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。

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. A reconciliation of these non-GAAP metrics is included as an appendix to today's slide presentation and in the earnings press release.

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，我們還將討論幾種非 GAAP 財務指標，具體來說，調整後的收入、調整後的每股收益、調整後的每股收益EBITDA、自由現金流、有機收入和收購收入。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。

I'll now turn the call over to Mercury's President and CEO, Mark Aslett. Please turn to Slide 3.

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. Typically, I'd start our prepared remarks with a review of our results for the quarter. However, given the other news we've announced today, I'll begin with key takeaways from those announcements. I'll then review the business. Mike will cover our financial results and guidance, and then we'll open it up for your questions. .

謝謝，邁克。大家下午好，感謝您加入我們。通常，我會先回顧一下本季度的業績，然後開始我們準備好的評論。然而，考慮到我們今天宣布的其他消息，我將從這些公告的主要內容開始。然後我會審查業務。邁克將介紹我們的財務結果和指導，然後我們將公開提問。 .

The Board's decision to initiate a review of strategic alternatives underscores our commitment to exploring all available avenues to enhance shareholder value. We've engaged 2 leading investment banks to pursue a range of options, including a potential sale. During the Board evaluation, we'll continue to execute on our strategic plan for growth and value creation. As you know, we need to let this process play out. And as such, we won't have further comment on it today. I want to emphasize that there can be no assurance that the transaction will result from the review. We also don't intend to disclose developments relating to this process unless and until the Board has approved a specific agreement or transaction or has terminated its review.

董事會決定啟動對戰略備選方案的審查強調了我們致力於探索所有可用途徑以提高股東價值的承諾。我們已聘請 2 家領先的投資銀行尋求一系列選擇，包括潛在的出售。在董事會評估期間，我們將繼續執行我們的增長和價值創造戰略計劃。如您所知，我們需要讓這個過程發揮作用。因此，我們今天不會對此發表進一步評論。我想強調的是，不能保證審查會導致交易。我們也不打算披露與此流程相關的進展，除非且直到董事會批准特定協議或交易或終止其審查。

Now let me say a few words about Mike. As you saw from our announcement, Mike has decided to step down from Mercury to accept an opportunity as a privately held company headquartered in Virginia, where he and his family reside. Mike has been a great partner for the past 8 years. We've made significant contributions to Mercury, including helping drive our M&A strategy and many acquisitions. Mike, on behalf of myself and the entire Mercury team, we wish you all the best in your new role. We've initiated a search for a permanent successor with the assistance of a leading executive search firm. We're fortunate to have a deep bench of talent on our finance team during this transition period.

現在讓我談談邁克。正如您從我們的公告中看到的那樣，Mike 已決定從 Mercury 辭職，接受一個總部位於弗吉尼亞州的私人控股公司的機會，他和他的家人居住在那裡。在過去的 8 年裡，Mike 一直是一位出色的合作夥伴。我們為 Mercury 做出了重大貢獻，包括幫助推動我們的併購戰略和許多收購。 Mike，我們代表我自己和整個 Mercury 團隊祝愿你在新職位上一切順利。在一家領先的獵頭公司的協助下，我們已經開始尋找永久繼任者。在此過渡期間，我們很幸運能夠在我們的財務團隊中擁有大量人才。

In addition to Michelle McCarthy's appointment as interim CFO, Nelson Erickson, Senior Vice President, Strategy and Corporate Development, will formally assume responsibility for Investor Relations. Last week, we also announced that Vivek Upadhyaya, who's joined Mercury as our Vice President of Financial Planning and Analysis, further bolstering our team. Over the coming weeks, Mike will work closely with Michelle, Nelson, Vivek and I to ensure a seamless handoff.

除了 Michelle McCarthy 被任命為臨時首席財務官外，負責戰略和企業發展的高級副總裁 Nelson Erickson 將正式負責投資者關係。上週，我們還宣布 Vivek Upadhyaya 加入 Mercury，擔任我們的財務規劃和分析副總裁，進一步加強了我們的團隊。在接下來的幾週內，Mike 將與 Michelle、Nelson、Vivek 和我密切合作，以確保無縫切換。

With that, let's discuss our second quarter results. Turning to Slide 4. Mercury's second quarter revenue was in line with our guidance, growing 4% year-over-year. More importantly, we returned to organic growth and generated positive cash flow in the quarter. GAAP net loss and loss per share as well as adjusted EBITDA and adjusted earnings per share go short of guidance. This was primarily due to an unforeseen delay in funding to our customer for a large FMS program. After this delay, which reduced Q2 revenue and margin by $10 million and $7 million, respectively, our results would have been up or above the high end of our Q2 guidance, which then resulted in lower Q3 guidance also, there's an additional $10 million of revenue and $7 million margin moved to fiscal '24. We're obviously disappointed with the delay in the short-term impact anticipated for this fiscal year. This is a large program and the timing is outside of our immediate control.

有了這個，讓我們討論我們的第二季度業績。轉到幻燈片 4。Mercury 第二季度的收入符合我們的指導，同比增長 4%。更重要的是，我們在本季度恢復了有機增長並產生了正現金流。 GAAP 淨虧損和每股虧損以及調整後的 EBITDA 和調整後的每股收益均低於預期。這主要是由於無法預料地延遲為我們的客戶提供大型 FMS 計劃的資金。在這次延遲之後，第二季度的收入和利潤率分別減少了 1000 萬美元和 700 萬美元，我們的業績本應達到或超過我們第二季度指導的高端，然後導致第三季度指導也降低，另外還有 1000 萬美元收入和 700 萬美元的利潤轉移到 24 財年。我們顯然對本財年預期的短期影響延遲感到失望。這是一個大型項目，時間不在我們的直接控制範圍內。

That said, our customers confident that their funding issues will ultimately be resolved, allowing us to recognize the entire $20 million in revenue and $14 million of margin early in this new fiscal year. Working with the customer, we've rotated in other related opportunities that we expect will partially offset the impact of this delay in the second half of fiscal '23. As we consider in the back half in our full fiscal year guidance, we are shifting our outlook to incorporate this program timing and the prolonged supply chain impacts, resulting in program delays and inefficiencies, which are temporarily affecting margins.

也就是說，我們的客戶相信他們的資金問題最終會得到解決，這使我們能夠在這個新財政年度的早期確認全部 2000 萬美元的收入和 1400 萬美元的利潤。與客戶合作，我們輪換了其他相關機會，我們預計這些機會將部分抵消 23 財年下半年這一延遲的影響。正如我們在整個財政年度指導的後半部分所考慮的那樣，我們正在改變我們的前景，以納入該計劃的時間安排和長期的供應鏈影響，從而導致計劃延遲和效率低下，這會暫時影響利潤率。

On the plus side, we believe that revenue is currently trending above the midpoint of our fiscal '23 guidance, while net income and adjusted EBITDA are now expected to be towards the low end. We are now in our fourth fiscal year dealing with these impacts. In addition to program delays and related inefficiencies, we continue to face long semiconductor lead times, tight labor market and inflation. These challenges, however, are not related to end market demand, which remains strong. They're largely timing related, they're short term, and they're not unique to Mercury. We continue to execute on our plan to control what we can in this environment, and we're optimistic about the future given our current positioning. Mercury's bookings for Q2 increased 14% year-over-year, the largest in F-35, F-18, LTAMDS and the classified C2 program. In nearly $60 million, the F-35 order for advanced microelectronics capabilities was the largest booking in the company's history.

從好的方面來看，我們認為收入目前趨於高於我們 23 財年指導的中點，而淨收入和調整後的 EBITDA 現在預計將接近低端。我們現在處於處理這些影響的第四個財政年度。除了項目延遲和相關效率低下之外，我們還繼續面臨半導體交貨時間長、勞動力市場緊張和通貨膨脹等問題。然而，這些挑戰與仍然強勁的終端市場需求無關。它們在很大程度上與時間有關，它們是短期的，而且它們並不是水星獨有的。我們將繼續執行我們的計劃，以控制我們在這種環境下所能做的事情，鑑於我們目前的定位，我們對未來持樂觀態度。 Mercury 第二季度的預訂量同比增長 14%，是 F-35、F-18、LTAMDS 和機密 C2 計劃中最大的。價值近 6000 萬美元的 F-35 先進微電子功能訂單是該公司歷史上最大的一筆訂單。

Driven by the growth in bookings, our book-to-bill is 1.18 in the quarter and 1.16 over the last 12 months. Backlog grew 17% year-over-year to a record $1.12 billion, which positions us well for future growth. Despite the SMS customer funding delay, our Q2 revenue increased 4% year-over-year. Organic revenue turned positive, growing 1% versus a 13% decline in Q2 of fiscal '22. We expect to return to organic growth for the year as a whole as expected.

在預訂量增長的推動下，我們本季度的訂單出貨比為 1.18，過去 12 個月為 1.16。積壓訂單同比增長 17%，達到創紀錄的 11.2 億美元，這為我們未來的增長奠定了良好的基礎。儘管 SMS 客戶資金延遲，我們第二季度的收入同比增長了 4%。有機收入轉正，增長 1%，而 22 財年第二季度下降 13%。我們預計全年將如預期恢復有機增長。

Our largest revenue programs in the quarter were F-35, F-16, NDSA tranche trucking layer, C8 and SAD. Q2 GAAP net income was negative and adjusted EBITDA declined year-over-year. Both were below guidance, primarily due to the FMS customer funding delay. Although revenue is trending above our fiscal '23 guidance midpoint, other financial measures, including adjusted EBITDA, are trending towards the low end, as I said, largely due to program delays and related inefficiencies. We believe these impacts are temporary in nature. We expect margins to increase as supply chain conditions begin to improve and as we realize further benefits from impact and the continued shift in our program mix through development to production.

本季度我們最大的收入計劃是 F-35、F-16、NDSA 分段卡車運輸層、C8 和 SAD。第二季度 GAAP 淨收入為負，調整後的 EBITDA 同比下降。兩者均低於指引，主要是由於 FMS 客戶資金延遲。儘管收入趨勢高於我們的 23 財年指導中點，但正如我所說，其他財務指標（包括調整後的 EBITDA）正趨向低端，這主要是由於計劃延遲和相關效率低下。我們認為這些影響本質上是暫時的。我們預計，隨著供應鏈條件開始改善，以及我們從影響中獲益更多，以及我們的項目組合從開發到生產的持續轉變，我們預計利潤率將會增加。

Operating and free cash flow for Q2 were positive, a substantial improvement sequentially. We expect to deliver a breakeven to slightly positive free cash flow for FY '23, including the impact of the R&D tax legislation.

第二季度的運營和自由現金流為正，環比大幅改善。我們預計 23 財年的自由現金流量將實現盈虧平衡至略微正的自由現金流，包括研發稅立法的影響。

Turning to Slide 5. The defense appropriations bill was approved after the midterm elections as expected, resulting in substantial spending increases in response to national security threats. That said, the House GOP rules package adopted this month and reported deal between Speaker McCarthy and the Freedom Caucus create risk to government FY '24 discretionary spending, including defense.

轉到幻燈片 5。國防撥款法案如期在中期選舉後獲得批准，導致支出大幅增加以應對國家安全威脅。也就是說，眾議院共和黨本月通過的一攬子規則以及議長麥卡錫和自由核心小組之間的協議給政府 24 財年的可自由支配開支（包括國防）帶來了風險。

An extended budget continuing resolution appears to be the base case scenario for GFY24, including the potential for a full year CR. However, although this does exist, we don't expect Congress to approve a reduction in DoD appropriations. Given the geopolitical challenges we face, there appears to be strong underlying Bipartisan support for increased defense spending. Looking ahead longer term, we believe the defense spending outlook remains positive, both domestically and internationally and that Mercury is well positioned to benefit in this environment. The growth in demand for the compute capability on board military platform shows no sign of slowing. We also stand debenture to the ongoing push for platform electronification. We believe that we're well positioned to continue to benefit from long-term industry trends. These include supply chain delayering and ensuring as well as increased outsourcing at the subsystem level.

延長預算的持續解決方案似乎是 GFY24 的基本情景，包括全年 CR 的可能性。然而，儘管這確實存在，但我們預計國會不會批准減少國防部撥款。鑑於我們面臨的地緣政治挑戰，兩黨似乎強烈支持增加國防開支。展望更長期，我們認為國防開支前景在國內和國際上都保持樂觀，並且 Mercury 處於有利地位，可以在這種環境中受益。對艦載軍事平台計算能力的需求增長沒有放緩的跡象。我們還支持持續推動平台電子化的債券。我們相信，我們有能力繼續從長期行業趨勢中受益。這些措施包括供應鏈延遲和確保以及在子系統級別增加外包。

Our addressable market has increased substantially, largely driven by our strategic move into mission systems and the potential to deliver innovative processing solutions at chip-scale. Our model sitting at the intersection of high-tech and defense positions us well.

我們的可尋址市場大幅增加，這在很大程度上是由於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。我們的模型位於高科技和國防的交叉點，使我們處於有利地位。

Turning to Slide 6. The industry environment continues to be challenging in the short term. Despite incremental improvement in the second quarter, supply chain constraints continue to affect program timing and efficiency. Mercury's sophisticated end-to-end processing platform pass some of the most critical A&D missions. High-end processing represents about 70% of the business. This is where Mercury likely has the largest opportunity to grow over the next 5 years. Prior to the pandemic, semiconductor processing lead times were 10 to 12 weeks. They increased rapidly in the second half of fiscal '21 and now range from 36 to 72 weeks. Although current lead times on average are slightly shorter than in Q1, we don't expect to see a significant improvement until the second half of fiscal '24.

轉到幻燈片 6。行業環境在短期內仍然充滿挑戰。儘管第二季度有所改善，但供應鏈限制繼續影響計劃時間和效率。 Mercury 先進的端到端處理平台通過了一些最關鍵的 A&D 任務。高端加工約佔業務的 70%。這是 Mercury 在未來 5 年內可能擁有最大增長機會的地方。在大流行之前，半導體加工的交貨時間為 10 到 12 週。它們在 21 財年下半年迅速增加，現在從 36 周到 72 週不等。儘管目前的平均交貨時間比第一季度略短，但我們預計在 24 財年下半年之前不會看到顯著改善。

Semiconductor inflationary pressures remain a challenge as well. Semiconductors equate to 38% of our direct supplier spend far more than our peers, we believe. We're making good progress in mitigating the impact of higher semiconductor costs. As part of our impact program, we established a centralized procurement organization, which enabled us to improve our purchasing efficiency, while helping us deal with the effects of supply chain disruption. We also established a pricing team, repriced standard products and incorporated price adjusted mechanisms in our rate base businesses and multiyear proposals.

半導體通脹壓力仍然是一個挑戰。我們認為，半導體占我們直接供應商支出的 38%，遠遠超過我們的同行。我們在減輕半導體成本上漲的影響方面取得了良好進展。作為影響計劃的一部分，我們建立了一個集中採購組織，這使我們能夠提高采購效率，同時幫助我們應對供應鏈中斷的影響。我們還成立了定價團隊，對標準產品重新定價，並將價格調整機制納入我們的費率基礎業務和多年期提案。

In addition, we implemented an across-the-board price increase in our microelectronics business. Through the pandemic, we've used the strength of our balance sheet to invest in new working capital necessary to mitigate supply chain risk as best we can. As a result, we positioned Mercury to deliver against customer commitments and generate stronger results over the time.

此外，我們對微電子業務進行了全面提價。通過大流行，我們利用資產負債表的實力來投資必要的新營運資金，以盡我們所能減輕供應鏈風險。因此，我們將 Mercury 定位為兌現客戶承諾並隨著時間的推移產生更強大的結果。

Turning to Slide 7. We believe that we've entered a multiyear period of accelerating growth and profitability. Demand is improving as evidenced by our strong LTM bookings and record backlog. The next several years could resemble the period post sequestration in 2013, absent a significant budget events in GFY24. Similar to the enhancements that we made in our business at that time, through impact, we're strengthening our fundamentals once again.

轉到幻燈片 7。我們相信我們已經進入了加速增長和盈利的多年期。我們強勁的 LTM 預訂和創紀錄的積壓證明了需求正在改善。未來幾年可能類似於 2013 年封存後的時期，沒有 GFY24 的重大預算事件。與我們當時在業務中所做的改進類似，通過影響，我們再次加強了我們的基礎。

We launched impact early in fiscal '22 and it's evolved substantially since then. We've begun by streamlining our organizational structure and strengthening the leadership team and continue to do so. We also focus on margin expansion initiatives, and we're now pushing our execution deeper into the business. With the recent addition of Allen Couture, Head of Execution Excellence, and Mitch Stevison taking over our mission business last quarter, we've doubled down on these assets, keeping to drive continuous improvement around supply chain, operations and program execution. These areas have all been affected by the cumulative impact of operating during the pandemic, with the resulting program delays and related inefficiencies temporarily impacting margins. We believe these headwinds will diminish the supply chain and labor market conditions continue to improve leading to marketing expansion.

我們在 22 財年早期推出了影響力，此後取得了長足的發展。我們已經開始精簡我們的組織結構並加強領導團隊，並將繼續這樣做。我們還專注於利潤擴張計劃，我們現在正在將我們的執行力推向更深入的業務。最近，卓越執行主管 Allen Couture 和 Mitch Stevison 上個季度接管了我們的任務業務，我們在這些資產上加倍投入，繼續推動圍繞供應鏈、運營和項目執行的持續改進。這些領域都受到了大流行期間運營的累積影響，由此產生的項目延遲和相關的低效率暫時影響了利潤率。我們認為這些逆風將削弱供應鍊和勞動力市場狀況繼續改善導致營銷擴張。

At the same time, we continue to focus on supply chain risk mitigation, working capital burn down and accelerated cash release. We believe that substantial cash will move off the balance sheet as a supply chain-related impacts on the business begin to unwind.

與此同時，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。我們認為，隨著與供應鏈相關的業務影響開始緩解，大量現金將從資產負債表中轉移。

Another initiative is R&D investment efficiency and returns. In addition, our digital transformation efforts in engineering, operations and back office will help improve our cost structure and give us better productivity, scalability and efficiency over time. We're also moving on our manufacturing facility footprint strategy. We consolidated our Mesa, Arizona facility into the Phoenix site in Q2 and released 2 additional facilities as planned.

另一項舉措是研發投資效率和回報。此外，我們在工程、運營和後台部門的數字化轉型工作將有助於改善我們的成本結構，並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。我們還在推進我們的製造工廠足跡戰略。我們在第二季度將我們位於亞利桑那州梅薩的設施整合到了鳳凰城，並按計劃增設了 2 個設施。

With that, I'd like to turn the call over to Mike. Mike?

有了這個，我想把電話轉給邁克。麥克風？

Thank you, Mark, and good afternoon, again, everyone. Before I discuss our results, I do want to say a few words about my decision to leave Mercury. Mercury has been a big part of my life for the better part of the decade. Since I started at the company in 2014, we've grown the business organically, completed 15 acquisitions and assembled a set of capabilities that uniquely position us in the defense industry. It's been a tremendous opportunity to be Mercury's CFO, working alongside Mark and the rest of our talented leadership team during this time.

謝謝馬克，大家下午好。在我討論我們的結果之前，我想就我離開 Mercury 的決定說幾句話。在這十年的大部分時間裡，水星一直是我生活的重要組成部分。自從我 2014 年開始在公司工作以來，我們有機地發展了業務，完成了 15 次收購，並積累了一系列能力，使我們在國防工業中獨樹一幟。成為 Mercury 的首席財務官，在這段時間裡與 Mark 和我們才華橫溢的領導團隊的其他成員一起工作，這是一個巨大的機會。

A few months ago, I was approached by a company that had recently been taken private, based closer to my home in Virginia. This is not something I sought out. But when the opportunity was presented to me, I felt at this point in my career, it was something I had to explore. There's never a great time for a move like this, but I'm firmly committed to making this transition a success. Michelle and I have been in lot step for years, and I've developed our finance, so I know how much talent there is at Mercury. I wouldn't have made the decision to leave if I didn't have complete confidence in this team and in the company's ability to enhance value for all shareholders, including me. To our investors and analysts, it's been a pleasure getting to know all of you over the years.

幾個月前，一家最近被私有化的公司找到了我，該公司離我在弗吉尼亞州的家很近。這不是我想要的。但是當機會出現在我面前時，我覺得在我職業生涯的這個階段，這是我必須去探索的東西。從來沒有像這樣採取行動的好時機，但我堅定地致力於使這一轉變取得成功。 Michelle 和我多年來一直保持密切聯繫，我開發了我們的財務，所以我知道 Mercury 有多少人才。如果我對這個團隊以及公司為包括我在內的所有股東提升價值的能力沒有完全的信心，我就不會做出離開的決定。對於我們的投資者和分析師來說，很高興多年來認識你們所有人。

Now turning to Mercury's results. As always, I'll begin with our second quarter actuals and then move to our Q3 and fiscal '23 guidance. As Mark discussed, Mercury delivered revenue in line with guidance, returning to organic growth and generating positive cash flow in Q2. Demand continues to be strong as we enter the second half. Our 12-month backlog was up 34% compared to Q2 last year, and up 10% compared to last quarter, providing us solid visibility into the remainder of the year.

現在轉向 Mercury 的結果。與往常一樣，我將從我們的第二季度實際情況開始，然後轉向我們的第三季度和 23 財年指導。正如 Mark 所討論的那樣，Mercury 在第二季度實現了符合指導的收入，恢復了有機增長並產生了正現金流。隨著我們進入下半年，需求繼續強勁。與去年第二季度相比，我們 12 個月的積壓訂單增加了 34%，與上一季度相比增加了 10%，這為我們提供了對今年剩餘時間的可靠可見性。

For fiscal '23, we expect to deliver increased bookings versus fiscal '22, a positive book-to-bill, a record $1 billion in revenues and positive organic growth. As Mark said, we expect our performance to be heavily weighted to the fourth quarter. We believe that revenue is currently trending above the midpoint of our fiscal '23 guidance, while adjusted EBITDA is trending towards the low end, as I'll discuss. Demand remains strong, supported by our position on well-funded franchise programs. However, supply chain constraints, labor availability and inflation continue to contribute to program delays and inefficiencies.

對於 23 財年，我們預計與 22 財年相比，預訂量將有所增加，訂單出貨比為正，收入創紀錄 10 億美元，有機增長為正。正如馬克所說，我們預計我們的業績將在第四季度佔很大比重。我們認為，收入目前趨於高於我們 23 財年指導的中點，而調整後的 EBITDA 趨向於低端，正如我將討論的那樣。在我們對資金充足的特許經營計劃的支持下，需求依然強勁。然而，供應鏈限制、勞動力可用性和通貨膨脹繼續導致項目延遲和效率低下。

With the post pandemic impact persisting through fiscal '23, we're experiencing shifts in high-margin production programs, including FMS sales into Q4 and fiscal '24, impacting Q3 and fiscal '23 gross margin expansion as a result.

隨著大流行後的影響持續到 23 財年，我們正在經歷高利潤生產計劃的轉變，包括 FMS 銷售進入第四季度和 24 財年，從而影響第三季度和 23 財年的毛利率擴張。

Slide 8 covers the bookings, book-to-bill backlog and revenue growth results that Mark discussed. Worth highlighting again is the large FMS program customer funding delay that had an impact of approximately $10 million on our Q2 revenue. Given the program's high-margin profile, it also impacted profitability by approximately $7 million, resulting in the adjusted EBITDA guidance miss for the quarter. This delay in customer funding reflects the nature of FMS contracting, which requires alignment between the U.S. government and the foreign government as well as our direct customers. This being an approved FMS deal, the delay only relates to the award timing for both our customer and Mercury. We now expect this program in our fiscal '24.

幻燈片 8 涵蓋了 Mark 討論的預訂、訂單到賬單積壓和收入增長結果。再次值得強調的是，大型 FMS 計劃客戶資金延遲對我們第二季度的收入產生了大約 1000 萬美元的影響。鑑於該計劃的高利潤率，它還影響了大約 700 萬美元的盈利能力，導致本季度調整後的 EBITDA 指導未達標。客戶資金的這種延遲反映了 FMS 合同的性質，這需要美國政府與外國政府以及我們的直接客戶之間保持一致。這是一項已獲批准的 FMS 交易，延遲僅與我們的客戶和 Mercury 的授標時間有關。我們現在期待在我們的 24 財年實施該計劃。

As Mark mentioned, we expect this to have an approximate $20 million and $14 million revenue and adjusted EBITDA impact to fiscal '23, respectively. Gross margins for the second quarter were down 430 basis points year-over-year. As we expected coming into the quarter, gross margins reflected a higher proportion of lower-margin development revenue as well as material and labor inflation year-over-year. Gross margins were slightly lower than expectations, driven by the FMS delay, which had an approximate 140 basis point impact on gross margins. Q2 gross margin was also impacted by incremental depreciation expense and lower absorption in the quarter primarily due to our site consolidation efforts.

正如馬克所提到的，我們預計這將分別對 23 財年產生約 2000 萬美元和 1400 萬美元的收入和調整後的 EBITDA 影響。第二季度毛利率同比下降 430 個基點。正如我們預期的那樣進入本季度，毛利率反映了較高比例的低利潤開發收入以及材料和勞動力通脹同比。由於 FMS 延遲，毛利率略低於預期，這對毛利率產生了約 140 個基點的影響。第二季度的毛利率也受到增量折舊費用和本季度吸收率降低的影響，這主要是由於我們的網站整合工作。

We expect to see higher gross margins in the second half of the fiscal year and especially in Q4. This is primarily a result of program mix shifts due to the high-margin FMS sales as well as execution on some of our larger development programs taking a little longer than expected in the current environment. GAAP net loss was $10.9 million for the quarter, while adjusted EBITDA was $35.7 million, down 6% from Q2 last year on lower gross margins. Our adjusted EBITDA margins were 15.5% for the quarter, down 180 basis points from 17.3% in Q2 fiscal '22. Again, the delay in the large FMS opportunity resulted in adjusted EBITDA and adjusted EBITDA margins being below our guidance range. Had we received this contract, adjusted EBITDA and adjusted EBITDA margins would have exceeded our Q2 guidance.

我們預計本財年下半年，尤其是第四季度，毛利率會更高。這主要是由於高利潤的 FMS 銷售以及我們一些較大的開發項目的執行時間比當前環境下的預期稍長而導致的項目組合轉變。本季度 GAAP 淨虧損為 1090 萬美元，而調整後的 EBITDA 為 3570 萬美元，由於毛利率較低，比去年第二季度下降 6%。本季度我們調整後的 EBITDA 利潤率為 15.5%，比 22 財年第二季度的 17.3% 下降了 180 個基點。同樣，大型 FMS 機會的延遲導致調整後的 EBITDA 和調整後的 EBITDA 利潤率低於我們的指導範圍。如果我們收到這份合同，調整後的 EBITDA 和調整後的 EBITDA 利潤率將超過我們的第二季度指導。

Free cash flow for the second quarter was an inflow of approximately $22 million, despite delays in payments from our customers at the end of their fiscal years. Delayed payment behavior across our customer base was partially offset by receivables factoring, which we discussed last quarter.

儘管我們的客戶在其財政年度末延遲付款，但第二季度的自由現金流流入約為 2200 萬美元。我們上個季度討論過的應收賬款保理業務部分抵消了我們客戶群中的延遲付款行為。

Slide 9 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 Q2 with cash and cash equivalents of $77 million and approximately $512 million of debt funded under our revolver. At current leverage levels, the interest rate under the revolver is approximately 5%, which positions Mercury to continue to allocate capital at attractive rates.

幻燈片 9 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。我們以 7700 萬美元的現金和現金等價物結束了第二季度，以及大約 5.12 億美元的債務在我們的循環貸款下融資。在當前的槓桿水平下，循環利率約為 5%，這使 Mercury 能夠繼續以有吸引力的利率配置資本。

From a working capital perspective, we've invested approximately $240 million since fiscal '21, potentially the start of the pandemic to support performance obligations to our customers and ensure delivery on critical programs. As these obligations are completed, we expect working capital, especially unbilled receivables and inventory to convert to cash and decrease substantially as a percentage of annualized sales.

從營運資金的角度來看，自 21 財年以來，我們已經投資了大約 2.4 億美元，這可能是大流行的開始，以支持對客戶的履約義務並確保關鍵項目的交付。隨著這些義務的完成，我們預計營運資金，尤其是未開票的應收賬款和存貨將轉換為現金，並大幅減少佔年銷售額的百分比。

Turning to cash flow on Slide 10. Last quarter, we forecasted breakeven to slightly positive free cash flow for Q2. Free cash flow for the quarter was $22 million. In Q2, we did see delays of approximately $30 million in receipts from billed receivables from our customers at the end of their fiscal year. These were partially offset through a factor in $20 million of receivables. At this point in Q3, we have received the $30 million of delayed payments from our customers. Given our fiscal year timing, we did not see any impact related to the R&D tax legislation in H1, but we're now forecasting an impact in H2.

轉向幻燈片 10 上的現金流。上個季度，我們預測第二季度的盈虧平衡到略微正的自由現金流。本季度的自由現金流為 2200 萬美元。在第二季度，我們確實看到客戶在其財政年度末的應收賬款延遲收款約 3000 萬美元。這些被 2000 萬美元的應收賬款因素部分抵消。在第三季度的這個時候，我們已經收到了客戶 3000 萬美元的延遲付款。鑑於我們的財政年度時間安排，我們沒有看到與上半年研發稅立法相關的任何影響，但我們現在預測下半年會產生影響。

I'll now turn to our financial guidance, starting with Q3 on Slide 11. Forecasting in the current environment remains challenging. Our guidance incorporates to the extent we can, potential impacts associated with the ongoing supply chain constraints and material and labor inflation headwinds. As a result of the high-margin FMS program moving into fiscal '24, coupled with the headwinds contributing to program delays and inefficiencies. H2 is more weighted to Q4 than Q3.

我現在轉向我們的財務指導，從幻燈片 11 的第三季度開始。在當前環境下進行預測仍然具有挑戰性。我們的指導意見盡可能納入了與持續的供應鏈限制以及材料和勞動力通脹逆風相關的潛在影響。由於高利潤的 FMS 計劃進入 24 財年，加上導致計劃延遲和效率低下的逆風。 H2 比 Q3 對 Q4 的權重更大。

For Q3, we currently expect revenue in the range of $245 million to $260 million. At the midpoint, this is approximately flat growth compared to the third quarter last year. Although we remain cautious with regard to award timing, program execution and the current industry headwinds, we expect gross margins to increase gradually in Q3 and more dramatically in Q4 as we complete execution across several of our lower-margin development contracts. The revenue growth in H2 and especially Q4 is expected to be driven by higher-margin production programs as well as licensed sales. We expect Q3 GAAP results to range from a net loss of $5.8 million to net income of $1 million. We expect adjusted EBITDA to be $40 million to $47 million, representing approximately 17% of revenue at the midpoint. As I've said, our Q3 adjusted EBITDA margins are being impacted by the delay in the FMS sale as well as a higher proportion of development contracts.

對於第三季度，我們目前預計收入在 2.45 億美元至 2.6 億美元之間。從中點來看，這與去年第三季度相比大致持平。儘管我們對授標時間、項目執行和當前行業逆風保持謹慎，但我們預計毛利率將在第三季度逐漸增加，隨著我們完成幾個利潤率較低的開發合同的執行，第四季度毛利率將大幅增加。預計下半年，尤其是第四季度的收入增長將受到利潤率更高的生產計劃和許可銷售的推動。我們預計第三季度 GAAP 業績將從淨虧損 580 萬美元到淨收入 100 萬美元不等。我們預計調整後的 EBITDA 為 4,000 萬至 4,700 萬美元，約佔中點收入的 17%。正如我所說，我們第三季度調整後的 EBITDA 利潤率受到 FMS 銷售延遲以及更高比例的開發合同的影響。

I'll now turn to our guidance for full year fiscal '23 on Slide 12. The near-term outlook across the industry remains far from certain, but the demand environment continues to be strong, as highlighted by our continued bookings momentum. Balancing these 2 dynamics, we're maintaining our previous guidance for the year for revenue and adjusted EBITDA. From a total company revenue perspective, our guidance remains $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. Based on our current demand environment, despite the approximate $20 million slip in FMS revenue, we still expect to see fiscal '23 revenue towards the high end of this range.

我現在將轉向我們在幻燈片 12 上對 23 財年全年的指導。整個行業的近期前景仍遠未確定，但需求環境仍然強勁，正如我們持續的預訂勢頭所強調的那樣。平衡這兩種動態，我們維持我們之前對本年度收入和調整後 EBITDA 的指導。從公司總收入的角度來看，我們在 23 財年的指引仍為 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%。根據我們目前的需求環境，儘管 FMS 收入下滑了約 2000 萬美元，但我們仍預計 23 財年的收入將達到這一範圍的高端。

GAAP net income for fiscal '23 is expected to be in the range of $13.9 million to $24.8 million, with GAAP EPS of $0.24 to $0.44 per share. The reduction at the low end and midpoint is a function of the incremental depreciation expense in the second quarter, partially offset by lower expected stock-based compensation. We're maintaining our fiscal '23 adjusted EBITDA guidance range of $202.5 million to $215 million, up 1% to 7% from fiscal '22. While we expect revenues at the high end of the range, we expect adjusted EBITDA to trend toward the lower end of the range. This is driven primarily by program mix including the FMS sale as well as supply chain-related program delays and inefficiencies also impacting adjusted EBITDA margins.

23 財年的 GAAP 淨收入預計在 1390 萬美元至 2480 萬美元之間，GAAP 每股收益為 0.24 美元至 0.44 美元。低端和中點的減少是第二季度增量折舊費用的函數，部分被較低的基於股票的薪酬預期所抵消。我們維持 23 財年調整後的 EBITDA 指導範圍為 2.025 億美元至 2.15 億美元，比 22 財年增長 1% 至 7%。雖然我們預計收入處於該範圍的高端，但我們預計調整後的 EBITDA 將趨向於該範圍的低端。這主要是由包括 FMS 銷售在內的項目組合以及與供應鏈相關的項目延遲和效率低下所驅動的，這些項目也影響了調整後的 EBITDA 利潤率。

Adjusted EPS is expected to be in the range of $1.90 to $2.08 per share. The reduction from our prior guidance is also a function of the incremental depreciation expense in the second quarter. From a free cash flow perspective, we're now targeting breakeven to slightly positive free cash flow for the year. This includes approximately $36 million of cash outflows related to R&D tax legislation in H2, which we've now incorporated into our guidance.

調整後每股收益預計在 1.90 美元至 2.08 美元之間。我們先前指導的減少也是第二季度增量折舊費用的函數。從自由現金流的角度來看，我們現在的目標是今年的自由現金流實現盈虧平衡。這包括約 3600 萬美元與下半年研發稅收立法相關的現金流出，我們現已將其納入我們的指導方針。

Turning to Slide 13. I want to briefly touch on Q4, which we expect to be a record quarter for Mercury across all key metrics. But we will not formally guide Q4 until next quarter. Based on H1 actuals and our Q3 and fiscal '23 guidance, we can arrive at an implied forecast for the fourth quarter. Looking at the midpoints of our fiscal '23 and Q3 guidance ranges, Q4 revenue at the midpoint would be approximately $320 million. This is an increase of approximately 11% from our record fourth quarter last year. Given our current backlog and anticipated bookings in Q3, we expect to enter Q4 with a solid forward backlog coverage, which is the basis for our current guidance.

轉到幻燈片 13。我想簡要談談第四季度，我們預計這將是 Mercury 所有關鍵指標的創紀錄季度。但我們要到下個季度才會正式指導第四季度。根據上半年的實際情況以及我們的第三季度和 23 財年指導，我們可以得出第四季度的隱含預測。看看我們 23 財年和第三季度指導範圍的中點，中點的第四季度收入約為 3.2 億美元。這比我們去年第四季度創紀錄的增長了約 11%。鑑於我們目前的積壓訂單和第三季度的預期預訂量，我們預計進入第四季度時會有可靠的前瞻性積壓訂單覆蓋，這是我們當前指導的基礎。

GAAP net income and GAAP EPS will be approximately $47 million and $0.83 per share, respectively, at the midpoint. Q4 adjusted EBITDA would be approximately $98 million and adjusted EBITDA margins to be approximately 31%. These results are driven by gross margin expansion, reflecting a mix weighted towards higher-margin production programs and licensing revenues. We also expect adjusted EBITDA margin improvement as a result of the operating leverage we've created in the business.

按中點計算，GAAP 淨收入和 GAAP 每股收益分別約為 4700 萬美元和 0.83 美元。第 4 季度調整後的 EBITDA 約為 9800 萬美元，調整後的 EBITDA 利潤率約為 31%。這些結果是由毛利率擴張推動的，反映了對更高利潤的生產計劃和許可收入的加權組合。由於我們在業務中創造的運營槓桿，我們還預計調整後的 EBITDA 利潤率會有所改善。

From a free cash flow perspective, we expect to see a strong rebound in Q4. So while Q4 would represent a record quarter across all our key metrics for Mercury, we believe we have a clear path to achieve our guidance.

從自由現金流的角度來看，我們預計第四季度會出現強勁反彈。因此，雖然第四季度將代表我們所有 Mercury 關鍵指標的創紀錄季度，但我們相信我們有一條明確的道路來實現我們的指導。

With that, I'll now turn the call back over to Mark.

有了這個，我現在將把電話轉回給馬克。

Thanks, Mike. Turning now to Slide 14. Mercury delivered strong bookings in the second quarter. We returned to organic growth and generated positive cash flow in a still challenging environment. Demand is strong and getting stronger. Our robust H1 bookings, record backlog and substantial forward revenue coverage provide us with good visibility into the second half of fiscal '23. Timing, however, remains a risk in the short term as we win larger, more complex subsystem deals. Given the impact of the delays associated with the FMS program, we have a larger fourth quarter than previously anticipated. We have a high level of confidence in our ability to recognize the associated revenue and margin in the first half of fiscal '24. And as a result of the additional opportunities we've rotated into the plan, we're maintaining our fiscal '23 revenue and adjusted EBITDA guidance. As I said earlier, while revenue is trending above the midpoint, adjusted EBITDA is likely to come in towards the low end of guidance as a result of mix and supply chain-driven program delays and inefficiencies.

謝謝，邁克。現在轉到幻燈片 14。Mercury 在第二季度交付了強勁的預訂量。在仍然充滿挑戰的環境中，我們恢復了有機增長並產生了正現金流。需求強勁，而且越來越強勁。我們強勁的 H1 預訂、創紀錄的積壓訂單和可觀的遠期收入覆蓋範圍使我們對 23 財年下半年有了很好的了解。然而，隨著我們贏得更大、更複雜的子系統交易，時機在短期內仍然是一個風險。考慮到與 FMS 計劃相關的延遲的影響，我們第四季度的業績比之前預期的要大。我們對我們在 24 財年上半年確認相關收入和利潤的能力充滿信心。由於我們已將更多機會輪換到計劃中，我們將維持我們的 23 財年收入和調整後的 EBITDA 指導。正如我之前所說，雖然收入趨勢高於中點，但由於混合和供應鏈驅動的計劃延遲和效率低下，調整後的 EBITDA 可能會接近指導的低端。

For the year, we expect to deliver strong bookings weighted toward Q4. We expect a positive book-to-bill and a return to organic growth with revenue approximately $1 billion for the first time. This should position us well for fiscal '24 as the supply chain conditions begin to normalize. We expect to deliver strong organic growth, margin expansion and improved cash flows release working capital, all of which should position us for further growth and value creation in future years.

今年，我們預計將提供以第四季度為權重的強勁預訂。我們預計訂單出貨比為正數，並首次恢復有機增長，收入約為 10 億美元。隨著供應鏈條件開始正常化，這應該使我們在 24 財年處於有利地位。我們預計將實現強勁的有機增長、利潤率擴張和現金流改善釋放營運資金，所有這些都將使我們在未來幾年進一步增長和創造價值。

That said, the potential for disruption around the GFY24 budget and the timing and level of the defense appropriation present additional risk. Looking further ahead, our outlook for the next 5 years remains strong. We expect increased defense spending domestically and internationally. We're well positioned strategically in the right path of the market with the right capabilities on the right programs. We believe that Mercury can and will grow organically at high single-digit to low double-digit rates. In addition to organic and M&A-related growth, our 5-year plan includes margin expansion driven by better execution as the industry headwinds subside, improved program and content mix as well as impact. This should lead to stronger profitability as well as improved working capital efficiency and cash conversion.

也就是說，圍繞 GFY24 預算的中斷可能性以及國防撥款的時間和水平帶來了額外的風險。展望未來，我們對未來 5 年的前景依然樂觀。我們預計國內和國際的國防開支都會增加。我們在正確的計劃中擁有正確的能力，在正確的市場道路上處於戰略位置。我們相信 Mercury 能夠並且將會以高個位數到低兩位數的速度有機增長。除了有機增長和與併購相關的增長外，我們的 5 年計劃還包括在行業逆風消退、改進計劃和內容組合以及影響的情況下通過更好的執行來推動利潤率增長。這應該會帶來更強的盈利能力，並提高營運資本效率和現金轉換率。

For more than a decade, we've successfully executed on our longer-term strategy. We've improved margins by growing the business organically, supplement with disciplined M&A and full integration. As a result, we've created significant value for our shareholders and expect to continue doing so.

十多年來，我們成功地執行了我們的長期戰略。我們通過有機地發展業務，輔之以嚴格的併購和全面整合，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 Mercury team's commitment to our success and strong performance in the second quarter. My sincere thanks to all of you. Before we turn it over to Q&A, I ask that you please keep your questions focused on our earnings results.

最後，我想感謝 Mercury 團隊對我們在第二季度的成功和強勁表現的承諾。衷心感謝大家。在我們將其轉為問答環節之前，請您將問題集中在我們的收益結果上。

With that, operator, please proceed with the Q&A.

那麼，接線員，請繼續進行問答。

(Operator Instructions) Your first question comes from the line of Peter Arment with Baird.

（操作員說明）您的第一個問題來自 Peter Arment 與 Baird 的對話。

The impact program you've talked about, quite a bit about on this call and in previous calls, I think you targeted net savings to be $30 million to $50 million when you look out to fiscal '25. Just wondering where that stands today? I know that you achieved at least $22 million in your first fiscal year. Can that still grow just given all the efforts you've done? And then just as a follow-up, I'll ask it now, just your confidence around kind of, is there much FMS mix in the fourth quarter that could also slide out, just given the kind of the impacts that you've had from customer shifts?

你談到的影響計劃，在這次電話會議和之前的電話會議上談了很多，我認為當你展望 25 財年時，你的目標是淨節省 3000 萬到 5000 萬美元。只是想知道今天的位置？我知道您在第一個財政年度至少取得了 2200 萬美元的收入。考慮到你所做的所有努力，它還能增長嗎？然後作為後續行動，我現在要問的是，考慮到你所產生的影響，第四季度是否有很多 FMS 組合也可能滑出從客戶轉移？

Yes. So thanks for the question, Peter. So I think we're absolutely on target for the impact savings. I think the program is going extremely well. If anything, we're probably slightly ahead of schedule compared to where we thought we were going to be at this point in time. Unfortunately, I think a lot of the efforts and the results that we've delivered aren't really showing up in our financials right now because they are simply offsetting some of the headwinds that we're facing. But for the programs on track, and we think there's substantial upside associated with it going forward. .

是的。彼得，謝謝你的提問。所以我認為我們絕對達到了節省影響力的目標。我認為該計劃進行得非常順利。如果說有什麼不同的話，那就是與我們當時認為的目標相比，我們可能稍微提前了一點。不幸的是，我認為我們所做的很多努力和成果目前並沒有真正體現在我們的財務中，因為它們只是抵消了我們面臨的一些不利因素。但對於走上正軌的計劃，我們認為它在未來有很大的好處。 .

As it relates to FMS, we do have some FMS in the fourth quarter. As we rotated out the $20 million of revenue and $14 million of margin from Q2 and Q3, we were working with the customer able to rotate in additional revenue that partially offset is some of the shortfall due to the delay in funding. So yes, there is some revenue in the fourth quarter. I can't get the number off the top of my head, my dear.

由於它與 FMS 相關，我們在第四季度確實有一些 FMS。當我們從第二季度和第三季度轉出 2000 萬美元的收入和 1400 萬美元的利潤時，我們正在與能夠輪換額外收入的客戶合作，部分抵消了由於資金延遲而導致的一些短缺。所以是的，第四季度有一些收入。親愛的，我無法忘記這個數字。

It's not something we break out specifically, but I would say, Peter, that the magnitude of the revenue we have is much lower than the $20 million of revenue and $14 million of gross margin has slipped down.

這不是我們具體打破的事情，但我會說，彼得，我們的收入規模遠低於 2000 萬美元的收入，1400 萬美元的毛利率已經下滑。

Your next question comes from the line of Seth Seifman with JPMorgan.

你的下一個問題來自摩根大通的 Seth Seifman。

I guess just on the topic of the availability of semiconductors and chips, I guess I'm wondering kind of what makes that take until the second half of your '24. We saw Intel's results last week. It seems like demand in the civil economy is really drying up. And you would think that maybe that would free up capacity more quickly for the defense industry, what makes that take so long?

我想只是關於半導體和芯片的可用性這個話題，我想我想知道是什麼讓這需要到你的 24 年下半年。我們上週看到了英特爾的業績。民用經濟的需求似乎真的在枯竭。你會認為這可能會更快地為國防工業釋放產能，是什麼讓這需要這麼長時間？

Yes. So first of all, I think it's based upon the feedback that we're getting specifically from some of those semiconductor companies based upon what they think is going to happen in terms of the capacity and their ability to supply. We did see some incremental improvements, Seth, in the second quarter. Last quarter, we were talking that the semiconductor lead times on the high end in particular, the stuff that's coming out of TSMC and Hudson of the high-end Intel processing, the lead times were 52 to 99 weeks. This quarter, we did see the average come down 36 to 72 weeks. So it's still extremely long and far longer than what we saw pre-pandemic, which is in the 10- to 12-week range. So we're pleased to see the improvement and see the average coming down, but it's still on a long way to go.

是的。所以首先，我認為這是基於我們從一些半導體公司那裡得到的具體反饋，這些反饋是基於他們認為在產能和供應能力方面將會發生的事情。 Seth，我們在第二季度確實看到了一些漸進的改進。上個季度，我們談到了高端半導體的交貨時間，特別是高端英特爾處理的台積電和哈德森的產品，交貨時間為 52 到 99 週。本季度，我們確實看到平均值下降了 36 周至 72 週。所以它仍然非常長，比我們在大流行前看到的時間要長得多，大流行前的時間在 10 到 12 週之間。所以我們很高興看到改善並看到平均水平下降，但它還有很長的路要走。

Okay. And then just as a follow-up, when we look at the data that comes out in the filing, about the sales breakdown between different types of products, different customers. Is there anything there that offers a little bit more insight into the gross margin compression that we've seen, whether it's -- I mean, last quarter kind of -- we only have it as of the -- I guess, as of the September quarter so far, but fewer sales into radar applications, I guess, fewer sales into components, more sales to Lockheed. As we look through these different categories, is there anything about the mix that's changing that we can be aware of in terms of thinking about the gross margin and the profitability of different types of sales?

好的。然後作為後續行動，當我們查看文件中出現的數據時，關於不同類型產品、不同客戶之間的銷售細分。有沒有什麼可以讓我們更深入地了解我們所看到的毛利率壓縮，無論是——我的意思是，上個季度——我們只有——我想，截至到目前為止的 9 月季度，但雷達應用的銷售額減少了，我猜，組件的銷售額減少了，洛克希德的銷售額增加了。當我們審視這些不同的類別時，在考慮不同類型銷售的毛利率和盈利能力方面，我們是否可以意識到正在發生變化的組合？

Not specifically at the macro level, Seth. I think if anything, what we are seeing is just the cumulative effect of operating under the pandemic and the delays that we've seen on programs and resulting in efficiencies. So if things are taking longer, we've seen cost growth and that's clearly what is impacting the margin. As we look forward, as we've said, is more of these programs going to get out of the development phase and into production, we'll start to see some mix shifts and some margin improvements there, coupled with some probably better efficiencies in supply chain, so less of a headwind. And then continued benefit from impact is really what's going to drive the margins as we go forward. So I don't know, Mike, if you would like to add anything to that.

不是特別在宏觀層面，賽斯。我認為，如果有的話，我們所看到的只是在大流行病下運作的累積效應以及我們在項目上看到的延誤並導致效率提高。因此，如果事情需要更長的時間，我們就會看到成本增長，這顯然是影響利潤率的因素。正如我們所說的那樣，正如我們期待的那樣，是否有更多的此類項目將退出開發階段並投入生產，我們將開始看到一些組合轉變和一些利潤率改善，以及一些可能更高的效率供應鏈，因此阻力較小。然後繼續從影響中獲益確實會在我們前進的過程中推動利潤率。所以我不知道，邁克，你是否想添加任何內容。

No. I mean, Seth, you'll see the detail when the Q comes out in terms of subsystems, components, modules. I think what Mark said is correct. It's going to be -- you're not going to see anything there significant that's going to stand out as the driver of the margin degradation. It really is these new program starts that we've talked about as the development programs transition over time to production. They're just taking a little longer in this environment. And then we expect that to transition in fiscal '24. So nothing specifically to point to in the Q more just around the trends that we're expecting in Q4 and in fiscal '24.

不，我的意思是，Seth，當 Q 在子系統、組件、模塊方面出現時，你會看到細節。我認為馬克說的是對的。它將是——你不會看到任何重要的東西會作為利潤率下降的驅動因素而脫穎而出。隨著開發計劃隨著時間的推移過渡到生產，我們確實談到了這些新計劃的啟動。他們只是在這種環境中需要更長的時間。然後我們預計這將在 24 財年過渡。因此，在 Q 中沒有什麼特別要指出的，只是圍繞我們在第四季度和 24 財年預期的趨勢。

Obviously, Seth, the FMS program that moved, that was pretty high margin based upon the capabilities that we're providing. It includes IP licenses and royalties. And we do see a pickup of that as we're going into the second half as well. So the mix in terms of capabilities and the programs really do matter, and it's unfortunate that the customer has this funding delay that moved the $20 million of revenue and $14 million out of the year.

顯然，Seth，移動的 FMS 程序，根據我們提供的功能，這是相當高的利潤。它包括知識產權許可和版稅。當我們進入下半場時，我們確實看到了這種情況。因此，能力和項目的組合確實很重要，不幸的是，客戶的資金延遲導致了 2000 萬美元的收入和 1400 萬美元的年收入。

Your next question comes from the line of Ken Herbert with RBC.

你的下一個問題來自 RBC 的 Ken Herbert。

I wanted to ask, Mark, on the free cash flow guidance, sorry if I missed it, but as you think about sort of breakeven to slightly positive, call it, $60 million in the second half of the year. How does that split between the third and fourth quarter? Or what's the guidance implied for the cadence of cash in the second half of the year?

馬克，我想問一下關於自由現金流量的指導，如果我錯過了，我很抱歉，但是當你考慮到收支平衡到略微積極的時候，下半年可以稱之為 6000 萬美元。第三季度和第四季度之間如何分配？或者下半年現金節奏的指引是什麼？

Yes. Ken, I'll take that one. It's Mike. So when we look at the second half, it is going to be more weighted to Q4. We think Q3 prior to the R&D tax, I'll give you a split between those between Q3 and Q4. But prior to the R&D tax payments, we think Q3 is going to look a lot like Q2, which we expected coming in prior to factoring to be breakeven to slightly positive, and that's what we're seeing in Q3 right now. Now that's pre the R&D tax payment, which we estimate is going to be $23 million in Q3, it's going to be $13 million in Q4 to get to the $36 million that we mentioned in the prepared remarks. So what we're looking at is a free cash outflow in Q3 and the magnitude of $20 million and Q4 is going to make up the difference as we see the higher net income, higher op income, and we actually expect working capital in Q4 to release especially in unbilled and inventory, which is driving the cash flow for the year.

是的。肯，我要那個。是邁克。因此，當我們看下半年時，它將更加重視第四季度。我們認為在研發稅之前的第三季度，我會給你第三季度和第四季度之間的分配。但在支付研發稅之前，我們認為第三季度看起來很像第二季度，我們預計在考慮因素之前會出現盈虧平衡或略微正增長，這就是我們目前在第三季度看到的情況。現在這是研發稅前的支出，我們估計第三季度為 2300 萬美元，第四季度為 1300 萬美元，達到我們在準備好的評論中提到的 3600 萬美元。所以我們看到的是第三季度的自由現金流出，2000 萬美元的規模，第四季度將彌補差額，因為我們看到更高的淨收入、更高的運營收入，我們實際上預計第四季度的營運資金將特別是在未開票和庫存中釋放，這推動了當年的現金流。

Yes, that's helpful. And it sounds like for cash earnings or cash and earnings, obviously, a pretty significant ramp in the fourth quarter. Is there any program you'd specifically called out maybe around progress payments or anything like that, that we should keep in mind as significant or material swing factors in the fourth quarter? Or there could either be potential risk or that are obviously embedded in what's going to help sort of hit the full year number? It seems like a pretty aggressive ramp in the fourth quarter.

是的，這很有幫助。聽起來現金收益或現金和收益顯然在第四季度出現了相當顯著的增長。是否有任何您特別提到的關於進度付款或類似內容的計劃，我們應該將其作為第四季度的重要或實質性搖擺因素牢記在心？或者可能存在潛在風險，或者明顯存在於有助於達到全年數字的因素中？這似乎是第四季度相當激進的增長。

Yes. Go ahead, Mike. Go ahead.

是的。來吧，邁克。前進。

I was just going to say, it's definitely a large quarter, Ken, but we do feel good. The good news as we look at it is we have good backlog coverage right now going into H2 and into Q4. We've got good visibility into the programs that aren't in backlog that make up the balance of our FY '23 and specifically the Q4. So we're entering with strong backlog coverage, a majority of the remaining are recurring programs, programs for which we're designed in on. We also have, and I think Mark touched on it briefly, we have improved visibility and coordination into the supply chain than we had in H1. So still risk around it, but we feel better about it.

我只是想說，這絕對是一個很大的季度，肯，但我們確實感覺很好。我們看到的好消息是，我們現在有很好的積壓覆蓋範圍，進入下半年和第四季度。我們對未積壓的計劃有很好的了解，這些計劃構成了我們 23 財年的餘額，特別是第四季度。因此，我們進入了強大的積壓覆蓋範圍，剩下的大部分都是經常性的項目，我們設計的項目。與上半年相比，我們還提高了供應鏈的可見性和協調性，我認為 Mark 簡要地談到了這一點。所以仍然冒險，但我們對此感覺更好。

And then we've got line of sight into some key execution milestones that drive revenue in Q4 on a couple of key programs. So there's still uncertainty in the environment, supply chain contracting delays, things that we've talked about. We're working to control what we can. But overall, we feel good about the demand environment and the programs we're just cautious on the items that are out of our control. And just from a profitability perspective, we obviously expect margin expansion in Q4, and that's going to drive cash flow as well.

然後我們看到了一些關鍵的執行里程碑，這些里程碑在幾個關鍵項目上推動了第四季度的收入。所以環境仍然存在不確定性，供應鏈合同延遲，我們已經討論過的事情。我們正在努力控制我們能控制的。但總的來說，我們對需求環境和計劃感覺良好，我們只是對我們無法控制的項目持謹慎態度。僅從盈利能力的角度來看，我們顯然預計第四季度利潤率將擴大，這也將推動現金流。

Yes. So Ken, just following up, the kind of 5 things, right? So the higher-margin program mix in the second half as we talked about -- we do have a pickup in high-margin IP licenses and some royalties on various programs. We are anticipating fewer execution delays and some inefficiencies. We saw supply chain, I would say, improve incrementally in the second quarter. And so as the conditions stabilize and as hiring continues to pick up, yes, I think we've got fewer headwinds there.

是的。所以肯，只是跟進，那種 5 件事，對嗎？因此，正如我們所談到的，下半年利潤率較高的項目組合——我們確實獲得了高利潤率的 IP 許可和各種項目的一些特許權使用費。我們預計執行延遲和一些低效率會減少。我想說，我們看到供應鏈在第二季度逐步改善。因此，隨著情況的穩定和招聘的持續增加，是的，我認為我們在那裡遇到的阻力越來越小。

Impact, I think, continues -- here we've got continued savings relating to pricing initiatives that we undertook early in the year. We've got some procurement savings. And this quarter, we had some facility footprint consolidation. We've got further consolidation in Q3 that will lead to savings. And then finally, just obviously, better absorption and better overhead leverage largely as a result of the higher revenues. So although it's a big quarter, I think we've done the work and we know what's going to drive the increase.

我認為，影響仍在繼續——在這裡，我們在今年年初採取的定價舉措方面繼續節省開支。我們已經節省了一些採購費用。本季度，我們進行了一些設施足跡整合。我們在第三季度進行了進一步整合，這將帶來節省。最後，很明顯，更好的吸收和更好的管理費用槓桿主要是由於更高的收入。因此，儘管這是一個很大的季度，但我認為我們已經完成了工作，我們知道什麼會推動增長。

Your next question comes from the line of Jonathan Ho with William Blair.

你的下一個問題來自 Jonathan Ho 與 William Blair 的對話。

Just wanted to start out with some of the delayed payments that you were seeing from your customers. Are you seeing that behavior maybe persist? Or are you sort of building that into your guidance, just given some of the challenges around cash flow management that everybody is sort of facing?

只是想從您從客戶那裡看到的一些延遲付款開始。您是否看到這種行為可能會持續存在？還是考慮到每個人都面臨著現金流管理方面的一些挑戰，您是否正在將其納入您的指導方針？

Sure. Jonathan, we saw it a little bit in Q1. We talked about it on the Q1 earnings call. We saw a little bit more of it in Q2. Now remember, our fiscal Q2 is our customers' year-end. So we did see them managing receivables to us at the end of the quarter. And as we mentioned, it was about $30 million that we saw held that was due for us in the quarter. We've received all of that already in Q3. So it was just a couple of weeks or less than a week delay as they straddled their fiscal and calendar years.

當然。喬納森，我們在第一季度看到了一點點。我們在第一季度的財報電話會議上談到了它。我們在第二季度看到了更多。現在請記住，我們的第二財季是我們客戶的年終。所以我們確實看到他們在本季度末管理我們的應收賬款。正如我們所提到的，我們看到本季度到期的大約 3000 萬美元。我們已經在第三季度收到了所有這些。所以這只是幾週或不到一周的延遲，因為他們跨越了他們的財政年度和日曆年度。

Going forward, I think we've got a really good group of customers that only pay on time. And so we're managing that with them. We also put in the factoring facility that I mentioned, and we used it exactly for this reason, Jonathan, which was a tool that we have that's a very low cost of financing to us in order to mitigate the impacts on our cash flow statement and our financials because of our customer behavior. So we feel good that we're in a position to manage it from an organic standpoint, but we also have a tool in the factoring facility should we need to use it, should we see this behavior continue.

展望未來，我認為我們有一群非常優秀的客戶，他們只會按時付款。所以我們正在與他們一起管理。我們還使用了我提到的保理工具，我們正是出於這個原因使用了它，Jonathan，這是我們擁有的一種工具，它對我們來說是一種非常低的融資成本，可以減輕對我們現金流量表的影響，並且我們的財務狀況是因為我們的客戶行為。因此，我們感覺很好，我們能夠從有機的角度對其進行管理，但如果我們需要使用它，我們在保理設施中也有一個工具，如果我們看到這種行為繼續下去的話。

Got it. Got it. That's helpful. And then in terms of some of the pricing actions that you've taken, how should we be thinking about like the timing and sort of the magnitude of how that flows through? Like I know there's a variety of different actions across both the pricing of services as well as products, but any color would be helpful?

知道了。知道了。這很有幫助。然後就您採取的一些定價行動而言，我們應該如何考慮這種流動的時間和規模？就像我知道在服務和產品定價方面有多種不同的行動，但是任何顏色都會有幫助嗎？

So pricing has obviously been 1 of the major elements of the NPAT program. And so we stood up a pricing center of excellence to try and drive strategic pricing and best practices in both pricing and cost estimation depending upon the part of the business. In the commercial portfolio, I think the team has done a really good job. And we're actually offsetting a significant amount of the inflationary pressures that we're seeing on the semiconductor side of things. So focus on value-based pricing. We're looking at the discounting and the [court solidarity].

因此，定價顯然是 NPAT 計劃的主要元素之一。因此，我們建立了一個卓越的定價中心，以根據業務的不同來嘗試推動戰略定價和定價和成本估算方面的最佳實踐。在商業組合中，我認為團隊做得非常好。我們實際上正在抵消我們在半導體方面看到的大量通脹壓力。因此，請關注基於價值的定價。我們正在考慮折扣和 [法院團結]。

And I think as I mentioned on the last call, we did do and across the board price increase in our commercial products at the start of the year, that is really the major driver of offsetting the inflation pressures that we see there. On the noncommercial portfolio, it's slightly different, right, here, that's largely some of the cost disclosure type of the business. Here, we're really mainly focused on wherever we possibly can, passing through both material and the labor inflation costs that we see as well as trying to do a better job monitoring the scope creep with customers and monetizing those as well.

我認為，正如我在上次電話會議中提到的那樣，我們確實在今年年初全面提高了商業產品的價格，這確實是抵消我們在那裡看到的通脹壓力的主要驅動力。在非商業投資組合上，它略有不同，對，在這裡，這主要是一些業務的成本披露類型。在這裡，我們真的主要關注可能的地方，通過我們看到的材料和勞動力通脹成本，並努力更好地監控客戶的範圍蔓延並將其貨幣化。

Now depending upon the type of contract and the -- what's already in backlog, the ability to be able to pass through those costs, obviously, there could be a time difference there. But I think overall, the team is doing a pretty good job. I think the inflationary headwinds with the work that we've done -- detrimental to what we thought they could be coming into the year.

現在取決於合同的類型以及 - 已經積壓的內容，能夠通過這些成本的能力，顯然，那裡可能存在時間差異。但我認為總的來說，團隊做得很好。我認為我們所做工作的通貨膨脹逆風 - 不利於我們認為他們可能會進入這一年。

Mike, do you like to add anything?

邁克，你想添加什麼嗎？

No, you got it.

不，你明白了。

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。

So it seems like there's a lot going on, Mark. Just both externally with the Board and internally. Maybe can you just talk to us about how you're balancing all the internal factors and what you're most focused on now in terms of the business? Is it just ensuring the sales come through? Is it supply chain? If you could talk to us a little bit about that. You mentioned R&D as well.

馬克，看來發生了很多事情。只是在董事會外部和內部。也許你能和我們談談你是如何平衡所有內部因素的，以及你現在在業務方面最關注的是什麼？是否只是確保銷售通過？是供應鏈嗎？如果你能和我們談談這個。你也提到了研發。

Sure. So it's a good question. So I think the demand environment continues to be strong. So we're still very, very focused on the top line bookings. As we said, we're up 14% year-over-year. We had a 1.18 book-to-bill in the quarter and 1.16 over the last 12 months, growing backlog 17%, which gives us pretty good confidence and coverage along with the bookings that we expect in Q3 and Q4. So clearly, what the team is very focused on right now is the execution in the second half. It was unfortunate that we saw those FMS delays, which has made the year more back-end loaded. But we did talk about the coverage that we've got, which is far higher than what we had coming into the second half last fiscal year. So we'll continue to focus on mitigating the supply chain in the semiconductor lead times, which continues to be a challenge albeit incrementally improved.

當然。所以這是個好問題。所以我認為需求環境繼續強勁。所以我們仍然非常非常專注於頂級預訂。正如我們所說，我們同比增長了 14%。我們本季度的訂單出貨比為 1.18，過去 12 個月為 1.16，積壓訂單增長 17%，這給了我們相當大的信心和覆蓋率，以及我們預計在第三季度和第四季度的預訂量。很明顯，球隊現在非常關注的是下半場的執行力。不幸的是，我們看到了 FMS 的延遲，這使得這一年的後端負載增加了。但我們確實談到了我們所獲得的覆蓋率，這遠遠高於我們上個財政年度下半年的覆蓋率。因此，我們將繼續專注於緩解半導體交貨期的供應鏈，這仍然是一個挑戰，儘管逐漸得到改善。

Hiring, I think, is that for the third quarter in a row. We are actually hiring more people than all even. And so -- but we still got open recs along with the rest of the industry, and it's important for us to continue to fill those positions as we're looking at the growth in the business going forward. So I would say that the team is very focused on just execution. We are focused on growing the business and focusing on continuing to deal with the cumulative effect of the pandemic, Sheila.

我認為，招聘是連續第三個季度。實際上，我們僱用的人數甚至超過了所有人。因此——但我們仍然與業內其他公司一起獲得了公開職位，在我們展望未來業務增長的同時，繼續填補這些職位對我們來說很重要。所以我想說團隊非常專注於執行。希拉，我們專注於發展業務，並專注於繼續應對大流行病的累積影響。

Sure. No, that's helpful. And if I could follow up, I don't know if you mentioned this in the room and answer to a question. The FMS sale that slipped out, you said was $20 million of sales and $14 million of earnings associated with it. Was that right?

當然。不，那很有幫助。如果我可以跟進，我不知道你是否在房間裡提到過這個問題並回答了一個問題。 FMS 的銷售下滑，你說是 2000 萬美元的銷售額和 1400 萬美元的相關收益。是這樣嗎？

That's correct. Yes. It's $10 million in Q2 and the same in Q3.

這是正確的。是的。第二季度為 1000 萬美元，第三季度為 1000 萬美元。

Okay. So it's a pretty high-margin contract in terms of thinking about that?

好的。所以就考慮這一點而言，這是一個相當高利潤的合同？

It is. So it's a mix of capabilities. So again, there's hardware associated with it. But based upon the capabilities that there's also revenues and royalties.

這是。因此，它是多種功能的組合。同樣，有與之相關的硬件。但基於還有收入和特許權使用費的能力。

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。

Kind of staying on what Sheila was asking with kind of internal, external, a lot going on. Just, I guess, Mark, labor has been tight to begin with. How do you think about managing talent right now, talent loss and doesn't this potential announcement of strategic alternatives? I mean, can't that add to disruption and kind of take employees off the ball focusing on execution. So how do you kind of think about managing that risk right now?

有點停留在 Sheila 的要求上，內部，外部，很多事情都在發生。只是，我想，馬克，勞動力從一開始就很緊張。您如何看待現在的人才管理、人才流失以及戰略替代方案的潛在公告？我的意思是，這難道不會增加混亂，讓員工無法專注於執行。那麼，您現在如何考慮管理該風險？

Yes. So I mean, look, it's a possibility, obviously, with just what we are now. But I do think that we've got a fair amount of hiring momentum inside of the company. I think there's obviously a lot of growth ahead of us. And I think we're a great company to work for. So I don't see necessarily a major challenge with respect to retention.

是的。所以我的意思是，看，很明顯，就我們現在的情況而言，這是一種可能性。但我確實認為我們在公司內部有相當大的招聘勢頭。我認為我們前面顯然有很多增長。我認為我們是一家值得為之工作的偉大公司。所以我認為在保留方面不一定是一個重大挑戰。

On the attraction side of things, I think we're really focused on 2 areas: one is on the direct labor side of things. And I don't really believe that the announcements that we made this morning through this afternoon around the potential process will have an impact there. Probably the more challenging areas on the engineering side. But again, yes, I think we've got a great employee value proposition and yes, I feel pretty confident just based upon the momentum that we're going to be able to actually make the highest that we need.

在事物的吸引力方面，我認為我們真正關注的是兩個領域：一個是事物的直接勞動力方面。我真的不相信我們今天上午到今天下午圍繞潛在流程所做的公告會在那裡產生影響。可能是工程方面更具挑戰性的領域。但同樣，是的，我認為我們有一個很好的員工價值主張，是的，我非常有信心基於我們將能夠真正達到我們需要的最高水平的勢頭。

Got it. Got it. And then just a follow-up, entirely separate. You guys have obviously -- you talked about the demand environment. We've seen a very strong book-to-bill for the last several quarters. How are you thinking about the bookings environment over the back half of the year, especially now with the budget in place?

知道了。知道了。然後只是跟進，完全分開。你們顯然 - 你談到了需求環境。在過去的幾個季度裡，我們看到了非常強勁的訂單出貨比。您如何看待今年下半年的預訂環境，尤其是在預算到位的情況下？

Yes. So I think we're expecting, again, strong bookings sequentially H2 over H1, Mike. I think just with some of the recent shift, [solid] than the more of the growth in the fourth quarter, just given some of the movements that we've seen. But we're expecting strong growth year-over-year with a positive book to bill. So I think this is not a demand issue. Obviously, the demand environment is very strong. If anything, these are kind of short-term timing issues and really a result of the cumulative effects of the pandemic.

是的。所以我認為我們再次期待 H2 超過 H1 的強勁預訂，邁克。我認為只是最近的一些轉變，[穩固] 比第四季度的增長更多，只是考慮到我們所看到的一些變化。但我們預計將實現強勁的同比增長，並帶來積極的賬面價值。所以我認為這不是需求問題。顯然，需求環境非常強勁。如果有的話，這些都是短期的時間問題，實際上是大流行累積影響的結果。

Got it. And to be clear, you think you can do -- you did 600 -- almost $30 million in bookings second half last year, you think you guys can do better than that is what you're saying?

知道了。明確地說，你認為你可以做到 - 你做了 600 - 去年下半年的預訂量接近 3000 萬美元，你認為你們可以做得比你所說的更好嗎？

So this year, if you look at, H1 was far stronger than the prior year. So the weighting of bookings was far more balanced. So for the year, we do expect bookings to be up substantially. Just given the waiting H1, H2, I think it's going to be more of a sequential story than it is year-over-year in H2.

所以今年，如果你看一下，H1 比前一年強得多。因此，預訂的權重要均衡得多。因此，對於今年，我們確實預計預訂量會大幅增加。考慮到等待的 H1、H2，我認為這將更像是一個連續的故事，而不是 H2 的年復一年。

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。

So my first question here, if we just stay on the topic of the supply chain, if we do continue to see lead times come down, I mean, I know it's sort of an incremental improvement in the second quarter, but it's still notable. Do you expect you're going to be reducing inventory stockpiling if lead times continue to fall? And do you expect as we go into potentially a recession here that materials costs might come down for Mercury?

所以我的第一個問題是，如果我們只停留在供應鏈的話題上，如果我們確實繼續看到交貨時間下降，我的意思是，我知道這是第二季度的漸進式改進，但它仍然值得注意。如果交貨時間繼續下降，您預計您會減少庫存積壓嗎？當我們在這裡進入潛在的經濟衰退時，您是否期望 Mercury 的材料成本可能會下降？

Mike, why didn't you take the first and I'll take the second one.

邁克，你為什麼不拿第一個，我拿第二個。

Yes. So with regards to the balance sheet, Austin, as the supply chain normalizes, as we've discussed, we do expect to see an unwind of inventory and an increase in inventory turns and also has been impacting our unbilled receivables where we've been unable to deliver in some circumstances because of long lead times or even a shortage of parts. And once that normalizes, we expect both those accounts, inventory and unbilled decrease, which is why we think there's stronger cash flow in Q4, but really heading into fiscal '24 as things begin to normalize, we expect that there should be a significant reduction in working capital, again, once that supply chain normalizes.

是的。因此，關於資產負債表，奧斯汀，正如我們所討論的那樣，隨著供應鏈的正常化，我們確實希望看到庫存的減少和庫存周轉率的增加，並且也一直在影響我們一直以來的未開票應收賬款由於提前期過長甚至零件短缺，在某些情況下無法交貨。一旦正常化，我們預計這些賬戶、庫存和未開票都會減少，這就是為什麼我們認為第四季度的現金流量會更強，但隨著情況開始正常化，真正進入 24 財年，我們預計應該會大幅減少一旦供應鏈正常化，營運資金就會再次增加。

And then on the semiconductor side of things, clearly, I think part of the semiconductor marketplace has rolled over on the lower range, largely as a result of what is going on, on the consumer electronics side of things. The high end, as I mentioned, is still -- although it softened somewhat from the lead time, it's come down a little bit on average. It's still far longer than what it was pre pandemic. And so we haven't seen much movement there. In fact, if anything, the prices are going the other way still. The high-end semiconductors, we've seen price increases from Intel, from Xilinx from analog devices. And so the high end is still -- pricing is still pretty challenging. On the lower end side of things, we have been able to negotiate better pricing in some parts of the market, but it's still pretty challenging out there, Austin.

然後在半導體方面，很明顯，我認為部分半導體市場已經在較低的範圍內滾動，這主要是由於消費電子方面正在發生的事情。正如我所提到的，高端仍然是 - 儘管它從交貨時間開始有所緩和，但它平均下降了一點。它仍然比大流行前要長得多。所以我們在那裡沒有看到太多動靜。事實上，如果有的話，價格仍然是相反的。高端半導體，我們已經看到英特爾的價格上漲，模擬設備的賽靈思的價格上漲。所以高端仍然是 - 定價仍然非常具有挑戰性。在低端方面，我們已經能夠在市場的某些部分協商更好的定價，但它仍然非常具有挑戰性，奧斯汀。

Okay. And then just to follow up on that. I think you said in the remarks, you're sort of anticipating improvement in the lead times in the second half of fiscal year '24. What are you seeing on your end that gives you confidence in that? Is that what's been communicated to you from TSMC and Intel? Or how should we think about the timing there?

好的。然後只是跟進。我想你在評論中說過，你有點期待 24 財年下半年交貨時間的改善。您最終看到了什麼讓您對此充滿信心？這是台積電和英特爾向您傳達的信息嗎？或者我們應該如何考慮那裡的時機？

Yes. So we're obviously not in contact with TSMC directly. If we're dealing with the companies whose chips are actually fab in the TSMC facility as well as other facilities offshore from various other companies. And so the 36 to 72 with lead times that I mentioned, is what we are seeing right now with respect to the part that we've got on the high end of semiconductors. And so these are the logic devices, the FPGAs that go into many of our processing systems. And so we're getting the input from our suppliers as to what they're seeing. And we'll see what happens as things continue. Hopefully, they continue to come down.

是的。所以我們顯然沒有直接與台積電聯繫。如果我們正在與那些芯片實際上是在台積電工廠以及其他公司離岸的其他工廠製造芯片的公司打交道。因此，我提到的 36 到 72 的交貨時間是我們現在看到的關於我們在半導體高端的部分。因此，這些是邏輯設備，進入我們許多處理系統的 FPGA。因此，我們正在從我們的供應商那裡獲得他們所看到的信息。隨著事情的繼續，我們會看到會發生什麼。希望他們繼續下降。

Your next question comes from the line of Noah Poponak with Goldman Sachs.

你的下一個問題來自高盛的 Noah Poponak。

Mike, thanks for spending time with us and working with us over the years and all the best going forward.

邁克，感謝您多年來與我們共事並與我們合作，祝您未來一切順利。

Thanks, Noah.

謝謝，諾亞。

It's been a funky 1.5 years or 2 years. If I kind of zoom out and try to sort of recalibrate for it, the top line actually never really gotten that bad. There's kind of 3 distinct quarters where the revenue decline is a little more severe and then a few words -- really actually not that severe, and that's kind of it. Relative to that, the margin change is more significant and pretty volatile in the year. And then the cash flow change is very significant and the working capital, in particular. I guess how do I square all of that? When you kind of look back at this 18- to 24-month window, why is the profitability and the cash flow so much more volatile than the top line?

這是一個時髦的 1.5 年或 2 年。如果我有點縮小並嘗試重新校準它，頂線實際上從來沒有變得那麼糟糕。有 3 個不同的季度，收入下降更為嚴重，然後是幾句話——實際上並沒有那麼嚴重，僅此而已。相對於此，當年的利潤率變化更為顯著且波動較大。然後現金流變化非常顯著，尤其是營運資金。我想我該如何平方所有這些？當您回顧這 18 到 24 個月的窗口時，為什麼盈利能力和現金流的波動性遠大於頂線？

Sure. So I think, yes, it's a good question. So it has been a few years, and each year has been slightly different in terms of the impact. And so bookings bottomed down, I think, in the third quarter of fiscal year '21. Organic growth actually bottomed out this quarter. We had 1% organic growth in Q2 versus a 13% decline. So we've got various metrics beginning to head in the right direction. If you look at the margin profile, it's really, I think, as a result of kind of what's happened a little bit with respect to linearity. So over the course of the pandemic as lead times dramatically increased, and as we started to see just the perturbations in the supply chain in terms of supply decommits, it obviously created push more of the business into H2, which obviously had an impact on margins in the first half. And then you've got the general inefficiencies associated with just the impacts that we've been facing. So the margin pressure is pretty much all related to the pandemic and the effects associated with that. There's nothing underlying the business.

當然。所以我認為，是的，這是一個很好的問題。所以已經有幾年了，每年的影響都略有不同。因此，我認為，預訂量在 21 財年第三季度觸底。有機增長實際上在本季度觸底。我們在第二季度實現了 1% 的有機增長，而下降了 13%。所以我們有各種指標開始朝著正確的方向發展。如果你看一下保證金概況，我認為這真的是線性方面發生的一些事情的結果。因此，在大流行的過程中，隨著交貨時間的急劇增加，並且當我們開始看到供應鏈中供應退役方面的擾動時，這顯然將更多業務推向了下半年，這顯然對利潤率產生了影響在上半年。然後你就會得到與我們一直面臨的影響相關的普遍低效率。因此，利潤率壓力幾乎都與大流行病及其相關影響有關。業務沒有任何基礎。

And if anything, I think as we look forward, as a result of the shift from development into production, ability mix as well as the ongoing benefits of impact, we see substantial opportunities for margin growth. And then the cash flow, I think, as you know, is very much tied up with the balance sheet, again, is the supply chain conditions became far more challenging as lead times actually increased. We ended up leveraging the balance sheet to make sure that wherever possible we can meet our customer commitments on an inventory side. And then again, on the unbilled side of things, that's where we saw the effects of part shortages and which type working capital up in unbilled. So ultimately, cash collects everything, and that's where we saw the greatest volatility. Mike, I don't know if you want to jump in there?

如果有的話，我認為在我們展望未來時，由於從開發到生產的轉變、能力組合以及影響的持續好處，我們看到了利潤增長的巨大機會。然後現金流，我認為，正如你所知，與資產負債表密切相關，再次是，隨著交貨時間的實際增加，供應鏈條件變得更具挑戰性。我們最終利用資產負債表來確保在任何可能的情況下我們都能在庫存方面滿足客戶的承諾。再一次，在未開票的方面，我們看到了零件短缺的影響以及未開票的營運資金類型。所以最終，現金可以收集一切，這就是我們看到最大波動的地方。邁克，我不知道你是否想跳進去？

No, I think that's -- I think Mark hit it. I mean just given some numbers, if you look back and just starting with adjusted EBITDA, the measure of profitability. When you look back fiscal '19, '20, '21, we were all around 22%. We came into fiscal '22, we dropped down to 20%. I think we talked about publicly that we had about 70 basis points or so as a result of supply chain inflation you look at fiscal '23 and where our guide is 20.3% at the midpoint and probably have a similar 70 basis point inflation impact. So those 2 would push it 21% and the reduction there from 22% from '19 to '21 down to '21 and '22 and '23 is really a result of the development programs that we've talked about.

不，我認為那是——我認為馬克成功了。我的意思是只給出一些數字，如果你回顧一下，從調整後的 EBITDA 開始，衡量盈利能力。當你回顧 19、20、21 財年時，我們都在 22% 左右。我們進入了 22 財年，下降到 20%。我想我們公開談論過，由於供應鏈通脹，我們有大約 70 個基點左右，你看看 23 財年，我們的指南中點是 20.3%，可能有類似的 70 個基點通脹影響。所以那些 2 會把它推高 21%，從 19 年到 21 年的 22% 減少到 21 年、22 年和 23 年，這實際上是我們討論過的開發計劃的結果。

And so as Mark said, when we look at EBITDA margins going forward, and we'll guide fiscal '24 when we get to our Q4. But we do see the opportunity for EBITDA margin expansion. So I don't think anything's fundamentally changed in the business from a profitability perspective. When you look at gross margins, there's a lot more movement. As you know, we had COVID expenses in fiscal '21, running through our gross margins. We had some movements between development programs and production on a quarterly basis. We've had a physical optics acquisition, which impacted gross margins. And then, again, on a quarterly basis, things like this FMS sale, our program mix makes -- create some volatility. But again, going to EBITDA, looking over the long term, a couple of key metrics, and we think the profitability of the business structurally is the same with opportunity for upside in fiscal '24 and beyond.

正如馬克所說，當我們展望未來的 EBITDA 利潤率時，我們將在進入第四季度時指導 24 財年。但我們確實看到了 EBITDA 利潤率擴張的機會。因此，從盈利能力的角度來看，我認為該業務沒有發生任何根本性的變化。當你看毛利率時，會有更多的變動。如您所知，我們在 21 財年的 COVID 支出貫穿了我們的毛利率。我們每季度在開發計劃和生產之間進行一些變動。我們進行了物理光學收購，這影響了毛利率。然後，再一次，在每個季度，像這次 FMS 銷售這樣的事情，我們的項目組合會產生一些波動。但同樣，對於 EBITDA，從長遠來看，幾個關鍵指標，我們認為該業務的盈利能力在結構上與 24 財年及以後的上行機會相同。

Mr. Aslett, it appears there are no further questions. Therefore, I'd 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，請您發表任何結束語。

Okay. Well, look, thank you very much for taking the time to join us this evening. Lots of news from Mercury. We look forward to speaking to you again next quarter. Thank you.

好的。好吧，非常感謝你今晚抽出時間加入我們。很多來自水星的消息。我們期待下個季度再次與您交談。謝謝。

This concludes today's conference call. Thank you for attending.

今天的電話會議到此結束。感謝您的出席。