RF Industries Ltd (RFIL) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to the RF Industries Second Quarter Fiscal 2023 Financial Results Conference Call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Jack Drapacz. Sir, the floor is yours.

大家好，歡迎參加 RF Industries 2023 財年第二季度財務業績電話會議。 （操作員指示）現在我很高興將發言權交給主持人 Jack Drapacz。先生，地板是你的了。

Thank you, operator. Good afternoon, and welcome to RF Industries Second Quarter Fiscal 2023 Financial Results Conference Call. With me on today's call are RF Industries' President and CEO, Rob Dawson; and Senior Vice President and Chief Financial Officer, Peter Yin.

謝謝你，接線員。下午好，歡迎參加 RF Industries 2023 財年第二季度財務業績電話會議。參加今天電話會議的有 RF Industries 總裁兼首席執行官 Rob Dawson；高級副總裁兼首席財務官 Peter Yin。

Before I turn the call over to Rob and Peter, I'd like to cover a few quick items. This afternoon, RF Industries issued a press release announcing its second quarter fiscal 2023 financial results. That results -- excuse me, that release is available on the company's website at rfindustries.com. This call is also being broadcast live over the Internet for all interested parties, and the webcast will be archived on the Investor Relations page of the company's website.

在將電話轉給 Rob 和 Peter 之前，我想簡單介紹一下一些內容。今天下午，RF Industries 發布新聞稿，公佈了 2023 財年第二季度財務業績。結果 - 對不起，該版本可在該公司的網站 rfindustries.com 上找到。此次電話會議還將通過互聯網向所有感興趣的各方進行現場直播，網絡廣播將存檔在公司網站的投資者關係頁面上。

I want to remind everyone that during today's call, management will make forward-looking statements that involve risks and uncertainties. Please note that except for the historical statements, statements on this call today may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.

我想提醒大家，在今天的電話會議中，管理層將做出涉及風險和不確定性的前瞻性聲明。請注意，除了歷史陳述外，今天本次電話會議的陳述可能構成 1934 年《證券交易法》第 21E 條含義內的前瞻性陳述。

When used, the words anticipate, believe, expect, intend, future and other similar expressions identify forward-looking statements. These forward-looking statements reflect management's current views with respect to future events and financial performance and are subject to risks and uncertainties, and actual results may differ materially from the outcomes contained in any forward-looking statements. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing or sales of products and other risks and uncertainties discussed in the company's periodic reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission.

使用時，預期、相信、期望、打算、未來和其他類似表達方式均視為前瞻性陳述。這些前瞻性陳述反映了管理層對未來事件和財務業績的當前看法，並受到風險和不確定性的影響，實際結果可能與任何前瞻性陳述中包含的結果存在重大差異。可能導致這些前瞻性陳述與實際結果不同的因素包括產品開發、營銷或銷售的延遲以及公司在10-K 和10-Q 表格定期報告以及向證券公司提交的其他文件中討論的其他風險和不確定性和交易委員會。

RF Industries undertakes no obligation to update or revise any forward-looking statements. Additionally, throughout this call, we will be discussing certain non-GAAP financial measures. Today's earnings release and the related current report on Form 8-K describe the differences between our GAAP and non-GAAP reporting and present the reconciliation between the 2 for the periods reported in the earnings release.

RF Industries 不承擔更新或修改任何前瞻性陳述的義務。此外，在整個電話會議中，我們將討論某些非公認會計準則財務指標。今天的收益發布和 8-K 表格中的相關當前報告描述了我們的 GAAP 和非 GAAP 報告之間的差異，並提供了收益發布中報告期間兩者之間的調節。

With that said, I will now turn the conference call over to Rob Dawson, President and Chief Executive Officer.

話雖如此，我現在將電話會議轉交給總裁兼首席執行官 Rob Dawson。

Thank you, Jack. Good afternoon, everyone. Thanks for joining our second quarter fiscal 2023 conference call. We had a solid quarter and delivered net sales of $22.3 million, a 3.7% increase against a strong Q2 last year. As anticipated, we shipped several customer orders that were delayed in the first quarter and our Optiflex hybrid fiber cable and interconnect products performed well.

謝謝你，傑克。大家下午好。感謝您參加我們的 2023 財年第二季度電話會議。我們的季度業績表現強勁，淨銷售額為 2,230 萬美元，比去年第二季度的強勁表現增長了 3.7%。正如預期的那樣，我們在第一季度交付了一些延遲的客戶訂單，並且我們的 Optiflex 混合光纖電纜和互連產品表現良好。

I think our Q2 results show what's possible in our business even with a challenging backdrop. Over the last few years, we have achieved significant growth yet there's always some volatility quarter-to-quarter, which makes it difficult to take a snapshot every 90 days for a company our size, especially in a market like this. Our growth trend hasn't been a perfect (inaudible) up into the right chart every year. But directionally, we're doing the right things, and our #1 focus right now is getting back to higher profitability.

我認為我們第二季度的業績表明，即使在充滿挑戰的背景下，我們的業務也有可能實現。在過去的幾年裡，我們取得了顯著的增長，但季度與季度之間總是存在一些波動，這使得我們這樣規模的公司很難每90 天進行一次快照，尤其是在這樣的市場中。我們的增長趨勢並不是每年都完美（聽不清）進入正確的圖表。但從方向上看，我們正在做正確的事情，我們現在的第一重點是恢復更高的盈利能力。

While we had a nice second quarter, the overall environment in the wireless carrier market hasn't really changed since our last call when we discussed a spending pause in wireless carrier CapEx and project delays. While our core interconnect offer, including custom cabling is performing well, DAC in small cell, our higher-margin and future growth drivers are being impacted by the sluggish CapEx spending as pressuring the consolidated gross margins and EBITDA in the short term. We expect a few more quarters of slower project spending and the related delays, but are optimistic that carriers will resume their build-outs, and we stand to benefit from that with our differentiated new higher-value solutions. Having navigated through several wireless spending cycles, we know how this works, and slow spots like this are normal.

雖然我們第二季度表現不錯，但自上次電話會議討論無線運營商資本支出暫停支出和項目延遲以來，無線運營商市場的整體環境並沒有真正改變。雖然我們的核心互連產品（包括定制佈線）表現良好，但小基站中的DAC、我們的較高利潤率和未來增長動力正受到資本支出疲軟的影響，在短期內對綜合毛利率和EBITDA 構成壓力。我們預計項目支出和相關延誤還會持續幾個季度，但樂觀地認為運營商將恢復其擴建，並且我們將通過我們差異化的新高價值解決方案從中受益。在經歷了幾個無線消費周期後，我們知道這是如何運作的，像這樣的緩慢點是正常的。

We also know how to prepare for an upturn and feel strongly that the investments we made in our business will kick into gear when carriers refocus their attention on the 4G and 5G builds. Additionally, many of our products have applications beyond wireless. And we're thinking strategically about diversifying into other industries where we have a smaller presence that could grow much larger over time, including wireline, utilities, transportation and aerospace and defense.

我們也知道如何為經濟好轉做好準備，並強烈認為，當運營商重新將注意力集中在 4G 和 5G 建設上時，我們在業務中所做的投資將會發揮作用。此外，我們的許多產品還具有無線以外的應用。我們正在戰略性地考慮向其他行業進行多元化發展，這些行業雖然我們的業務規模較小，但隨著時間的推移可能會擴大規模，包括有線、公用事業、運輸、航空航天和國防。

Let me just say we're executing well and showing progress on what's in our control. In the second quarter, we continued to make progress on our strategic transformation of RF Industries. One key element imprinting a growth mindset throughout the company is redefining our value proposition in the market. To that end, we launched a rebranding initiative to better connect RF's well-established reputation to the current market. After 45 years in operation, we now have a new logo and fresh brand identity that embraces both our history and the significant evolution of the company and our product offerings. This was unveiled in early May at the Connectivity Expo event. And when fully completed by year-end, we'll have a new corporate image, redesign of the website and a new investor presentation. This rebranding reflects our strategy to target both current and new markets with a more cohesive corporate identity that connects our powerful product portfolio to our roots.

我只想說，我們執行得很好，並且在我們控制的範圍內取得了進展。二季度，我們射頻產業戰略轉型繼續取得進展。在整個公司留下成長心態的一個關鍵因素是重新定義我們在市場上的價值主張。為此，我們發起了一項品牌重塑計劃，以更好地將 RF 的良好聲譽與當前市場聯繫起來。經過 45 年的運營，我們現在擁有一個新的徽標和全新的品牌標識，既體現了我們的歷史，也體現了公司和產品的重大演變。該產品於五月初在 Connectivity Expo 活動中亮相。當年底完全完成時，我們將擁有新的企業形象、重新設計的網站和新的投資者介紹。此次品牌重塑反映了我們的戰略，即以更具凝聚力的企業形象瞄準當前和新市場，將我們強大的產品組合與我們的根源聯繫起來。

On our last call, I touched on our 2023 strategic plan to reduce operating expenses by consolidating and streamlining operations. I'm pleased to report that we're making solid progress. Last quarter, we moved our coaxial cable operation to our new San Diego facility with no production downtime. And this week, we're adding our faster and fiber optic lines to that same facility.

在我們上次的電話會議上，我談到了我們的 2023 年戰略計劃，即通過整合和精簡運營來減少運營費用。我很高興地報告，我們正在取得紮實的進展。上個季度，我們將同軸電纜業務轉移到了聖地亞哥的新工廠，沒有造成生產停機。本週，我們將在同一設施中添加更快的光纖線路。

In July, we're consolidating some of our East Coast operations, which includes moving the Microlab production operations and then combining our small cell and DAC product lines later this summer. Moving production lines of the heavy lift. But so far, everything has gone smoothly without any disruption to our customers. The money that we're investing in consolidations will lead to significant efficiency gains and ultimately, cost savings. We expect these moving expenses will be largely behind us at the end of our third quarter.

7 月，我們將整合東海岸的一些業務，其中包括遷移 Microlab 生產業務，然後在今年夏天晚些時候合併我們的小型蜂窩和 DAC 產品線。移動重型起重機的生產線。但到目前為止，一切都很順利，沒有對我們的客戶造成任何干擾。我們投資於整合的資金將帶來顯著的效率提升，並最終節省成本。我們預計這些搬遷費用將在第三季度末基本消除。

At the same time, as I mentioned previously, we've been investing in product development, primarily within our Integrated Systems product offering. This spending has resulted in some higher operating expenses, which in turn has created a short-term drag on earnings until sales from these product lines ramp up as we expect in coming quarters. This important development cycle that keeps us competitive in the market is largely completed. As we strip out these costs and look to increase sales, we expect to be a much more profitable business in future quarters, So it's difficult to give specific timing in the short term.

與此同時，正如我之前提到的，我們一直在投資產品開發，主要是在我們的集成系統產品範圍內。這項支出導致運營費用增加，進而對盈利造成短期拖累，直到這些產品線的銷售額如我們預期的那樣在未來幾個季度出現增長。這個使我們保持市場競爭力的重要開發週期已基本完成。當我們剔除這些成本並尋求增加銷售額時，我們預計未來幾個季度的業務利潤會更高，因此很難在短期內給出具體的時間安排。

Now let's take a few minutes to expand a bit on the current operating environment. We believe we'll see a few more quarters of the capital expenditure downturn among wireless carriers for the reasons I discussed earlier. Based on our experience, these down cycles usually last 3 to 4 quarters. Once capital expenditures pick up, we see significant leverage in our P&L that could have a favorable impact on gross margins either from higher sales or product mix shift or both. Plus, as we reduce expenses, any incremental sales should flow to the bottom line.

現在讓我們花幾分鐘時間來擴展一下當前的操作環境。我們相信，由於我之前討論過的原因，我們將看到無線運營商的資本支出下降幾個季度。根據我們的經驗，這些下行週期通常持續 3 到 4 個季度。一旦資本支出回升，我們就會看到損益表中存在巨大的槓桿作用，這可能會對毛利率產生有利的影響，無論是銷售額的增加還是產品結構的轉變，或者兩者兼而有之。另外，隨著我​​們減少開支，任何增量銷售都應該流入利潤。

To better understand our business, the math is fairly straightforward. If we do $20 million in quarterly sales or 30% gross margin, we would deliver $6 million in gross profit. Our operating expenses have been hovering around $6 million per quarter. So that puts us roughly at GAAP breakeven around the $20 million sales level. Higher or lower sales will obviously change the operating profit number. So as we increase our focus on selling higher-margin products. The mix alone in the quarter can take our profitability up.

為了更好地理解我們的業務，數學相當簡單。如果我們的季度銷售額為 2000 萬美元，毛利率為 30%，我們將實現毛利潤 600 萬美元。我們的運營費用每季度一直徘徊在 600 萬美元左右。因此，按照 GAAP 計算，我們的銷售額大致達到了 2000 萬美元的盈虧平衡點。銷售額的增加或減少將明顯改變營業利潤數。因此，當我們更加關註銷售更高利潤的產品時。僅本季度的組合就可以提高我們的盈利能力。

Looking at it from the expense side, we anticipate lower operating costs based on our facility consolidations and other initiatives and are also working hard to rationalize our inventory position while being careful to maintain our core business proposition of availability and fast turn. Lower OpEx and inventory would obviously also help us deliver higher profits. So far, fiscal 2023 has served up some new market challenges that are pressuring our top line growth. As I said earlier, based on our experience, we think these are near-term hurdles. Regardless, our focus on improving profitability is our top priority, and we've set a goal of achieving an adjusted EBITDA above 10% of sales through our margin improvement and expense reduction initiatives.

從費用方面來看，我們預計基於我們的設施整合和其他舉措，運營成本將會降低，並且我們也在努力合理化我們的庫存狀況，同時小心地維持我們的可用性和快速周轉的核心業務主張。較低的運營支出和庫存顯然也有助於我們實現更高的利潤。到目前為止，2023 財年帶來了一些新的市場挑戰，給我們的收入增長帶來壓力。正如我之前所說，根據我們的經驗，我們認為這些是近期的障礙。無論如何，提高盈利能力是我們的首要任務，我們設定的目標是通過提高利潤率和削減費用舉措，實現調整後 EBITDA 佔銷售額 10% 以上。

Regarding M&A, as a growth-oriented team, we'll be looking at potential acquisitions to complement our business. Right now, deal flow is relatively slow, but there are opportunities out there and valuations seem to be normalizing. While we continue to focus on organic growth with our existing infrastructure, some specialty sectors like aerospace and defense may require strategic M&A to make an impact. The overall environment remains challenging, but we're not standing still. We see tremendous growth opportunity ahead once the CapEx faucet turns on.

關於併購，作為一個以增長為導向的團隊，我們將尋找潛在的收購來補充我​​們的業務。目前，交易量相對緩慢，但存在機會，估值似乎正在正常化。雖然我們繼續專注於現有基礎設施的有機增長，但航空航天和國防等一些專業領域可能需要戰略併購才能產生影響。整體環境仍然充滿挑戰，但我們並沒有停滯不前。一旦資本支出水龍頭打開，我們就會看到巨大的增長機會。

Our core business is strong and sustaining us and we're starting to see some green shoots of interest in our higher-value products and solutions, something that's been lacking over the last few quarters. In fact, some recent orders that we booked early in the third quarter give us more confidence that we're gaining traction with new products as we move through the rest of our fiscal year and into fiscal 2024. We think we're in a great position to generate solid returns for investors over the long term, and we're grateful for the ongoing support of our shareholders.

我們的核心業務很強大，支撐著我們，我們開始看到人們對我們的高價值產品和解決方案感興趣，這是過去幾個季度所缺乏的。事實上，我們在第三季度初預訂的一些近期訂單讓我們更有信心，隨著我們進入本財年剩餘時間和進入 2024 財年，我們正在獲得新產品的牽引力。我們認為我們處於良好的狀態我們有能力為投資者帶來長期穩定的回報，我們感謝股東的持續支持。

With that, I'll turn the call over to Peter to discuss our financials.

這樣，我會將電話轉給彼得，討論我們的財務狀況。

Thank you, Rob, and good afternoon, everyone. Before I get into the comparisons, our second quarter of fiscal 2023 includes a full quarter of Microlab results compared to 2 months of Microlab results in the second quarter of fiscal 2022. We acquired Microlab in March of 2022.

謝謝你，羅布，大家下午好。在進行比較之前，我們的 2023 財年第二季度包括 Microlab 整個季度的業績，與 2022 財年第二季度 Microlab 兩個月的業績相比。我們於 2022 年 3 月收購了 Microlab。

As Rob mentioned, we do not really see a change in the wireless carrier market spend since our last call as we continue to see a delay in wireless carrier CapEx. Our offering that was most impacted was our DAC and small cell solutions as we did not receive orders we were expecting and shipments related to existing orders continue to be delayed.

正如 Rob 提到的，自上次電話會議以來，我們並沒有真正看到無線運營商市場支出發生變化，因為我們繼續看到無線運營商資本支出的延遲。我們受影響最大的產品是我們的 DAC 和小型基站解決方案，因為我們沒有收到預期的訂單，並且與現有訂單相關的發貨繼續延遲。

Second quarter revenue was $22.3 million, up 3.7% compared to the same quarter last year. The increase is primarily related to our interconnect products and hybrid fiber cables, offset by a decrease in our small cell products. Second quarter gross profit margin was 27.4% as compared to 28.3% in the same quarter last year. The decrease is primarily related to lower revenue contribution from our small cell solutions, which have a higher margin profile compared to our blended gross margin rate.

第二季度營收為 2230 萬美元，比去年同期增長 3.7%。這一增長主要與我們的互連產品和混合光纖電纜有關，但被我們的小基站產品的減少所抵消。第二季度毛利率為27.4%，去年同期為28.3%。這一下降主要與我們的小型蜂窩解決方案的收入貢獻較低有關，與我們的混合毛利率相比，該解決方案的利潤率較高。

Operating income was $489,000 compared to operating income of $746,000 in the second quarter of fiscal 2022, primarily related to lower gross profit contribution from our small cell solutions and therefore, less leverage to cover costs.

營業收入為 489,000 美元，而 2022 財年第二季度的營業收入為 746,000 美元，這主要與我們的小型基站解決方案的毛利潤貢獻較低有關，因此覆蓋成本的槓桿較小。

Net income was $581,000 for the second quarter or $0.06 per diluted share compared to $503,000 or $0.05 per diluted share in the same period last year. This is primarily due to an income tax benefit of $164,000 compared to an income tax provision of $136,000.

第二季度淨利潤為 581,000 美元，即稀釋後每股收益 0.06 美元，而去年同期淨利潤為 503,000 美元，即稀釋後每股收益 0.05 美元。這主要是由於所得稅優惠為 164,000 美元，而所得稅撥備為 136,000 美元。

Non-GAAP net income was $1.3 million or $0.13 per diluted share for the second quarter compared to $1.5 million or $0.15 per diluted share for the same period last year. Adjusted EBITDA for the second quarter was $1.4 million compared to $1.9 million in the second quarter of 2022. The decrease is primarily related to product mix, as discussed earlier related to lower sales from our higher-margin products and therefore, less leverage to cover certain fixed costs.

第二季度非公認會計準則淨利潤為 130 萬美元，即稀釋後每股收益 0.13 美元，而去年同期淨利潤為 150 萬美元，即稀釋後每股收益 0.15 美元。第二季度調整後EBITDA 為140 萬美元，而2022 年第二季度為190 萬美元。這一下降主要與產品組合有關，正如前面所討論的，與我們利潤率較高的產品銷售額下降有關，因此，用於覆蓋某些產品的槓桿率較低。固定成本。

We continue to focus on lowering expenses through consolidation and streamlining our operations and working to reduce ongoing operating expenses. We expect the cost saving benefits from the consolidation of our West Coast headquarters and facilities, which will be completed during our current fiscal third quarter, and the upcoming consolidation of some of our East Coast operations, which we expect to be completed in our fiscal fourth quarter. These related expense reductions will better position us to navigate the challenging economic environment helping to minimize our downside and increase our profitability when our product mix shifts to include a greater portion of high-margin solutions that are project-based and dependent upon carrier CapEx spend.

我們繼續致力於通過整合和精簡我們的運營來降低費用，並努力減少持續的運營費用。 We expect the cost saving benefits from the consolidation of our West Coast headquarters and facilities, which will be completed during our current fiscal third quarter, and the upcoming consolidation of some of our East Coast operations, which we expect to be completed in our fiscal fourth四分之一.當我們的產品組合轉變為包含更多基於項目並依賴於運營商資本支出的高利潤解決方案時，這些相關費用的削減將使我們能夠更好地應對充滿挑戰的經濟環境，從而幫助最大限度地減少我們的不利因素並提高我們的盈利能力。

At the end of the second quarter, our cash and cash equivalents was $4.3 million, working capital of $25.1 million and the full $3 million available under our revolver. Subsequent to quarter end, we drew down our revolver by $1 million to cover leasehold improvements associated with the consolidation efforts mentioned earlier. Inventory was $20.4 million up from $19.1 million last year, primarily due to Microlab, which we have invested an additional $1.5 million since last year. On a sequential basis, we reduced inventory by $550,000 or approximately 3% as we work through some delayed project shipments from the first quarter. Looking ahead, we believe there is opportunity to further reduce and rationalize our inventory, which would help to increase our cash position. We understand this is a lever we can pull to help our liquidity and are actively monitoring our inventory levels such that our value proposition of being available to our customers is not negatively impacted.

截至第二季度末，我們的現金和現金等價物為 430 萬美元，營運資本為 2510 萬美元，我們的左輪手槍可用資金為 300 萬美元。季度末後，我們提取了 100 萬美元的左輪手槍資金，用於支付與前面提到的整合工作相關的租賃權益改善費用。庫存從去年的 1,910 萬美元增加到 2,040 萬美元，這主要歸功於 Microlab，自去年以來我們又向 Microlab 投資了 150 萬美元。由於我們處理了一些從第一季度開始延遲的項目發貨，因此我們的庫存環比減少了 550,000 美元，即大約 3%。展望未來，我們相信有機會進一步減少和合理化我們的庫存，這將有助於增加我們的現金狀況。我們知道這是我們可以用來幫助我們提高流動性的槓桿，並且正在積極監控我們的庫存水平，以便我們向客戶提供服務的價值主張不會受到負面影響。

Our backlog at the end of the second quarter was $18.9 million on second quarter bookings of $16.7 million. And as of today, our backlog stands at $17.6 million. The decrease in our backlog primarily relates to shipments against our hybrid fiber cables. This concludes my comments.

第二季度末我們的積壓訂單為 1,890 萬美元，第二季度的預訂量為 1,670 萬美元。截至今天，我們的積壓訂單已達 1,760 萬美元。我們的積壓訂單減少主要與我們的混合光纖電纜的發貨量有關。我的評論到此結束。

Operator, we are ready to open the line for questions.

接線員，我們已準備好開通提問線路。

(Operator Instructions) Your first question is coming from Josh Nichols from B. Riley.

（操作員說明）您的第一個問題來自 B. Riley 的 Josh Nichols。

Good to see the 2Q numbers, top and bottom line came in better than expected despite the challenging environment. I know visibility is probably fairly limited given the carrier CapEx slowdown, but any trajectory you could give us overall to what you're seeing in the business for the back half of the fiscal year relative to the first half?

儘管環境充滿挑戰，但很高興看到第二季度的數字、營收和利潤都好於預期。我知道，考慮到運營商資本支出放緩，能見度可能相當有限，但您能否向我們提供本財年後半段相對於上半年的業務總體軌跡？

Yes. Thanks, Josh. Good question. You're right. Visibility is pretty low. We're not alone in that. So it's -- if it's comforting to hear from others, I think it's something we're all kind of seeing and hearing in the space. I think all year, we've been saying we expected the back half of the year to be better than the first. We generally think that's right. I think the one thing that I would say related to our Q2 numbers is they came in a little better than what we had expected originally for the second quarter, largely due to some demand being pulled in on hybrid fiber cables.

是的。謝謝，喬什。好問題。你說得對。能見度相當低。我們並不孤單。所以，如果聽到別人的聲音令人感到安慰，我認為這是我們在這個領域看到和聽到的。我想一整年，我們一直在說我們預計下半年會比上半年更好。我們普遍認為這是對的。我認為與我們第二季度的數據相關的一件事是，第二季度的數據比我們最初的預期要好一些，這主要是由於混合光纖電纜的一些需求被拉動。

So you look at that and how does that impact Q3 and/or Q4. It's not massive, but what numbers our size, it means quarter-to-quarter things can move around. So I think our general expectation is our back half should be better than the front. Putting that into 90-day increments, it Is really difficult to do this in a setting though.

所以你看看這對第三季度和/或第四季度有何影響。它並不大，但就我們的規模而言，這意味著每個季度的事情都可以移動。所以我認為我們的總體期望是我們的後半場應該比前半場更好。考慮到 90 天的增量，在某種環境中做到這一點確實很困難。

Fair enough. And is it fair to assume that the kind of gross margin profile of the business around this like 27%, 28%. There's opportunity for that to improve incrementally in the back half, I would think if your revenue is going to be a little bit better, but probably still my guess is below the longer-term 30% target? Or what are you thinking?

很公平。假設該業務的毛利率分佈在 27%、28% 左右，是否公平？下半年有機會逐步改善，我想如果你的收入會好一點，但我的猜測可能仍然低於長期 30% 的目標？或者你在想什麼？

Yes. I think it's -- so product mix is a big driver for us now. And that hasn't always been the big piece of our gross margin calculation. But it certainly is now because we have some definite higher value and higher-margin items in our portfolio. So the better those do, that can certainly have a positive impact, taking those margins up. You're probably looking at it right in the short term. And just sub 30% is probably where it makes sense to be. Although we're also taking out some -- expect to be taking out some meaningful expenses. So the timing of that happening over the next couple of quarters if we get that done earlier without impacting the business in a negative way, it could certainly help our gross margins as well. So those are kind of the 2 key pieces of it.

是的。我認為產品組合現在是我們的一大推動力。這並不總是我們毛利率計算的重要組成部分。但現在肯定是這樣，因為我們的投資組合中有一些明確的更高價值和更高利潤的項目。因此，做得越好，肯定會產生積極影響，提高利潤。您可能會在短期內正確看待它。低於 30% 的比例可能是合理的。儘管我們也扣除了一些——預計會扣除一些有意義的費用。因此，如果我們能更早地完成這項工作，而不會對業務產生負面影響，那麼在接下來的幾個季度中發生這種情況的時間肯定也會有助於我們的毛利率。這些是其中的兩個關鍵部分。

But we also feel like we're sort of at the -- from a CapEx perspective and what's going on, we're kind of at the bottom of the trough here, and we've been bumping along here for a few quarters. Sales still move around from a shipment perspective but from a timing of larger venue-based or project-based kind of opportunities, we still feel like we're kind of sitting here at the bottom and starting to see the light at the end of the tunnel a bit.

但我們也覺得，從資本支出和正在發生的事情的角度來看，我們正處於低谷的底部，而且我們已經在這裡顛簸了幾個季度。從出貨量的角度來看，銷售仍在變化，但從更大的基於場地或基於項目的機會的時機來看，我們仍然覺得我們正坐在底部，開始看到最後的曙光。隧道一點。

And then just on the SG&A front. So you're going to be down with the West Coast integration this quarter, East Coast by the end of this fiscal year. Your SG&A this year was the lowest it's been, right, for a few quarters. What type of impact is that going to have to the second half? Do you expect to remain around these levels or maybe come in a little bit? Or what's the expectation?

然後就是SG&A 方面。因此，本季度西海岸的整合將會失敗，東海岸的整合將在本財年結束時結束。你們今年的銷售管理費用是幾個季度以來最低的，對吧。這將對下半年產生什麼影響？您預計會保持在這些水平附近還是可能會有所下降？或者說有什麼期待？

Yes. I think you'll see some onetime charges around some of these initiatives that we talked through to ultimately reduce our expenses. We'll be able to give some -- I think, some better specifics at the end of Q3 around what that means going forward, but we certainly would expect our go-forward OpEx SG&A to -- to come down in a meaningful way. We think it's going to be a real impact here. it's going to be confusing based on the onetime charges here for the next couple of quarters, but we'll give them a clearer sense of what that looks like as we get into our Q3 results.

是的。我認為您會看到我們為最終減少開支而討論的一些舉措產生了一些一次性費用。我認為，我們將能夠在第三季度末提供一些關於這意味著什麼的更好的細節，但我們當然希望我們的未來運營支出SG&A能夠以一種有意義的方式下降。我們認為這將在這裡產生真正的影響。根據接下來幾個季度的一次性費用，這將會令人困惑，但當我們進入第三季度的業績時，我們會讓他們更清楚地了解情況。

Great. And then I think you mentioned -- 2 things to hit on, like, one, just like the cash flow. Is it fair to assume that your inventory was down here, you expect that to come down further? Is there any idea for what a normalized inventory level would look like or how long that may take? I'm just trying to think about the cash flow impact from the working capital side from just the operating improvements that you guys have already made?

偉大的。然後我想你提到了——有兩件事需要注意，一是現金流。假設您的庫存已經下降，您預計還會進一步下降，這是否公平？是否知道標準化庫存水平會是什麼樣子或者可能需要多長時間？我只是想考慮一下你們已經做出的運營改進對營運資金方面的現金流影響？

Yes, that's fair. So I think we do believe there's room for inventory to come down more. We -- through the consolidation, it becomes really clear where we have duplicate inventory that maybe we didn't recognize before. So that's one focus area. The other is we're finally starting to see a little more normalized supply chain. So for us, sometimes it comes down to timing. There are some items that we ordered several weeks ago that had a 20- or 24-week lead time on them that are going to come in here shortly to address some projects that we have later in the year and early next year. So again, our number is small, so an order of a couple of hundred grand can move our inventory percentage point.

是的，這很公平。因此，我認為我們確實相信庫存還有進一步下降的空間。通過整合，我們可以非常清楚地看到我們以前沒有意識到的重複庫存。這是一個重點領域。另一個是我們終於開始看到更加規範化的供應鏈。所以對我們來說，有時歸結為時機。我們幾週前訂購的一些產品的交貨時間為 20 或 24 週，這些產品很快就會運到這裡，以解決我們今年晚些時候和明年初的一些項目。再說一次，我們的數量很少，所以幾百大的訂單可以使我們的庫存增加一個百分點。

But we believe that as we get through the year, you should our inventory start to come down, whether it happens exactly in Q3 or Q4, it's hard to nail on timing there, but we're very focused on getting our liquidity up through rationalizing that inventory.

但我們相信，隨著這一年的過去，我們的庫存應該開始下降，無論是在第三季度還是第四季度，很難確定具體時間，但我們非常注重通過合理化來提高流動性那個庫存。

And then last question for me. You've talked about the backlog before. It was obviously very elevated with some of these large onetime orders that kind of had been delayed you're starting to see the beginning of a normalization. It looks like this quarter. Any visibility you have into like how much of the current backlog you expect to ship in like the back half of this year? I'm guessing you would expect the backlog to be materially lower from where it is today to more normalized levels unless you got some more large orders from some of the carriers.

然後是我的最後一個問題。您之前已經談到過積壓的問題。顯然，其中一些大型一次性訂單的數量已經被推遲，你開始看到正常化的開始。看起來像這個季度。您是否了解目前積壓的訂單中有多少預計在今年下半年發貨？我猜你會期望積壓訂單會比現在的水平大幅降低到更加正常化的水平，除非你從一些承運商那裡得到了更多的大訂單。

Yes. We're -- And that last point is a big one that 1 or 2 meaningful orders of a few million bucks that are going to be drawn against over time, will artificially elevate that backlog, which we've been seeing. I've said in the past that backlog in the mid-teens is still a spectacular level for us and a huge amount of our day-to-day business really never hits the backlog. It comes in and goes out in a matter of (inaudible) hours, but certainly a matter of a few days. So it's really a snapshot of time.

是的。我們——最後一點是一個大問題，隨著時間的推移，一兩筆價值數百萬美元的有意義的訂單將人為地增加我們已經看到的積壓訂單。我過去曾說過，十幾歲左右的積壓對我們來說仍然是一個驚人的水平，我們的大量日常業務實際上從未達到積壓的水平。它在（聽不清）幾個小時內進來並出去，但肯定是幾天的時間。所以這確實是時間的快照。

We do expect it to continue trending down some. I think that's good. We need to work through some of this 15-month-old kind of stuff that's been on the -- from a bookings perspective that came in. It's good to work through that. I think it's helpful to see customers taking some of that inventory. So I would expect it to come down some more this year. The wildcard there being does someone show up in one of these projects and instead of placing it in chunks decide to place a blanket or something larger that could have a material impact to be positive on that too, which could [help].

我們確實預計它會繼續呈下降趨勢。我認為這很好。我們需要解決一些 15 個月前的問題——從預訂的角度來看。解決這個問題很好。我認為看到客戶拿走一些庫存是有幫助的。所以我預計今年它會進一步下降。存在的通配符是否有人出現在這些項目之一中，而不是把它分成幾塊，而是決定放置一條毯子或更大的東西，這可能會產生積極的實質性影響，這可能會[有所幫助]。

(Operator Instructions) Thank you. That concludes our Q&A session. I will now hand the conference back to our host for closing remarks. Please go ahead.

（操作員說明）謝謝。我們的問答環節到此結束。現在我將把會議交還給我們的東道主致閉幕詞。請繼續。

Thank you, Matthew, and thanks, everyone, for joining our call today. We look forward to sharing our fiscal third quarter results with all of you in September. Have a good day.

謝謝馬修，也謝謝大家今天加入我們的電話會議。我們期待在 9 月份與大家分享我們第三財季的業績。祝你有美好的一天。

Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

謝謝大家。今天的活動到此結束。此時您可能會斷開連接，並度過美好的一天。感謝您的參與。