Mercury Systems Inc (MRCY) 2024 Q1 法說會逐字稿

Good day, everyone, and welcome to the Mercury Systems First Quarter Fiscal 2024 Conference Call. Today's call is being recorded.

大家好，歡迎參加 Mercury Systems 2024 財年第一季電話會議。今天的通話正在錄音。

At this time, for opening remarks and introductions, I would like to turn the call over to the company's Executive Vice President and Chief Financial Officer, Dave Farnsworth. Please go ahead, Mr. Farnsworth.

此時，我想將電話轉給公司執行副總裁兼財務長 Dave Farnsworth 進行開場發言和介紹。請繼續，法恩斯沃斯先生。

Good afternoon, and thank you for joining us. With me today is our President and Chief Executive Officer, Bill Ballhaus. 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 Bill and I will be referring to is posted on the Investor Relations section of the website under Events and Presentations.

下午好，感謝您加入我們。今天與我在一起的是我們的總裁兼執行長比爾鮑爾豪斯 (Bill Ballhaus)。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副本，您可以在我們的網站 mrcy.com 上找到它。比爾和我將提到的幻燈片簡報發佈在網站的「投資者關係」部分的「活動和簡報」下。

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.

轉向簡報中的投影片 2，我想提醒您，今天的簡報包含前瞻性陳述，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資訊。這些前瞻性陳述受到未來風險和不確定性的影響，可能導致我們的實際結果或績效出現重大差異。

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.

所有前瞻性陳述應與收益新聞稿中幻燈片 2 中的警示性陳述以及 Mercury 向 SEC 提交的文件中包含的風險因素結合考慮。我還想提一下，除了按照公認會計原則或公認會計原則報告財務業績外，在電話會議期間，我們還將討論一些非公認會計原則財務指標，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, Bill Ballhaus. Please turn to Slide 3.

這些非公認會計原則指標的調節作為今天投影片簡報和收益新聞稿的附錄。現在我將把電話轉給 Mercury 總裁兼執行長 Bill Ballhaus。請翻到幻燈片 3。

Thanks, Dave. Good afternoon, everyone. Thank you for joining our Q1 FY '24 earnings call. Today, I'd like to talk through 3 topics: first, some introductory comments on our business and results. Second, an update on the progress we are making in each of our 4 priority areas that we outlined in our last call: delivering predictable performance, building and thriving growth engine, expanding margins and driving improved free cash flow. And third, expectations for our performance, both for FY '24 and longer term. Then I'll turn it over to Dave, who will walk through our financial results and guidance in more detail.

謝謝，戴夫。大家下午好。感謝您參加我們的 24 財年第一季財報電話會議。今天我想講三個主題：第一，對我們的業務和業績做一些介紹性的評論。其次，介紹我們在上次電話會議中概述的 4 個優先領域中所取得的最新進展：提供可預測的業績、建立和蓬勃發展的成長引擎、擴大利潤率以及推動改善自由現金流。第三，對我們 24 財年及更長期業績的預期。然後我會將其交給戴夫，他將更詳細地介紹我們的財務表現和指導。

Please turn to Slide 4. Since our last quarter's call and during my first full quarter in the business, I've had the opportunity to meet with a number of customers, visit our Mercury teams and facilities domestically and abroad and deepen my understanding of the underlying opportunities and challenges in the business. As I said last quarter, I am optimistic and confident in our strategic positioning as a leader in mission-critical processing at the edge, the attractiveness of our business model, and our outlook over time to deliver predictable organic growth with expanding margins and robust free cash flow. In the near term, however, we are addressing 2 transitory dynamics in our business that are impacting our financial results.

請參閱幻燈片4。自從我們上個季度的電話會議以來以及在我從事該業務的第一個完整季度期間，我有機會與許多客戶會面，參觀了我們國內外的水星團隊和設施，並加深了我對業務的了解。業務中潛在的機會和挑戰。正如我上季度所說，我對我們作為邊緣關鍵任務處理領導者的戰略定位、我們業務模式的吸引力以及我們隨著時間的推移實現可預測的有機增長、不斷擴大的利潤和強勁的免費服務的前景感到樂觀和充滿信心。現金週轉。然而，短期內，我們正在解決業務中影響我們財務表現的兩個暫時性動態。

First, a high mix of low-margin development programs that we expect to eventually transition into a portfolio of predictably performing production programs; and second, an increase in working capital over the last few years namely in unbilled receivables and inventory that will convert over time into significant free cash flow. I'd like to provide a little color on these 2 transients before turning to our priorities including how we are addressing these dynamics.

首先，我們期望最終轉變為可預測執行的生產項目組合的低利潤開發項目的高組合；其次，過去幾年營運資本的增加，即未開票的應收帳款和庫存的增加，隨著時間的推移，這些資金將轉化為大量的自由現金流。在討論我們的優先事項（包括我們如何解決這些動態問題）之前，我想對這兩個瞬態現象提供一些說明。

Please turn to Slide 5. With respect to the volume of development activities, as we discussed last quarter, we entered the year with an increased mix of development revenue versus production revenue at approximately 40-60 versus our historical norm of 20-80. We view this increased mix as a positive indicator of future organic growth as we complete the development efforts and transition to production programs. In the near term, however, and including in Q1, we are seeing this higher mix impact our P&L in a number of ways.

請參閱投影片 5。關於開發活動的數量，正如我們上季度討論的那樣，我們進入這一年時，開發收入與生產收入的比例約為 40-60，而歷史標準為 20-80。隨著我們完成開發工作並過渡到生產計劃，我們將這種增加的組合視為未來有機成長的正面指標。然而，在短期內，包括第一季，我們看到這種更高的組合以多種方式影響我們的損益。

First, mix-driven margin pressure as our development programs typically generate 1,000 basis points lower gross margin on average than our production programs. Second, cost growth impact on a subset of programs, a majority of which are development in nature, has led to additional volatility in our revenue and gross margin. Third, continued buildup of working capital as we progress these programs, which are typically overtime contracts toward completion and billing milestones. And fourth, lumpiness and delays in follow-on development task orders and production contracts tied to completion of development activities.

首先，混合驅動的利潤壓力，因為我們的開發項目產生的毛利率通常比我們的生產項目平均低 1,000 個基點。其次，成本成長對部分項目（其中大部分是開發性質）的影響導致我們的收入和毛利率出現額外波動。第三，隨著我們推進這些計劃，營運資金不斷積累，這些計劃通常是為了完成和計費里程碑而加班的合約。第四，與完成開發活動相關的後續開發任務訂單和生產合約的混亂和延遲。

Again, despite the near-term impacts on our results, we view this increased mix of development work as a positive leading indicator of organic growth associated with the transition of the development efforts to production contracts. I'll come back to our progress in executing on the development programs in a moment.

同樣，儘管對我們的業績產生了短期影響，但我們認為這種開發工作組合的增加是與開發工作向生產合約過渡相關的有機成長的積極領先指標。稍後我將回顧我們執行開發計劃的進展。

Please turn to Slide 6. Turning now to the second transient I mentioned, which is the large ramp in unbilled receivables and inventory over the last 2 years, largely related to our subsystem development programs. The increase in unbilled receivables has occurred across a number of large, long-standing contracts, many of which relate to our challenged programs where revenue is recognized as we make progress on the contracts or specifically as material is consumed and hardware is assembled, while invoicing on these contracts has generally been tied to shipments of completed hardware.

請看投影片 6。現在轉向我提到的第二個瞬態，即過去兩年未開立應收帳款和庫存的大幅增加，很大程度上與我們的子系統開發計畫有關。未開立發票應收帳款的增加發生在許多大型長期合約中，其中許多與我們面臨挑戰的計劃有關，在這些計劃中，當我們在合約上取得進展時，或者特別是在材料消耗和硬體組裝時確認收入，同時開立發票這些合約通常與成品硬體的運輸掛鉤。

As a result, over the last 2 years, we have recognized revenue and adjusted EBITDA on these contracts and generated unbilled receivables that will only convert to cash once we complete the hardware deliveries. Our large unbilled receivable balances reflect a growing amount of hardware in process, largely tied to our subsystem development programs that we need to deliver in order to invoice and collect cash.

因此，在過去的兩年裡，我們確認了這些合約的收入並調整了 EBITDA，並產生了未開立的應收帳款，這些應收帳款只有在我們完成硬體交付後才會轉換為現金。我們大量的未開立發票應收帳款餘額反映了在建硬體數量的不斷增加，這在很大程度上與我們需要提供的子系統開發計劃有關，以便開立發票和收取現金。

Additionally, it's important to note that on many of the programs with large unbilled balances, the majority of revenue has been recognized and only a small portion of the contract revenue remains to be recognized with the final delivery of the hardware. On a late-stage program, for example, the unbilled receivable balance can represent upwards of 80% or more of the total contract value. As material received and labor incurred would have been recognized as revenue in prior periods. Looking ahead, as we complete the hardware associated with that unbilled balance, while we'll be able to invoice and collect cash for 100% of the hardware value, we will be recognizing a small fraction of the total remaining contract revenue.

此外，值得注意的是，在許多具有大量未開票餘額的項目中，大部分收入已得到確認，只有一小部分合約收入仍有待在最終交付硬體時確認。例如，在後期項目中，未開立發票應收帳款餘額可能佔合約總價值的 80% 以上。由於收到的材料和發生的勞務將在前期確認為收入。展望未來，當我們完成與未開票餘額相關的硬體時，雖然我們將能夠為硬體價值的 100% 開立發票並收取現金，但我們將確認剩餘合約總收入的一小部分。

A second significant driver of the growth in unbilled in inventory over the last 2 years has been our historical approach to ordering material ahead of hardware delivery as opposed to just in time, due in part to prior disruptions in the supply chain. Receiving material ahead of the just-in-time need has adversely increased working capital in a number of ways. On overtime revenue contracts, material was kitted and labor allocated to respective programs resulting in revenue recognition and in most cases, increased unbilled receivables given our legacy billing terms were weighted heavily towards hardware shipments.

過去兩年未開票庫存成長的第二個重要驅動因素是我們過去的做法是在硬體交付之前訂購材料，而不是及時訂購，部分原因是供應鏈之前發生了中斷。在滿足即時需求之前接收材料會在許多方面對營運資金產生不利影響。在加班收入合約中，材料被配備，勞動力被分配到相應的項目，從而導致收入確認，並且在大多數情況下，由於我們的傳統計費條款嚴重偏重於硬體發貨，因此未開票應收賬款增加。

For our point-in-time revenue contracts, material was received into inventory awaiting any remaining components within the bill of material to begin transformation to end product. Related to a number of development programs, material was purchased and received into inventory in advance of production awards to support customer schedules, but for which development is a precursor.

對於我們的時間點收入合同，材料被接收到庫存中，等待材料清單中的任何剩餘組件開始轉換為最終產品。與許多開發計劃相關，在生產授予之前就購買了材料並將其存入庫存，以支援客戶的進度，但開發是其先導。

Going forward, our approach to address even the buildup in working capital is very simple: deliver hardware so that we can invoice and collect cash and time material closely to resource availability and ultimately, hardware delivery need dates. While our approach to unlocking a significant amount of cash over time is clear, in the near term, working through the current volume of hardware in process creates pressure on our P&L in a couple of ways.

展望未來，我們解決營運資金累積問題的方法非常簡單：提供硬件，以便我們可以根據資源可用性以及最終的硬體交付需求日期開立發票並收集現金和時間材料。雖然我們隨著時間的推移釋放大量現金的方法是明確的，但在短期內，處理目前在建硬體數量會在幾個方面給我們的損益帶來壓力。

First, completing hardware associated with the unbilled receivables consumes significant operational capacity, but generates little revenue. Second, our cash-efficient operational approach aligning timing of material consumption to hardware delivery and cash milestone payments yields less near-term revenue, creating a timing dynamic. That said, we believe this shift is important to improving our working capital posture over the long run. With this overview of 2 significant near-term transient in our business, I'll now transition to an update on our 4 priority areas that I introduced in our last quarterly call that also address these dynamics.

首先，完成與未開立發票應收帳款相關的硬體會消耗大量營運能力，但產生的收入卻很少。其次，我們的現金高效營運方法將材料消耗時間與硬體交付和現金里程碑付款相結合，從而減少了近期收入，從而創造了時間動態。也就是說，我們認為這種轉變對於改善我們的長期營運資本狀況非常重要。概述了我們業務中的 2 個近期重大瞬變，我現在將過渡到我在上一季度電話會議中介紹的 4 個優先領域的最新情況，這些領域也解決了這些動態。

Please turn to Slide 7. Starting first with our focus on delivering more predictable performance through improved execution on our development programs. During Q1, we continued to build and mature integrated processes and management systems to deliver more predictable performance on complex development programs with an immediate focus on the approximately 20 challenge programs that contributed to a majority of the $56 million in cost growth in FY '23. We made good progress executing on these programs in Q1. During the quarter, we completed two more of the approximately 20 challenge programs that we referenced in our last call, in addition to the 2 programs completed as of Q4. We remain on track to complete 5 or more of the challenged programs by H1 as expected, and we expect to complete the majority of the challenged programs by the end of FY '24.

請參閱投影片 7。首先，我們將重點放在透過改進開發計劃的執行來提供更可預測的績效。在第一季度，我們繼續建立和成熟整合流程和管理系統，以便在複雜的開發項目上提供更可預測的效能，並立即關注約20 個挑戰項目，這些項目在23 財年5,600 萬美元的成本成長中佔了大部分。我們在第一季執行這些計劃方面取得了良好進展。在本季度，除了截至第四季度已完成的 2 個項目外，我們還完成了上次電話會議中提到的約 20 個挑戰項目中的兩個項目。我們仍有望按預期在上半年完成 5 個或更多挑戰項目，我們預計將在 24 財年末完成大部分挑戰項目。

We also saw a significantly reduced impact from cost growth on these programs in the quarter with little variation except for one of the 20 reference programs. Cost growth impact on the challenge programs was approximately $6 million in the quarter, of which $5 million was driven by one program. On this program, the cost growth impact was a result of facts and circumstances that arose in the quarter and specifically related to engineering changes in the development efforts, impacting the bill of materials for low rate initial production hardware units. The remainder of the challenged programs executed reasonably well against revised baseline estimates with an aggregate impact of approximately $1 million in the quarter.

我們還發現，本季成本成長對這些計畫的影響顯著降低，除了 20 個參考計畫之一之外，幾乎沒有變化。本季挑戰專案的成本成長影響約為 600 萬美元，其中 500 萬美元由一個專案驅動。在此計劃中，成本增長的影響是本季度出現的事實和情況造成的，特別是與開發工作中的工程變更相關，影響了低速初始生產硬體單元的物料清單。其餘受到質疑的項目相對於修訂後的基準估計執行得相當好，本季的總影響約為 100 萬美元。

As anticipated and in the normal course of business, we experienced some cost growth impact on programs outside of the 20 challenge programs referenced in the prior quarter. Specifically, we recorded an impact of approximately $12 million across the remaining program portfolio. This cost growth impact was primarily non-technical in nature and related mostly to investment decisions and annual standard cost increases. Of that $12 million, nearly half was expected in our first quarter, understood early and actively managed. The remaining $6 million reflected a high volume of low dollar impacts across a large set of programs demonstrating our more rigorous program management review process, which began in Q1.

正如預期的那樣，在正常業務過程中，我們對上一季提到的 20 個挑戰項目之外的項目經歷了一些成本增長影響。具體而言，我們記錄了剩餘計劃組合的影響約為 1200 萬美元。這種成本成長影響主要是非技術性的，主要與投資決策和年度標準成本成長有關。在這 1200 萬美元中，近一半是我們第一季預計的、及早了解並積極管理的。剩下的 600 萬美元反映了大量專案的大量低美元影響，這表明我們從第一季開始就採取了更嚴格的專案管理審查流程。

While this level of cost growth impact was not expected in the first quarter, it was a planned risk within our annual guidance. It is worth noting that our production programs, which accounted for approximately 60% of our annual revenue over the past year, continue to perform predictably and profitably at gross margins consistent with our historical averages of approximately 40%. However, our heightened mix of development programs, which accounted for approximately 40% of our annual revenue over the past year combined with the temporary cost growth we are experiencing on a relatively small number of programs, continues to obscure the underlying performance of the business and contributed to the majority of our year-over-year gross margin decline. I believe the actions we are taking to improve program execution will yield tangible progress toward more predictable performance as we move through FY '24.

雖然第一季不會出現這種程度的成本成長影響，但這是我們年度指引中計畫的風險。值得注意的是，我們的生產項目約占我們去年年收入的 60%，繼續以可預測的方式實現盈利，毛利率與我們約 40% 的歷史平均水平一致。然而，我們的開發項目組合不斷增加，約占我們去年年收入的 40%，加上我們在相對較少的項目上經歷的臨時成本增長，繼續掩蓋了業務的基本業績和造成我們毛利率同比下降的主要原因是。我相信，隨著我們進入 24 財年，我們為改進計劃執行而採取的行動將在實現更可預測的績效方面取得實際進展。

Turning now to our focus on driving organic growth in tuning the growth engine that is bidding and winning new contracts at an appropriate level given our scale. In our last call, I mentioned that this effort will occur over a longer period of time given the time constants associated with improving book-to-bill levels and that our near-term growth will likely be fueled by the transition of development programs to production programs where we are extremely well positioned primarily in the back half and beyond this fiscal year.

現在轉向我們的重點是推動有機成長，調整成長引擎，即根據我們的規模，在適當的水平上競標和贏得新合約。在我們上次的電話會議中，我提到，鑑於與提高訂單到賬單水平相關的時間常數，這項工作將在更長的時間內進行，並且我們的近期增長可能會受到開發計劃向生產的過渡的推動我們主要在本財年下半年及以後的計劃中處於極其有利的位置。

Our bookings for the quarter were $191.5 million, resulting in a book-to-bill of 1.06. While we continue to see steady demand for our standard product businesses, which are comprised of components and modules, we saw a delay in bookings for our subsystem offerings outside of Q1. As discussed last quarter, we see a number of subsystem production bookings that have been delayed due to the dependency on completing challenged development programs.

本季我們的訂單量為 1.915 億美元，訂單出貨比為 1.06。雖然我們繼續看到由組件和模組組成的標準產品業務的穩定需求，但我們發現第一季以外的子系統產品的預訂出現了延遲。正如上季所討論的，我們看到許多子系統生產預訂由於依賴完成有挑戰性的開發計劃而被推遲。

As we complete these development programs in FY '24, we anticipate growth in follow-on production bookings. That said, we did receive some important bookings in Q1 and have good line of sight on major bookings later in the year that will drive organic growth in FY '25 and beyond.

當我們在 24 財年完成這些開發計畫時，我們預計後續生產訂單將會成長。也就是說，我們確實在第一季收到了一些重要的預訂，並且對今年稍後的主要預訂有良好的視野，這將推動 25 財年及以後的有機增長。

For example, in Q1, we received a large award from a government customer to develop composable secure system and package technologies. The total contract value is worth more than $80 million, only a fraction of which was included in our Q1 bookings.

例如，在第一季度，我們獲得了政府客戶的大筆獎勵，以開發可組合的安全系統和封裝技術。合約總價值超過 8000 萬美元，其中只有一小部分包含在我們第一季的預訂中。

Given our position in the defense industrial base, and our positioning as a leader in mission-critical processing at the edge, we continue to see a large organic growth opportunity in front of us. Our customers recognize the unique value we bring and continue to rely on us for their most critical franchise programs. Our focus on execution, particularly in our subsystem business will pave the way for a return to strong organic growth in FY '25 and beyond.

鑑於我們在國防工業基地的地位，以及我們作為邊緣關鍵任務處理領域領導者的定位，我們繼續看到擺在我們面前的巨大有機成長機會。我們的客戶認識到我們帶來的獨特價值，並繼續依賴我們來實施他們最重要的特許經營計劃。我們對執行的關注，特別是在我們的子系統業務中，將為 25 財年及以後恢復強勁的有機成長鋪平道路。

Please turn to Slide 8. Turning now to our priority focus on margin expansion. Last quarter, we laid out a bridge for delivering industry-leading margins in the mid-20% range, as shown on the slide. While we have confidence in this outlook, clearly, we are not there today given the transient we're experiencing in the business. This quarter, our high mix of development programs and the cost growth impact I mentioned earlier, were the primary drivers of variance to our long-term gross margin goals.

請轉向幻燈片 8。現在轉向我們的首要關注點是利潤擴張。上個季度，我們為實現 20% 左右的行業領先利潤率搭建了一座橋樑，如幻燈片所示。雖然我們對這一前景充滿信心，但顯然，鑑於我們在業務中經歷的短暫性變化，我們今天還沒有實現這一目標。本季度，我們的開發計劃的高度混合和我之前提到的成本成長影響是我們長期毛利率目標差異的主要驅動因素。

Additionally, given the year-over-year revenue decline, which I'll speak to in a moment, we experienced negative operating leverage in the quarter, driving the additional variance to our long-term adjusted EBITDA margin expectations. To achieve our adjusted EBITDA margin targets, as we discussed last quarter, we are focused on the following levers: executing on development programs and minimizing cost growth impacts, adjusting back toward a historical mix of development production programs, driving organic growth to generate positive operating leverage and achieving efficiencies through our cost structure.

此外，考慮到營收年減（我稍後會談到），我們​​在本季經歷了負營運槓桿，導致我們的長期調整後 EBITDA 利潤率預期出現額外差異。為了實現我們調整後的EBITDA 利潤率目標，正如我們上季度討論的那樣，我們專注於以下槓桿：執行開發計劃並最大限度地減少成本增長影響，調整開發生產計劃的歷史組合，推動有機增長以產生積極的營運透過我們的成本結構發揮槓桿作用並提高效率。

Since I have already discussed the first 3 levers, let me touch on our approach to driving efficiencies through our cost structure. As we discussed in the last call, as I stepped into the business, the team worked quickly to make targeted reductions to our operating expenses in an effort to better align our cost structure with our scale and financial expectations. These actions are expected to generate approximately $24 million in annual run rate cost savings, including approximately $20 million to $22 million of net benefit to fiscal '24.

由於我已經討論了前 3 個槓桿，讓我談談我們透過成本結構提高效率的方法。正如我們在上次電話會議中討論的那樣，當我進入該業務時，團隊迅速開展工作，有針對性地削減我們的營運費用，以便更好地使我們的成本結構與我們的規模和財務預期保持一致。這些行動預計將每年節省約 2,400 萬美元的營運成本，其中包括為 24 財年帶來約 2,000 萬至 2,200 萬美元的淨收益。

In addition, in Q1, we developed initiatives to achieve additional efficiencies in SG&A, targeted prioritizations and R&D investments and longer-term manufacturing footprint to drive margin expansion through gross margin and operating leverage. These ongoing efforts will continue to yield efficiencies in our business through the back half of the year and beyond.

此外，在第一季度，我們制定了一些舉措，以提高銷售、管理和行政費用、有針對性的優先順序和研發投資以及長期製造足跡的效率，以透過毛利率和營運槓桿推動利潤率擴張。這些持續的努力將在今年下半年及以後繼續提高我們的業務效率。

Please turn to Slide 9. Turning to our fourth priority focus. Improving cash flow by reducing the working capital that has accumulated in the business over the last few years. As I've mentioned, improved free cash flow conversion and cash release involves delivering hardware and transitioning to a cash-efficient approach whereby we are timing material more closely to resource availability and ultimately, hardware deliveries. With time, we are confident that this approach will deliver significant free cash flow.

請翻到投影片 9。轉向我們的第四個優先焦點。透過減少過去幾年企業累積的營運資金來改善現金流。正如我所提到的，改善自由現金流轉換和現金釋放涉及交付硬體並過渡到現金效率高的方法，透過這種方法，我們可以更緊密地根據資源可用性以及最終的硬體交付來安排材料。隨著時間的推移，我們相信這種方法將帶來大量的自由現金流。

However, as we work through this transition, we will see some temporary impacts to our P&L, as we are applying operational capacity to delivering hardware with little revenue and moving towards a more cash efficient operational posture, which will result in lower overtime revenue in the near term. Reflective of these impacts, revenue in Q1 was $181 million down $47 million or 20% compared to the first quarter of FY '23. The year-over-year decline in revenue was almost entirely driven by our volume of overtime revenue in Q1 versus last year.

然而，當我們完成這一轉變時，我們將看到對損益表的一些暫時影響，因為我們正在運用營運能力來提供收入很少的硬件，並轉向更現金效率更高的營運態勢，這將導致加班收入降低短期。考慮到這些影響，第一季的營收為 1.81 億美元，比 23 財年第一季減少了 4,700 萬美元，即 20%。收入年減幾乎完全是由我們第一季的加班收入與去年相比造成的。

In Q1 of FY '23 specifically, we received a significant amount of material to which we applied labor and progressed the program but could not complete and deliver hardware. This yielded a nearly all-time high of $143 million in overtime revenue in the quarter. This compares to $105 million of overtime revenue in Q1 of FY '24, our lowest quarterly overtime revenue since 2021. This year-over-year decline of almost $40 million, demonstrates the dynamic associated with our operational shift to better align with a just-in-time model with regard to both material and labor resources as well as timing on our production follow-on activity. We expect to see a downward trend in unbilled receivables related to our large long-standing contracts and especially our challenge programs as we progress through the year and apply resources to deliver hardware and burn down legacy unbilled balances.

具體來說，在 23 財年第一季度，我們收到了大量資料，我們對其進行了人工處理並推進了項目，但無法完成和交付硬體。這使得該季度的加班收入幾乎創歷史新高，達到 1.43 億美元。相較之下，24 財年第一季的加班收入為1.05 億美元，這是我們自2021 年以來最低的季度加班收入。這一同比下降近4000 萬美元，表明了與我們的營運轉變相關的動態，以便更好地與剛剛實現的目標保持一致。關於物質和勞動力資源以及我們後續生產活動的時間安排的及時模型。我們預計，隨著我們在這一年中取得進展並運用資源提供硬體並銷毀遺留的未開票餘額，與我們的大型長期合約相關的未開立應收帳款將呈下降趨勢，尤其是我們的挑戰計劃。

While we expect an overall decrease in unbilled receivables as we exit FY '24, this will be partially offset by growth in overtime revenues in the second half of the year. Inventory increased $26 million in the quarter, primarily tied to material orders over the last few quarters in anticipation of follow-on production awards. As we progress through FY '24, we expect to see this balance decrease as we complete development programs, receive follow-on production awards and transition the business to a more disciplined, cash-efficient approach, especially with regard to material receipt and labor transformation timing.

雖然我們預計隨著 24 財年退出，未開票應收帳款將整體減少，但這將被下半年加班收入的成長部分抵消。本季度庫存增加了 2600 萬美元，主要與過去幾季的材料訂單有關，以期獲得後續生產訂單。隨著我們在24 財年的進展，我們預計隨著我們完成開發計劃、獲得後續生產獎勵並將業務轉變為更加規範、現金效率更高的方法，尤其是在材料接收和勞動力轉型方面，這種餘額將會減少定時。

Please turn to Slide 10. With that overview of our priority focus, let me wrap with a summary of our expectations looking forward. We are reiterating our full year FY '24 guidance based on our current view of bookings, timing of product delivery and our allocation of factory capacity. As we continue to work through the transient I referenced earlier, we anticipate improved profitability in the second half and positive free cash flow for the year. While there remains risk of a government shutdown or a prolonged continuing resolution and there may be some variability in the timing of improvement as we address transitory impacts on the business, we are confident we will see the benefit of our efforts reflected in financial results as we move towards the back half of FY '24.

請參閱投影片 10。在概述了我們的優先重點之後，讓我總結一下我們對未來的期望。我們根據目前的預訂、產品交付時間和工廠產能分配的觀點，重申 24 財年全年指引。隨著我們繼續解決我之前提到的暫時性問題，我們預計下半年的獲利能力將有所改善，今年的自由現金流將為正值。儘管仍然存在政府關閉或長期持續解決方案的風險，並且在我們解決對業務的暫時影響時，改進的時間可能存在一些變化，但我們相信，隨著我們的努力，我們的努力將在財務業績中得到體現。邁向 24 財年後半段。

Furthermore, these actions will unlock organic growth and continued margin expansion as we exit the fiscal year. In summary, we remain confident in our strategic positioning, our business model and our ability to deliver organic growth with expanding margins and attractive free cash flow over the mid- to long term.

此外，當我們結束本財年時，這些行動將釋放有機成長和持續的利潤率擴張。總而言之，我們對我們的策略定位、業務模式以及在中長期內透過不斷擴大的利潤率和有吸引力的自由現金流實現有機成長的能力仍然充滿信心。

With that, I'll turn the call over to Dave to walk through the financial results for the first quarter, and I look forward to your questions. Dave?

接下來，我將把電話轉給戴夫，介紹第一季的財務業績，並期待您的提問。戴夫？

Thank you, Bill. I'll start with our first quarter fiscal '24 results and then discuss our full year fiscal '24 guidance. As Bill mentioned in our first full quarter at Mercury, we have spent considerable time visiting our facilities, meeting many of our employees and deepening our understanding of the capabilities and challenges in the business.

謝謝你，比爾。我將從我們的 24 財年第一季業績開始，然後討論我們的 24 財年全年指導。正如比爾在水星的第一個完整季度中提到的，我們花了相當多的時間參觀我們的設施，會見我們的許多員工，並加深我們對業務能力和挑戰的了解。

I continue to be impressed by the breadth of innovation throughout our program offerings as well as the unwavering commitment of our employees to deliver mission-critical processing to the edge. It has also become increasingly evident that our near-term focus on developing a mature integrated management operating system is the anchoring point from which we can achieve predictable performance and deliver differentiated end-to-end processing solutions that our customers demand.

我們整個計劃產品的創新廣度以及我們員工將關鍵任務處理交付到邊緣的堅定承諾仍然給我留下了深刻的印象。越來越明顯的是，我們近期對開發成熟的整合管理作業系統的關注是我們實現可預測效能並提供客戶所需的差異化端到端處理解決方案的基點。

Turning to our first quarter fiscal '24 results. As expected, our financial performance was below that of the prior year across all P&L metrics. As discussed in our last earnings call, fiscal '24 is a transition year, where the organization is dedicated to executing on our challenged programs, most of which are development in nature and then progressing to the follow-on production awards. Through that transition, we will recognize the small proportion of remaining revenues on the challenge program contracts.

轉向我們 24 財年第一季的業績。正如預期的那樣，我們的所有損益指標的財務表現均低於上一年。正如我們在上一次財報電話會議中所討論的，24 財年是一個過渡年，該組織致力於執行我們面臨的挑戰項目，其中大部分是開發性質的，然後進入後續生產獎。透過這項轉變，我們將認識到挑戰計畫合約中剩餘收入的一小部分。

But more importantly, we will move toward releasing the significant working capital balances that have accumulated, particularly within unbilled receivables. We will then shift our resources to execute on the follow-on production awards, which will begin to rebalance our program portfolio more heavily towards higher-margin, predictable production programs as well as consume existing inventories. We expect this transition to occur throughout fiscal '24 and into fiscal '25. In Q1, we made progress towards this rebalance through the complication of 2 additional challenged programs and are on track to complete at least 5 challenged programs in the first half of fiscal '24. Our portfolio of production programs continues to execute predictably and in line with expectations.

但更重要的是，我們將著手釋放已累積的大量營運資金餘額，特別是未開立應收帳款。然後，我們將把我們的資源轉移到執行後續的生產任務上，這將開始重新平衡我們的項目組合，更多地轉向利潤率更高、可預測的生產項目，並消耗現有庫存。我們預計這一轉變將在整個 24 財年和 25 財年期間發生。在第一季度，我們透過 2 個額外的挑戰計畫的複雜化在再平衡方面取得了進展，並有望在 24 財年上半年完成至少 5 個挑戰計畫。我們的生產計劃組合繼續按預期執行並符合預期。

With that as background, please turn to Slide 11, which details the Q1 results. Our bookings for the quarter were $192 million with a book-to-bill of 1.06, yielding backlog of $1.15 billion. We have several meaningful awards expected in the second quarter and continue to expect the book-to-bill above 1.0 for the first half and full fiscal '24. Revenues for the first quarter were $181 million, down $47 million or 20% compared to the prior year of $228 million.

以此為背景，請參閱投影片 11，其中詳細介紹了第一季的結果。本季我們的訂單量為 1.92 億美元，訂單出貨比為 1.06，積壓訂單量為 11.5 億美元。我們預計第二季將獲得幾個有意義的獎項，並繼續預計上半年和整個 24 財年的訂單出貨比將高於 1.0。第一季營收為 1.81 億美元，比去年同期的 2.28 億美元減少 4,700 萬美元，成長 20%。

As expected, revenues decreased year-over-year due to our pivot towards enhanced execution. Specifically, with regard to our challenged programs, we have recognized a majority of the revenue and related costs as we acquired material and applied labor over the period of performance to progress these programs. As we continue to resolve technical challenges and complete these programs, the remaining revenues are recognized.

正如預期的那樣，由於我們轉向加強執行，收入同比下降。具體來說，對於我們面臨挑戰的項目，我們已經確認了大部分收入和相關成本，因為我們在執行期間獲得了材料和應用勞動力來推進這些項目。隨著我們繼續解決技術挑戰並完成這些計劃，剩餘的收入得到確認。

However, these revenues represent only a very small proportion of the total contract value. In addition, as we transition to a just-in-time operating model to more properly balanced working capital, we are experiencing a temporary shift in the allocation of material and related labor to our overtime revenue programs. This is evidenced by a decrease of approximately $40 million in overtime revenues year-over-year. Gross margin for the quarter decreased to 27.9% from 34.3% in the prior year. Gross margin contracted 640 basis points, primarily as a result of program mix and related cost growth impacts year-over-year.

然而，這些收入僅佔合約總價值的一小部分。此外，隨著我們過渡到準時營運模式，以更適當地平衡營運資金，我們正在經歷加班收入計畫的材料和相關勞動力分配的暫時轉變。加班收入年減約 4000 萬美元就證明了這一點。本季毛利率從去年同期的 34.3% 下降至 27.9%。毛利率收縮了 640 個基點，主要是由於計劃組合和相關成本增長影響同比。

Program mix in the quarter continues to be heavily weighted towards the execution of our challenged programs, most of which are development in nature and carry lower gross margins. Certain of our challenged programs, trend lower on average on gross margins as a result of costs associated with technical issues. The growth in estimated cost to complete recorded in fiscal '23, resulted in a onetime cumulative impact, but also significantly reduced overall margins recognized on these programs through completion.

本季的計劃組合繼續主要專注於執行我們面臨的挑戰計劃，其中大部分是開發性質的，毛利率較低。由於與技術問題相關的成本，我們的某些受到挑戰的項目的平均毛利率呈下降趨勢。 23 財年記錄的估計完成成本的成長導致了一次性的累積影響，但也顯著降低了這些專案在完成後確認的整體利潤率。

In addition, we recorded approximately $18 million of cost growth impact in the first quarter. This represents approximately $5 million or 410 basis points of incremental cost growth impact in the first quarter of fiscal '24 as compared to the prior year. As Bill mentioned, the cost growth impact recognized on challenged programs, was $6 million, and related to facts and circumstances in the quarter, which were primarily nontechnical in nature. Approximately $5 million was recognized on one program with the remaining $1 million recognized across all other challenged programs.

此外，我們在第一季記錄了約 1,800 萬美元的成本成長影響。這意味著與前一年相比，24 財年第一季的增量成本成長影響約為 500 萬美元或 410 個基點。正如 Bill 所提到的，對受挑戰的項目確認的成本增長影響為 600 萬美元，並且與本季度的事實和情況有關，這些事實和情況主要是非技術性的。其中一個項目獲得了大約 500 萬美元的資助，其餘 100 萬美元則用於所有其他受到挑戰的項目獲得資助。

The remaining $12 million of cost growth impact was more normal course in nature and contemplated as planned risks in our guidance for the year. The remaining decrease in gross margin year-over-year was due to higher manufacturing variances primarily related to nonrecurring cost adjustments as well as inventory reserves. Operating expenses increased year-over-year primarily as a result of $9.5 million of restructuring charges in the quarter. Consistent with our fourth quarter earnings call, we completed a restructuring action in the first quarter, reducing our workforce as well as discretionary and third-party spend. These cost-saving actions are expected to yield net cost savings of $20 million to $22 million in fiscal '24 and annualized net savings of approximately $24 million going forward.

其餘 1200 萬美元的成本成長影響本質上是更正常的過程，並在我們今年的指導中作為計劃風險進行了考慮。毛利率年減的原因是製造差異較大，這主要與非經常性成本調整以及庫存儲備有關。營運費用年增主要是由於本季 950 萬美元的重組費用。與我們第四季度的財報電話會議一致，我們在第一季完成了重組行動，減少了我們的員工以及可自由支配的第三方支出。這些成本節約行動預計將在 24 財年實現淨成本節約 2,000 萬至 2,200 萬美元，並且未來年化淨節約約為 2,400 萬美元。

The increase of $9.5 million in operating expense was partially offset by the realization of these savings in the latter half of the first quarter, including the reversal of stock-based compensation or forfeitures related to the workforce reduction. GAAP net loss and loss per share in the first quarter was $36.7 million and $0.64, respectively, as compared to $14.3 million and $0.26, respectively, in the prior year. GAAP net loss in the first quarter of fiscal '24 included a tax benefit of $13 million calculated using the discrete method. A more appropriate methodology given our year-to-date and expected fiscal '24 results.

營運費用增加 950 萬美元，部分被第一季後半段實現的節省所抵消，其中包括扭轉股票薪酬或與裁員相關的沒收。第一季 GAAP 淨虧損和每股虧損分別為 3,670 萬美元和 0.64 美元，去年同期分別為 1,430 萬美元和 0.26 美元。 24 財年第一季的 GAAP 淨虧損包括使用離散方法計算的 1,300 萬美元的稅收優惠。考慮到我們今年迄今和預期的 24 財年業績，這是一種更合適的方法。

In the prior year, our income tax benefit was $1 million. Year-over-year, GAAP net loss and loss per share reflects negative operating leverage due to lower revenues of approximately $47 million and a 640 basis point reduction in gross margin, partially offset by the increased tax benefit. Adjusted EBITDA for the first quarter was $2 million compared to $31.2 million in the prior year. Adjusted loss per share was $0.24, and as compared to adjusted earnings per share of $0.24 in the prior year. Consistent with GAAP net loss and loss per share, the decrease was a result of lower revenues and gross margin. Free cash flow for the quarter was an outflow of approximately $47.1 million, as compared to an outflow of $73.4 million in the prior year.

去年，我們的所得稅優惠為 100 萬美元。與去年同期相比，公認會計原則淨虧損和每股虧損反映了由於收入減少約 4,700 萬美元和毛利率下降 640 個基點而產生的負經營槓桿，但部分被稅收優惠增加所抵消。第一季調整後 EBITDA 為 200 萬美元，去年同期為 3,120 萬美元。調整後每股虧損為 0.24 美元，上一年調整後每股收益為 0.24 美元。與公認會計準則淨虧損和每股虧損一致，此下降是由於收入和毛利率下降所致。本季自由現金流流出約 4,710 萬美元，而前一年流出 7,340 萬美元。

Slide 12 presents Mercury's balance sheet for the last 5 quarters. We ended the first quarter with cash and cash equivalents of $89 million. We increased our borrowings by $65 million to fund operations in the quarter, resulting in $576.5 million of funded debt under our $1.1 billion revolver. Billed receivables decreased approximately $33 million as a result of continued strong collections, coupled with lower invoicing volume in the quarter. Unbilled receivables increased approximately $6 million. In the quarter, there were 6 programs contributing about $20 million of incremental unbilled receivables with the balance of the portfolio declining approximately $14 million.

投影片 12 顯示了 Mercury 過去 5 個季度的資產負債表。第一季結束時，我們的現金和現金等價物為 8,900 萬美元。我們增加了 6,500 萬美元的借款，為本季的營運提供資金，導致我們 11 億美元的循環貸款下的融資債務達到 5.765 億美元。由於收款持續強勁，加上本季發票量減少，應收帳款減少了約 3,300 萬美元。未開立應收帳款增加約 600 萬美元。本季度，有 6 個項目貢獻了約 2,000 萬美元的增量未開立應收帳款，投資組合餘額減少了約 1,400 萬美元。

Inventory increased approximately $26 million, primarily as a result of the receipt of long lead material procured over 12 months ago. This inventory is required to execute against our existing backlog as well as expected demand. We continue to maintain abnormally high levels of working capital driven by unbilled receivables and inventory. As we progress through completion of our challenged programs, we will convert unbilled to build receivables and ultimately, cash.

庫存增加約 2600 萬美元，主要是因為收到了 12 個月前購買的長鉛材料。該庫存需要根據我們現有的積壓訂單以及預期需求來執行。在未開立應收帳款和庫存的推動下，我們持續維持異常高的營運資金水準。隨著我們完成挑戰性專案的進展，我們將把未開立的款項轉化為應收帳款，並最終轉化為現金。

With the receipt of follow-on production awards, a few of which are expected in the second quarter of fiscal '24, we will transition inventory acquired in anticipation of these awards to unbilled, then billed receivables and ultimately, cash. While unbilled receivables will continue to cycle as new awards progress, we expect to see an overall reduction as the legacy balances, especially related to our challenged programs. Our billed and collected yielding stronger cash flows in the second half of the year. In addition, as we continue to transition to a more just-in-time operating model, our inventory balance will decrease over time.

隨著收到後續生產合約（其中一些預計將在 24 財年第二季完成），我們將把預期這些合約而獲得的庫存轉為未開票、然後開票的應收帳款，最終轉為現金。雖然隨著新獎項的進展，未開立發票應收帳款將繼續循環，但我們預計遺留餘額將整體減少，特別是與我們面臨挑戰的項目相關的餘額。我們的計費和收款在下半年產生了更強勁的現金流。此外，隨著我們繼續向更準時的營運模式過渡，我們的庫存餘額將隨著時間的推移而減少。

Finally, we continue to negotiate more favorable terms and even advanced payments for long lead material on new contracts in an effort to further reduce our working capital to more appropriate levels. As we've discussed on prior calls, we consider 35% of trailing 12-month revenues to be a more appropriate level of working capital for the business.

最後，我們繼續就新合約中的長提前期材料談判更優惠的條款，甚至預付款，以進一步將我們的營運資金減少到更合適的水平。正如我們在先前的電話會議中所討論的那樣，我們認為過去 12 個月收入的 35% 對於企業來說是更合適的營運資金水準。

Turning to cash flow on Slide 13. Our free cash flow for the quarter was an outflow of $47.1 million, primarily as a result of our GAAP net loss of $36.7 million. In the quarter, we repriced our interest rate swap to approximately 4.7%, resulting in proceeds of $7.4 million.

轉向幻燈片 13 上的現金流。本季我們的自由現金流為 4,710 萬美元，主要是由於我們的 GAAP 淨虧損為 3,670 萬美元。本季度，我們將利率互換重新定價至約 4.7%，收益為 740 萬美元。

I'll now turn to our financial guidance for the full year fiscal '24 on Slide 14. As discussed on our fourth quarter earnings call, we have shifted our guidance approach in fiscal '24 to guide annually rather than quarterly. While we have taken actions to improve predictability, fiscal '24 will be a transition year with our primary focus on operational execution, especially with regard to our challenged programs. We are progressing on the completion of our challenged programs as expected and continue to believe we will complete 5 or more programs within the first half of fiscal '24 with the majority of programs completed by the end of the fiscal year.

現在，我將在投影片14 上討論我們對24 財年全年的財務指導。正如我們在第四季度財報電話會議上所討論的那樣，我們已經將24 財年的指導方法轉變為每年指導而不是季度指引。雖然我們已採取行動提高可預測性，但 24 財年將是過渡年，我們的主要重點是營運執行，尤其是我們面臨挑戰的計劃。我們正在按預期完成受挑戰的項目，並繼續相信我們將在 24 財年上半年完成 5 個或更多項目，其中大部分項目將在本財年年底前完成。

Our portfolio of production programs continues to execute predictably and in line with expectations. In addition, we expect the demand environment to continue to support strong bookings, especially in the second quarter, yielding a positive book-to-bill in fiscal '24. As a result, we are maintaining our full year guidance across revenues and adjusted EBITDA. Our fiscal '24 guidance for total company revenues remains at $950 million to $1 billion. This represents flat growth at the midpoint. Given our current backlog, combined with strong expected second quarter bookings, we have line of sight into the demand required to deliver revenue consistent with our full year guidance.

我們的生產計劃組合繼續按預期執行並符合預期。此外，我們預計需求環境將繼續支持強勁的預訂，特別是在第二季度，從而在 24 財年實現積極的預訂出貨比。因此，我們維持全年收入和調整後 EBITDA 的指導。我們對公司總收入的 24 財年指引仍為 9.5 億至 10 億美元。這代表中點成長平穩。鑑於我們目前的積壓，再加上預計第二季度的預訂量強勁，我們已經了解了交付與我們全年指導一致的收入所需的需求。

Our backlog continues to support a high level of revenue visibility providing more than 70% forward coverage for the remainder of the fiscal year. We continue to expect a book-to-bill above 1.0 for the first half and full fiscal '24. Revenues in the second quarter are expected to be lower than that of the prior year, as we continue to focus on the execution of our challenged programs. As discussed, final hardware deliveries represent a small proportion of the total contract value on these programs.

我們的積壓訂單繼續支持高水準的收入可見性，為本財年剩餘時間提供超過 70% 的遠期覆蓋率。我們繼續預期 2024 年上半年和整個財年的訂單出貨比將高於 1.0。由於我們繼續專注於執行有挑戰性的項目，預計第二季的收入將低於去年同期。如所討論的，最終的硬體交付僅佔這些專案合約總價值的一小部分。

However, these deliveries will drive a reduction to our working capital balances and most especially, unbilled receivables in the second quarter. Gross margins through the first half of the fiscal year will be below those of fiscal '23 as we continue to transition through the challenged programs and balance the potential for unknown risks that may materialize through final stages of completion. Gross margins will increase throughout the year as we receive and execute on the expected production follow-on awards and begin to shift from a lower-margin development program mix. GAAP results for fiscal '24 are expected to be in the range of a net loss of $15.9 million to net income of $3.8 million with GAAP loss per share of $0.28 to earnings per share of $0.07.

然而，這些交付將導致我們的營運資金餘額減少，尤其是第二季的未開立發票應收帳款。隨著我們繼續完成充滿挑戰的計劃並平衡在完成的最後階段可能出現的未知風險的潛力，本財年上半年的毛利率將低於 23 財年的毛利率。隨著我們收到並執行預期的後續生產合同，並開始從利潤率較低的開發計劃組合轉向，全年毛利率將有所增加。 24 財年的 GAAP 業績預計為淨虧損 1,590 萬美元至淨利 380 萬美元，GAAP 每股虧損 0.28 美元至每股收益 0.07 美元。

The improvement on the high end of the guidance range is primarily a result of lower stock-based compensation expense and income taxes. We continue to expect fiscal '24 adjusted EBITDA in the range of $160 million to $185 million, up 30% at the midpoint from fiscal '23 and reflecting adjusted EBITDA margins of 16.8% to 18.5%. Adjusted EPS is expected to be in the range of $1.19 to $1.54 per share. Adjusted EBITDA and adjusted EBITDA margins for the fiscal year continue to reflect the marked improvement in gross margins, although not a full recovery to historical levels. Reflecting the potential for unknown risks materializing as we transition through final stages of execution on our challenge programs, especially in the first half of the year.

指導範圍上限的改善主要是由於股票補償費用和所得稅的降低。我們繼續預期 24 財年調整後 EBITDA 在 1.6 億至 1.85 億美元之間，較 23 財年中點成長 30%，反映調整後 EBITDA 利潤率為 16.8% 至 18.5%。調整後每股收益預計在 1.19 美元至 1.54 美元之間。本財政年度調整後 EBITDA 和調整後 EBITDA 利潤率繼續反映出毛利率的顯著改善，儘管並未完全恢復到歷史水準。反映出當我們進入挑戰計畫執行的最後階段時，特別是在今年上半年，未知風險可能會出現。

We realized certain of those risks in the first quarter. Our adjusted EBITDA and adjusted EBITDA margins in the first half will be significantly below the comparative period in fiscal '23 with a meaningful ramp in the second half, supported by strong bookings leading to higher margin revenues as well as the continued execution and completion of a majority of our challenged programs. In addition, the cost actions we have taken, combined with our continued initiatives to expand margins will turn the negative operating leverage we experienced in Q1, into positive operating leverage in the second half of the year. We expect positive cash flow for the fiscal year, inclusive of a full year of cash outflows related to R&D tax legislation.

我們在第一季意識到了其中的某些風險。我們上半年的調整後EBITDA 和調整後EBITDA 利潤率將顯著低於23 財年的同期水平，下半年將出現有意義的增長，這得益於強勁的預訂導致更高的利潤率收入以及持續執行和完成的我們大多數受到挑戰的項目。此外，我們採取的成本行動，加上我們持續擴大利潤率的舉措，將使我們在第一季經歷的負經營槓桿在下半年轉變為正經營槓桿。我們預計本財年將出現正現金流，包括與研發稅收立法相關的全年現金流出。

While cash flow in the second quarter is projected to be negative, we expect significant improvement in cash flow in the second half of the fiscal year as we complete a majority of our challenged programs, ship and bill final product and convert unbilled receivables to billed receivables and then to cash. A government shutdown or prolonged continuing resolution may pose risk to our cash flow expectations. As discussed, we expect improvement in net working capital by the end of the year as we begin to see reductions in unbilled receivables and inventory with more meaningful reductions over the longer term. Our continued progress on executing against our challenge programs, coupled with our strong slate of existing programs within our backlog as well as new or expanded program content bookings throughout the year, positions us well for organic growth, margin expansion and improved working capital over time.

雖然第二季的現金流預計為負數，但我們預計本財年下半年的現金流將顯著改善，因為我們完成了大部分有挑戰性的計劃，運輸和開立最終產品帳單，並將未開票應收帳款轉換為開立發票應收帳款然後到現金。政府關門或長期持續的解決方案可能會為我們的現金流量預期帶來風險。正如所討論的，我們預計到今年年底淨營運資本將有所改善，因為我們開始看到未開票應收帳款和庫存的減少，並且從長遠來看，減少的幅度更大。我們在執行挑戰計劃方面不斷取得進展，加上我們積壓的現有計劃以及全年新的或擴展的計劃內容預訂，使我們能夠隨著時間的推移實現有機增長、利潤擴張和營運資本改善。

In closing, we continue to be focused on 4 priorities: enhancing execution to deliver predictable performance, building a thriving organic growth engine, addressing our cost structure to improve margin expansion and driving free cash flow release and improved conversion. Executing on these priorities will not only enable a return to historical revenue growth and profitability, but will also drive further margin expansion and cash conversion, demonstrating the long-term value creation potential of the business.

最後，我們繼續關注 4 個優先事項：增強執行力以提供可預測的績效、建立蓬勃發展的有機成長引擎、解決成本結構以提高利潤率擴張、推動自由現金流釋放和提高轉換率。執行這些優先事項不僅能夠恢復歷史收入成長和獲利能力，還將推動進一步的利潤擴張和現金轉換，以展示業務的長期價值創造潛力。

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

這樣，我現在將把電話轉回給比爾。

Thanks, Dave. With that, operator, let's proceed with the Q&A.

謝謝，戴夫。那麼，接線員，讓我們繼續進行問答。

(Operator Instructions) Our first question comes from the line of Ken Herbert with RBC Capital Markets.

（操作員說明）我們的第一個問題來自 RBC Capital Markets 的 Ken Herbert。

Maybe Bill or Dave, I just want to make sure I've got this correctly. So it sounds like you've -- you're targeting sort of 5 of the programs of the 20 programs to be complete by the first half, which if I understand properly, you did 2 in the fourth quarter and 2 this quarter, so that implies, 1 in the second quarter? And then you've said a majority is so implying sort of at least 5 to 6 in the second half of the year. Is that the right way to think about the pacing of these? And is there any opportunity to maybe accelerate the completion of those programs in the second half of the year?

也許是比爾或戴夫，我只是想確保我的理解正確。所以聽起來你的目標是在上半年完成 20 個項目中的 5 個項目，如果我理解正確的話，你在第四季度完成了 2 個項目，本季度完成了 2 個項目，所以這意味著，第二季為1？然後你說「多數」意味著下半年至少有 5 到 6 個。這是考慮這些節奏的正確方法嗎？下半年是否有機會加快完成這些計畫？

Yes, Ken, this is Bill. First of all, I think that is the right way to think about it or at least that's how we're thinking about it in terms of pacing. And while that is the majority of the programs, I think it puts us on a good track to unlock a significant amount of bookings, and that's what we're really focused on. We want to get the development programs done. We want to execute predictably on them so that we can mitigate any EAC impact or gross margin impact tied to our mix. And what we're really interested in is as we complete these development programs, pull that margin mix pressure and uncertainty out of our results, unlock the bookings that lead to the attractive production programs and with that free up unbilled and generate cash. So that's why we're so focused on it from a pacing standpoint. I think what you articulated is consistent with our expectations.

是的，肯，這是比爾。首先，我認為這是正確的思考方式，或者至少我們在節奏方面是這樣思考的。雖然這是大部分計劃，但我認為它使我們走上了釋放大量預訂的良好軌道，而這正是我們真正關注的重點。我們希望完成開發計劃。我們希望對它們進行可預測的執行，以便我們可以減輕與我們的組合相關的任何 EAC 影響或毛利率影響。我們真正感興趣的是，當我們完成這些開發計劃時，將利潤組合壓力和不確定性從我們的結果中消除出來，解鎖導致有吸引力的生產計劃的預訂，從而釋放未開票並產生現金。這就是為什麼我們從節奏的角度如此關注它。我認為你所闡述的內容符合我們的期望。

Okay. Great. And Bill, on those programs, it looks like there was a little bit of cost creep, especially with one particular program in the first quarter, is the run rate of sort of the $6 million for the development programs at $12 million for the other sort of programs, which sounds like that $12 million was initially contemplated in the guidance. But that $6 million on these programs, is that something that should significantly step down in the second quarter? Or how should we think about that from a modeling perspective?

好的。偉大的。比爾，在這些項目上，看起來有一點成本上升，特別是第一季的一個特定項目，開發項目的運行費用為 600 萬美元，而其他項目的運行費用為 1200 萬美元聽起來像是指南中最初考慮的1200 萬美元。但這些項目的 600 萬美元是否應該在第二季大幅削減？或者說我們應該如何從建模的角度來思考這個問題？

Yes. Obviously, our goal is to see that step down over time. If we look at the $18 million and just unpack that, I'd say that about 1/3 of that is ordinary course that we would expect to see. And as we said in our remarks, we saw it, targeted it, identified it early. And over time, the $12 million, the other $12 million, we would like to see that come down over time. And we've mentioned in our last call and reiterated this call, we've really increased the rigor and scrutiny that we're putting into these development programs.

是的。顯然，我們的目標是隨著時間的推移看到這種情況逐漸減少。如果我們看看這 1800 萬美元並把它拆開，我會說其中大約 1/3 是我們期望看到的普通過程。正如我們在演講中所說，我們看到了它、瞄準了它、及早識別了它。隨著時間的推移，這 1200 萬美元、另外的 1200 萬美元，我們希望看到它隨著時間的推移而下降。我們在上次電話會議中提到並重申了這次電話會議，我們確實提高了對這些開發計劃的嚴格性和審查。

I think a big difference from how we're executing today is we've got a weekly rhythm in place on our development programs and our production programs so that if something comes up from either a technical standpoint or a production standpoint, we can jump on it early and mitigate the impact. We put increased rigor in our monthly processes around EACs, et cetera. So over time, we would expect to see the impacts be mitigated from what we've experienced this quarter and historically, and that's certainly our goal.

我認為與我們今天執行方式的一個很大的不同是，我們在開發計劃和生產計劃上製定了每週的節奏，這樣，如果從技術角度或生產角度出現問題，我們可以立即採取行動及早採取行動並減輕影響。我們在 EAC 等方面的每月流程中更加嚴格。因此，隨著時間的推移，我們預計本季和歷史上所經歷的影響會減輕，這當然是我們的目標。

Yes. And I think one of the things certainly for us was that we didn't -- that we said -- we saw growth, but it was largely nontechnical in nature. So it wasn't because there was new technical challenges that we had to go solve. So the risks we identified around those things are -- seem like they're the right risk still, and we're working our way through them. I think ideally, as Bill said, I'd love to be in a mode as we go forward where we get down the road and we don't see this kind of change in some of these EACs. But frankly, the fact that on the challenged programs, it was 1 EAC that was -- that grew by about $5 million, and the balance of that the roughly 20 programs was only $1 million was really a positive sign.

是的。我認為對我們來說肯定的一件事是我們沒有——我們說過——我們看到了成長，但這在很大程度上是非技術性的。所以這並不是因為我們必須解決新的技術挑戰。因此，我們圍繞這些事情所確定的風險似乎仍然是正確的風險，我們正在努力解決這些風險。我認為理想情況下，正如比爾所說，我希望在我們前進的道路上處於一種模式，並且我們在某些​​ EAC 中看不到這種變化。但坦白說，在受到挑戰的項目中，1 個 EAC 增長了約 500 萬美元，而大約 20 個項目的餘額僅為 100 萬美元，這確實是一個積極的信號。

Yes. So those 20 programs, just over the course of the last 90 days, we've seen a lot more stability. And as Dave mentioned on the one program where we did see cost growth, it was primarily bill and material related, and there were shifts in assumptions around quantities that drove pricing, et cetera. So without getting into too much detail, it's something that wasn't technical in nature in the balance of the 20 programs, we saw a lot more stability than we've seen historically.

是的。因此，在過去 90 天的時間裡，我們發現這 20 個項目的穩定性提高了許多。正如戴夫在我們確實看到成本增長的一個計劃中提到的那樣，這主要與賬單和材料相關，並且圍繞推動定價的數量的假設發生了變化，等等。因此，無需討論太多細節，這在 20 個程序的平衡中本質上不是技術性的，我們看到了比歷史上看到的更多的穩定性。

(Operator Instructions) Our next question is from the line of Michael Ciarmoli with Truist Securities.

（操作員說明）我們的下一個問題來自 Truist Securities 的 Michael Ciarmoli。

Bill, you obviously -- you gave a lot of detail there. And I guess, to put it maybe simplistically, I mean, you laid out the $18 million of cost growth. You talked about more run rate savings, I think to the tune of $24 million. You kept the guidance. I mean there was a lot of information. I mean, are you guys on plan tracking better than planned, worse than planned? I mean what's the quick simple assessment of where you are right now?

比爾，顯然，你在那裡提供了很多細節。我想，簡單地說，我的意思是，您列出了 1800 萬美元的成本增長。您談到了更多運行率節省，我認為節省了 2400 萬美元。你保留了指導。我的意思是有很多資訊。我的意思是，你們的計劃追蹤是比計劃好還是比計劃差？我的意思是，對你現在所處的位置進行快速簡單的評估是什麼？

Yes. I'd say, look, when it comes to the challenged programs, we talked to the fact that we put a pretty detailed scrub across those programs as we went through the first quarter. So personally, for me, I was disappointed to see the magnitude of the impact that we saw on the development programs. The $18 million, about 1/3 of it, I think we would consider expected. But for me, seeing cost growth on 1 of the 20 programs, I don't feel great about that. And we saw about $6 million across a number of other programs that it was just like one small thing after another. I do expect to see the impact from these programs go down with time. As we just keep driving increased rigor, putting attention on these programs, program by program and when something comes up, jumping on it quickly.

是的。我想說，看，當談到有挑戰性的計劃時，我們談到了這樣一個事實，即我們在第一季對這些計劃進行了非常詳細的清理。因此，就我個人而言，我對開發計畫所受到的巨大影響感到失望。 1800 萬美元，大約是其中的 1/3，我認為我們會認為是預期的。但對我來說，看到 20 個項目中有 1 個項目的成本成長，我對此感覺不太好。我們在許多其他項目中看到了大約 600 萬美元，這就像一件又一件的小事。我確實希望看到這些計劃的影響隨著時間的推移而減弱。我們不斷提高嚴謹性，將注意力集中在這些項目上，一個項目接著一個項目，當出現問題時，迅速採取行動。

So I'd say from that standpoint, probably beneath our expectations. That said, as we look ahead, we've got pretty good line of sight on follow-on production programs and bookings coming as we're completing and making progress on these development programs. And just based on that line of sight, we feel good about the back half of the year as we articulated in our guidance. But I'd say the one area where I was a little bit disappointed in ourselves was the amount of EAC growth that we saw. But other than that, pretty much within our expectations.

所以我想說，從這個角度來看，可能會低於我們的預期。也就是說，當我們展望未來時，隨著我們正在完成這些開發計劃並取得進展，我們對後續生產計劃和預訂有了很好的了解。正是基於這一觀點，我們對今年下半年的情況感覺良好，正如我們在指導中所闡述的那樣。但我想說的是，我對自己有點失望的一個領域是我們看到的 EAC 成長量。但除此之外，幾乎在我們的預期之內。

I think, Mike, that we recognize, and I think we said initially when Bill and I did the last call that we saw still risk but the risk was largely first half weighted. So not -- I mean, frankly, we're both expect a lot from folks. So it would have been -- it wasn't perfect for sure. From a -- Bill talked about the cost growth, but from a revenue standpoint, we absolutely entered in our minds with a plan that the first half would be lower, and I think we talked about that. And as we were looking towards not trying to pull a bunch of costs onto the balance sheet, we talked about that. And to position ourselves for growth in the second half and to get these programs done, and we spent a huge amount of the capacity of the firm working towards getting these programs done.

麥克，我認為我們認識到，而且我想我們最初在比爾和我進行最後一次通話時說過，我們仍然看到風險，但風險很大程度上是上半年加權的。所以不是——坦白說，我的意思是，我們都對人們抱有很大的期望。所以它肯定不是完美的。從 - 比爾談到了成本增長，但從收入的角度來看，我們絕對想到了上半年會降低的計劃，我想我們已經討論過這一點。當我們希望不要試圖將大量成本納入資產負債表時，我們討論了這一點。為了讓自己在下半年成長並完成這些項目，我們花費了公司的大量能力來完成這些項目。

And making sure we're ready at the -- when we get into the second half and we expect, as we said, some significant awards in Q2 that we're ready to produce on those contracts as we go. One of the things that was actually really strong and was good to see was on the production side of the business, which is 60-plus percent. I mean, we absolutely -- the team nailed it. The margins were right in line with what our expectations were. And so that gives us a really good sense of the strength we have in the back half of the year.

確保我們在進入下半年時做好準備，正如我們所說，我們預計在第二季度會獲得一些重要的獎項，我們已經準備好在這些合約上交付。其中一個實際上非常強大且值得一看的事情是業務的生產方面，佔 60% 以上。我的意思是，我們的團隊絕對做到了。利潤率完全符合我們的預期。這讓我們對今年下半年的實力有了很好的認識。

And as Dave said, we came into the year expecting that the first half will be down. The first quarter would be down. And if you just look at Slide 11 and walk top to bottom on that chart, it's pretty understandable as to where we are versus last year. We talked, for instance, about the large booking that we got in the year, and we only recognized a portion of it. We talked about the revenue differential and the fact that the bulk of the revenue change year-over-year is tied to our overtime contracts, and we are deliberately timing material to be much more efficient and linking it to the just-in-time need of our hardware.

正如戴夫所說，我們進入這一年時預計上半年會下滑。第一季將會下滑。如果您只看投影片 11，並在該圖表上從上到下瀏覽，就很容易理解我們與去年相比的情況。例如，我們談到了今年收到的大量預訂，但我們只認識到其中的一部分。我們討論了收入差異，以及大部分收入同比變化與我們的加班合約有關的事實，我們故意安排材料的時間以提高效率，並將其與即時需求聯繫起來我們的硬體。

And then when you look at the gross margin differential, we talked about the impact of the development programs and adjusting back for the impact of the development programs, the gross margins were largely consistent with our expectations. So I think that should be a pretty good indication that our results in the quarter, while they're down year-over-year, we expected them to be down. And I think we've got good line of sight around those variances.

然後，當您查看毛利率差異時，我們討論了開發計劃的影響並根據開發計劃的影響進行調整，毛利率與我們的預期基本一致。因此，我認為這應該是一個很好的跡象，表明我們本季的業績雖然同比下降，但我們預計它們會下降。我認為我們對這些差異有很好的認識。

And as we look forward, we can see how driving execution on these development programs is going to lead the bookings. It's going to take variability out of our performance as we mitigate the impacts of the EACs and cost growth, et cetera. And as we move hardware through the factory and time material, more closely to hardware delivery, we're going to improve dramatically the free cash flow of this business. So it may sound odd, but I think we feel pretty good about where we sit right now.

展望未來，我們可以看到這些開發計劃的推動執行將如何引領預訂。當我們減輕 EAC 和成本成長等的影響時，我們的績效將會改變。當我們在工廠和時間材料中移動硬體時，更接近硬體交付，我們將極大地改善該業務的自由現金流。所以這可能聽起來很奇怪，但我認為我們對現在的位置感覺很好。

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

我們的下一個問題來自 Sheila Kahyaoglu 和 Jefferies 的對話。

So I just wanted to go over a few things as possible on the top line and the bookings. Maybe if you could square away what's happening with the top line a little bit more? I know you guys talked extensively, but are you kind of accounting for it in a different way? Does overtime revenues that are kind of what happens to how you account for it based on a material and labor way? And are you also saying that the revenue recognition left to do on the challenged programs is very small? So what part of the top line is driving the organic decline, I guess, I would [at the half]?

所以我只想盡可能地回顧一下營收和預訂方面的一些事情。也許您可以將頂線發生的情況再平移一點？我知道你們談得很多，但你們是否以不同的方式解釋這一點？加班收入是依照物質和人工方式核算的嗎？您是否也說，受挑戰的專案剩下的收入確認非常小？那麼，我想，收入的哪一部分正在推動有機下降？（在一半）？

Yes. This is Dave, Sheila. I would not say -- we're not accounting for anything differently. It's the same accounting, obviously, and we're recognizing the material and the labor as we progress. And the one thing that's happened to the business in the past is we brought in a bunch of that material and Bill talked about this. We brought in a bunch of material and applied labor to it early on in the process. And for lots of reasons, some of those reasons were go back way in time when supply chains were completely going haywire because of COVID, which is long behind us. And -- but some of that practice was -- would bring it in as early as possible and start progressing it and then get to a stage, it would sit on the balance sheet until it was ready to be progressed further.

是的。這是戴夫，希拉。我不會說——我們沒有以不同的方式解釋任何事情。顯然，這是相同的會計，隨著我們的進步，我們正在認識到材料和勞動力。過去在業務中發生的一件事是我們帶來了一堆材料，比爾談到了這一點。我們在這個過程的早期引入了一堆材料並對其進行了人工處理。由於多種原因，其中一些原因可以追溯到很久以前，當時供應鏈因新冠疫情而完全陷入混亂，而這種情況已經過去很久了。而且 - 但其中一些做法是 - 儘早將其引入並開始進展，然後到達一個階段，它將保留在資產負債表上，直到準備好進一步進展。

And so we intentionally said let's not do that. We don't need to do that. Supply chain stable enough now. There's some long lead stuff that still freaks everybody out in the industry, and we all know that. But let's make sure we're not bringing it early. We're not trying to progress it ahead of when it's needed. And so that really did lead to a significant decline in the overtime revenue. We expect that we'll still have that material and be able to progress it with the labor we need to and largely, that's going to happen in the second half, and we'll be able to bring it in.

所以我們故意說我們不要這樣做。我們不需要這樣做。現在供應鏈夠穩定。有一些長期領先的東西仍然讓業內的每個人感到害怕，我們都知道這一點。但我們要確保我們不會提前帶來它。我們並不想在需要的時候提前推進它。這確實導致了加班收入的大幅下降。我們預計我們仍然擁有這些材料，並且能夠透過我們需要的勞動力來推進它，這在很大程度上將在下半年發生，我們將能夠將其引入。

At the same time, as we get the new programs, you'll see a bunch of the inventory we've got progressed too into those projects and products so that, that will show up as revenue where today, it does not. But I thought one of the things that was a positive. If you look at our inventories and you look at the 10-Q, you can see that the inventories grew $26 million, but $21 million of that growth in the quarter was work in process, not raw materials. So it's activities that we're progressing towards final product so that we can ship it. So it's stuff that's making its way through the pipeline.

同時，當我們獲得新計劃時，您會看到我們在這些項目和產品中也取得了進展，因此，這將顯示為收入，而今天卻沒有。但我認為其中一件事情是正面的。如果你看看我們的庫存，再看看 10 季度，你會發現庫存增加了 2,600 萬美元，但本季成長的 2,100 萬美元是在製品，而不是原料。因此，我們正在推進最終產品的活動，以便我們可以發貨。所以這些東西正在通過管道。

So I don't think Sheila, there's been a big change other than us trying to be more just in time and trying to get ourselves in a better position from a working capital standpoint, which I think is critical to the business.

因此，希拉，我認為除了我們努力變得更加及時並努力從營運資本的角度使自己處於更好的位置之外，沒有發生重大變化，我認為這對業務至關重要。

Well, I would say that our focus on working capital really has 2 pieces to it that are really important. One is our focus on hardware delivery. So not just progressing hardware, but actually completing hardware, getting it out the door so that we can invoice and collect cash. Now because we've recognized revenue on a number of programs that have the large unbilled balances and in many cases, it's most of the contract revenue completing the hardware may have very little revenue associated with it in many cases, but it's what we have to do in order to invoice and collect cash. So part of the dynamics that you're seeing is us being focused on allocating factory capacity to hardware that we need to get out the door, so that we can collect cash that may have a small amount of remaining revenue to be recognized. Hopefully, that additional color is helpful.

嗯，我想說，我們對營運資本的關注確實有兩個非常重要的部分。一是我們對硬體交付的關注。因此，不僅僅是改進硬件，而是實際完成硬件，將其推出，以便我們可以開發票並收取現金。現在，因為我們已經確認了許多具有大量未開票餘額的計劃的收入，並且在許多情況下，完成硬體的大部分合約收入可能在許多情況下與之相關的收入很少，但這就是我們必須要做的以便開立發票和收取現金。因此，您看到的動態的一部分是我們專注於將工廠產能分配給我們需要走出去的硬件，以便我們可以收集現金，而這些現金可能有少量剩餘收入需要確認。希望額外的顏色有幫助。

Yes, it does. Maybe just switching a little bit of gears. Can you then talk about how you're thinking about some of the bookings element of it, just down 30%? Now you mentioned a big component of that is system orders you're waiting for, obviously, the development program. But how should we sort of think about that timing disconnect that you're only going to go complete 11 of the programs this year? So kind of when do bookings improve, I guess?

是的，它確實。也許只是切換一點齒輪。那麼您能談談您對其中一些預訂元素（僅下降 30%）的看法嗎？現在您提到其中一個重要組成部分是您正在等待的系統訂單，顯然是開發計劃。但是，我們該如何考慮今年只完成 11 個專案的時間脫節呢？我猜預訂量什麼時候會有所改善？

Yes. Well, I'll tell you, we expect to see the bookings improve as we go through the year starting in Q2. And we've got pretty good line of sight to a small number of good-sized bookings that we expect to see coming in starting in Q2. And I'd also point to the large award that we mentioned where we only recognized a fraction of it in Q1. So those are a couple of the dynamics that are happening on the bookings front.

是的。好吧，我告訴你，我們預計從第二季開始，預訂量將會改善。我們對少量大尺寸訂單有很好的了解，預計從第二季開始就會出現這些訂單。我還要指出我們提到的大獎項，但我們在第一季只認可了其中的一小部分。這些是預訂方面發生的一些動態。

And I think, Sheila, one of the things -- this is Dave again. One of the things you'll see as a significant ramp up our backlog to set ourselves up for the second half of the year. Bill talked about a couple of the programs. Just generically, we don't go through programs individually and talk about bookings before their they're coming in, but we definitely have line of sight on a couple of those significant bookings. We're not intending and don't need all of the challenged programs to finish. The ones that are driving the most significant bookings are largely in the realm of the programs we will be finished with.

我想，希拉，其中一件事──這又是戴夫。您會看到其中一件事是我們的積壓工作顯著增加，為下半年做好準備。比爾談到了幾個項目。一般來說，我們不會單獨審查計劃並在預訂到來之前討論預訂，但我們肯定對其中一些重要的預訂有了解。我們不打算也不需要完成所有有挑戰性的專案。推動最重要預訂的主要是我們即將完成的專案領域。

At this point, I'd like to turn the call back over to Mr. Ballhaus for closing comments.

現在，我想將電話轉回鮑爾豪斯先生以徵求結束意見。

Okay. Thanks, Aaron, and thanks, everybody, for joining our Q1 call, and we look forward to connecting with you soon to talk through our Q2 results. Thanks for your time this evening.

好的。感謝亞倫，感謝大家加入我們的第一季電話會議，我們期待很快與您聯繫，討論我們第二季的結果。感謝您今晚抽出時間。

Thank you, gentlemen. And ladies and gentlemen, this does conclude the Mercury Systems First Quarter Fiscal 2024 Conference Call. Have a great evening.

謝謝你們，先生們。女士們、先生們，Mercury Systems 2024 年第一季財年電話會議到此結束。祝您有個美好的夜晚。