TTM Technologies Inc (TTMI) 2022 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to TTM Technologies Fourth Quarter and Fiscal 2022 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded today, February 8, 2023.

女士們先生們，下午好，感謝你們的支持。歡迎參加迅達科技第四季度和 2022 財年財務業績電話會議。 （操作員說明）提醒一下，本次會議將於今天 2023 年 2 月 8 日錄製。

I would now like to hand the call over to Sameer Desai, TTM's Vice President of Corporate Development and Investor Relations to review TTM's disclosure statement. Please go ahead, sir.

我現在想將電話轉交給迅達公司企業發展和投資者關係副總裁 Sameer Desai，以審查迅達公司的披露聲明。請繼續，先生。

Thank you, Sheri. Before we get started, I would like to remind everyone that today's call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to TTM's future business outlook. Actual results could differ materially from these forward-looking statements, due to one or more risks and uncertainties, including the factors explained in our most recent Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. These forward-looking statements are based on management's expectations and assumptions as of the date of this presentation. TTM does not undertake any obligation to publicly update or revise any of these statements, whether as a result of new information, future events or other circumstances, except as required by law. Please refer to the disclosures regarding the risks that may affect TTM, which may be found in reports on Form 10-K, 10-Q, 8-K, the registration statement on Form S4 and the company's other SEC filings.

謝謝你，雪莉。在我們開始之前，我想提醒大家，今天的電話會議包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述，包括與迅達未來業務前景相關的陳述。由於一種或多種風險和不確定性，包括我們最近的 10-K 表格年度報告和我們向美國證券交易委員會提交的其他文件中解釋的因素，實際結果可能與這些前瞻性陳述存在重大差異。這些前瞻性陳述基於管理層截至本報告發布之日的預期和假設。 TTM 不承擔公開更新或修改任何這些聲明的義務，無論是由於新信息、未來事件或其他情況，除非法律要求。請參閱有關可能影響 TTM 的風險的披露，這些披露可以在 10-K、10-Q、8-K 表格的報告、S4 表格的註冊聲明和公司的其他 SEC 備案文件中找到。

We will also discuss in this call certain non-GAAP financial measures such as adjusted EBITDA. Such measures should be not be considered as a substitute for the measures prepared and presented in accordance with GAAP. We direct you to the reconciliation of non-GAAP to GAAP measures included in the company's press release which was filed with the SEC and is available on TTM's website at www.ttm.com. We have also posted on our website a slide deck that we'll refer to during our call.

我們還將在本次電話會議中討論某些非 GAAP 財務指標，例如調整後的 EBITDA。這些措施不應被視為替代根據公認會計原則編制和提交的措施。我們向您介紹公司向美國證券交易委員會提交的新聞稿中包含的非 GAAP 與 GAAP 措施的對賬，該新聞稿可在 TTM 的網站 www.ttm.com 上查閱。我們還在我們的網站上發布了一張幻燈片，我們將在通話期間參考它。

I will now turn the call over to Tom Edman, TTM's Chief Executive Officer. Please go ahead, Tom.

我現在將把電話轉給迅達的首席執行官湯姆·埃德曼 (Tom Edman)。請繼續，湯姆。

Thank you, Sameer. Good afternoon and thank you for joining us for our fourth quarter and fiscal year 2022 conference call. I'll begin with a review of our business highlights from the quarter and a discussion of our fourth quarter results, followed by a summary of our business strategy. Todd Schull, our CFO, will follow with an overview of our Q4 2022 financial performance and our Q1 2023 guidance. We will then open the call to your questions.

謝謝你，薩米爾。下午好，感謝您加入我們的第四季度和 2022 財年電話會議。我將首先回顧本季度的業務亮點，討論我們第四季度的業績，然後總結我們的業務戰略。我們的首席財務官 Todd Schull 隨後將概述我們 2022 年第四季度的財務業績和 2023 年第一季度的指導方針。然後我們將打開您的問題的電話。

The quarter's highlights are also shown on Slide 3 of the investor presentation posted on TTM's website. In the fourth quarter of 2022, TTM delivered solid results in a difficult business environment. While revenue softened, non-GAAP EPS was above the midpoint of guidance, despite a challenging supply chain and the labor environment and the continued impact that COVID-19 is having on our business.

本季度的亮點也顯示在 TTM 網站上發布的投資者介紹的幻燈片 3 中。 2022 年第四季度，迅達在艱難的商業環境中取得了穩健的業績。雖然收入疲軟，但非 GAAP 每股收益高於指導的中點，儘管供應鍊和勞動力環境充滿挑戰，並且 COVID-19 對我們的業務產生持續影響。

Demand in our aerospace and defense market remained strong with record bookings and backlog, offset by weaker demand and bookings in our commercial end markets. We also saw improvement in our profit margins year-on-year in Q4. I am proud of our employees for delivering solid results this quarter in a tough environment.

我們的航空航天和國防市場的需求依然強勁，預訂量和積壓量創歷史新高，但被我們商業終端市場的需求和預訂量疲軟所抵消。我們還看到第四季度的利潤率同比有所改善。我為我們的員工在本季度艱難的環境中取得了可觀的業績感到自豪。

As we look into Q1, production inefficiencies in our Asia-Pacific facilities due to Chinese New Year, inventory adjustments and weaker demand from some of our commercial end markets are causing revenue and margin declines. But we will continue to see strong demand in our A&D market, which now represents 40% of our revenues. For the full year 2022, excluding the acquisition of Telephonics, TTM grew revenue 5.4% with improved year-on-year profitability, despite the challenges I previously mentioned.

當我們回顧第一季度時，由於農曆新年、庫存調整和我們一些商業終端市場的需求疲軟導致我們亞太地區工廠的生產效率低下，導致收入和利潤率下降。但我們將繼續看到 A&D 市場的強勁需求，該市場目前占我們收入的 40%。對於 2022 年全年，不包括對 Telephonics 的收購，TTM 的收入增長了 5.4%，盈利能力同比有所提高，儘管我之前提到過挑戰。

Full year cash flow from operations was $272.9 million, enabling us to purchase Telephonics and strengthen our balance sheet, while returning capital to shareholders. In addition, we repaid $50 million of our Term Loan B on January 3, 2023.

全年運營現金流為 2.729 億美元，使我們能夠購買 Telephonics 並加強我們的資產負債表，同時將資本返還給股東。此外，我們於 2023 年 1 月 3 日償還了 5000 萬美元的定期貸款 B。

I am proud of what our employees have accomplished in the face of these challenges despite one of the most difficult manufacturing environments that we've ever experienced.

我為我們的員工在面對這些挑戰時所取得的成就感到自豪，儘管這是我們經歷過的最困難的製造環境之一。

I would now like to provide a strategic update. TTM is on a journey to transform our business to be less cyclical and more differentiated. Over the past several years, TTM is consistently emphasized that a key part of our strategy is to add value to the product solutions that we deliver to our customers, particularly in the aerospace and defense market. In 2018, we acquired Anaren, which broadened TTM's product portfolio into highly engineered RF components and subassemblies, as well as adding critical RF engineering capability and resources. In 2022, we acquired Telephonics, which builds on Anaren and TTM's customer driven culture and disciplined approach to engineering and manufacturing. The addition of Telephonics expands TTM's aerospace and defense product offering vertically into higher level engineered system solutions and horizontally into the surveillance and communications markets, while strengthening our position in radar systems. As a result of these strategic moves, over 50% of A&D revenues are from engineered and integrated electronic products, with PCBs being less than 50% of the overall contribution.

我現在想提供一個戰略更新。 TTM 正在努力轉變我們的業務，以減少週期性和差異化。在過去的幾年裡，TTM 一直強調我們戰略的一個關鍵部分是為我們提供給客戶的產品解決方案增加價值，特別是在航空航天和國防市場。 2018 年，我們收購了 Anaren，這將 TTM 的產品組合擴展到高度工程化的 RF 組件和子組件，並增加了關鍵的 RF 工程能力和資源。 2022 年，我們收購了 Telephonics，它建立在 Anaren 和 TTM 的客戶驅動文化和嚴謹的工程和製造方法之上。 Telephonics 的加入將 TTM 的航空航天和國防產品垂直擴展到更高級別的工程系統解決方案，並橫向擴展到監視和通信市場，同時加強了我們在雷達系統中的地位。由於這些戰略舉措，超過 50% 的 A&D 收入來自工程和集成電子產品，PCB 佔總收入的比例不到 50%。

An example of how this strategy is strengthening our business is our recent announcement of the multi-year agreement with Raytheon Technologies for the SPY-6 family of radars. This is an agreement to provide radio frequency assemblies, electronic hardware and Printed Circuit Boards for the SPY-6 family of AESA radars. The agreement has the potential to reach $500 million over 5 years. The SPY-6 radar will be on 40 ships of 7 different classes by 2030. TTM designs and manufactures the beam-forming network along with PCBs and specialized assemblies for these radars. This type of multi-year commitment for supply allows TTM to increase value to our end customer.

我們最近宣布與 Raytheon Technologies 就 SPY-6 系列雷達達成多年協議，這就是該戰略如何加強我們業務的一個例子。這是一項為 SPY-6 系列 AESA 雷達提供射頻組件、電子硬件和印刷電路板的協議。該協議有可能在 5 年內達到 5 億美元。到 2030 年，SPY-6 雷達將安裝在 7 個不同級別的 40 艘船上。TTM 為這些雷達設計和製造波束形成網絡以及 PCB 和專用組件。這種多年供應承諾使迅達能夠為我們的最終客戶增加價值。

Another important element of our differentiation strategy is the current construction of a new state-of-the art highly automated PCB manufacturing facility in Penang, Malaysia. The decision to build this new factory is a direct response to our customers' increasing concerns about supply chain resiliency and regional diversification and, in particular, the need for advanced multilayer PCB sourcing options in locations outside of China.

我們差異化戰略的另一個重要因素是目前正在馬來西亞檳城建設一個新的最先進的高度自動化 PCB 製造工廠。建立這家新工廠的決定直接回應了我們的客戶對供應鏈彈性和區域多元化的日益關注，特別是對中國以外地區先進多層 PCB 採購選擇的需求。

The new facility in Malaysia will assist customers in our commercial markets, such as networking, data center computing and medical industrial and instrumentation. We made great progress on the Malaysian facility this past quarter, as we completed the pilings required for the building, laid the majority of the foundation, completed the power substation and the roof. We also received multiple deposits from customers with whom we have signed long-term agreements, which provide a business base for over 70% of the planned capacity in this new building.

馬來西亞的新設施將協助我們商業市場的客戶，例如網絡、數據中心計算以及醫療工業和儀器儀表。上個季度，我們在馬來西亞的設施取得了很大進展，因為我們完成了建築物所需的打樁，奠定了大部分基礎，完成了變電站和屋頂。我們還收到了與我們簽訂長期協議的客戶的多筆定金，這些客戶為這座新大樓超過 70% 的計劃容量提供了業務基礎。

Finally, I'd like to discuss today's announcement regarding the consolidation of our manufacturing footprint. After the market closed today, we issued a press release announcing that we plan to close 3 small manufacturing facilities in order to improve total plant utilization, operational performance, customer focus and profitability.

最後，我想討論一下今天關於整合我們的製造足蹟的公告。今天收市後，我們發布了一份新聞稿，宣布我們計劃關閉 3 家小型製造工廠，以提高工廠總利用率、運營績效、客戶關注度和盈利能力。

PCB manufacturing operations in Anaheim and Santa Clara, California and Hong Kong will be closed and consolidated into TTM's remaining facilities. The plant closures are expected to improve both facility and talent utilization across our footprint, resulting in improved profitability. TTM is offering customers of the affected PCB plants continued support at our remaining manufacturing sites. We plan to close the Hong Kong facility by the end of our second quarter, and the 2 North America facilities by the end of the year, in order to allow for necessary customer approvals at other facilities.

位於加利福尼亞州阿納海姆和聖克拉拉以及香港的 PCB 製造業務將關閉並整合到迅達的其餘工廠中。工廠關閉預計將提高我們整個業務範圍內的設施和人才利用率，從而提高盈利能力。 TTM 正在為受影響的 PCB 工廠的客戶提供我們其餘製造基地的持續支持。我們計劃在第二季度末關閉香港工廠，並在年底前關閉 2 個北美工廠，以便在其他工廠獲得必要的客戶批准。

We expect the actions we are announcing today will allow us to better serve our customers, with more focused operations as well as a more efficient cost structure. We will be working with our employees to transfer them into other facilities and, where that is not possible, to treat all of these employees with the respect that they are due for their dedication to TTM. Todd will later discuss the financial impact.

我們希望我們今天宣布的行動將使我們能夠更好地為客戶服務，運營更加集中，成本結構更加高效。我們將與我們的員工合作，將他們轉移到其他設施，並且在不可能的情況下，以尊重所有這些員工的方式對待他們，因為他們對 TTM 的奉獻精神。托德稍後將討論財務影響。

Now I'd like to review our end markets, which are referenced on Page 4 and Page 5 of the earnings presentation on our website. The aerospace and defense end-market represented 40% of total fourth quarter sales compared to 30% of Q4 2021 sales and 38% of sales in Q3 2022. The majority of the year-on-year growth was due to the inclusion of Telephonics. Excluding that impact, our Q4 A&D revenues grew 3.4% year-on-year organically.

現在我想回顧一下我們的終端市場，這些市場在我們網站上的收益介紹的第 4 頁和第 5 頁中有提及。航空航天和國防終端市場佔第四季度總銷售額的 40%，而 2021 年第四季度銷售額為 30%，2022 年第三季度銷售額為 38%。同比增長的主要原因是電話業務。排除這一影響，我們第四季度的 A&D 收入同比有機增長 3.4%。

We continue to experience some positive defense climate with our A&D program backlog at $1.36 billion, including Telephonics. Excluding Telephonics, program backlog was $1 billion compared to $768 million a year ago. This solid backlog was driven by a second quarter of record bookings of $464 million, including Telephonics. The solid demand in the defense market is a result of a positive tailwind in defense budgets, our strong strategic program alignment and key bookings for ongoing franchise programs.

我們的 A&D 計劃積壓金額為 13.6 億美元，其中包括電話技術，我們繼續經歷一些積極的國防氛圍。不包括電話，項目積壓為 10 億美元，而一年前為 7.68 億美元。這一穩固的積壓是由第二季度創紀錄的 4.64 億美元的預訂推動的，其中包括 Telephonics。國防市場的強勁需求是國防預算積極順風、我們強大的戰略計劃調整以及正在進行的特許經營計劃的關鍵預訂的結果。

During the quarter, we saw significant bookings for key programs, including the SPY-6 radar and MH-60R program. We expect sales in Q1 from this end market to represent about 43% of our total sales. For the full year, aerospace and defense revenues grew 1.2%, excluding Telephonics. Our revenue growth was limited by labor, supply chain and production challenges. In the US, we are encouraged by the continued strong support for National Security, including overwhelming bipartisan support for a 10% spending increase in the fiscal year 2023 defense budget that was passed in December. In 2023, we expect end market growth to be above market projections of 3% to 5%, driven by the defense side of our business.

本季度，我們看到關鍵項目的大量預訂，包括 SPY-6 雷達和 MH-60R 項目。我們預計該終端市場第一季度的銷售額將占我們總銷售額的 43% 左右。全年，航空航天和國防收入增長 1.2%，不包括電話業務。我們的收入增長受到勞動力、供應鍊和生產挑戰的限制。在美國，我們對國家安全的持續大力支持感到鼓舞，包括兩黨壓倒性地支持在 12 月通過的 2023 財年國防預算中增加 10% 的支出。到 2023 年，我們預計終端市場增長將高於 3% 至 5% 的市場預測，這主要受我們業務防禦方面的推動。

We also recently announced the pending confirmation by the Defense Counter Intelligence and Security Agency or DCSA, the TTM Board of Directors have adopted a Special Board Resolution or SBR, replacing the Special Security Agreement, or SSA, that the company had entered into with DCSA in 2010. The replacement of the SSA with the SBR, is a result of the significantly reduced foreign ownership of TTM. The company plans to maintain much of the robust infrastructure developed during the adoption of and compliance with the SSA to continue to serve our customers and to maintain our focus on the National Security of United States, in our aerospace and defense sector, as one of the top 40 U.S.-based defense companies.

我們最近還宣布了國防反情報和安全局或 DCSA 的待定確認，TTM 董事會已通過特別董事會決議或 SBR，取代公司與 DCSA 簽訂的特別安全協議或 SSA 2010. SSA 被 SBR 取代，是 TTM 外資所有權大幅減少的結果。公司計劃保留在採用和遵守 SSA 期間開發的大部分強大基礎設施，以繼續為我們的客戶提供服務，並繼續關注美國的國家安全，在我們的航空航天和國防領域，作為美國 40 強國防公司。

The medical industrial instrumentation end market contributed 17% of our total sales in the fourth quarter compared to 19% in the year ago quarter and 19% in the third quarter of 2022. A number of our customers have been reducing inventory, as well as quick turn business. In addition, the instrumentation segment is weighted toward automated test equipment for the semiconductor capital equipment market, which is seeing weaker demand.

醫療工業儀器終端市場在第四季度占我們總銷售額的 17%，而去年同期為 19%，2022 年第三季度為 19%。我們的許多客戶一直在減少庫存，並迅速轉業務。此外，儀器儀表部分偏重於需求疲軟的半導體資本設備市場的自動化測試設備。

For the first quarter, we expect MI&I to be 18% of revenues. For the full year, MI&I grew 16.7%, following a 11.5% growth in 2021 and 12.4% growth in 2020, well above industry forecast 3 years in a row, as we took advantage of the mega trends and faster growing sub-segments of this end market. In 2023, we expect growth to be below the 2% to 4% industry forecasts, as these segments see moderated demand following the extraordinary strength of the past 3 years.

對於第一季度，我們預計 MI&I 將佔收入的 18%。 MI&I 全年增長 16.7%，繼 2021 年增長 11.5% 和 2020 年增長 12.4% 後，連續 3 年遠高於行業預測，因為我們利用了大趨勢和增長更快的細分市場終端市場。到 2023 年，我們預計增長將低於 2% 至 4% 的行業預測，因為在過去 3 年的非凡實力之後，這些細分市場的需求有所緩和。

Automotive sales represented 16% of total sales during the fourth quarter of 2022 compared to 19% in the year ago quarter and 15% during the third quarter of 2022. We saw stable trends sequentially for automotive PCBs despite the combined impact of supply chain and demand disruptions caused by COVID, the Ukraine-Russia conflict and semiconductor shortages that have been impacting automotive OEM production. We expect our automotive business to contribute 17% of total sales in Q1, a slight decline from Q4, resulting from a reduced number of working days in Q1 due to Chinese New Year.

2022 年第四季度，汽車銷售額佔總銷售額的 16%，而去年同期為 19%，2022 年第三季度為 15%。儘管受到供應鍊和需求的綜合影響，我們仍看到汽車 PCB 的連續趨勢穩定COVID、烏克蘭-俄羅斯衝突和半導體短缺造成的中斷影響了汽車原始設備製造商的生產。我們預計我們的汽車業務將在第一季度貢獻總銷售額的 17%，比第四季度略有下降，這是由於中國農曆新年導致第一季度工作日減少所致。

For the full year, automotive increased 4.2%. In 2022, advanced technology was 31% of our automotive end market compared to 24% in 2021 due to strong growth in our HDI and radar product areas. In 2022, we won new designs with the lifetime value of $530 million with a record $279 million in wins in the fourth quarter. This compares to $532 million in 2021.

汽車全年增長 4.2%。到 2022 年，由於我們的 HDI 和雷達產品領域的強勁增長，先進技術占我們汽車終端市場的 31%，而 2021 年這一比例為 24%。 2022 年，我們贏得了生命週期價值為 5.3 億美元的新設計，第四季度贏得了創紀錄的 2.79 億美元。相比之下，2021 年為 5.32 億美元。

Designs that we're winning this year will contribute to revenues in future years. We expect this market in 2023 to be below longer-term forecast of 6% to 8% after the strong post-COVID recovery. Sales in the data center computing end-market represented 14% of total sales in the fourth quarter compared to 15% in Q4 of 2021 and 14% in the third quarter of 2022. We expect revenues in this end market to represent approximately 12% of first quarter sales due to a slowdown in the data center market coupled with ongoing weakness in the semiconductor market.

我們今年贏得的設計將在未來幾年為收入做出貢獻。我們預計 2023 年該市場在 COVID 後強勁復甦後將低於 6% 至 8% 的長期預測。數據中心計算終端市場的銷售額佔第四季度總銷售額的 14%，而 2021 年第四季度為 15%，2022 年第三季度為 14%。我們預計該終端市場的收入約佔總銷售額的 12%由於數據中心市場放緩以及半導體市場持續疲軟，第一季度銷售額下降。

For the full year, datacenter computing grew 16.7%, as we saw continued solid growth across our datacenter customers, following 25% growth in 2021 and 9.1% growth in 2020. In 2023, we expect to be below the forecasted end market growth of 9% to 12%, driven primarily by inventory digestion in the datacenter market.

全年數據中心計算增長 16.7%，因為我們看到數據中心客戶在 2021 年增長 25% 和 2020 年增長 9.1% 之後持續穩健增長。到 2023 年，我們預計終端市場增長將低於 9% 的預測% 至 12%，主要受數據中心市場庫存消化的推動。

In regards to our networking and communications end market, we have renamed it networking given the focus on networking customers. Networking accounted for 13% of revenue during the fourth quarter of 2022. This compares to 16% in the fourth quarter of 2021 and 14% of revenue in the third quarter of 2022. In Q1, we expect this end market to be 10% of revenue, as customers manage their inventory levels and some customers see weak demand. For the full year, networking declined 4.4%, with declines in Telecom customers, partially offset by growth in networking customers. We expect this market to be below the longer-term forecast of 3% to 6% growth in 2023, due to the anticipated soft start to the year.

關於我們的網絡和通信終端市場，鑑於對網絡客戶的關注，我們將其重新命名為網絡。網絡在 2022 年第四季度佔收入的 13%。相比之下，2021 年第四季度為 16%，2022 年第三季度為 14%。在第一季度，我們預計該終端市場將佔總收入的 10%收入，因為客戶管理他們的庫存水平，一些客戶看到需求疲軟。全年，網絡業務下降 4.4%，其中電信客戶的下降部分被網絡客戶的增長所抵消。我們預計該市場將低於 2023 年增長 3% 至 6% 的長期預測，原因是今年預計開局疲軟。

Next I'll cover some details from the fourth quarter. This information is also available on Page 5 of our earnings presentation. During the quarter, our advanced technology and engineered products business, which includes HDI, rigid flex, RF subsystems and components and engineered systems, accounted for approximately 39% of our revenue. This compares to approximately 31% in the year-ago quarter and 41% in Q3.

接下來我將介紹第四季度的一些細節。此信息也可在我們的收益演示文稿的第 5 頁上找到。本季度，我們的先進技術和工程產品業務（包括 HDI、軟硬結合、RF 子系統和組件以及工程系統）約占我們收入的 39%。相比之下，去年同期約為 31%，第三季度為 41%。

We are continuing to pursue new business opportunities and increase customer design engagement activities that will leverage our advanced technology and engineered products capabilities in new programs and new markets. PCB capacity utilization in Asia Pacific was 75% in Q4 compared to 88% in the year ago quarter and 78% in Q3. Our overall PCB capacity utilization in North America was 40% in Q4 compared to 50% in the year-ago quarter and 45% in Q3.

我們將繼續尋求新的商機並增加客戶設計參與活動，這些活動將在新項目和新市場中利用我們的先進技術和工程產品能力。第四季度亞太地區 PCB 產能利用率為 75%，而去年同期為 88%，第三季度為 78%。第四季度，我們在北美的整體 PCB 產能利用率為 40%，而去年同期為 50%，第三季度為 45%。

The lower rate in Asia-Pacific was caused by a decline in production volumes, while the lower year-over-year rate in North America was due to additional plating capacity added earlier in the year and direct labor shortages in certain regions. Our top 5 customers contributed 37% of total sales in the fourth quarter of 2022 compared to 33% in the third quarter of 2022. We had one customer over 10% in the quarter.

亞太地區較低的增長率是由於產量下降，而北美較低的同比增長率是由於今年早些時候增加的額外電鍍產能以及某些地區的直接勞動力短缺。我們的前 5 大客戶在 2022 年第四季度貢獻了總銷售額的 37%，而 2022 年第三季度為 33%。我們有一個客戶在本季度貢獻了 10% 以上。

At the end of Q4, our 90-day backlog, not including Telephonics, which is subject to cancellations, was $546.7 million compared to $615 million at the end of the fourth quarter of last year. Including Telephonics, our backlog at year end was $603.1 million. Our book-to-bill ratio including Telephonics was 1.05 for the 3 months ended January 2, reflecting a stronger aerospace and defense book-to-bill, offset by a weaker commercial book-to-bill.

在第四季度末，我們 90 天的積壓訂單（不包括可能會被取消的 Telephonics）為 5.467 億美元，而去年第四季度末為 6.15 億美元。包括電話在內，我們年底的積壓訂單為 6.031 億美元。截至 1 月 2 日的 3 個月，我們的訂單出貨比（包括電話業務）為 1.05，反映出航空航天和國防的訂單出貨比表現強勁，但被較弱的商業訂單出貨比所抵消。

Our A&D bookings also ship over a longer period of time compared to our commercial bookings. As we look into Q1, we are seeing our commercial markets soften. As a result, we are taking extraordinary actions, including consolidating our facilities, as I already explained, setting down for the full Chinese New Year holiday season, freezing new hires, except the special approvals, reducing discretionary spending and putting travel restrictions in place. We also continue to focus on managing supply chain bottlenecks, particularly in our A&D business, which has limited our ability to deliver on several key A&D programs and will constrain revenue in the first half of the year.

與我們的商業預訂相比，我們的 A&D 預訂發貨時間也更長。當我們回顧第一季度時，我們看到我們的商業市場正在走軟。因此，我們正在採取非同尋常的行動，包括整合我們的設施，正如我已經解釋過的那樣，為整個農曆新年假期做好準備，凍結新員工（特別批准除外），減少可自由支配的支出以及實施旅行限制。我們還繼續專注於管理供應鏈瓶頸，特別是在我們的 A&D 業務中，這限制了我們交付幾個關鍵 A&D 項目的能力，並將限制今年上半年的收入。

I am confident that with the effort of our employees, we will be able to overcome these challenges as we work our way through 2023. In the meantime, I wish to thank our employees for continuing to contribute to TTM and our critical mission of inspiring innovation for our customers.

我相信，在我們員工的努力下，我們將能夠在 2023 年的道路上克服這些挑戰。與此同時，我要感謝我們的員工繼續為 TTM 和我們激發創新的重要使命做出貢獻為我們的客戶。

Now Todd will review our financial performance for the fourth quarter. Todd?

現在托德將審查我們第四季度的財務業績。托德？

Thanks, Tom and good afternoon, everyone. I will be reviewing our financial results for the fourth quarter that were included in the press release distributed today as well as on Slide 7 of our earnings presentation that is posted on our website.

謝謝，湯姆，大家下午好。我將回顧我們第四季度的財務業績，這些業績包含在今天發布的新聞稿中，以及我們網站上發布的收益演示文稿的幻燈片 7 中。

For the fourth quarter, net sales were $617.2 million compared to $598.1 million in the fourth quarter of 2021. The year-over-year increase in revenue was due to the inclusion of Telephonics as well as organic growth in our aerospace and defense end market, partially offset by declines in our commercial markets.

第四季度淨銷售額為 6.172 億美元，而 2021 年第四季度為 5.981 億美元。收入同比增長是由於電話業務的納入以及我們航空航天和國防終端市場的有機增長，部分被我們商業市場的下滑所抵消。

For the full year, revenues grew 5.4% excluding Telephonics, driven by our medical industrial and instrumentation, data center computing, automotive and A&D end markets. For all of 2022, revenue was $2.5 billion. This compares to $2.2 billion in 2021. GAAP operating income for the fourth quarter of 2022 was $97.6 million and includes a gain of $51.8 million in December 2022 from the sale of the property occupied by our former Shanghai EMS entity. This compares to $33.1 million in the fourth quarter of 2021.

在我們的醫療工業和儀器儀表、數據中心計算、汽車和 A&D 終端市場的推動下，全年收入增長 5.4%（不包括電話業務）。 2022 年全年，收入為 25 億美元。相比之下，2021 年為 22 億美元。2022 年第四季度的 GAAP 營業收入為 9760 萬美元，其中包括 2022 年 12 月出售我們前上海 EMS 實體佔用的房產所得的收益 5180 萬美元。相比之下，2021 年第四季度為 3310 萬美元。

On a GAAP basis, net income in the fourth quarter of 2022 was $6 million or $0.6 per diluted share. Our fourth quarter 2022 results include a tax reserve of $51.7 million to establish a valuation allowance for certain U.S. deferred tax items and $14.7 million associated with the gain on the sale of the property noted earlier. This compares to GAAP net income of $8.4 million or $0.08 per diluted share in the fourth quarter of last year.

根據美國通用會計準則，2022 年第四季度的淨收入為 600 萬美元或攤薄後每股收益 0.6 美元。我們 2022 年第四季度的業績包括 5170 萬美元的稅收儲備，用於為某些美國遞延稅項建立估值津貼，以及與前面提到的出售該物業的收益相關的 1470 萬美元。相比之下，去年第四季度 GAAP 淨收入為 840 萬美元或每股攤薄收益 0.08 美元。

The remainder of my comments will focus on our non-GAAP financial performance. Our non-GAAP performance excludes M&A related costs, restructuring costs, certain non-cash expense items such as amortization of intangibles and stock compensation, gains on the sale of property and other unusual or infrequent items, such as the tax valuation reserve I mentioned earlier. We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations in prior periods.

我的其餘評論將集中在我們的非 GAAP 財務業績上。我們的非 GAAP 業績不包括併購相關成本、重組成本、某些非現金支出項目，如無形資產攤銷和股票補償、出售財產的收益和其他不尋常或不常見的項目，如我之前提到的稅收估值儲備.我們提供非 GAAP 財務信息，使投資者能夠從管理層的角度看待公司，並便於與前期預期進行比較。

Gross margin in the fourth quarter was 19.8% and compares to 16.7% in the fourth quarter of 2021. The year-on-year increase was due to the addition of Telephonics, better products mix, favorable foreign exchange and lower material costs, partially offset by higher year-on-year labor costs, particularly in North America as we raise wages this year to be more competitive and lower revenue in our commercial markets.

第四季度的毛利率為 19.8%，而 2021 年第四季度為 16.7%。同比增長是由於增加了電話、更好的產品組合、有利的外彙和更低的材料成本，部分抵消了勞動力成本同比上漲，尤其是在北美，因為我們今年提高了工資，以提高商業市場的競爭力並降低收入。

Selling and marketing expense was $18.8 million in the fourth quarter or 3% of net sales compared to $15.6 million or 2.6% of net sales a year ago. Fourth quarter G&A expense was $37.4 million or 6.1% of net sales compared to $30.4 million or 5.1% of net sales in the same quarter a year ago. The inclusion of Telephonics added 2.5 and $4.1 million in sales and marketing and G&A, respectively. In the fourth quarter R&D expense was $6.4 million or 1% of revenues compared to $4.8 million or 0.8% in the year-old quarter. $1.5 million of the increase was due to the inclusion of Telephonics.

第四季度的銷售和營銷費用為 1880 萬美元，占淨銷售額的 3%，而去年同期為 1560 萬美元，占淨銷售額的 2.6%。第四季度 G&A 費用為 3740 萬美元，占淨銷售額的 6.1%，而去年同期為 3040 萬美元，占淨銷售額的 5.1%。 Telephonics 的加入分別增加了 2.5 和 410 萬美元的銷售和營銷以及 G&A。第四季度研發費用為 640 萬美元，佔收入的 1%，而去年同期為 480 萬美元，佔收入的 0.8%。增加的 150 萬美元是由於包含了 Telephonics。

Our operating margin in Q4 was 9.7%, a solid result given the macro challenges we've been facing. This compares to 8.2% in the same quarter last year. For the full year, 2022 operating margin was 9.4% compared to 8.4% in 2021. Interest expense was $12 million in the fourth quarter compared to $11.2 million in the same quarter last year. During the quarter, there was a negative $3.2 million foreign exchange impact below the operating line.

我們在第四季度的營業利潤率為 9.7%，考慮到我們一直面臨的宏觀挑戰，這是一個不錯的結果。相比之下，去年同期為 8.2%。全年來看，2022 年的營業利潤率為 9.4%，而 2021 年為 8.4%。第四季度的利息支出為 1200 萬美元，而去年同期為 1120 萬美元。本季度，運營線以下產生了 320 萬美元的負面外匯影響。

Government incentives and interest income decreases to $1.9 million or a $0.02 negative impact to our EPS. This compares to a loss of $1.1 million or $0.01 impact on EPS in Q4 last year. Our effective tax rate was 6.5% in the fourth quarter, resulting in tax expense of $2.9 million. This compares to a rate of 1.6% or tax expense of $0.6 million in the prior year. For the full year, our effective tax rate was 13.1%. Fourth quarter net income was $42.7 million or $0.41 per diluted share. This compares to fourth quarter 2021 net income of $36.2 million or $0.34 per diluted share. For the full year, net income was $181.2 million or $1.74 per diluted share compared to $138 million or $1.28 per diluted share in 2021. Adjusted EBITDA for the fourth quarter was $81.6 million or 13.2% of revenue compared with fourth quarter 2021 adjusted EBITDA of $70.4 million or 11.8% of revenue. For the full year, adjusted EBITDA was $343.1 million or 13.8% of revenue.

政府激勵措施和利息收入減少至 190 萬美元或對我們的每股收益產生 0.02 美元的負面影響。相比之下，去年第四季度每股收益損失 110 萬美元或 0.01 美元。我們第四季度的有效稅率為 6.5%，導致稅費為 290 萬美元。相比之下，上一年的稅率為 1.6% 或稅費為 60 萬美元。全年，我們的有效稅率為 13.1%。第四季度淨收入為 4270 萬美元或每股攤薄收益 0.41 美元。相比之下，2021 年第四季度的淨收入為 3620 萬美元或攤薄後每股收益 0.34 美元。全年淨收入為 1.812 億美元或每股攤薄收益 1.74 美元，而 2021 年為 1.38 億美元或每股攤薄收益 1.28 美元。第四季度調整後的 EBITDA 為 8160 萬美元或占收入的 13.2%，而 2021 年第四季度調整後的 EBITDA 為 70.4 美元百萬或收入的 11.8%。全年，調整後的 EBITDA 為 3.431 億美元，佔收入的 13.8%。

Depreciation for the quarter was $24 million. Net capital spending for the quarter was $20.8 million. Cash flow from operations was very strong at $77.6 million or 12.6% of revenue, exceeding our target of 10%. Free cash flow was also very good at $56.8 million or 9.2% of revenue. For the full year, cash flow from operations was $272.9 million or 10.9% of revenue. Free cash flow for the full year was $176 million or 7.1% of revenue. Cash-and-cash equivalents at the end of the fourth quarter of 2022 were $402.7 million and our net debt divided by last 12 months EBITDA was 1.5x, at the bottom of our targeted range of 1.5x to 2x. Following the end of the fiscal year, we repaid $50 million of our Term Loan B.

本季度的折舊為 2400 萬美元。本季度的淨資本支出為 2080 萬美元。運營現金流非常強勁，達到 7760 萬美元，佔收入的 12.6%，超過了我們 10% 的目標。自由現金流也非常好，達到 5680 萬美元，佔收入的 9.2%。全年，運營現金流為 2.729 億美元，佔收入的 10.9%。全年自由現金流為 1.76 億美元，佔收入的 7.1%。 2022 年第四季度末現金及現金等價物為 4.027 億美元，我們的淨債務除以過去 12 個月的 EBITDA 為 1.5 倍，處於我們 1.5 倍至 2 倍目標範圍的底部。本財政年度結束後，我們償還了 5000 萬美元的定期貸款 B。

Before I discuss first quarter guidance, I'd like to discuss the financial impact of today's facilities consolidation announcements. The company expects to record between 22 and $28 million in separation, asset impairment and disposal costs related to this restructuring, primarily between now and the end of 2023. Approximately 80% of these costs are expected to be in the form of cash expenditures and the rest in the form of non-cash charges.

在我討論第一季度指導之前，我想討論一下今天的設施整合公告的財務影響。公司預計與此次重組相關的離職、資產減值和處置成本將在 22 至 2800 萬美元之間，主要是從現在到 2023 年底。預計這些成本中約 80% 將以現金支出和以非現金費用的形式休息。

Today's actions are expected to yield an annual operating profit increase of approximately $22 million to $27 million, after the facilities are closed and the transferred business is fully assimilated within our remaining footprint.

在設施關閉並且轉移的業務完全融入我們剩餘的足蹟之後，今天的行動預計將使年度營業利潤增加約 2200 萬美元至 2700 萬美元。

Now I'd like to turn to guidance for the first quarter. As Tom mentioned earlier, we expect a sequential decline in revenues due to weaker booking trends in our commercial end markets, resulting from inventory adjustments, weak end market demand and the Chinese New Year holiday. We expect a sequential decline in margins due to lower revenues, the inefficiencies associated with the Chinese New Year holiday, higher material costs and unfavorable mix. Given these factors, we project total revenue for the first quarter of 2023 to be in the range of $550 million to $590 million, a non-GAAP earnings to be in the range of $0.16 to $0.22 per diluted share. The EPS forecast is based on a diluted share count of approximately 104.6 million shares, which includes dilutive securities such as options and RSUs. We expect that SG&A expense will be about 9.5% of revenue in the first quarter and R&D will be about 1.2% of revenue. We expect interest expense to total approximately $11.9 million. Finally, we estimate our effective tax rate to be between 13% and 17%.

現在我想談談第一季度的指導。正如湯姆之前提到的那樣，我們預計由於庫存調整、終端市場需求疲軟和中國春節假期導致我們的商業終端市場預訂趨勢疲軟，收入將出現環比下降。我們預計由於收入下降、與農曆新年假期相關的低效率、材料成本上升和不利的組合，利潤率將連續下降。鑑於這些因素，我們預計 2023 年第一季度的總收入將在 5.5 億美元至 5.9 億美元之間，非 GAAP 每股攤薄收益將在 0.16 美元至 0.22 美元之間。每股收益預測基於約 1.046 億股的攤薄股數，其中包括期權和 RSU 等稀釋性證券。我們預計第一季度 SG&A 費用將佔收入的 9.5% 左右，研發費用將佔收入的 1.2% 左右。我們預計利息支出總額約為 1190 萬美元。最後，我們估計我們的有效稅率在 13% 到 17% 之間。

To assist you in developing your financial models, we offer the following additional information. During the first quarter, we expect to record amortization of intangibles of about $11.7 million, stock-based comp expense of about $5.9 million, non-cash interest expense of approximately $0.7 million and we estimate appreciation expense will be approximately $24.5 million.

為了幫助您開發財務模型，我們提供以下附加信息。第一季度，我們預計無形資產攤銷約為 1170 萬美元，股票補償費用約為 590 萬美元，非現金利息費用約為 70 萬美元，我們估計增值費用約為 2450 萬美元。

Additionally, as you're building your financial models for 2023, I'd like to call your attention to 3 items. First, interest rates have risen and may rise further. In 2022, our average borrowing rate on our term loan, which is a variable rate debt was 1.7% plus a margin of 250 basis points. Today, we are already incurring a rate of 4.6% plus our margin. Second, in 2022, we realized favorable foreign exchange below the operating line of $12.7 million. We cannot predict how the Chinese-U.S. exchange ratio will move into 2023. Consequently, we do not forecast this item. And third, we are investing in a new plant in Penang, Malaysia. We expect to start production in the second half of the year and begin ramping towards full volume production. During the 2023 startup phase, we expect to incur a negative impact to our margins of between 30 and 50 basis points. We estimate that approximately 75% of that impact will be weighted towards the second half of 2023.

此外，在您構建 2023 年財務模型時，我想提請您注意 3 個項目。首先，利率已經上升並可能進一步上升。 2022 年，我們定期貸款（可變利率債務）的平均借款利率為 1.7% 加上 250 個基點的利差。今天，我們已經產生了 4.6% 的利率加上我們的保證金。二是2022年實現經營線以下有利外匯1270萬美元。我們無法預測中美關係如何。匯率將進入 2023 年。因此，我們不預測該項目。第三，我們正在馬來西亞檳城投資新工廠。我們預計將在今年下半年開始生產，並開始向全面量產邁進。在 2023 年的啟動階段，我們預計會對我們的利潤率產生 30 到 50 個基點的負面影響。我們估計，大約 75% 的影響將集中在 2023 年下半年。

Finally, I'd like to announce that we'll be participating in the Cowen Aerospace Defense and Industrials Conference on February 16, the JPMorgan High Yield and Leveraged Finance conference on March 7 and the JP Morgan Industrials Conference on March 16.

最後，我想宣布，我們將參加 2 月 16 日的考恩航空航天國防和工業會議、3 月 7 日的摩根大通高收益和槓桿融資會議以及 3 月 16 日的摩根大通工業會議。

That concludes our prepared remarks and now we'd like to open the line for questions. Sheri?

我們準備好的發言到此結束，現在我們要開始提問。雪莉？

(Operator Instructions) And today's first question will come from the line of James Ricchiuti with Needham and Co.

（操作員說明）今天的第一個問題將來自 James Ricchiuti 與 Needham and Co. 的對話。

So maybe putting aside the aerospace and defense, where you have pretty good line of sight, which is the commercial markets? As you look at it today, do you believe perhaps has the most uncertainty attached to them. I mean, you're clearly seeing weakness in several of them?

所以也許拋開航空航天和國防，你有很好的視線，這是商業市場？當你今天看它時，你認為它們可能具有最大的不確定性。我的意思是，你清楚地看到了其中幾個的弱點？

Yes, I think 2 areas, Jim, in terms of areas of weakness. I think we've seen and we saw during the course of the quarter, a pronounced weakness in data center. And so that affects our computing and datacenter computing end market which, 2/3s of that is really data centers and the third is semiconductor, both now really showing signs of weakness. In the case of data center, a lot of discussion around inventory control and digestion. But I think market that certainly in the first half I think, will continue to be weak.

是的，我認為有 2 個方面，吉姆，就弱點而言。我認為我們已經看到並且在本季度期間看到了數據中心的明顯弱點。因此，這影響了我們的計算和數據中心計算終端市場，其中 2/3 是真正的數據中心，第三是半導體，兩者現在都顯示出疲軟的跡象。就數據中心而言，圍繞庫存控制和消化進行了大量討論。但我認為市場在上半年肯定會繼續疲軟。

Networking is the second similar in nature, right? I think the networking by and large, lot of inventory control, discussion around softening demand environment, spending environment and a lot of discussion around the first half of the year. Telecom really everyone holding their breath for India investment, which is coming, but it's coming slowly. And frankly, that's a pretty small part of that networking end market for us. So those are the 2 markets side. From a challenging standpoint, I'd say are out there with softening demand.

網絡是第二個相似的性質，對吧？我認為總的來說，網絡、大量庫存控制、圍繞需求環境疲軟的討論、支出環境以及圍繞今年上半年的大量討論。電信真的每個人都屏住呼吸印度投資，它來了，但它來得很慢。坦率地說，這對我們來說只是網絡終端市場的一小部分。所以這是兩個市場方面。從具有挑戰性的角度來看，我會說需求疲軟。

And just to finish the discussion MII, medical industrial instrumentation, it's really the instrumentation side that is showing the pronounced weakness, medical and industrial, relatively better though a lot of discussion around inventory control, but I think that's shorter term in nature. Automotive continuing to really hold up pretty well. We are taking the Chinese New Year time off in our facilities there, and so our revenues would be down in Q1. But if you do the quick calculation and you add back that 1.5 week to 2-weeks of production that we lose, you'd be right back on top of Q4's numbers on automotive, so holding up pretty well.

只是為了結束討論 MII，醫療工業儀器，它確實是儀器方面顯示出明顯的弱點，醫療和工業，雖然圍繞庫存控制進行了大量討論，但相對更好，但我認為這本質上是短期的。汽車繼續保持良好狀態。我們在那裡的工廠正在過春節假期，因此我們的收入在第一季度會下降。但是，如果你進行快速計算，並將我們損失的 1.5 周到 2 週的產量加回去，你就會回到第四季度的汽車數據之上，所以保持得很好。

Got it. And then follow-up question I have is that you may have made some reference to this in the opening remarks. But does the announcement today with respect to the manufacturing footprint, was that in anyway change the investment plans or timing for Malaysia?

知道了。然後我的後續問題是你可能在開場白中提到了這一點。但是今天關於製造業足蹟的公告是否改變了馬來西亞的投資計劃或時機？

No, absolutely not. That really for us and we look at our footprint regularly. These smaller facilities in Hong Kong and the 2 facilities in California, really been struggling in terms of profitability and their plant charter. And that's been a struggle and as we look into our forecast, they also don't look much better for the long term. So difficult actions to take, but necessary and we will continue the investment in Malaysia. Our customer base is counting on this. It's a critical investment for TTM to make in terms of supply chain resiliency, automated high layer count, efficient production, volume production capability. So we're moving proceeding there as scheduled and holding to our schedule at this point.

不，絕對不是。這對我們來說確實如此，我們會定期查看我們的足跡。香港的這些較小的設施和加利福尼亞的 2 個設施，在盈利能力和工廠特許權方面確實一直在苦苦掙扎。這是一場鬥爭，當我們審視我們的預測時，從長遠來看，它們看起來也不會好多少。採取如此艱難的行動，但卻是必要的，我們將繼續在馬來西亞投資。我們的客戶群指望著這一點。這是迅達在供應鏈彈性、自動化高層計數、高效生產和批量生產能力方面進行的一項重要投資。因此，我們將按計劃進行，並在這一點上堅持我們的時間表。

One moment for our next question, will come from the line of Mike Crawford with B. Riley Securities.

我們的下一個問題將由 B. Riley Securities 的 Mike Crawford 提供。

I heard from your remarks that you basically have 70% of your capacity, generally sold with customers for the Malaysia plant this opening. Is that a case where you're hoping to run that facility at, what, 80% plus utilization or is that going to be the same, maybe type of metrics that you have for your China facilities or is it going to be slightly different?

我從你的言論中聽說，你基本上有70%的產能，一般是與客戶一起銷售給馬來西亞工廠的。在這種情況下，您是否希望以 80% 以上的利用率運行該設施，或者這將是相同的，也許是您對中國設施擁有的指標類型，還是會略有不同？

So the goal will be to run it north of that. I mean, ideally you'd love to be in between that 80%, 90% utilization rate. But you're absolutely right, Mike, it's very similar in term -- with our China facilities, in terms of volume capabilities and the need to leverage your manufacturing footprint and keep that utilization at a high level. And these will be volume requirements for these customers and obviously we won't hit that about 80% right away. We've got a good ramp that will carry began the end of this year and then carry us through next year to get there. But again, it's a very strong backdrop for us to have those customers lined up and willing to sort of -- with their deposits to help us with, as we invest in this critical capability.

所以我們的目標是在它的北邊運行它。我的意思是，理想情況下，您希望處於 80%、90% 的利用率之間。但你是絕對正確的，邁克，它與我們在中國的設施非常相似，在容量方面以及利用你的製造足跡並保持高水平利用率的需要。這些將是這些客戶的數量要求，顯然我們不會立即達到大約 80%。我們有一個很好的斜坡，可以從今年年底開始，然後通過明年到達那裡。但同樣，當我們投資於這一關鍵能力時，讓這些客戶排隊並願意排序——用他們的存款來幫助我們，這對我們來說是一個非常強大的背景。

And then my second question switches to ASSO. What is the potential upside for, A, more ships being included onto that program perhaps as a result of the forthcoming budget and budget request we'll see in a few weeks. And secondly for potential forward military sales to hours.

然後我的第二個問題切換到 ASSO。潛在的好處是什麼，A，更多的船隻被納入該計劃可能是由於我們將在幾週內看到即將出台的預算和預算請求。其次是潛在的軍事銷售時間。

So it's always hard to speak for our customer. I would say that there certainly is upside there. And you're right, there is possibility of foreign military sales as well. We have to stick to their announcement. I think even that is a very strong base for us and we continue to see of course, a number of other radar systems and programs move to AESA that are really allowing us to grow strongly in that market. So not relying solely on that program. But it is a -- it's a program that has potential upside for sure and our focus will be on servicing the customer, making sure that we ramp here successfully through the course of this year for aerospace and defense market and critical to that is that we solve supply chain bottlenecks in that market and that's the big area of focus for us as we ramp. It's great to be -- to have a program backlog as strong as we have. At the beginning of the year, allows our operations to really focus on getting the job done.

所以總是很難為我們的客戶說話。我會說那里肯定有好處。你是對的，也有對外軍售的可能性。我們必須遵守他們的公告。我認為即使這對我們來說也是一個非常強大的基礎，我們當然會繼續看到，許多其他雷達系統和程序轉向 AESA，這確實使我們能夠在該市場實現強勁增長。所以不要僅僅依賴那個程序。但這是一個 - 這是一個肯定具有潛在優勢的計劃，我們的重點將放在為客戶提供服務上，確保我們在今年的過程中成功地在航空航天和國防市場上取得成功，對此至關重要的是我們解決該市場的供應鏈瓶頸，這是我們發展過程中關注的重點領域。擁有像我們一樣強大的計劃積壓真是太好了。在年初，讓我們的運營真正專注於完成工作。

(Operator Instructions) Our next question that will come from the line of Matt Sheerin with Stifel.

（操作員說明）我們的下一個問題將來自 Stifel 的 Matt Sheerin。

Just a question on the outlook for the automotive sector. It sounds like you're looking below the market growth there and I know you're starting out down, I guess mid teens year-over-year in Q1. Most of the suppliers sound more optimistic, some are seeing a little bit of inventory, but most expect some production growth this year and content growth. Do you expect auto to grow for the year, even though you're going to be down significantly in the first half?

只是關於汽車行業前景的問題。聽起來你看的是低於那裡的市場增長，我知道你開始下降了，我猜第一季度的年增長率是十幾歲。大多數供應商聽起來更樂觀，一些供應商看到了一點點庫存，但大多數供應商預計今年的產量和內容會有所增長。你是否預計汽車今年會增長，即使你將在上半年大幅下滑？

So the answer Matt, yes. The impact if you start to look sequentially and that's probably the best way to look at, if you will see that Chinese New Year impact. And so you can and that's really what this is. Last year we ran full out Chinese New Year, we were -- and the interesting thing last year that was a bit different than other years is that with COVID out there, the government was encouraging employees to just stay in-place. So we had our full complement of labor as well.

所以馬特的回答是，是的。如果你開始按順序查看影響，這可能是最好的查看方式，如果你會看到中國新年的影響。所以你可以，這就是真的。去年我們用完了農曆新年，我們是——去年與其他年份有點不同的有趣的事情是，隨著 COVID 的出現，政府鼓勵員工留在原地。所以我們也有充分的勞動力。

So we ran as hard as we could in Q1 and that's the difference you're seeing. Its that Chinese meter difference, now demand environment overall a little bit off from where we were in Q1 last year, but not substantially so. The market is holding up well, we think it will -- it looks to hold up well through the first half. So yes, as we go -- again, it's difficult to predict the back half of the year and that's mainly because there still are critical shortages out there in parts. But what we see in the first half is a good strong demand market -- demand environment. And yes, we would expect to be able to grow in automotive this year.

所以我們在第一季度盡了最大努力，這就是你所看到的不同之處。這就是中國的電錶差異，現在的需求環境總體上與去年第一季度的情況有點不同，但幅度不大。市場表現良好，我們認為它會 - 它看起來在上半年表現良好。所以是的，隨著我們的前進——再次，很難預測今年下半年，這主要是因為部分地區仍然存在嚴重短缺。但上半年我們看到的是良好的強勁需求市場——需求環境。是的，我們希望今年能夠在汽車領域實現增長。

And I know someone just asked about the commercial markets being weak. In terms of the cloud computing inventory correction you're seeing and same thing in the related semiconductor markets, are you getting seeing signs at all of that bottoming in the next quarter or 2 or will it get worse before it stabilizes.

我知道有人剛剛問過商業市場疲軟的問題。就您所看到的雲計算庫存修正以及相關半導體市場的同樣情況而言，您是否會在下一季度或第二季度看到所有觸底跡象，或者在穩定之前會變得更糟。

Yes, I think we're looking at -- I think the key there is quarter or 2. Because I think this is really a -- the indications we have are for the first half. Now we'll see how demand, what shifts there in terms of demand as we go into the second half of the year. But most of the commentary we've had from customers is around, is related to the first half and digestion, as they put it. That is necessary in the first half. And it's due to a substantial inventory buildup and bringing those inventories down before they can start to see again true levels of demand impacting the supply chain.

是的，我認為我們正在研究——我認為關鍵是第 2 季度。因為我認為這真的是——我們的跡像是上半年的。現在我們將看看需求如何，隨著我們進入今年下半年，需求會發生什麼變化。但我們從客戶那裡得到的大部分評論都是圍繞著他們所說的，與上半年和消化有關。這在上半年是必要的。這是由於大量的庫存積累，並且在他們能夠再次看到影響供應鏈的真實需求水平之前降低了這些庫存。

And then, Todd, I had a couple of modeling questions. I don't remember you or you may have talked about the OpEx guidance for the quarter. Did you give that number out?

然後，托德，我有幾個建模問題。我不記得你，或者你可能已經談論過本季度的運營支出指南。你給了那個號碼嗎？

So what we would kind of give you in terms of insight into Q1, we're expecting SG&A expense to be about 9.5% of revenue and then R&D to be an additional 1.2% of revenue in Q1.

因此，就第一季度的洞察力而言，我們會給你什麼，我們預計 SG&A 費用約為收入的 9.5%，然後研發費用將佔第一季度收入的 1.2%。

Okay. So 10.7% total. Okay, great and so that implies your gross margin is actually still up year-over-year. Is that primarily due to the mix with the acquisition? Or I know you have difficult, obviously, tough some issues I know in Q1 of last year. I was just trying to figure out, given the big revenue decline, how margins can actually be up?

好的。所以總計 10.7%。好的，這意味著您的毛利率實際上仍在同比增長。這主要是由於與收購的混合嗎？或者我知道你在去年第一季度遇到了一些我知道的很困難的問題。我只是想弄清楚，鑑於收入大幅下降，利潤率實際上如何提高？

Well, okay. So that's a good discussion. I think when we're looking at Q1 and comparing that to Q1 last year, okay, year-year-over-year. Revenue was only down slightly, but there is a big mix shift, right. We added Telephonics, so when we look at year-over-year, Q1 -- Q1 a year ago at the midpoint of guidance, our revenues are down about $11 million. The aerospace and defense is up almost $75 million. If you take all the guidance that we've given. So that implies the commercial markets are down substantially.

哦，那好吧。所以這是一個很好的討論。我認為當我們查看第一季度並將其與去年第一季度進行比較時，好吧，同比。收入僅略有下降，但混合變化很大，對吧。我們增加了 Telephonics，因此當我們查看與去年同期相比的第一季度 - 一年前的第一季度指導的中點時，我們的收入下降了約 1100 萬美元。航空航天和國防增加了近 7500 萬美元。如果你接受我們給出的所有指導。因此，這意味著商業市場大幅下滑。

Down about 20%. Yes.

下降約 20%。是的。

Right. But when you look at the margin impact, okay, so you have some mix shifting. We add Telephonics, we lose commercial PCB business. They have different economic profiles. The PCB business at that kind of volume is pretty lucrative and Telephonics is we brought that on. We're working with synergies to improve their profit profile. But it's not yet quite dollar-for-dollar exchange in terms of profitability.

正確的。但是當你看到利潤率影響時，好吧，所以你有一些混合變化。我們增加了 Telephonics，我們失去了商業 PCB 業務。他們有不同的經濟狀況。這種規模的 PCB 業務非常有利可圖，而 Telephonics 正是我們帶來的。我們正在利用協同效應來改善他們的利潤狀況。但就盈利能力而言，這還不是完全對等的。

We're also going to see year-over-year, some pricing challenges, -- but we've got some favorable FX up in our cost structure. Exchange rates are -- the Chinese currency is a little weaker in this quarter, we're seeing compared to a year ago. So that gives us a little bit of tailwind. So kind of workshop, better mix a little FX help and that's offsetting some of the challenges that you see in our annual kind of pricing and less premium revenue this year compared to last year. And it all kind of break fee, the right margins stay relatively consistent, maybe up slightly, but even though there is a big mix, there is a lot going on underneath the covers.

我們還將逐年看到一些定價挑戰，但我們的成本結構中有一些有利的外匯。匯率是——與一年前相比，本季度人民幣略微走弱。所以這給了我們一點順風。這樣的研討會，更好地混合一點 FX 幫助，這抵消了您在我們的年度定價中看到的一些挑戰，以及與去年相比今年保費收入減少。這一切都是分手費，正確的利潤率保持相對穩定，可能略有上升，但即使有很大的組合，在幕後也有很多事情要做。

Thank you. And speakers, I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Tom Edman for any closing remarks.

謝謝。發言者，我現在不會在隊列中顯示更多問題。我現在想將電話轉回給 Tom Edman 先生，聽取任何結束語。

Thank you. Yes, I'd just like to close by summarizing some of the points that I made earlier. First, we delivered non-GAAP EPS above the midpoint of guidance and saw good year-over-year improvement on margins. Second, we announced the consolidation of our manufacturing footprint to streamline our operations to better serve our customers and lower our cost structure. And third, we generated strong cash flow, resulting in a net leverage of 1.5x at the low end of our target range of 1.5x to 2x. And fourth, really despite weakness in our commercial markets, we are seeing very strong demand in our aerospace and defense market.

謝謝。是的，我只想總結一下我之前提出的一些觀點。首先，我們交付的非 GAAP 每股收益高於指導的中點，並且利潤率同比有了良好的改善。其次，我們宣布整合我們的製造足跡以簡化我們的運營，從而更好地為我們的客戶服務並降低我們的成本結構。第三，我們產生了強勁的現金流，導致淨槓桿率為 1.5 倍，處於我們 1.5 倍至 2 倍目標範圍的低端。第四，儘管我們的商業市場疲軟，但我們看到航空航天和國防市場的需求非常強勁。

In closing, I'd like to thank our employees, our customers and our investors for your continued support as we navigate the challenges to our business. We'll continue our long-term strategic focus on diversification, differentiation and discipline. With that I'd like to thank you again. Good-bye, everyone.

最後，我要感謝我們的員工、客戶和投資者在我們應對業務挑戰時的持續支持。我們將繼續將長期戰略重點放在多元化、差異化和紀律上。我想再次感謝你。再見了，大家。

Thank you all for participating, this concludes today's program. You may now disconnect.

感謝大家的參與，今天的節目到此結束。您現在可以斷開連接。