Red Cat Holdings Inc (RCAT) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Red Cat Holdings fiscal 2023 second-quarter financial results and corporate update conference call. (Operator Instructions)

各位女士、先生，感謝您稍候。下午好，歡迎參加 Red Cat Holdings 2023 會計年度第二季財務業績與公司最新進展電話會議。（接線員指示）

Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through March 15, 2023.

敬告本次電話會議的與會者，本次電話會議的音訊正透過網際網路進行即時直播，並同時錄音以供回放。電話會議結束後約一小時起至 2023 年 3 月 15 日，將提供網路直播重播。

I would now like to turn the call over to Joey Delahoussaye, Vice President of CoreIR, the company's Investor Relations firm. Please go ahead, sir.

現在我想把電話交給 CoreIR 副總裁、亦為本公司投資人關係顧問公司代表的 Joey Delahoussaye。先生，請開始。

Thank you, MJ. Good afternoon, everyone, and thank you for joining us for the Red Cat Holdings fiscal 2023 second-quarter financial results and corporate update conference call. Joining us today from Red Cat holdings are Jeff Thompson, Chief Executive Officer; and Joseph Hernon, Chief Financial Officer.

謝謝你，MJ。各位下午好，感謝各位參加 Red Cat Holdings 2023 會計年度第二季財務業績與公司最新進展電話會議。今天與我們一同出席、來自 Red Cat Holdings 的有：執行長 Jeff Thompson，以及財務長 Joseph Hernon。

During this call, management will be making forward-looking statements, including statements that address Red Cat's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

在本次電話會議中，管理層將作出前瞻性陳述，包括涉及 Red Cat 對未來表現或營運結果之預期的陳述。前瞻性陳述涉及風險及其他因素，可能導致實際結果與該等陳述存在重大差異。

For more information about these risks, please refer to the risk factors described in Red Cat's most recently filed periodic reports on Form 10-K and Form 10-Q and in Red Cat's press release that accompanies this call, particularly the cautionary statements in it, and content of this call contains time-sensitive information that is accurate only as of today, December 15, 2022.

關於上述風險的更多資訊，請參閱 Red Cat 最近提交的 Form 10-K 與 Form 10-Q 定期報告中所述之風險因素，以及隨本次電話會議一併發布的 Red Cat 新聞稿，特別是其中的警示性陳述；此外，本次電話會議內容包含具時效性的資訊，僅截至今日（2022 年 12 月 15 日）為準且屬正確。

Except as required by law, Red Cat disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Jeff Thompson, Chief Executive Officer. Jeff?

除法律要求外，Red Cat 不承擔在本次電話會議後就任何資訊進行公開更新或修訂、以反映其後發生之事件或情況的任何義務。現在我很榮幸把電話交給執行長 Jeff Thompson。Jeff？

Yes, thank you, Joey. Welcome to our fiscal year 2023 second-quarter earnings conference call. This has been a tough year for the economy and a brutal stock market. Many businesses and technology companies are battening down the hatches. But at Red Cat, we are focused on growth. The defense industry is growing, not shrinking, in the US and NATO.

好的，謝謝你，Joey。歡迎各位參加我們 2023 會計年度第二季財報電話會議。今年對經濟而言是艱難的一年，股市也極為慘烈。許多企業與科技公司都在收縮防守。但在 Red Cat，我們專注於成長。國防產業在美國與北約是成長而非萎縮。

First, let's talk about the current military and defense drone industry. The defense space is going through a huge change. Ukraine War has demonstrated that drones are changing warfare and specifically small drones like the Teal Golden Eagle.

首先，我們來談談目前的軍用與國防無人機產業。國防領域正在經歷巨大變革。烏克蘭戰爭已證明無人機正在改變戰爭型態，尤其是像 Teal Golden Eagle 這樣的小型無人機。

Just some recent headlines, drone warfare in Ukraine and the changing battlefield, source CBC. Russia and Ukraine are finding the first full-scale drone war, Washington Post; the drone war in Ukraine, Financial Times; the tiny and nightmarishly efficient future of drone warfare, the Atlantic; Ukraine enters a dark new era of drone warfare, Wired Magazine.

僅舉一些近期新聞標題：〈烏克蘭的無人機戰與變動中的戰場〉，來源 CBC；《華盛頓郵報》：俄羅斯與烏克蘭正在打第一場全面性的無人機戰；《金融時報》：烏克蘭的無人機戰；《大西洋月刊》：小型且效率驚人的無人機戰未來；《連線》雜誌：烏克蘭進入無人機戰的黑暗新時代。

Two main developments are going to impact future war, said Daniel Bendett, a military analyst at the Virginia-based research group, CNA. The proliferation and availability of combat drones for longer range, more sophisticated operations, and the absolute necessity to have cheap tactical drones for close support operations. Just Google Ukraine drone war, it comes back with 3-million-plus results.

維吉尼亞州研究機構 CNA 的軍事分析師 Daniel Bendett 表示，兩項主要發展將影響未來戰爭：其一是作戰無人機的擴散與可得性提升，使其能執行更長航程、更複雜的作戰；其二是近距離支援作戰絕對必須具備低成本的戰術無人機。只要在 Google 搜尋「Ukraine drone war」，就會出現超過 300 萬筆結果。

Drones, and more specifically short-range reconnaissance drones like the Teal Golden Eagle, are changing warfare. Defense budgets across the globe need to replenish, and many have doubled in NATO countries. Many of these new programs like the SRR Program of record go well past 2030.

無人機，且更具體而言像 Teal Golden Eagle 這類短程偵察無人機，正在改變戰爭。全球各地的國防預算需要補充，在許多北約國家甚至已翻倍。許多這類新計畫（例如 SRR 記錄在案計畫）將延續至 2030 年以後。

Red Cat estimates that small, unmanned aircraft fleet size are 64,000 for the US military and approximately 78,000 for US allies. These projections and research were pre-Ukraine War. Red Cat has invested heavily in our supply chain inventory. Most of these orders were 18 months ago. We have invested in a new factory in Salt Lake City that can produce tens of thousands of drones per year.

Red Cat 估計，美軍小型無人機機隊規模為 64,000 架，美國盟友約為 78,000 架。這些預測與研究是在烏克蘭戰爭之前完成的。Red Cat 已在供應鏈庫存上投入大量資金，其中多數訂單是在 18 個月前下達。我們也在鹽湖城投資新工廠，每年可生產數萬架無人機。

We believe we are well positioned now to meet the growing demand for made-in-USA drones. The Teal drone is a great drone. But like an iPhone, it's nothing without the apps. Our open platform has allowed for two great partnerships to give the warfighter a complete out-of-the-box system.

我們相信，我們目前已具備良好條件以滿足對「美國製造」無人機日益成長的需求。Teal 無人機是一款很棒的無人機。但就像 iPhone 一樣，沒有應用程式就什麼也不是。我們的開放式平台促成了兩項重要合作夥伴關係，為作戰人員提供完整、開箱即用的系統。

We've announced partnerships recently with Reveal Technology and Tomahawk Robotics and expect to add to this list of partners. Each Teal drone now ships with a fully licensed version of Kinesis software from Tomahawk Robotics. When you add the Reveal mapping capabilities, you can get the warfighter tactical advantages not seen before in the battlefield. I could spend an hour on the capabilities we are bringing to the table with these three companies.

我們近期已宣布與 Reveal Technology 及 Tomahawk Robotics 的合作夥伴關係，並預期會持續增加合作夥伴名單。每一架 Teal 無人機目前出貨時都隨附 Tomahawk Robotics 的 Kinesis 軟體完整授權版本。再加上 Reveal 的測繪能力，即可為作戰人員帶來前所未見的戰場戰術優勢。我可以花一小時來談我們與這三家公司共同帶來的能力。

Let's talk about Skypersonic. Skycopter is an inspection drone, and we inspect the infrastructure built to produce large contracts in late 2023. We are on our second version of the Skycopter. It is a much more reliable drone now.

接著談談 Skypersonic。Skycopter 是一款檢測無人機，我們正檢測為於 2023 年底取得大型合約而建置的基礎設施。我們目前已推出第二代 Skycopter，現在的可靠性大幅提升。

We have also found a new market for the Skycopter, the military. The Skycopter is a great solution for GPS-denied flying. This includes caves, abandoned buildings, tunnels, and any other place you don't want to put a soldier at risk. We have received some great initial feedback in recent demonstrations for the US military down in Fort Bragg.

我們也為 Skycopter 找到一個新市場：軍方。Skycopter 是在 GPS 受限環境飛行的絕佳解決方案，包括洞穴、廢棄建築、隧道，以及任何你不希望讓士兵暴露於風險之處。我們近期在布拉格堡（Fort Bragg）為美軍進行展示，並收到非常好的初步回饋。

Let's switch gears and talk about current contracts and then the SRR program. As you know, we have a $90 million contract with the Border Patrol. We are one of a handful of companies in the contract. They recently gave us a purchase order for approximately $1 million. We gave similar contracts to two other companies. We believe we are in a bake-off to replace the existing Chinese fleet.

接下來我們換個話題，談談目前的合約，然後再談 SRR 計畫。如各位所知，我們與邊境巡邏隊（Border Patrol）有一份 9,000 萬美元的合約。我們是該合約中少數幾家公司之一。他們最近給了我們約 100 萬美元的採購訂單。他們也給了另外兩家公司類似的合約。我們相信目前正在進行一場評比（bake-off），以取代現有的中國製機隊。

We expect to ship this order in January 2023. We believe we are well positioned with our capabilities to fly at night when those missions take place. Red Cat's mission is to dominate the night and we hope to expand the Border Patrol contract throughout 2023 and beyond.

我們預期將於 2023 年 1 月出貨此筆訂單。我們相信，憑藉我們在夜間執行任務（這些任務通常在夜間進行）的能力，我們具備良好優勢。Red Cat 的使命是主宰夜間，我們希望在 2023 年及其後擴大邊境巡邏隊合約。

SRR, otherwise known as Short Range Reconnaissance Tranche 2, SRRT 2 program of record. Tranche 2 is going according to plan. We have weekly meetings with the Army, and the first fly off in January 2023. This is an alpha version of the new Tranche 2 bird. We are excited to demonstrate the capabilities of our new drone and payload.

SRR，也就是短程偵察（Short Range Reconnaissance）第二批次（Tranche 2），即 SRRT 2 記錄在案計畫。第二批次正按計畫推進。我們每週都與陸軍開會，並將於 2023 年 1 月進行首次飛行競比（fly off）。這是新一代 Tranche 2 機型的 Alpha 版本。我們很期待展示我們新無人機與載荷的能力。

We are also pleased to report that Tranche 3 and cancelled. They are adding Tranche 3 Tranche 2 to accelerate the program. We believe this will increase the contract size of Tranche 2 as it absorbs Tranche 3 capabilities.

我們也很高興報告，Tranche 3 已被取消。他們正把 Tranche 3 併入 Tranche 2，以加速該計畫。我們相信，隨著 Tranche 2 吸收 Tranche 3 的能力，這將提高 Tranche 2 的合約規模。

To summarize, we are excited that our brand-new factory is now producing the newest version of Golden Eagle. We expect 2023 to be an explosive year for drones.

總結來說，我們很振奮我們全新的工廠現已開始生產最新版的 Golden Eagle。我們預期 2023 年將是無人機爆發性成長的一年。

And with that, I'm going to hand it over to Joseph. Thank you.

接下來，我把電話交給 Joseph。謝謝。

Thank you, Jeff, and to everyone for joining the call today. I will now provide some financial highlights of our results through the second fiscal quarter, which ended on October 31. Year to date, our revenues for the first six months of fiscal '23 increased 41% compared to the same period last year. This reflects contributions from all of our wholly owned subsidiaries.

謝謝你，Jeff，也謝謝各位今天加入本次電話會議。接下來我將提供截至 10 月 31 日止第二個會計季度的部分財務重點。截至目前為止，我們 2023 會計年度前六個月的營收較去年同期成長 41%。這反映了我們所有全資子公司的貢獻。

Most notably, year-to-date revenues for Teal increased significantly on a year-over-year basis as it begins to generate revenues from its military contracts and relationships. During the quarter, much of our focus continued to be on building out the Teal organization and preparing it for the multitude of revenue opportunities that are emerging, some of which Jeff just described.

最值得注意的是，Teal 的年初至今營收較去年同期大幅成長，因其開始自軍方合約與合作關係中產生營收。在本季度，我們的重點仍有很大一部分放在擴建 Teal 組織並為正在浮現的眾多營收機會做好準備，其中部分正如 Jeff 剛才所描述。

We doubled the size of its manufacturing facilities, both to increase its manufacturing capacity and to house its workforce, which has more than tripled since we acquired Teal. While this strategy has resulted in higher operating costs, we strongly believe that controlling the manufacturing process internally best positions us to take advantage of sales opportunities rather than relying on third-party manufacturers.

我們將其製造設施的規模擴大了一倍，一方面是為了提升其製造產能，另一方面是為了容納其員工隊伍；自我們收購 Teal 以來，員工人數已增加至三倍以上。雖然此策略導致營運成本上升，但我們堅信，將製造流程掌握在內部，能使我們在把握銷售機會方面處於最佳位置，而非依賴第三方製造商。

Operating expenses totaled $7 million in the second fiscal quarter compared to $3 million in the same quarter last year. This increase largely reflects our people and facilities expansion at Teal, which, at this point, is significantly completed.

第二個會計年度季度的營運費用合計為 700 萬美元，相較去年同期為 300 萬美元。此增幅主要反映我們在 Teal 的人員與設施擴張，而截至目前，該擴張已大致完成。

After careful deliberation, the company has decided to sell the consumer segment and exclusively focus its efforts and resources on the enterprise segment, which means Teal and Skypersonic.

經過審慎研議後，公司已決定出售消費者業務部門，並將其努力與資源專注於企業業務部門，也就是 Teal 與 Skypersonic。

As Jeff noted, the war in Ukraine has changed the rules in the battlefield with drones playing an ever-increasing role. We believe that our initial government contracts are a positive indication regarding the future scope and size of additional contracts. We will realize a profit on the sale of the consumer segment, and the proceeds of $18 million will provide non-dilutive capital to support our growth initiatives.

正如 Jeff 所提到的，烏克蘭戰爭已改變戰場規則，無人機扮演的角色日益重要。我們認為，我們初期的政府合約對於未來追加合約的範圍與規模是一項正面指標。我們將在出售消費者業務部門上實現獲利，而 1,800 萬美元的所得款項將提供非稀釋性資本，以支持我們的成長計畫。

We ended the third quarter with almost $33 million in cash and marketable securities and remain in a strong financial position.

我們在第三季末持有接近 3,300 萬美元的現金與有價證券，並維持強勁的財務狀況。

I will now turn the call over to the operator for questions.

我現在把電話交給接線員進行提問。

Thank you. (Operator Instructions). At this time, I would like to turn the call to Joey Delahoussaye of CoreIR to read pre-submitted questions for management. Joey? Joey, is it possible your line is muted?

謝謝。（接線員指示）。此時，我想把電話交給 CoreIR 的 Joey Delahoussaye，由他宣讀先前提交給管理層的問題。Joey？Joey，你的線路是否可能被靜音了？

Yes, sorry. Thank you, MJ.

是的，不好意思。謝謝你，MJ。

Jeff, over the last few weeks, we received a few questions from investors recently. And -- but this would be a good chance for you to address those for all investors. Why don't we just dive right in on these questions? Can you provide any update on the divestiture of the consumer segment and when that will possibly close?

Jeff，在過去幾週，我們最近收到投資人提出的幾個問題。而且——這會是你向所有投資人一併回應的好機會。我們就直接切入這些問題吧。你能否就消費者業務部門的剝離進度，以及可能何時完成交割，提供任何更新？

Yes. I think it's on track. They have recently filed their S1, which is part of the IPO process for them, which gets the clock ticking so that we can get to a close because that's their IPO is one of the conditions to close the deal. And I know they've submitted their S-1 to the SEC, so that is a good first step.

可以。我認為一切按計畫進行。他們最近已提交 S-1，這是其 IPO 流程的一部分，這會讓時程開始推進，使我們能夠走向交割，因為他們的 IPO 是完成交易交割的條件之一。我知道他們已將 S-1 提交給 SEC，因此這是很好的第一步。

And so, as soon as they get reviewed and get the okay, they'll get up to the market to IPO. And we will be able to get -- as Joseph mentioned, that will raise, $18 million for us of non-dilutive capital.

因此，一旦完成審查並獲得核准，他們就會進入市場進行 IPO。而我們也將能夠——如 Joseph 所提到的——為我們帶來 1,800 萬美元的非稀釋性資本。

Okay, great. And in past press releases and conferences, you've mentioned [you have an exposure] to the Ukraine conflict and possible international sales being part of your pipeline. Do you have any update on how some international efforts have been going?

好的，很棒。接著，在過去的新聞稿與會議中，你曾提到[你們對烏克蘭衝突有所曝險]，以及潛在的國際銷售是你們管線的一部分。你能否更新一下部分國際推進的進展？

Well, there's no contract wins yet, but we are still -- that's expected because of the timelines of the RFPs, but we do have quite a few RFPs, and our team will be in Europe and Africa. They actually just came back from Africa in -- starting in late January, and they will be there for a couple of months because there's a lot of activity there, specifically with our new birds that we'll be bringing.

嗯，目前還沒有贏得合約，但我們仍在推進——這是預期之內，因為 RFP 的時程較長；不過我們確實有相當多的 RFP，我們的團隊也將前往歐洲與非洲。他們其實剛從非洲回來——大約從一月底開始——而且他們會在那裡待上幾個月，因為那邊活動很多，特別是我們即將帶去的新機型。

So we hope to get some of these RFPs or at least a couple of them. I know that we should be finding out if we're down selected in January, which is good. So yes, there's a lot of activity, not only in Europe and NATO and Africa right now -- we are working on two different things in Africa -- but also in Asia. We're starting to get quite a bit of activity on some pretty large contracts.

因此我們希望能拿下一些 RFP，或至少其中幾個。我知道我們應該會在一月得知是否進入下一輪入選名單，這是好消息。所以是的，目前不僅在歐洲、北約與非洲有很多活動——我們在非洲正推進兩個不同的項目——在亞洲也一樣。我們開始在一些相當大型的合約上看到不少動能。

Great. And then the last one, in your prepared remarks, you gave an update -- a bit of an update on the Army's short-range reconnaissance program. Is there anything else that investors should possibly know about where that stands?

很好。最後一個問題，在你準備好的發言中，你對陸軍的短程偵察計畫提供了一些更新。投資人是否還需要知道其他關於目前進展的資訊？

Yes. We just found out about this, and they basically took Tranche 3 and all the capabilities that we're going to be required for Tranche 3 and they absorbed them into Tranche 2. We believe this is also because of the activity in the Ukraine. Everyone needs drones now. They don't want to wait another three years from the Tranche 3 program to get the drones that they need for the warfighter.

是的。我們剛得知這件事：他們基本上把 Tranche 3 以及我們在 Tranche 3 需要具備的所有能力，吸收併入 Tranche 2。我們認為這也與烏克蘭的情勢有關。現在每個人都需要無人機。他們不想再等 Tranche 3 計畫的三年，才取得作戰人員所需的無人機。

So that's a pretty significant change for us. And we're pretty excited at how far along we are in this process and that we'd actually [not have to] finish in May through September, and they start the whole process, and we demo for Tranche 3 late next year. It's all going to be -- those three years are going to get combined right into Tranche 2.

所以這對我們而言是相當重大的變化。我們也對目前在此流程中推進的程度感到非常振奮，因為我們實際上[不必]在 5 月到 9 月完成，然後他們再啟動整個流程，並在明年年底為 Tranche 3 進行展示。這三年的內容將全部直接併入 Tranche 2。

Wow, that's pretty interesting. That does that mean then that the Tranche 2 program is possibly bigger in [award value] now that it's combining, essentially elements from Tranche 3?

哇，這相當有意思。那是否表示，因為實質上把 Tranche 3 的要素併入，Tranche 2 計畫現在在[授標金額]上可能更大？

Yes, absolutely, it will be much larger than Tranche 2 would have been by itself. And when we looked at the beginning of the program for the SRR program, it looked like it was going to be about a little under a $0.5 billion program of record. That was years ago. Tranche 1 ended up being $100 million.

是的，絕對如此，它會比單獨的 Tranche 2 大得多。當我們在 SRR 計畫一開始評估這個專案時，看起來它會是一個略低於 5 億美元的正式列管計畫（program of record）。那是多年前的事了。Tranche 1 最終是 1 億美元。

So now that Tranche 2 and Tranche 3 are combined, if we fill out the rest of that program of record, it could be a very substantial contract for hundreds of millions of dollars. It's pretty exciting. And also, we typically would get additional capital from the Army for Tranche 3 prototypes. So we were hoping that we also get additional capital from the Army early next year for the additional features and prototyping.

因此，現在 Tranche 2 與 Tranche 3 合併後，如果我們能把該正式列管計畫的其餘部分補齊，它可能會是一份非常可觀、金額達數億美元的合約，這相當令人振奮。此外，通常我們會從陸軍獲得用於 Tranche 3 原型的額外資金。因此我們也希望能在明年年初，針對額外功能與原型開發，從陸軍取得更多資金。

So there's really good news for us. Actually, it's great news for Red Cat and Red Cat shareholders on. We're pretty far down the process. We now have a factory that's capable of handling Tranche 2/3 now. We -- there's lots of contracts out there across the globe, and the brand-new Golden Eagle that's just starting to come off the production line is flying great.

所以這對我們來說真的是好消息。其實，這對 Red Cat 以及 Red Cat 股東而言都是極佳的消息。我們在流程上已經推進得很深入。我們現在有一座工廠，具備處理 Tranche 2/3 的能力。我們——全球各地有很多合約機會，而全新的 Golden Eagle 才剛開始從產線下線，飛行表現非常出色。

We've got the best payload in the industry. Basically, set for -- that means best camera for most people to understand that. And with that new camera and the thermal capabilities, we can dominate the nighttime. And nighttime is when all the missions take place.

我們擁有業界最佳的酬載。基本上——為了讓大多數人理解——這代表最好的相機。搭配那款新相機與熱成像能力，我們可以在夜間占據優勢。而夜間正是所有任務發生的時段。

So the Golden Eagle and the new Teal capabilities with a new payload are made specifically for the military, for the Department of Defense, and very much focused on the Army, Marines, and Navy.

因此，Golden Eagle 以及具備新酬載的全新 Teal 能力，是專為軍方、國防部而打造，並且非常聚焦於陸軍、海軍陸戰隊與海軍。

So we are building drones for the for the military. We're not a consumer company that happens to make some drones for the military. We're only focused on the military and don't make consumer drones. So we expect it to be quite an exciting 2023.

所以我們是在為軍方打造無人機。我們不是一家消費型公司，剛好也為軍方做一些無人機。我們只專注於軍方，也不製造消費型無人機。因此我們預期 2023 年會相當令人振奮。

Great. Well, Jeff, thanks for those answers. Those are the last of the previously submitted questions, and I would like to turn the call back over to you for any other closing remarks.

很好。Jeff，謝謝你的回答。以上就是先前提交問題的最後幾個，我想把電話交回給你，看看你是否還有其他結語。

Well, I don't have any additional remarks. I just want to thank everybody for jumping on the call, and we'll talk to you when we do our next quarter. Thanks, everybody.

嗯，我沒有其他補充。我只是想感謝大家參與這通電話會議，我們下個季度再與各位交流。謝謝大家。

The conference has now concluded. Thank you for your participation. You may now disconnect.

本次電話會議到此結束。感謝各位參與。您現在可以掛線。