One Stop Systems Inc (OSS) 2024 Q2 法說會逐字稿

Good day, and. welcome to the One Stop Systems second-quarter 2024 conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded.

美好的一天，並且。歡迎參加一站式系統 2024 年第二季電話會議和網路廣播。（操作員指示）謹此提醒，本次會議正在錄製中。

As part of the discussion today, the representatives of OSS will be making certain forward-looking statements regarding the company's future financial and operating results, as well as their business plans, objectives, and expectations. These statements are based on the company's current beliefs and expectations and should not be regarded, as a representation of OSS, that any of these plans or expectations will be achieved.

作為今天討論的一部分，OSS 的代表將就該公司未來的財務和經營業績以及其業務計劃、目標和期望發表某些前瞻性聲明。這些聲明是基於公司當前的信念和期望，不應被視為 OSS 代表任何這些計劃或期望將會實現。

Please be advised that these forward-looking statements are covered under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 and that OSS desires to avail itself to the protections of the Safe Harbor for these statements. Please also be advised that the actual results could differ materially from those stated or implied by the forward-looking statements due to certain risks and uncertainties, including those described in the company's most recent annual report from Form 10-K, subsequent quarterly reports on Form 10-Q, and the recent press releases.

請注意，這些前瞻性陳述受 1995 年《私人證券訴訟改革法案》的安全港條款管轄，並且 OSS 希望利用安全港對這些陳述的保護。另請注意，由於某些風險和不確定性，包括公司最近的10-K 表格年度報告和隨後的10-K 表格季度報告中描述的風險和不確定性，實際結果可能與前瞻性陳述中明示或暗示的結果有重大差異。

Please read these reports and the future filings that OSS will be making with the SEC. OSS disclaims any duty to update or revise its forward-looking statements except as required by the applicable law.

請閱讀這些報告以及 OSS 未來將向 SEC 提交的文件。除適用法律要求外，OSS 不承擔任何更新或修改其前瞻性陳述的義務。

It is now my pleasure to turn the conference over to OSS President and CEO, Mr. Mike Knowles. Please go ahead, sir.

現在我很高興將會議交給 OSS 總裁兼執行長 Mike Knowles 先生。請繼續，先生。

Thank you, John. Good afternoon, everyone, and thank you for joining today's call. I'm pleased with the progress we made during the 2024 second quarter as we continue transitioning our business to pursue emerging opportunities within large and growing defense and commercial markets. Second-quarter performance was aligned with our plan as we continue to pursue opportunities in AI, machine learning, and edge computing.

謝謝你，約翰。大家下午好，感謝您參加今天的電話會議。我對 2024 年第二季的進展感到高興，因為我們繼續進行業務轉型，以在不斷增長的大型國防和商業市場中尋求新興機會。隨著我們繼續尋求人工智慧、機器學習和邊緣運算領域的機會，第二季的業績與我們的計畫保持一致。

Highlights for the 2024 second quarter include positive segment orders which have outpaced quarterly revenue in three of the last four quarters, sequential revenue growth of 4.3%, expanded customer development revenue;, and year-over-year OSS segment revenue growth of 8.3% as adjusted to exclude revenue attributable to a former media customer. We believe these favorable trends are positioning OSS for continued sequential revenue growth throughout the remainder of 2024.

2024 年第二季的亮點包括部門訂單積極，在過去四個季度中的三個季度超過了季度收入、環比收入增長 4.3%、客戶開發收入擴大；以及 OSS 部門收入同比增長 8.3%。排除前媒體客戶的收入。我們相信，這些有利的趨勢將使 OSS 在 2024 年剩餘時間內實現收入持續連續成長。

This year, we've been focused on two important objectives to take advantage of favorable market dynamics and the healthy pipeline we have developed. First, we are focused on converting our pipeline to orders in our OSS segment. And second, we are pursuing customer-funded development opportunities that we believe will establish OSS as an incumbent on platforms driving future multi-year production contracts.

今年，我們一直專注於兩個重要目標，以利用有利的市場動態和我們開發的健康管道。首先，我們專注於將我們的管道轉化為 OSS 領域的訂單。其次，我們正在尋求客戶資助的開發機會，我們相信這些機會將使 OSS 成為推動未來多年生產合約的平台的主導者。

Across our global defense and commercial markets, customers are looking for technology partners like OSS to support their expanding needs for rugged enterprise-class compute solutions. Driving these trends are the emerging requirements for AI, machine learning, autonomy, and sensor processing at the edge. The company's best-in-class hardware and software platforms bring the latest data center performance to harsh and challenging applications that we believe will allow OSS to take advantage of future -- current and future demand trends.

在我們的全球國防和商業市場中，客戶正在尋找 OSS 等技術合作夥伴來滿足他們對堅固型企業級運算解決方案不斷增長的需求。推動這些趨勢的是人工智慧、機器學習、自主性和邊緣感測器處理的新興需求。該公司一流的硬體和軟體平台將最新的資料中心效能帶到嚴酷且具有挑戰性的應用中，我們相信這將使 OSS 能夠利用未來——當前和未來的需求趨勢。

Our underlying performance during the second quarter and first half of the year is aligned with our plan. We continue to believe 2024 is creating a strong foundation for sustainable year-over-year revenue growth and profitability in 2025 even as we navigate growing economic uncertainty and continued weakness in our European markets through 2024, with expected recovery in 2025.

我們第二季和上半年的基本業績與我們的計劃一致。我們仍然相信，2024 年將為2025 年可持續的同比收入增長和盈利能力奠定堅實的基礎，儘管我們將在2024 年應對不斷增長的經濟不確定性和歐洲市場的持續疲軟，並預計在2025 年實現復甦。

So with this introduction, let's take a look at the progress we made during the second quarter in more detail, starting with our efforts to convert our pipeline to orders. Our unfactored pipeline at the end of the second quarter remained over $1 billion. Approximately 70% of our current pipeline is comprised of platform opportunities, which we believe will help drive predictable multi-year revenue and backlog to OSS.

因此，透過這個介紹，讓我們更詳細地了解我們在第二季度取得的進展，首先是我們將管道轉化為訂單的努力。第二季末我們的未保理管道仍超過 10 億美元。我們目前管道中大約 70% 由平台機會組成，我們相信這將有助於推動 OSS 的可預測的多年收入和積壓。

I'm pleased with the growth and transformation of our pipeline, reflecting the positive contribution of our sales organization, the strategic investments we are making in product development, and the growing demand for our hardware and software platforms. As we continue pursuing opportunities to grow our pipeline, our operating plan in 2024 remains focused on increasing orders within our OSS segment.

我對我們產品線的成長和轉型感到滿意，這反映了我們銷售組織的積極貢獻、我們在產品開發方面的策略投資以及對我們硬體和軟體平台不斷增長的需求。隨著我們繼續尋求擴大管道的機會，我們 2024 年的營運計劃仍然專注於增加 OSS 部門的訂單。

For the 2024 second quarter, we saw orders outpace revenue by over 20% for the second quarter in a row. Order growth over the past three months was driven by existing customers in the ground intelligence, surveillance, and reconnaissance market, known as the ISR market; and from customers in the commercial aerospace market. In addition, we had new customer awards in the air ISR market. We expect many of these new engagements will evolve into multiyear follow-on revenue opportunities in future periods.

2024 年第二季度，我們看到訂單量連續第二季超過營收 20% 以上。過去三個月的訂單成長是由地面情報、監視和偵察市場（稱為 ISR 市場）的現有客戶推動的；以及來自商業航空航太市場的客戶。此外，我們還獲得了空中 ISR 市場的新客戶獎項。我們預計，許多新的合作將在未來發展成為多年的後續收入機會。

Second important objective we are pursuing this year is focused on growing our presence on customer-funded development programs. As we mentioned on our first quarter call, we started to disclose separate revenue and cost lines in our financial results associated with customer-funded development projects to show our potential and track new wins. We have defined program-related development work as customer-funded development on our financial statements.

我們今年追求的第二個重要目標是擴大我們在客戶資助的開發計畫中的影響力。正如我們在第一季電話會議上提到的，我們開始在與客戶資助的開發項目相關的財務業績中披露單獨的收入和成本線，以展示我們的潛力並追蹤新的勝利。我們在財務報表中將與專案相關的開發工作定義為客戶資助的開發。

Through customer-funded development programs, we are typically providing a more integrated solution compared to the company's historic offerings. In addition, it establishes OSS as a platform incumbent on what is almost always a follow-on production and multi-year support contract. As a result, we expect our business model to benefit from a higher mix of annual recurring revenue and contracted multi-year backlogs in the future.

透過客戶資助的開發計劃，與公司的歷史產品相比，我們通常提供更整合的解決方案。此外，它還將 OSS 建立為一個平台，幾乎總是後續生產和多年支援合約。因此，我們預計我們的業務模式將受益於未來年度經常性收入和合約多年積壓訂單的更高組合。

Development relationships are expected to take one to two years before leaving to production orders. So as business scales, we expect to benefit from steady quarter-over-quarter revenue growth while building a solid foundation of potential large-scale program opportunities.

開發關係預計需要一到兩年的時間才能完成生產訂單。因此，隨著業務規模的擴大，我們預計將從季度環比收入的穩定成長中受益，同時為潛在的大型專案機會奠定堅實的基礎。

I'm pleased to report that customer-funded development revenue increased to $1.4 million in the 2024 second quarter compared to $365,000 just three months ago. This growth was driven principally by the expansion of an existing relationship with a commercial aerospace customer for fielding of a new product and follow-on production.

我很高興地報告，2024 年第二季客戶資助的開發收入增至 140 萬美元，而三個月前為 365,000 美元。這一增長主要是由於擴大了與商業航空客戶的現有關係，以部署新產品和後續生產。

As expected, we are seeing increased interest from customers to support their development programs, and we have multiple proposals currently submitted. As a result, we believe we will continue to experience sequential growth throughout the remainder of 2024 in customer-funded development revenue.

正如預期的那樣，我們看到客戶對支持他們的開發計劃的興趣日益濃厚，並且我們目前已提交多份提案。因此，我們相信，在 2024 年剩餘時間內，客戶資助的開發收入將持續成長。

We also have expanded our product development efforts this year and currently have five product efforts under development in the OSS segment focused on edge computing for both defense and commercial applications. We expect to announce and demonstrate these products in the second half of this year and the first half of 2025.

今年我們也擴大了產品開發工作，目前 OSS 領域正在開發五種產品，重點在於國防和商業應用的邊緣運算。我們預計將在今年下半年和 2025 年上半年發布並展示這些產品。

Our second-quarter results also reflect strategic investments we are making to support current and future growth. Over the past 12 months, we have added new program management personnel with experience managing large, complex development and production programs for government and defense customers. We believe their experience will allow us to pursue even larger programs for development and production in defense and commercial markets.

我們第二季的業績也反映了我們為支持當前和未來成長而進行的策略投資。在過去 12 個月中，我們增加了新的專案管理人員，他們擁有為政府和國防客戶管理大型、複雜的開發和生產專案的經驗。我們相信他們的經驗將使我們能夠在國防和商業市場上進行更大的開發和生產項目。

As I mentioned last quarter, we are developing a new growth-focused multi-year strategic plan. Our markets are rapidly evolving, which has required additional time to finalize our three-year strategic plan. We expect to communicate the growth strategies we are pursuing in our presentation later this year.

正如我上季度提到的，我們正在製定一項新的以成長為重點的多年戰略計劃。我們的市場正在迅速發展，這需要更多時間來完成我們的三年策略計畫。我們希望在今年稍後的演講中傳達我們正在追求的成長策略。

As we look to the remainder of 2024, I'm excited by the long-term strategies we are pursuing to scale our business and drive profitable growth. Though it has taken some time, I'm encouraged by the growing progress underway as we establish ourselves in our markets.

展望 2024 年剩餘時間，我對我們為擴大業務規模和推動獲利成長而追求的長期策略感到興奮。儘管這需要一些時間，但隨著我們在市場上站穩腳跟，我們所取得的不斷進步讓我感到鼓舞。

We continue to execute against our near-term transformation plan as we focus on driving orders, building backlog, growing revenue, and improving profitability. While the timing of orders will remain a factor as we get to scale, I'm confident we are building a strong foundation to achieve our long-term growth objectives.

我們繼續執行近期轉型計劃，專注於推動訂單、建立積壓訂單、增加收入和提高獲利能力。雖然隨著我們規模的擴大，訂單時間仍將是一個因素，但我相信我們正在為長期成長目標奠定堅實的基礎。

I want to thank our team for their continued hard work and dedication as we pursue compelling growth strategy aimed at building greater value for our shareholders.

我要感謝我們的團隊在我們追求旨在為股東創造更大價值的引人注目的成長策略時所持續的辛勤工作和奉獻精神。

Looking forward, we anticipate consolidated revenue of approximately $13.3 million in the third quarter of 2024, which accounts for approximately $1.6 million of orders that we pushed to the fourth quarter. Our guidance for the third quarter of 2024 also includes expected OSS segment revenue of $6.3 million, representing 15% year-on-year growth in the OSS segment, partially offset by lower Bressner revenue due to continued softness in the company's European markets.

展望未來，我們預計 2024 年第三季的合併收入約為 1,330 萬美元，其中我們推至第四季的訂單約為 160 萬美元。我們對 2024 年第三季的指導還包括預計 OSS 部門營收為 630 萬美元，相當於 OSS 部門年增 15%，但由於該公司歐洲市場持續疲軟而導致 Bressner 營收下降，部分抵銷了該營收。

While uncertain economic conditions and softness in Europe may negatively impact our consolidated second-half performance, we believe our leading enterprise-class compute solutions, strong balance sheet, and committed team are well positioned to take advantage of positive fundamentals across global markets and create long-term value for shareholders.

儘管歐洲不確定的經濟狀況和疲軟可能會對我們下半年的綜合業績產生負面影響，但我們相信，我們領先的企業級計算解決方案、強大的資產負債表和忠誠的團隊有能力利用全球市場的正面基本面，創造長期的績效。

With this overview, I'd like to turn the call over to our CFO, John Morrison, to review our 2024 second-quarter financial results in more detail. John, please go ahead.

有了這個概述，我想將電話轉給我們的財務長約翰·莫里森 (John Morrison)，以更詳細地審查我們的 2024 年第二季度財務業績。約翰，請繼續。

Thank you, Mike, and good afternoon, everyone. Our 2024 second-quarter results reflect the ongoing transformation of our business model and continued improvements in orders.

謝謝麥克，大家下午好。我們的 2024 年第二季業績反映了我們業務模式的持續轉型和訂單的持續改善。

As a reminder, the company is comprised of two operating segments. Our OSS segment operates in the United States and is primarily focused and involved in the design and manufacture of high-performance ruggedized edge processing, compute, storage, and connectivity systems. Our Bressner segment operates throughout Europe and as a system integrator with standard and custom all-in-one hardware systems and components. Bressner also serves as a channel for OSS products to the European and Middle East markets.

提醒一下，該公司由兩個營運部門組成。我們的 OSS 部門在美國運營，主要專注於並參與高效能加固邊緣處理、運算、儲存和連接系統的設計和製造。我們的 Bressner 部門在整個歐洲開展業務，是一家提供標準和客製化一體化硬體系統和組件的系統整合商。Bressner 也作為 OSS 產品進入歐洲和中東市場的管道。

The following comments are based upon comparison of second-quarter 2024 results to the second quarter of 2023. For the second quarter, we reported consolidated revenue of $13.2 million, which exceeds our guidance of $13 million.

以下評論是根據 2024 年第二季業績與 2023 年第二季業績的比較。第二季度，我們報告的綜合收入為 1,320 萬美元，超出了我們 1,300 萬美元的指導。

The 23.3% year-over-year decline in consolidated revenue was primarily attributable to a $3.2 million reduction in revenue related to our former media customer and a $1.3 million decline in Bressner revenue associated with slower economic activity in Europe. Lower second-quarter revenue was partially offset by a new customer funded -- by new customer-funded development orders and revenue growth to new and existing customers.

合併收入年減 23.3%，主要是因為與我​​們的前媒體客戶相關的收入減少了 320 萬美元，以及與歐洲經濟活動放緩相關的 Bressner 收入減少了 130 萬美元。第二季營收下降被新客戶資助的開發訂單以及新客戶和現有客戶的營收成長部分抵銷。

Looking at our OSS segment and backing out the $3.2 million impact from a former media customer, revenue at our OSS segment grew 8.3%, reflecting revenue growth from new and existing customers and the initial success adding new customer-funded development project.

看看我們的 OSS 部門，排除前媒體客戶 320 萬美元的影響，我們 OSS 部門的收入增長了 8.3%，反映了新客戶和現有客戶的收入增長以及添加新客戶資助的開發項目的初步成功。

As Mike mentioned, in the first quarter of 2024, we started to separately disclose revenue and cost of sales line items associated with customer-funded development work in our financial statements. Customer-funded development typically represents non-reoccurring design and development work associated with the introduction of new products paid for by the customer. We expect customer-funded development to grow throughout 2024.

正如麥克所提到的，2024 年第一季度，我們開始在財務報表中單獨揭露與客戶資助的開發工作相關的收入和銷售成本。客戶資助的開發通常代表與客戶付費推出新產品相關的非重複設計和開發工作。我們預計客戶資助的開發將在 2024 年持續成長。

Consolidated gross profit in the second quarter was 25.2% compared to 27.9% for the same period last year. The decline in our consolidated gross margin was primarily attributable to our underabsorption of our OSS segment production capacity and additional inventory reserves.

第二季綜合毛利為25.2%，去年同期為27.9%。我們的綜合毛利率下降主要是因為我們對OSS部門產能和額外庫存儲備的吸收不足。

Total second-quarter operating expenses decreased 31.9% to $5.6 million, which was attributable to the elimination of prior-year costs associated with organizational restructuring and outside professional services. And these were partially offset by planned program management and investments made during the quarter.

第二季營運支出總額下降 31.9%，至 560 萬美元，這是由於消除了去年與組織重組和外部專業服務相關的成本。這些部分被本季計劃的專案管理和投資所抵消。

In addition, our financial results for the second quarter 2023 were impacted by a $2.7 million charge related to the impairment of goodwill and a $1.3 million charge related to the employee retention -- excuse me, $1.3 million benefit related to the employee retention tax credit.

此外，我們2023 年第二季的財務業績也受到與商譽減損相關的270 萬美元費用和與員工保留相關的130 萬美元費用的影響- 對不起，與員工保留稅收抵免相關的130 萬美元福利。

For the second quarter, the company reported a GAAP net loss of $2.3 million or $0.11 per share compared to a net loss of $2.4 million or $0.12 per share in the prior year. The company reported a non-GAAP net loss of $1.8 million or $0.09 per share compared to a non-GAAP net loss of $84,000 or $0 per share. Adjusted EBITDA, a non-GAAP metric, was a loss of $1.3 million compared to a positive adjusted EBITDA of $520,000 in the prior year second quarter.

第二季度，該公司公佈的 GAAP 淨虧損為 230 萬美元，即每股 0.11 美元，而前一年的淨虧損為 240 萬美元，即每股 0.12 美元。該公司公佈的非 GAAP 淨虧損為 180 萬美元，即每股 0.09 美元，而非 GAAP 淨虧損為 84,000 美元，即每股 0 美元。調整後 EBITDA（非 GAAP 指標）虧損 130 萬美元，而去年第二季調整後 EBITDA 為 52 萬美元。

Now, looking at the balance sheet in more detail. As of June 30, 2024, OSS had total cash, cash equivalents, and marketable securities of $11.8 million and total working capital of $32.6 million. This is compared to total cash, cash equivalents, and marketable securities of $11.8 million and total working capital of $35.6 million at December 31, 2023.

現在，更詳細地查看資產負債表。截至 2024 年 6 月 30 日，OSS 的現金、現金等價物及有價證券總額為 1,180 萬美元，營運資本總額為 3,260 萬美元。相較之下，截至 2023 年 12 月 31 日，現金、現金等價物及有價證券總額為 1,180 萬美元，營運資本總額為 3,560 萬美元。

OSS had no borrowings outstanding on its $2 million line -- revolving line of credit on June 30, 2024, and December 31, 2023, respectively. The company's Bressner operations had a consolidated balance outstanding on its term loans at June 30, 2024, of $1.1 million, down from $2.1 million at December 31, 2023, and $3 million at June 30, 2023.

OSS 分別於 2024 年 6 月 30 日和 2023 年 12 月 31 日的 200 萬美元循環信貸額度上沒有未償還借款。截至2024年6月30日，該公司布雷斯納業務的定期貸款未償還綜合餘額為110萬美元，低於2023年12月31日的210萬美元和2023年6月30日的300萬美元。

For the six months ended June 30, 2024, OSS generated $1.2 million in cash from operating activities compared to $2 million for the six months ended June 30, 2023. This completes our financial review for the quarter.

截至2024年6月30日的六個月，OSS從經營活動中產生了120萬美元的現金，而截至2023年6月30日的六個月則為200萬美元。我們本季的財務審查到此結束。

We would like to now turn -- open the call to questions. Operator, John?

我們現在想開始提問。接線員，約翰？

Yes, sir. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Tony Filling, Lake Street Capital.

是的，先生。謝謝。女士們、先生們，我們現在開始問答環節。（操作員說明）Tony Filling，Lake Street Capital。

Good afternoon, guys. This is Tony Felling filling in for Eric Martinuzzi. Appreciate the question. Yeah. So do we feel the company is properly staffed for a tighter focus on the defense customers?

下午好，夥計們。我是 Tony Felling 接替 Eric Martinuzzi。感謝這個問題。是的。那麼我們是否認為該公司配備了適當的人員來更加關注國防客戶？

Yeah, Tony, I do. And we've made some really, really good progress over the year to where we are. I think we're very well set to actually scale really well too with the people we have.

是的，托尼，我願意。在這一年裡，我們已經取得了一些非常非常好的進展，達到了目前的水平。我認為我們已經做好了充分準備，可以與我們現有的人員一起真正實現良好的擴展。

So going back over the course of the year, just a quick summary. Of course, myself joined the team, run commercial and defense, but defense background of 30-plus years. And then we brought on a VP of Sales and Marketing, Robert Kalebaugh. He and I worked for a decade together in the defense market. He has over 35 years' experience selling and marketing into not in the US, but global defense.

回顧這一年的歷程，我簡單總結一下。當然，我自己也加入了這個團隊，負責商業和國防，但有30多年的國防背景。然後我們聘請了銷售和行銷副總裁 Robert Kalebaugh。他和我在國防市場一起工作了十年。他擁有超過 35 年的銷售和行銷經驗，不僅在美國，而且在全球國防領域。

And then as I mentioned in the script, we wanted to augment the team with experienced program managers who are used to running large-scale defense programs that have development, production, sustainment, fielding, et cetera. So we added two program managers to the staff. Each, who, in their own right, have experienced running $100 million-plus programs on the defense side.

然後，正如我在腳本中提到的，我們希望用經驗豐富的專案經理來擴充團隊，他們習慣於運行大規模的國防項目，包括開發、生產、保障、部署等。因此，我們在員工隊伍中增加了兩位專案經理。他們每個人都曾在國防方面運行過價值超過 1 億美元的項目。

So we're really well situated there. In addition, as AS9100-certified company and ISO 9001 certified, we're really well set in policy, process quality, et cetera, to meet the standards required for defense and commercial. So I think we're in a really good place to execute against defense programs.

所以我們在那裡的位置非常好。此外，作為通過 AS9100 認證和 ISO 9001 認證的公司，我們在政策、流程品質等方面確實制定得很好，以滿足國防和商業所需的標準。所以我認為我們處於執行防禦計劃的非常好的位置。

That's great. And I mean, do you think there's any risk in terms of revenue concentration with more focus on the defense customers going forward or is that kind of where we're headed? .

那太棒了。我的意思是，您認為未來更專注於國防客戶在收入集中方面是否存在任何風險，或者這就是我們的發展方向？。

Can you maybe repeat the front end of that, Tony?

東尼，你能重複一下前面的內容嗎？

Just revenue risk -- with risk in terms of revenue concentration with more focus on defense customers.

只是收入風險——收入集中度方面的風險，更關注國防客戶。

Yeah, I don't think so. When I showed up to the company, we were primarily a larger value on the commercial side. So as -- we've increased up to about a 50-50 ratio right now. As we're projecting and we're looking at our pipeline for the next three to five years, we see that same ratio in our pipeline.

是的，我不這麼認為。當我來到公司時，我們主要是在商業方面具有更大的價值。因此，我們現在已經將比例增加到大約 50-50。正如我們所預測的那樣，我們正在研究未來三到五年的管道，我們在管道中看到了相同的比率。

So I don't think we'll get a revenue concentration specifically that would become a risk. If anything, we've seen quite a deep success here in the first year in broadening out that revenue across more defense customers in addition to the commercial customers that we've had. So I don't see a risk in the concentration in defense.

因此，我認為我們不會特別集中收入，這會成為一種風險。如果有的話，我們在第一年就看到了相當大的成功，除了我們擁有的商業客戶之外，我們還擴大了更多國防客戶的收入。所以我不認為集中防守有風險。

For sure. Great. I appreciate you taking the question. I'll jump back.

一定。偉大的。我很感謝你提出這個問題。我會跳回來。

Thank you.

謝謝。

Thanks, Tony.

謝謝，托尼。

Thank you. Brian Kinstlinger, AGP.

謝謝。布萊恩·金斯林格，AGP。

Hey. Thanks so much. Can you speak to the government procurement environment? Are you seeing reasonable sales cycles? Are they still elongated? And then as we enter the new fiscal year for the federal government, which always brings a set of budget delays, what can the company do to ensure a steady flow of orders, if at all?

嘿。非常感謝。能談談政府採購環境嗎？您看到合理的銷售週期嗎？它們還會拉長嗎？然後，當我們進入聯邦政府的新財政年度時，這總是會帶來一系列預算延遲，公司可以採取什麼措施來確保穩定的訂單流（如果有的話）？

Yeah, Brian, the bane of existence, doing the business with the US government and defense actually. It's the same in most global MODs also.

是的，布萊恩，存在的禍根，實際上與美國政府和國防部做生意。在大多數全球 MOD 中也是如此。

So the interesting thing we've seen is, I would say, the normal acquisition cycles from markets, like I mentioned, the ISR market. Their kind of technology road map time frames have generally been consistent. So not really concerned there in terms of where the markets are going, their needs.

因此，我想說，我們看到的有趣的事情是市場的正常採購週期，就像我提到的 ISR 市場。他們的技術路線圖時間框架總體上是一致的。因此，他們並不真正關心市場的走向和他們的需求。

The biggest factor really has been -- and this has been a trend over the last three to five years is, we're just seeing the procurement arms on the contract side taking exorbitantly longer time to award and contract out the contracts that have already been selected as winners or awarded as sole source.

最大的因素確實是——過去三到五年的趨勢是，我們看到合約方面的採購部門花費了相當長的時間來授予和承包已經完成的合約。

And when I say extensions, right, it used to be, you might -- when a winner was selected or they're getting to the end of a procurement, it might be three to four weeks for them to process. It's not uncommon now to see those sometimes take 12 to 14 weeks, which has really gotten a bigger impact now on timing.

當我說延期時，對，過去，你可能會——當選擇獲勝者或他們即將結束採購時，他們可能需要三到四個星期的時間來處理。現在，有時需要 12 到 14 週的時間並不罕見，這確實對時間安排產生了更大的影響。

So we worked through some timing issues a little bit. That's probably our biggest risk. In terms of their demand, the market needs, and the technology and the process they've gone through, those still remain fairly consistent.

所以我們稍微解決了一些時間問題。這可能是我們最大的風險。從他們的需求、市場的需求、他們所經歷的技術和流程來看，這些仍然保持相當一致。

And then as for next year, yes, we always [get] concerned about CRs. The benefit you get on winning programs the year prior is the CRs usually affect new starts. So the more we win this year, the more stability we have in business into next year.

至於明年，是的，我們總是擔心 CR。您從前一年獲勝專案中獲得的好處是 CR 通常會影響新的開始。因此，今年我們贏得的勝利越多，明年的業務就越穩定。

But we do keep an eye on the CRs. We work with customers, the best you can to plan for those. We did have two or three programs this year that were delayed. Close to seven months passed when we thought they would hit just because of the longer CR we had this year and then the follow-on impact of them having to get the money appropriated.

但我們確實會關注 CR。我們與客戶合作，盡最大努力為他們做好計劃。今年我們確實有兩三個項目被推遲。將近七個月過去了，我們認為他們會受到打擊，只是因為今年我們的 CR 時間更長，然後他們必須獲得撥款的後續影響。

So the timing issues, definitely, we have to deal with. Not much we can do rather than work closely with our customers, have things aligned and ready to go. We have seen some large primes, have taken on considerations of funding smaller companies to protect schedules for awards they know they're going to get but are waiting on award.

因此，我們必須處理時間安排問題。除了與客戶密切合作、協調一致並做好準備之外，我們無能為力。我們已經看到一些大型公司已經考慮向較小的公司提供資金，以保護他們知道自己將獲得但正在等待獎項的時間表。

And then the last thing we've been doing is -- we use some of our lobbying efforts just to help facilitate programs and timing and movement. Ultimately, if it's a CR, right, there's not much we can do. But we do work through our lobbying office to help resolve our (inaudible) or put in place anything we can.

然後我們一直在做的最後一件事是——我們利用一些遊說努力來幫助促進計劃、時間安排和行動。歸根結底，如果是 CR，對吧，我們無能為力。但我們確實透過遊說辦公室來幫助解決我們的問題（聽不清楚）或採取我們所能做的措施。

Great. And then when you talk about customer-funded development, I assume growth in these programs are leading indicators of larger awards. And if that's the case, how do you think about the average time of a government -- a customer-funded development program? And how long might it take or typically take until it turns into something that I might call production or I'm not sure how to describe it?

偉大的。然後，當您談論客戶資助的開發時，我認為這些計劃的成長是獲得更大獎項的領先指標。如果是這樣的話，您如何看待政府（客戶資助的開發計畫）的平均時間？需要多長時間或通常需要多長時間才能將其變成我可以稱之為生產的東西，或者我不確定如何描述它？

Yeah. No, Brian, I think what you could -- it's safe to say now for the kinds of programs that we're bidding and we've started to win, we'll generally see the NRE or the development period beyond the order of 6 to 12 or 18 months. So we're in that 6- to 18-month range depending on the size and scope of the development in the system we're developing.

是的。不，布萊恩，我認為你可以 - 現在可以肯定地說，對於我們正在投標並且我們已經開始獲勝的項目類型，我們通常會看到 NRE 或開發週期超過 6 的數量級至 12 或 18 個月。因此，我們的時間範圍是 6 到 18 個月，具體取決於我們正在開發的系統的開發規模和範圍。

Usually, at the end of that 18 months, you have the first fieldings. Usually, that's the low risk -- the risk, the lower rate initial production. That's usually the first four, five or six prototypes, that's usually delivered within the first three to six months after that development period, and then you roll into production period.

通常，在那 18 個月結束時，您會進行第一次部署。通常，這就是低風險——風險，初始生產力較低。這通常是前四個、五個或六個原型，通常在開發期後的前三到六個月內交付，然後進入生產期。

That can usually run anywhere from one to two to three to five years, and then usually have a technology refresh cycle that rolls up on the back end of that. So a perfect example is the Raytheon P8 program we have. There is initial front-end development.

這通常可以持續一到兩年到三到五年，然後通常有一個技術更新周期，在其後端滾動。一個完美的例子就是我們的雷神公司 P8 計畫。有初步的前端開發。

We've been on that program for the better part of seven, eight years now. And we're on, I think, our second or third tech refresh. We're just finishing some development right now for the next technology refresh update for our system there.

我們已經參與這個計畫七、八年了。我認為我們正在進行第二次或第三次技術更新。我們現在剛完成系統下一次技術更新的一些開發。

So that's the benefit of getting in on these front-end customer development programs. So a little bit of a long answer, but between 6 to 18 months, depending on the scope, is what I would say is average for us on those front-end development.

這就是參與這些前端客戶開發計畫的好處。答案有點長，但根據範圍不同，我認為 6 到 18 個月之間是我們前端開發的平均時間。

Thank you. Last question I have, as we start to think about the revenue expectations that we like to think about from the OSS segment. Is there any way you can quantify either the first six months or the trailing 12 months book-to-bill?

謝謝。我的最後一個問題是，當我們開始考慮 OSS 領域的收入預期時。有沒有什麼方法可以量化前 6 個月或後 12 個月的訂單到帳單？

Yeah. So we've been tracking this year. So the -- as I mentioned in the earnings call, right, the bookings have been outpacing revenue in that OSS segment by a little over 20%, right? So that -- those would be like book-to-bill ratio --

是的。所以我們今年一直在追蹤。因此，正如我在財報電話會議中提到的那樣，OSS 領域的預訂量超過了收入 20% 多一點，對吧？那麼——這些就像訂單出貨比--

[1.2]?

[1.2]？

I'm sorry, Brian?

對不起，布萊恩？

So 1.2 maybe -- so maybe like 1.2 in this last quarter is the initial valuation?

所以也許是 1.2——所以也許最後一個季度的初始估值是 1.2？

Yeah. For the trailing six months for this year, we've been probably a little bit closer to [1.26]. The last quarter here was a little bit stronger. We were upwards of a little over [1.3]. So we're starting to see some pickup on the booking side from a lot of work we initiated last year. And then we're forecasting that to see that continued positive book-to-bill ratio greater than 1 through the next two quarters based on where we see things.

是的。在今年過去的六個月裡，我們可能更接近[1.26]。最後一季的表現稍強。我們有點超過了[1.3]。因此，我們開始看到預訂方面從去年開始的大量工作中有所回升。然後，根據我們的觀察，我們預測未來兩季的訂單出貨比將持續大於 1。

The biggest impact would be timing on some, making sure the awards come in as planned. But based on where we're sitting, the majority of the pipeline that we have bid right now or we're waiting on awards is either competitions we've won or sole-source work. So we're feeling pretty confident in the scope and the value that we could potentially pull through. We're working the timing, as I mentioned, on processing it through the systems.

最大的影響將是對某些人的時間安排，確保獎項按計劃發放。但根據我們目前的情況，我們現在已經投標或正在等待獎項的大部分管道要么是我們贏得的競賽，要么是獨家來源的工作。因此，我們對我們可能實現的範圍和價值非常有信心。正如我所提到的，我們正在安排時間透過系統處理。

Let me squeeze one more in. Back to -- we're heading to the end of the government fiscal year. Some businesses in the government obviously have a budget flush at the end of the year. Obviously, that also helps for the year after because you've had some budget this year and it protects you against CR. Do your business have a budget flush in September, generally, a benefit from that? Or is that not typically the case?

讓我再擠一顆進去。回到—我們即將迎來政府財政年度結束。政府的一些企業顯然在年底預算充裕。顯然，這對後年也有幫助，因為你今年有一些預算，它可以保護你免受 CR 的影響。一般來說，您的企業在 9 月的預算充足嗎？或者通常情況並非如此？

So not much last year. So generally, on the government side, when they get to year end and they're trying to use up a budget at the end of the year, they will generally go for buying additional production buys or spare buys. So generally, if you're incumbent on a platform, you'll see a better return on those year-end sweep-up funds.

所以去年不多。因此，一般來說，在政府方面，當他們到了年底並且試圖在年底用完預算時，他們通常會購買額外的生產產品或備用產品。因此，一般來說，如果您在某個平台上任職，您會看到這些年終清理資金的回報會更好。

So we've started to position ourselves in some of those programs so we could start to take advantage of that. Because of some of the positioning work we did last year, the other way you can grab sweep-up funds is, usually, if some labs or organizations are interested in some early technology fieldings so they can work them in their lab or try them in exercises. We can sometimes see those pickups.

因此，我們已經開始在其中一些計劃中定位自己，以便我們可以開始利用這一點。由於我們去年所做的一些定位工作，您可以獲得掃蕩資金的另一種方式通常是，如果一些實驗室或組織對某些早期技術領域感興趣，那麼他們可以在實驗室中使用它們或嘗試它們練習。我們有時可以看到這些皮卡。

So we've expanded our relationships across the defense so that we try to pursue opportunities where we can for people who might want to buy something for their lab or for some experiment in anticipation of a program in the following year. So as we get a bigger market share in defense, sweep-up money will definitely be a lever that we can pull. We just need a little bit more penetration and incumbency across a few more platforms, and then we'll -- I think we'll start to see that really add more to our opportunities.

因此，我們擴大了與國防部門的關係，以便我們盡力為那些可能想為實驗室購買東西或為明年的計劃進行一些實驗的人尋找機會。因此，當我們在國防領域獲得更大的市場份額時，掃蕩資金肯定會成為我們可以拉動的槓桿。我們只需要在更多的平台上有更多的滲透和任職，然後我們 - 我認為我們將開始看到這確實增加了我們的更多機會。

Okay. Thanks for answering all my questions.

好的。感謝您回答我所有的問題。

Thank you, Brian.

謝謝你，布萊恩。

Thanks, Brian.

謝謝，布萊恩。

Thank you. And there are no further questions at this time, sir. Please continue.

謝謝。先生，目前沒有其他問題。請繼續。

Okay, John. Thank you very much. We appreciate it.

好吧，約翰。非常感謝。我們很感激。

Thank you. This concludes our conference for today. Thank you all for participating. You may now disconnect.

謝謝。我們今天的會議到此結束。感謝大家的參與。您現在可以斷開連線。