TTM Technologies Inc (TTMI) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the TTM Technologies Second Quarter Fiscal 2023 Financial Results Conference Call. (Operator Instructions). As a reminder, this conference is being recorded today, August 2, 2023.

女士們、先生們，下午好。謝謝你的支持。歡迎參加 TTM Technologies 2023 財年第二季度財務業績電話會議。 （操作員說明）。謹此提醒，本次會議於今天（2023 年 8 月 2 日）錄製。

I would now like to turn the call over to Sameer Desai, TTM's Vice President of Corporate Development & Investor Relations to review TTM disclosure statement. Mr. Desai, the floor is yours.

我現在想將電話轉給 TTM 企業發展和投資者關係副總裁 Sameer Desai，以審查 TTM 披露聲明。德賽先生，請發言。

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-10K and our other filings with the Securities and Exchange Commission.

謝謝你，[雪莉]。在開始之前，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 TTM 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，包括我們最新的 Form-10K 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。

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.

這些前瞻性陳述基於管理層截至本演示文稿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、未來事件還是其他情況（法律要求除外）。

Please refer to disclosures regarding the risks that may affect TTM, which may be found in the report on Form-10K, 10-Q, 8-K, the registration statement on Form S-4 and the company's other SEC filings. We will also discuss on this call certain non-GAAP financial measures such as adjusted EBITDA. Such measures should not be considered as a substitute for measures prepared and presented in accordance with GAAP, and 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 at www.ttm.com. We have also posted on our website a slide deck that we will refer to during our call.

請參閱有關可能影響 TTM 的風險的披露，這些信息可以在 Form-10K、10-Q、8-K 報告、Form S-4 註冊聲明以及公司其他 SEC 文件中找到。我們還將在本次電話會議上討論某些非公認會計準則財務指標，例如調整後的 EBITDA。此類措施不應被視為替代根據 GAAP 準備和提出的措施，我們會指導您對公司新聞稿中包含的非 GAAP 與 GAAP 措施進行協調，該新聞稿已向 SEC 備案，可於TTM 的網址為www.ttm.com。我們還在網站上發布了幻燈片，我們將在電話會議期間參考。

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

我現在想將電話轉給 TTM 首席執行官 Tom Edman。請繼續，湯姆。

Thank you, Sameer. Good afternoon, and thank you for joining us for our second quarter fiscal year 2023 conference call. First of all, I want to address the release which went out this morning announcing Todd's intent to retire from TTM.

謝謝你，薩米爾。下午好，感謝您參加我們的 2023 財年第二季度電話會議。首先，我想談談今天早上發布的托德打算從 TTM 退休的消息。

As many of you know, Todd and I have spent our career at TTM together since 2013 driving this business forward. I could not have asked for a better partner during that time. I speak on behalf of the board and executive team at TTM in thanking Todd for his tremendous dedication and service to TTM. I've always been able to count on Todd to have his fingers on the pulse of our business, while prudently managing our balance sheet and optimizing our financials. Plus, he has been a real friend to the executive team members and myself.

正如你們許多人所知，自 2013 年以來，Todd 和我一直在 TTM 度過我們的職業生涯，推動這項業務向前發展。在那段時間裡，我找不到比這更好的合作夥伴了。我代表迅達董事會和執行團隊感謝托德對迅達的巨大奉獻和服務。我一直能夠指望托德掌控我們業務的脈搏，同時審慎地管理我們的資產負債表並優化我們的財務狀況。另外，他一直是執行團隊成員和我自己的真正朋友。

Tood has agreed to hold off his retirement a bit until the end of the year as we transition to Dan Bailey, to be a successor. I do also want to welcome Dan Bailey to TTM on the heels of the successful sale of Aerojet Rocketdyne to L3Harris. Dan brings tremendous CFO experience and defense industry expertise to TTM. As wee map our strategic direction towards building our A&D business from 47% of our revenues where it stood at the end of Q2 to an over 50% contribution in the future, it was critical to us that we continue to build a management team with a strong understanding of defense industry dynamics. I am confident that with Dan joining our team, we will have added yet another strong, knowledgeable and ethical leader to our executive team.

圖德同意將退休時間推遲到今年年底，因為我們將把接班人交給丹·貝利 (Dan Bailey)。在 Aerojet Rocketdyne 成功出售給 L3Harris 後，我還想歡迎 Dan Bailey 加入 TTM。 Dan 為迅達帶來了豐富的首席財務官經驗和國防工業專業知識。當我們制定戰略方向，將 A&D 業務從第二季度末佔收入的 47% 提高到未來的 50% 以上時，對我們來說至關重要的是，我們必須繼續建立一支管理團隊，對國防工業動態有深刻的了解。我相信，隨著 Dan 加入我們的團隊，我們將為我們的執行團隊增添另一位強大、知識淵博且有道德的領導者。

With that, let's move on to the discussion of the quarter. I'll begin with a review of our business highlights from the quarter and a discussion of our second quarter results followed by a summary of our business strategy. Todd Schull will follow with an overview of our Q2 2023 financial performance and our Q3 2023 guidance. We will then open the call to your questions.

接下來，讓我們繼續討論本季度的情況。我將首先回顧本季度的業務亮點，討論第二季度的業績，然後總結我們的業務戰略。 Todd Schull 隨後將概述我們 2023 年第二季度的財務業績和 2023 年第三季度的指導。然後我們將開始電話詢問您的問題。

The quarter's results are also shown on Slide 4 of the investor presentation posted on TTM's website. In the second quarter of 2023, revenues were within guided range. Due to continued strength in the Aerospace and Defense end market and better-than-expected results from our Data Center Computing end market. These 2 markets offset lower-than-expected results from our Medical, Industrial and Instrumentation and Automotive end markets. Non-GAAP EPS was well above the guided range as a result of improved mix and operational execution, particularly in our North America PCB operations. Demand in our Aerospace and Defense market remains strong with continued record backlog, offset by weaker demand in some of our commercial end markets.

該季度的業績還顯示在 TTM 網站上發布的投資者演示文稿的幻燈片 4 中。 2023 年第二季度，收入處於指導範圍內。由於航空航天和國防終端市場的持續強勁以及我們的數據中心計算終端市場的業績好於預期。這兩個市場抵消了我們的醫療、工業和儀器儀表以及汽車終端市場低於預期的業績。由於組合和運營執行的改進，特別是在我們的北美 PCB 業務中，非 GAAP 每股收益遠高於指導範圍。我們的航空航天和國防市場的需求依然強勁，訂單積壓持續創紀錄，但被一些商業終端市場的需求疲軟所抵消。

As we look into Q3, we see a mixed picture in our commercial markets with sequential growth in our Data Center Computing and MI&I markets. Stability in the Automotive market and a continued decline in the networking market. Demand remain strong in our A&D market, which now represents 47% of our revenues. 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 has 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.

當我們展望第三季度時，我們看到商業市場的情況好壞參半，數據中心計算和 MI&I 市場連續增長。汽車市場穩定，網絡市場持續下滑。我們的 A&D 市場需求依然強勁，目前占我們收入的 47%。我現在想提供戰略更新。 TTM 正在努力將我們的業務轉型為更少的周期性和更具差異化的業務。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向客戶提供的產品解決方案增加價值，特別是在航空航天和國防市場。

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.

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射頻元件和組件，並增加了關鍵的射頻工程能力和資源。 2022 年，我們收購了 Telephonics，該公司建立在 Anaren 和 TTM 的客戶驅動文化以及嚴格的工程和製造方法的基礎上。 Telephonics 的加入將 TTM 的航空航天和國防產品縱向擴展至更高級別的工程系統解決方案，橫向擴展至監控和通信市場，同時鞏固了我們在雷達系統領域的地位。

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. Since January, our A&D sector has been operating with 2 business units: Radar and C4ISR plus Space. Our objective with this new organization has been to align our businesses with the critical program priorities of our customer base. I'm excited to see this new organization take shape as a critical piece of our strategy.

這些戰略舉措的結果是，超過 50% 的 A&D 收入來自工程集成電子產品，而 PCB 佔總體貢獻不到 50%。自 1 月份以來，我們的 A&D 部門一直由 2 個業務部門運營：雷達和 C4ISR 加上太空。我們成立這個新組織的目標是使我們的業務與客戶群的關鍵計劃優先事項保持一致。我很高興看到這個新組織的形成，成為我們戰略的關鍵部分。

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 multi-layer 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在馬來西亞檳城建設一座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是對我們的客戶對供應鏈彈性和區域多元化日益關注的直接回應，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 continue to make progress on the Malaysian facility and construction is approximately 75% complete tracking to target. We began to move in equipment in the second quarter and will continue this effort through the third quarter. We remain on track for first production samples in the fourth quarter.

馬來西亞的新工廠將為網絡、數據中心計算以及醫療、工業和儀器儀表等商業市場的客戶提供幫助。我們繼續在馬來西亞設施上取得進展，施工進度已完成約 75%，達到目標。我們從第二季度開始搬入設備，並將在第三季度繼續這一努力。我們仍有望在第四季度生產第一批樣品。

Finally, I'd like to update you on the consolidation of our manufacturing footprint. We previously announced our plan to close 3 small manufacturing facilities in order to improve total plant utilization, operational performance, customer focus and profitability. PCB manufacturing operations in Anaheim and Santa Clara, California and Hong Kong are being closed and consolidated into TTM's remaining facilities. We cease production at the Hong Kong facility during the second quarter and remain on track for ending production at the 2 North America facilities by the end of the year. Customers have been supportive of the consolidation, and we expect to retain the majority of the business that will be transitioning from the closed facilities.

最後，我想向您介紹我們製造足跡整合的最新情況。我們之前宣布計劃關閉 3 個小型製造工廠，以提高工廠總利用率、運營績效、客戶關注度和盈利能力。加利福尼亞州阿納海姆和聖克拉拉以及香港的 PCB 製造業務正在關閉，並併入 TTM 的剩餘工廠。我們在第二季度停止了香港工廠的生產，並有望在年底前結束兩個北美工廠的生產。客戶一直支持合併，我們希望保留將從關閉設施過渡的大部分業務。

Now I'd like to review our end markets, which are referenced on Page 4 of the earnings presentation on our website. The Aerospace and Defense end market represented 47% of total second quarter sales compared to 30% of Q2 2022 sales and 43% of sales in Q1 2023. A majority of the year-on-year growth was due to the inclusion of Telephonics. Excluding that impact, our Q2 A&D revenues grew 5.9% year-on-year organically. We continue to experience a positive defense climate, with our A&D program backlog at $1.39 billion, including Telephonics.

現在我想回顧一下我們的終端市場，我們網站上的收益演示第 4 頁引用了這些市場。航空航天和國防終端市場佔第二季度總銷售額的47%，而2022 年第二季度銷售額為30%，2023 年第一季度銷售額為43%。同比增長的大部分歸功於電話技術的納入。排除這一影響，我們第二季度的 A&D 收入同比有機增長 5.9%。我們繼續經歷積極的國防氣氛，我們的 A&D 項目積壓金額為 13.9 億美元，其中包括電話技術。

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. In terms of the defense budget backdrop, a debt ceiling agreement was reached, resulting in a fiscal 2024 increase of 3% for the DoD budget over the fiscal 2023 enacted funding, in line with the fiscal 2024 President's budget request, or PBR.

國防市場的強勁需求是國防預算積極推動、我們強有力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。在國防預算背景方面，達成了債務上限協議，導致 2024 財年國防部預算比 2023 財年頒布的資金增加 3%，符合 2024 財年總統預算要求（PBR）。

During the quarter, we saw significant bookings for key programs, including the Javelin antitank-guided munition system and the Army's air missile defense planning and control system and Integrated Battle Command system. While the demand picture looks favorable, we continue to experience supply chain challenges for integrated electronics due to the complexity of the supply chain, including a number of smaller organizations that are struggling to meet the lead time requirements of TTM and our customers.

本季度，我們看到了關鍵項目的大量預訂，包括標槍反坦克制導彈藥系統、陸軍空中導彈防禦規劃和控制系統以及綜合作戰指揮系統。雖然需求情況看起來不錯，但由於供應鏈的複雜性，我們繼續面臨集成電子產品的供應鏈挑戰，包括許多較小的組織正在努力滿足迅達和我們客戶的交貨時間要求。

We expect sales in Q3 from this end market to represent about 45% of our total sales. Automotive sales represented 17% of total sales during the second quarter of 2023 compared to 18% in the year ago quarter and 17% during the first quarter of 2023. The year-over-year decline for Automotive was due primarily to continued inventory adjustments at several customers. We expect our Automotive business to contribute 16% of total sales in Q3 as customers are expected to continue to adjust inventory levels in line with expected semiconductor and other critical material deliveries.

我們預計第三季度該終端市場的銷售額將占我們總銷售額的 45% 左右。汽車銷量佔 2023 年第二季度總銷量的 17%，而去年同期為 18%，2023 年第一季度為 17%。汽車銷量同比下降主要是由於持續的庫存調整幾個客戶。我們預計汽車業務將佔第三季度總銷售額的 16%，因為預計客戶將繼續根據預期的半導體和其他關鍵材料交付情況調整庫存水平。

The Medical, Industrial and Instrumentation end market contributed 16% of our total sales in the second quarter compared to 21% in the year ago quarter and 19% in the first quarter of 2023. The sequential decline is caused primarily by inventory reductions at a number of our customers. In addition, the Instrumentation segment is weighted towards the semiconductor capital equipment market, which is seeing weaker demand. For the third quarter, we expect MI&I to be 17% of revenues. Sales in the Data Center Computing end market represented 12% of total sales in the second quarter compared to 17% in Q2 of 2022 and 10% in the first quarter of 2023. This end market performed better than expected and saw sequential growth due to strength in our data center customers, building products for generative AI applications.

醫療、工業和儀器終端市場佔第二季度總銷售額的 16%，而去年同期為 21%，2023 年第一季度為 19%。環比下降主要是由於一些公司的庫存減少造成的。我們的客戶。此外，儀器儀表領域主要關注需求疲軟的半導體資本設備市場。對於第三季度，我們預計 MI&I 將佔收入的 17%。數據中心計算終端市場的銷售額佔第二季度總銷售額的12%，而2022 年第二季度為17%，2023 年第一季度為10%。該終端市場表現好於預期，並且由於實力強勁而實現環比增長在我們的數據中心客戶中，為生成式人工智能應用程序構建產品。

We expect revenues in this end market to represent approximately 15% of third quarter sales as we continue to see sequential growth from these same customers. Networking accounted for 8% of revenue during the second quarter of 2023. This compares to 14% in the second quarter of 2022 and 11% of revenue in the first quarter of 2023.

我們預計該終端市場的收入將佔第三季度銷售額的 15% 左右，因為我們繼續看到這些客戶的連續增長。 2023 年第二季度，網絡業務佔收入的 8%。相比之下，2022 年第二季度為 14%，2023 年第一季度為 11%。

A majority of the decline in the quarter was due to the sale of our Shanghai backplane assembly facility, which generated $8 million of revenue in Q1 and had no revenues in Q2. In addition, demand was softer as customers focus on inventory digestion. In Q3, we expect this end market to be 7% of revenues as we see continued weakness due to softer market conditions and inventory management by customers.

本季度下降的主要原因是出售了我們的上海背板組裝工廠，該工廠在第一季度創造了 800 萬美元的收入，但在第二季度沒有收入。此外，由於客戶專注於庫存消化，需求疲軟。在第三季度，我們預計該終端市場將佔收入的 7%，因為我們看到由於市場狀況疲軟和客戶庫存管理而持續疲軟。

Next I'll cover some details from the second quarter. The 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 43% of our revenue. This compares to approximately 33% in the year ago quarter and 41% in Q1. 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.

接下來我將介紹第二季度的一些細節。這些信息也可以在我們的收益報告的第 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、剛柔結合板、射頻子系統和組件以及工程系統）約占我們收入的 43%。相比之下，去年同期約為 33%，第一季度約為 41%。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。

PCB capacity utilization in Asia-Pacific was 46% in Q2 compared to 81% in the year ago quarter and 52% in Q1. Our overall PCB capacity utilization in North America was 38% in Q2 compared to 44% in the year ago quarter and 39% in Q1. 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 as well as a greater mix of higher technology products that requires less finished plating. Our top 5 customers contributed 40% of total sales in the second quarter of 2023 compared to 36% in the first quarter of 2023. We had one customer over 10% in the quarter.

第二季度亞太地區 PCB 產能利用率為 46%，去年同期為 81%，第一季度為 52%。第二季度我們在北美的整體 PCB 產能利用率為 38%，而去年同期為 44%，第一季度為 39%。亞太地區的增長率較低是由於產量下降造成的，而北美地區的同比增長率較低是由於額外的電鍍產能增加以及需要更少成品電鍍的更高技術產品的更多組合。我們的前 5 位客戶在 2023 年第二季度貢獻了總銷售額的 40%，而 2023 年第一季度為 36%。本季度我們有一個客戶貢獻了 10% 以上。

At the end of Q2, our 90-day backlog, not including Telephonics, which is subject to cancellations, was $505.7 million compared to $635.7 million at the end of the second quarter last year. Including Telephonics, our backlog at the end of Q2 was $556.2 million. Our book-to-bill ratio, including Telephonics, was 1.04 for the 3 months ended July 3. As we look into Q3, we are seeing our commercial market somewhat mixed with improving trends in Data Center Computing, driven by momentum related to artificial intelligence advancements and demand growth in the Medical, Industrial and Instrumentation market. Stabilization in Automotive and continued weakness in Networking.

截至第二季度末，我們的 90 天積壓訂單（不包括可能被取消的電話業務）為 5.057 億美元，而去年第二季度末為 6.357 億美元。包括電話業務在內，我們第二季度末的積壓訂單為 5.562 億美元。截至7 月3 日的3 個月，我們的訂單出貨比（包括電話業務）為1.04。展望第三季度，我們發現我們的商業市場與數據中心計算的改善趨勢有些混合，這主要是受人工智能相關勢頭的推動醫療、工業和儀器儀表市場的進步和需求增長。汽車行業穩定，網絡行業持續疲軟。

On the A&D side of our business, we continue to focus on making incremental improvements in shipments as we work with supply chain partners to loosen bottlenecks and take advantage of an improving labor market. I am confident that with the effort of our employees and supply chain partners, 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.

在我們業務的 A&D 方面，我們繼續專注於逐步改善出貨量，與供應鏈合作夥伴合作，放鬆瓶頸並利用不斷改善的勞動力市場。我相信，在我們的員工和供應鏈合作夥伴的努力下，我們將能夠在 2023 年努力克服這些挑戰。同時，我要感謝我們的員工繼續為 TTM 和我們的關鍵業務做出貢獻。為客戶激發創新的使命。

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

現在托德將回顧我們第二季度的財務業績。托德？

Thank you, Tom, for your kind comments, and good afternoon, everyone. I will be reviewing our financial results for the second quarter that were included in the press release distributed today as well as on Slide 6 of our earnings presentation that is posted on our website. For the second quarter, net sales were $546.5 million compared to $625.6 million in the second quarter of 2022. The year-over-year decrease in revenue was due to declines in our commercial markets, partially offset by the inclusion of Telephonics as well as organic growth in our Aerospace and Defense end market.

謝謝湯姆的善意評論，大家下午好。我將回顧我們第二季度的財務業績，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幻燈片 6 中。第二季度淨銷售額為 5.465 億美元，而 2022 年第二季度為 6.256 億美元。收入同比下降是由於我們的商業市場下降，但部分被電話業務和有機業務的納入所抵消。我們的航空航天和國防終端市場的增長。

GAAP operating income for the second quarter of 2023 was $21.4 million and compares to operating income of $37.2 million in the second quarter of 2022. On a GAAP basis, net income in the second quarter of 2023 was $6.8 million or $0.07 per diluted share. This compares to GAAP net income of $27.8 million or $0.27 per diluted share in the second quarter of last year. 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 noncash expense items such as amortization of intangibles and stock compensation, gains on the sale of property and other unusual or infrequent items.

2023 年第二季度的GAAP 營業收入為2140 萬美元，而2022 年第二季度的營業收入為3720 萬美元。按照GAAP 計算，2023 年第二季度的淨利潤為680 萬美元，或攤薄後每股收益0.07 美元。相比之下，去年第二季度 GAAP 淨利潤為 2780 萬美元，即稀釋後每股收益 0.27 美元。我的其餘評論將集中於我們的非公認會計準則財務業績。我們的非公認會計原則業績不包括併購相關成本、重組成本、某些非現金費用項目，例如無形資產攤銷和股票補償、出售財產的收益以及其他不尋常或罕見的項目。

We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparison with expectations in prior periods. Gross margin in the second quarter was 19.2% and compares to 20% in the second quarter of 2022. The year-on-year decrease was due to the decline in revenue in the commercial sector, including lower premium revenue and prices and production inefficiencies, which include supply chain challenges in the integrated electronics portion of our A&D business. These were offset partially by favorable mix, the inclusion of Telephonics and favorable exchange rates.

我們提供非公認會計準則財務信息，使投資者能夠通過管理層的視角了解公司，並便於與前期預期進行比較。第二季度的毛利率為 19.2%，而 2022 年第二季度的毛利率為 20%。同比下降是由於商業部門收入下降，包括保費收入和價格下降以及生產效率低下，其中包括我們A&D 業務的集成電子部分的供應鏈挑戰。這些被有利的組合、電話技術和有利的匯率所部分抵消。

Selling and marketing expense was $17.5 million in the second quarter or 3.2% of net sales versus $16.9 million or 2.7% of net sales a year ago. Second quarter G&A expense was $35.1 million or 6.4% of net sales compared to $35.4 million or 5.7% of net sales in the same quarter a year ago. In the second quarter of 2023, R&D expense was $6.2 million or 1.1% of revenues compared to $5 million or 0.8% in the year ago quarter. The year-over-year increases in SG&A and R&D were due primarily to the addition of Telephonics. Our operating margin in Q2 was 8.4%. This compares to 10.8% in the same quarter last year. Interest expense was $11.3 million in the second quarter compared to $10.2 million in the same quarter last year.

第二季度銷售和營銷費用為 1,750 萬美元，占淨銷售額的 3.2%，而去年同期為 1,690 萬美元，占淨銷售額的 2.7%。第二季度管理及行政費用為 3510 萬美元，占淨銷售額的 6.4%，而去年同期為 3540 萬美元，占淨銷售額的 5.7%。 2023 年第二季度，研發費用為 620 萬美元，佔收入的 1.1%，而去年同期為 500 萬美元，佔收入的 0.8%。 SG&A 和 R&D 的同比增長主要是由於電話業務的增加。我們第二季度的營業利潤率為 8.4%。相比之下，去年同期為 10.8%。第二季度利息支出為 1,130 萬美元，而去年同期為 1,020 萬美元。

During the quarter, there was a positive $3.2 million foreign exchange impact below the operating line. Government incentives and interest income of $1.9 million resulted in a net $5.1 million gain or $0.04 positive impact to EPS. This compares to a gain of $7.6 million or a $0.06 impact on EPS in Q2 last year. Our effective tax rate was 17% in the second quarter, resulting in tax expense of $6.8 million. This compares to a rate of 15% or tax expense of $9.8 million in the prior year. Second quarter net income was $33 million or $0.32 per diluted share. This compares to second quarter 2022 net income of $55.3 million or $0.54 per diluted share.

本季度，營業線以下的外匯影響為 320 萬美元。 190 萬美元的政府激勵措施和利息收入為每股收益帶來了 510 萬美元的淨收益或 0.04 美元的積極影響。相比之下，去年第二季度的收益為 760 萬美元，對 EPS 的影響為 0.06 美元。第二季度我們的有效稅率為 17%，稅費支出為 680 萬美元。相比之下，上一年的稅率為 15%，稅費為 980 萬美元。第二季度淨利潤為 3300 萬美元，或攤薄後每股收益 0.32 美元。相比之下，2022 年第二季度淨利潤為 5530 萬美元，即稀釋後每股收益 0.54 美元。

Adjusted EBITDA for the second quarter was $74.7 million or 13.7% of revenue compared with second quarter 2022 adjusted EBITDA of $96.9 million or 15.5% of revenue. Depreciation for the quarter was $24.9 million. Net capital spending for the quarter was $49.4 million, which was higher than normal due to a $20 million deposit related to the new building in Penang, which we expect to be refunded in Q3 as part of the overall lease structure for the facility.

第二季度調整後 EBITDA 為 7470 萬美元，佔收入的 13.7%，而 2022 年第二季度調整後 EBITDA 為 9690 萬美元，佔收入的 15.5%。本季度折舊額為 2,490 萬美元。本季度的淨資本支出為 4940 萬美元，高於正常水平，因為與檳城新建築相關的 2000 萬美元押金，我們預計將在第三季度作為該設施整體租賃結構的一部分退還。

Cash flow from operations in the second quarter of 2023 was $25.9 million. The operating cash flow was lower than the first quarter due to lower collections of accounts receivable as revenue was relatively consistent with the prior quarter, partially offset by lower payments of accounts payable. Cash and cash equivalents at the end of the second quarter of 2023 were $398.7 million. Our net debt divided by last 12-month EBITDA was 1.5x at the low end of our targeted range of 1.5 to 2x. During the quarter, we completed the refinancing of our Term Loan B and US and Asia ABL. The new ABL facilities mature in 2028, the senior notes mature in 2029, and the new term loan matures in 2030.

2023 年第二季度運營現金流為 2590 萬美元。營業現金流低於第一季度，原因是應收賬款收款減少，而收入與上一季度相對一致，部分被應付賬款支付減少所抵消。截至 2023 年第二季度末，現金和現金等價物為 3.987 億美元。我們的淨債務除以過去 12 個月的 EBITDA 為 1.5 倍，處於我們目標範圍 1.5 至 2 倍的下限。本季度，我們完成了定期貸款 B 以及美國和亞洲 ABL 的再融資。新的 ABL 融資將於 2028 年到期，優先票據於 2029 年到期，新定期貸款於 2030 年到期。

Now I'd like to turn to our guidance for the third quarter. We project total revenue for the third quarter of 2023 to be in the range of $550 million to $590 million and non-GAAP earnings to be in the range of $0.25 to $0.31 per diluted share. The expected sequential decline in EPS is primarily the result of foreign exchange and other income forecasted at 0 in Q3 when they were a gain of $5.1 million in Q2. In addition, lower performance at the 2 North America plants scheduled for closure this year are expected to impact gross margins in the quarter as they wind down operations. The EPS forecast is based on a diluted share count of approximately 105 million shares, which includes dilutive securities such as options and RSUs.

現在我想談談我們對第三季度的指導。我們預計 2023 年第三季度的總收入將在 5.5 億至 5.9 億美元之間，非 GAAP 稀釋每股收益將在 0.25 至 0.31 美元之間。 EPS 預期環比下降主要是由於第三季度外彙和其他收入預測為 0，而第二季度則為 510 萬美元。此外，計劃於今年關閉的兩家北美工廠的業績下降預計將影響本季度的毛利率，因為它們將逐步減少運營。 EPS 預測基於約 1.05 億股的稀釋股數，其中包括期權和 RSU 等稀釋證券。

We expect that SG&A expense will be about 10% of revenue in the third quarter and R&D to be about 1.2% of revenue. We expect interest expense to total approximately $11.3 million. And finally, we estimate our effective tax rate to be between 15% and 19%. To assist you in developing your financial models, we offer the following additional information. During the third quarter, we expect to record amortization of intangibles of about $13.8 million, stock-based compensation expense of about $6.5 million, noncash interest expense of approximately $0.4 million, and we estimate depreciation expense will be approximately $23.9 million.

我們預計第三季度SG&A費用將佔收入的10%左右，研發費用將佔收入的1.2%左右。我們預計利息支出總計約為 1130 萬美元。最後，我們估計我們的有效稅率在 15% 到 19% 之間。為了幫助您開發財務模型，我們提供以下附加信息。在第三季度，我們預計無形資產攤銷約為 1380 萬美元，股票補償費用約為 650 萬美元，非現金利息費用約為 40 萬美元，我們預計折舊費用約為 2390 萬美元。

Finally, I'd like to announce that we'll be participating in the Needham Virtual Industrial Tech, Robotics and Clean Tech 1x1 Conference on August 7, the Jefferies Semiconductor, IT Hardware & Communications Technology Summit on August 29 in Chicago; and the Jefferies Industrial Conference in September 6 in New York City. That concludes our prepared remarks.

最後，我想宣布，我們將參加 8 月 7 日在芝加哥舉行的 Needham 虛擬工業技術、機器人和清潔技術 1x1 會議，以及 8 月 29 日在芝加哥舉行的 Jefferies 半導體、IT 硬件和通信技術峰會；以及 9 月 6 日在紐約舉行的 Jefferies 工業會議。我們準備好的發言到此結束。

Now I'd like to open the line for questions. Sheri?

現在我想開通提問熱線。雪莉？

P^Operator^ Our first question will come from the line of William Stein with Truist Securities.

P^Operator^ 我們的第一個問題來自 Truist Securities 的 William Stein。

Congrats on the better profitability and then the outlook. First, I'm hoping you can remind us of the timing and the magnitude of cost savings associated with the factory closures you discussed?

祝賀更好的盈利能力和前景。首先，我希望你能提醒我們與你討論的工廠關閉相關的成本節省的時間和幅度？

Sure. Will, this is Todd. Our expectations, we were planning to incur about $25 million plus or minus a couple of million dollars of costs associated with shutting down the facilities. So that includes labor-related costs such as severance as well as contract terminations and some equipment write-offs and disposals and the sort. We expect most of that to occur during 2023. There may be a little bit that spills over, but the overwhelming majority of that cost will take place in 2023. And then as we go forward, we're expecting to transition most of that revenue to our other facilities. So there will be very little leakage. And that bodes well then for the other facilities where we'll get a strong profit flow-through from that revenue.

當然。威爾，這是托德。我們預計，我們計劃承擔約 2500 萬美元，加上或減去與關閉設施相關的幾百萬美元的成本。這包括與勞動力相關的成本，例如遣散費、合同終止以及一些設備註銷和處置等。我們預計其中大部分將在 2023 年期間發生。可能會有一點溢出，但絕大多數成本將在 2023 年發生。然後，隨著我們的前進，我們預計將大部分收入轉移到我們的其他設施。所以洩漏量會很少。這對於其他設施來說是個好兆頭，我們將從這些收入中獲得強勁的利潤流。

And so we expect benefits once that transition is completed in the new facilities and the products are up to speed in the new facilities to also be approximately a $25 million annual benefit.

因此，我們預計，一旦新設施的過渡完成並且新設施中的產品達到最高速度，每年的效益也將約為 2500 萬美元。

So should we think of that coming in, in like Q1 of '24? Or does it take multiple quarters to have that benefit realized?

那麼我們是否應該考慮到 24 年第一季度的情況？或者是否需要多個季度才能實現這一效益？

I think it will be -- certainly in the first half of the year, it should ramp up, and we should be at full speed by the second half of the year. There's just a -- when you bring on a new product in a plant, there is some yield curve, you got to climb and so forth. So it won't be all at full speed in Q1, but certainly by the middle of the year, I would expect it to be a full too.

我認為它會——當然在今年上半年，它應該會加速，到下半年我們應該會全速前進。當你在工廠推出新產品時，會有一些收益率曲線，你必須攀升等等。因此，第一季度不會全速運轉，但到今年年中，我預計它也會全速運轉。

And then my follow-up is about the margin improvement that you saw in the quarter. I think the press release alluded to better efficiencies in North American operations. But Tom, in your prepared remarks, I think you mentioned mix as well. Can you maybe give us an idea as to which factor was the predominating one? And when we talk about better efficiency of operations in North America, maybe you can give us an idea about what's changing there and how sustainable we should expect it? Does it continue to improve from here?

然後我的後續行動是關於您在本季度看到的利潤率改善。我認為新聞稿提到了北美運營效率的提高。但是湯姆，在你準備好的發言中，我認為你也提到了混合。您能否告訴我們哪個因素是主導因素？當我們談論北美更高的運營效率時，也許您可​​以告訴我們那裡正在發生什麼變化以及我們應該期望它的可持續性如何？從這裡開始是否繼續改善？

Well, you'll recall from our Analyst Day back in late May that we shared some numbers on different portions of our business to give a little more insight to investors as to how we're doing. And we recall that the North America PCB operations had -- we've had some challenges over the last couple of years. COVID-related has a lot to do with it. Labor cost inflation is another factor, and we've been climbing kind of out of that goal for a while. Happy to say that we saw some great progress in several facilities. We're not 100%. There's all -- when you have a portfolio of factories as we do, there's always room for improvement in some place, and we certainly still feel that way. But we had some excellent performance.

好吧，您可能還記得五月下旬的分析師日，我們分享了有關業務不同部分的一些數據，以便讓投資者更深入地了解我們的經營情況。我們記得北美 PCB 業務在過去幾年中遇到了一些挑戰。與新冠疫情有很大關係。勞動力成本通脹是另一個因素，一段時間以來我們一直在偏離這一目標。很高興地說，我們看到一些設施取得了一些重大進展。我們不是100%。總而言之，當你像我們一樣擁有一系列工廠時，總會在某些地方有改進的空間，我們當然仍然有這種感覺。但我們也有一些出色的表現。

Mix has to do some of that in terms of higher margin products that we are building, but also the production levels in these plants, both the level and the ability to execute. We've been working on implementing new tools to help create better visibility to our general managers so that they can run the business more effectively, and that was paying some dividends also. So we kind of lump it together, but both factors were important contributors in our North America operations.

Mix 必須在我們正在生產的更高利潤的產品方面做到這一點，而且還要提高這些工廠的生產水平，包括執行水平和能力。我們一直致力於實施新工具，以幫助我們的總經理獲得更好的可見性，以便他們能夠更有效地運營業務，這也帶來了一些紅利。所以我們把它放在一起，但這兩個因素都是我們北美業務的重要貢獻者。

One moment for our next question. That will come from the line of Matt Sheerin with Stifel.

請稍等一下我們的下一個問題。這將來自馬特·謝林 (Matt Sheerin) 和斯蒂菲爾 (Stifel) 的血統。

And Todd, congratulations on your retirement. Just a question regarding the gross margin guidance. You talked about some of the headwinds with the North America closures. And what about any headwinds related to the ramp in Malaysia over the next couple of quarters? I know you've signaled that in the past as some margin headwind. Could you talk about that?

托德，祝賀你退休。只是關於毛利率指導的問題。您談到了北美關閉帶來的一些不利因素。未來幾個季度與馬來西亞的增長相關的任何阻力又如何呢？我知道您過去曾表示過這一點，認為這是一些利潤逆風。你能談談這個嗎？

Sure, Matt. We are expecting to incur additional costs as we ramp in the second half of the year here in Penang. That is factored into our forecast. And certainly, our investment levels from a P&L standpoint are increasing in Q3 compared to Q2, and that's reflected in our forecast. Our Asia operations have continued to perform at a very high level even though they're -- they could use more revenue. The commercial markets, the decline in those markets certainly impact that region more profoundly than North America. They don't have the A&D business that North America enjoys. But -- and they're executing very well and they're compensating for that.

當然，馬特。隨著我們下半年在檳城的擴張，我們預計會產生額外的成本。我們的預測已考慮到這一點。當然，從損益的角度來看，我們的投資水平在第三季度比第二季度有所增加，這反映在我們的預測中。我們的亞洲業務繼續保持在非常高的水平，儘管它們需要更多的收入。商業市場，這些市場的衰退對該地區的影響肯定比北美更深遠。他們沒有北美所享有的航空航天和國防業務。但是——他們執行得非常好，並且正在彌補這一點。

So we've got that reflected in our forecast. It's consistent with what we talked about. There is a drag associated with it. But we also don't -- with the progress on closing the Hong Kong facility that having that behind us, as Tom mentioned in his remarks, we ceased production here during the -- at the end of Q2. So we won't have the loss associated with that, that we incurred in Q2. And it will roughly offset the Penang cost investment. So we're relatively neutral quarter-to-quarter in our Asia operations as a result of those factors.

所以我們的預測反映了這一點。這與我們所說的一致。有一個與之相關的阻力。但我們也沒有——隨著關閉香港工廠的進展，正如湯姆在講話中提到的那樣，我們在第二季度末停止了這裡的生產。因此，我們不會有第二季度產生的與此相關的損失。並且將大致抵消檳城的成本投資。因此，由於這些因素，我們亞洲業務的季度業績相對中性。

And I know you haven't given guidance for Q4, and I appreciate that. But in terms of those cost headwinds, should that continue into Q4 as well on the margin side?

我知道您還沒有為第四季度提供指導，我對此表示讚賞。但就這些成本不利因素而言，這種情況是否應該持續到第四季度以及利潤率方面？

We'll probably ramp a little bit. I think we've given guidance to the fact that we thought there was probably a 30 to 50 basis point impact to gross margin as a result of the ramp of the Penang facility, all things being equal. And of course, Matt, all things aren't equal. There's always stuff happening every quarter. And so you're not going to see that so much in Q3, but the drag is there. And we're able just to compensate for it by some progress in other areas and better execution.

我們可能會稍微增加一點。我認為我們已經給出了指導，我們認為在所有條件相同的情況下，檳城工廠的產能擴張可能會對毛利率產生 30 到 50 個基點的影響。當然，馬特，並非所有事情都是平等的。每個季度總會發生一些事情。所以你在第三季度不會看到那麼多，但阻力是存在的。我們可以通過其他領域的一些進展和更好的執行來彌補這一點。

And Tom, on your commentary regarding an uptick in cloud and data center related to AI. Could you talk about your products there and the difference between maybe your technology with AI applications? And is there a higher content? And could you give us some outlook in terms of -- are we talking about multiple customers you're ramping for and the outlook as you get into next year there?

Tom，關於您對人工智能相關雲和數據中心增長的評論。您能談談您的產品以及您的技術與人工智能應用之間的區別嗎？還有更高的含量嗎？您能否給我們一些展望——我們是否在談論您正在爭取的多個客戶以及您明年的前景？

Sure. Yes. I think if you look at data center, as we call it Data Center Computing market overall, you think about 75% of that approximately being data center, another 25% being really semiconductor. Obviously, that 25% is acting as a bit of a drag this year. If you then start to look parse out data center overall, about -- more than half of that right now is really being driven by AI designs. And to your point, what it really -- of course, the complexity of the Board is really being driven by the chipsets that are being used. And so as the designs for those chipsets advance, they place additional requirements on boards. And that comes out in the forms of materials that are being used and particularly the thermals and the speeds associated with those materials and then the layer count.

當然。是的。我認為，如果你看看數據中心，我們稱之為整個數據中心計算市場，你會認為其中大約 75% 是數據中心，另外 25% 是真正的半導體。顯然，這 25% 今年有點拖累。如果你開始分析整個數據中心，那麼現在大約有一半以上實際上是由人工智能設計驅動的。就你的觀點而言，它到底是什麼——當然，主板的複雜性實際上是由所使用的芯片組驅動的。因此，隨著這些芯片組設計的進步，它們對主板提出了額外的要求。這以所使用的材料的形式表現出來，特別是與這些材料相關的熱量和速度，然後是層數。

So we're continuing to increase the layer count of the boards that we're building. Those tend -- for AI applications, the design work tends to be done in a relatively confidential setting. And so, these are proprietary designs that are released. I think the TTM footprint as it stands today with North America and the ability to work hand-in-hand with our customers in North America is a real benefit down the road with Malaysia coming on, again, that will give a great facility for volume to move in for these applications and our existing capability in China, where we're really doing some advanced technology work for those customers. So we're positioned well.

因此，我們正在繼續增加我們正在構建的電路板的層數。對於人工智能應用來說，設計工作往往是在相對保密的環境中完成的。因此，這些都是已發布的專有設計。我認為迅達目前在北美的足跡以及與北美客戶攜手合作的能力對於馬來西亞的到來將帶來真正的好處，這將為銷量提供良好的便利進入這些應用程序和我們在中國的現有能力，我們實際上正在為這些客戶做一些先進的技術工作。所以我們的定位很好。

I believe it is more than certainly a lot of activity from a small set of customers but multiple customers, Matt. So we are seeing that activity at multiple customers hoping that what we see today continues to spread here into some of the other areas of cloud and data center performance requirements as we go into next year. So the way I characteristic -- characterizes overall is multiple customers, but still too limited for what we're hoping to see as we go through the balance of the year and really into next year, we're hoping to see more spread of that business volume. So that's really what we're seeing there. It's certainly encouraging particularly if you look at sequential growth in data center.

我相信這不僅僅是一小部分客戶的大量活動，而是多個客戶的活動，馬特。因此，我們看到多個客戶的活動，希望我們今天看到的情況在進入明年時繼續擴展到雲和數據中心性能要求的其他一些領域。因此，我的總體特徵是多個客戶，但對於我們在今年剩餘時間和真正進入明年時希望看到的內容來說仍然太有限，我們希望看到更多的傳播業務量。這就是我們所看到的情況。如果您看到數據中心的連續增長，這無疑令人鼓舞。

One moment for our next question. That will come from the line of Griffin Boss with B. Riley Securities.

請稍等一下我們的下一個問題。這將來自 Griffin Boss 與 B. Riley Securities 的血統。

Apologies, I sort of missed this a bit, but you talked about the $20 million deposit for the Penang facility. Do you say you expect to get that back in the third quarter? Or when is that -- when should we expect that to come back in?

抱歉，我有點錯過了這一點，但你談到了檳城工廠的 2000 萬美元押金。你說你希望在第三季度收回這一點嗎？或者什麼時候——我們應該期望它什麼時候回來？

Yes, we did, Griffin. I mentioned that we put the deposit in to keep progress going, but we are working on a financing arrangement for that facility, and we are expecting to complete that in the third quarter, which would then refund that $20 million. So it's kind of a temporary bridge, if you will, for our development, we can keep construction moving forward on our Penang facility.

是的，我們做到了，格里芬。我提到我們存入押金是為了保持進展，但我們正在為該設施制定融資安排，預計在第三季度完成，然後將退還那 2000 萬美元。因此，這是一座臨時橋樑，如果您願意，為了我們的發展，我們可以繼續推進檳城工廠的建設。

And then also related to Penang and just CapEx going forward, I think I heard you say you're expecting increased levels of investment in the third quarter versus second quarter. So should we expect CapEx going forward to come back down closer to that 4% to 5% of revenue target that you have in maybe the fourth quarter or in 2024? Or how are you thinking about that?

然後也與檳城和未來的資本支出有關，我想我聽到你說你預計第三季度的投資水平將比第二季度有所增加。那麼，我們是否應該預期未來的資本支出會回落到接近您在第四季度或 2024 年設定的 4% 至 5% 的收入目標？或者你是怎麼想的？

Yes. So our expectations for this year are going to be about $140 million in CapEx, plus or minus, and that will be above that 5% range, which we've kind of told everybody was going to happen this year. I do expect elevated CapEx spending next year also, and it will start to wind itself down a bit. So that -- so those 2 years, '23 and '24 will be the peak investment years for getting this Penang facility launched and ramped up. Then I would expect us to return to our more normal level.

是的。因此，我們對今年資本支出的預期約為 1.4 億美元（加減），這將高於 5% 的範圍，我們已經告訴每個人今年都會發生這種情況。我確實預計明年的資本支出也會增加，並且會開始逐漸減少。因此，“23”和“24”這兩年將是檳城設施啟動和擴建的投資高峰年。然後我希望我們能回到更正常的水平。

Typically, on a sustaining basis, our CapEx runs closer to 4% than it does to 5%. But we will peak up every now and then if we've got a new facility or a big technology launch. And so that's what we're in the middle of right now with today.

通常，在持續的基礎上，我們的資本支出接近 4%，而不是 5%。但如果我們有新設施或推出大型技術，我們會時不時地達到頂峰。這就是我們今天所面臨的情況。

And then just last for me. Can you just give us an update on the total program value for auto exiting the quarter?

然後就對我來說最後一次。您能否向我們提供有關本季度自動退出計劃總價值的最新信息？

Oh, yes, sure. So this quarter in auto, we won a lifetime program value of about $95 million. This tends to be a low quarter if you compare it to last year. Last year, we won about $60 million in the same quarter. If -- but we're tracking well for the year. Just a reminder that last quarter, we were at $267 million. And total year last year was $530 million. So if you add up that $95 million to $267 million, we're tracking really well for the year. Looking forward to, obviously, additional wins here as we go through the balance of the year. And just a reminder, of course, that these are program wins, they translate into revenue. We really will start the program generally the following year, and then it will ramp up over a 3-year period, generally, and you'll see a 3- to 5-year program length to give a feel for that.

哦，是的，當然。因此，本季度在汽車領域，我們贏得了價值約 9500 萬美元的終身計劃。如果與去年相比，這往往是一個低季度。去年同一季度，我們贏得了約 6000 萬美元。如果——但我們今年進展順利。只是提醒一下，上個季度我們的收入為 2.67 億美元。去年的總額為 5.3 億美元。因此，如果將 9500 萬美元加到 2.67 億美元，我們今年的跟踪情況非常好。顯然，在我們度過今年剩下的時間時，我們期待著更多的勝利。當然，只是提醒一下，這些都是項目的勝利，它們會轉化為收入。我們通常會在第二年啟動該計劃，然後通常會在 3 年的時間內逐步推進，您會看到 3 到 5 年的計劃長度來感受一下。

One moment for our next question. That will come from the line of Jim Ricchiuti with Needham.

請稍等一下我們的下一個問題。這將來自吉姆·里基烏蒂（Jim Ricchiuti）和李約瑟（Needham）的血統。

So I think I heard utilization rate in Asia. But I'm curious, with the guidance you're giving and the pickup in some areas of the business, are you anticipating that utilization rate to move up meaningfully in the current quarter?

所以我想我聽說了亞洲的利用率。但我很好奇，根據您提供的指導以及某些業務領域的回升，您是否預計本季度的利用率會大幅上升？

So yes, Jim, I think what we're seeing and as Todd mentioned, you can really tie certainly our Asia facilities close to 100% tied to the commercial sector business. And so as we start to see some of these markets improve and if you look sequentially, certainly, we're looking for a strong improvement in data center in Q3.

所以，是的，吉姆，我認為我們所看到的，正如托德提到的，你確實可以將我們的亞洲設施與商業部門業務緊密聯繫在一起，接近 100%。因此，當我們開始看到其中一些市場有所改善時，如果您按順序觀察，當然，我們正在尋求第三季度數據中心的強勁改善。

Also Medical, Industrial and Instrumentation, we're looking for sequential improvement. There will be benefits there. There's going to be a little bit of a pull down networking. But overall, if you just look at where we're guiding to in terms of market improvement, we should see utilization rates climb in Asia as a result. Of course, we are continuing to put capital into those facilities, but that capital tends to be focused on technology versus capacity. So that should result in some improvement in utilization.

此外，在醫療、工業和儀器儀表領域，我們也在尋求連續改進。那裡會有好處。將會有一些下拉網絡。但總的來說，如果你只看我們在市場改善方面的指導，我們應該會看到亞洲的利用率有所上升。當然，我們將繼續向這些設施投入資金，但這些資金往往集中在技術而不是產能上。因此，這應該會導致利用率有所提高。

And provide a little bit of a tailwind with respect to gross margins? I know there's always mix issues involved in that. But I'm just curious, is that a fair way to think about it?

並為毛利率提供一點推動力？我知道這總是涉及到混合問題。但我只是好奇，這是一個公平的思考方式嗎？

No, you're right, Jim. As we -- and I kind of -- you have to temper it with the Penang comments when I was answering Matt's question earlier. But generally speaking, the revenue uptick that we've highlighted in those commercial markets is going to benefit our Asia operations and improve utilization that includes profitability. And then that's tempered just a touch by obviously, the ramp-up of our Canadian operations.

不，你是對的，吉姆。正如我們——我也是——你必須用我早些時候回答馬特的問題時檳城的評論來緩和它。但總的來說，我們在這些商業市場中強調的收入增長將有利於我們的亞洲業務，並提高利用率（包括盈利能力）。然後，顯然，我們加拿大業務的擴張稍微緩和了這一點。

Go ahead, please.

請繼續。

No, I was just saying it's good news. I mean, we're looking for to turn the corner and start making some progress in our commercial markets. And we're not prepared to say we've called the bottom here, but this is encouraging me to see some uptick.

不，我只是說這是個好消息。我的意思是，我們正在尋求扭轉局面，並開始在我們的商業市場取得一些進展。我們不准備說我們已經觸底，但這鼓勵我看到一些上升。

And that, I guess, segues into the next question. In many of these markets, you don't have great visibility on the commercial side, things move around. But it sounds like what you're describing in data center has some legs to it. And I'm just wondering, as you look beyond the current quarter, what changes are you seeing, if any, in the overall environment in some of the other commercial markets?

我想，這就引出了下一個問題。在許多這樣的市場中，你在商業方面沒有很高的知名度，事情會發生變化。但聽起來您在數據中心中描述的內容有一定道理。我只是想知道，當您展望本季度之後，您在其他一些商業市場的整體環境中看到了哪些變化（如果有的話）？

Sure. Yes. I think the -- as we head into the second half of the year beyond data center and certainly, data center, there's -- it's a reaction to critical requirements with AI really sweeping in. And that's great to see because that has impact in other areas as well. If you -- let me start with what I would see as markets that will continue to probably struggle a bit this year. I think semiconductor capital equipment really don't expect to see much activity there until we get into next year. Semiconductor itself probably will also remain relatively subdued. So those 2 markets, we're still watching to see indications of a return to demand.

當然。是的。我認為，當我們進入數據中心之外的下半年時，當然，數據中心，這是對人工智能真正席捲而來的關鍵需求的反應。這是很高興看到的，因為這對其他領域產生了影響地區也是如此。如果你——讓我先談談我認為今年可能會繼續陷入困境的市場。我認為，在進入明年之前，半導體資本設備確實不會出現太多活動。半導體本身可能也將保持相對低迷。因此，我們仍在關注這兩個市場，看看需求恢復的跡象。

Certainly, AI helps there, but I think they need to see broader-based recovery to really drive semiconductor demand and therefore capital equipment. If you move into networking, there's an inventory -- certainly inventory digestion going on here. And then on the telecom side, subdued really service provider spending. So again, a market that at least in Q3, we're not expecting great things. May see improvement going into Q4. We'll see. And I think that's going to be really tied to service providers and what -- and where they're going to go. Automotive is holding up well. If you look overall year-on-year, yes, we're down, but the market -- but we're not down in -- we're not down in a really large way.

當然，人工智能在這方面有所幫助，但我認為他們需要看到更廣泛的複蘇，才能真正推動半導體需求，從而推動資本設備。如果你進入網絡領域，就會有庫存——當然這裡正在進行庫存消化。然後在電信方面，服務提供商的支出確實受到抑制。再說一次，至少在第三季度，我們預計市場不會有什麼好事情。進入第四季度可能會看到改善。我們拭目以待。我認為這將與服務提供商以及他們的去向密切相關。汽車業表現良好。如果你看整體同比情況，是的，我們下跌了，但是市場——但我們並沒有下跌——我們並沒有大幅下跌。

So auto has continued to hold up. And I would expect that to continue with auto. And really, as I said last quarter, we're still waiting for the semiconductors, particularly analog in this case, to catch up on auto. So there is that shortage piece that makes it really hard to forecast. I think there's some optimism around Q4 coming from the Automotive customer base, but they're tempering that by us with some continuing challenges on supply chain.

因此汽車繼續保持堅挺。我希望這種情況能夠在汽車領域繼續下去。事實上，正如我上個季度所說，我們仍在等待半導體，特別是在這種情況下的模擬半導體，趕上汽車。因此，存在著短缺問題，這使得預測變得非常困難。我認為汽車客戶群對第四季度持樂觀態度，但我們因供應鏈面臨的一些持續挑戰而緩和了這種樂觀情緒。

And then medical industrial, that piece really looks -- we're starting to see that our customers have moved beyond the inventory correction and our -- we're starting to see some improved demand there. And that's a -- and I expect that will continue in that market as we see now that the inventory digestion is behind many of our customers. So looking for ongoing sequential improvements there. And then finally, Aerospace and Defense, as I highlighted, really strong demand profile, I think that will continue. It's really, for us, a matter of sequential improvements as we deal with supply chain issues and continuing to drive that both the PCB side of the business as well as our integrated electronics operations. So that's pretty much what we're seeing out there, Jim.

然後是醫療工業，這看起來確實——我們開始看到我們的客戶已經超越了庫存調整，我們的——我們開始看到那裡的需求有所改善。我預計這種情況將在該市場持續下去，因為我們現在看到，許多客戶都在消化庫存。因此，我們正在尋找持續的連續改進。最後，正如我強調的那樣，航空航天和國防的需求狀況非常強勁，我認為這種情況將持續下去。對於我們來說，這確實是一個連續改進的問題，因為我們處理供應鏈問題並繼續推動 PCB 業務以及我們的集成電子業務。這就是我們所看到的情況，吉姆。

Thanks for the color Tom, and Todd, congrats on the news.

感謝湯姆和托德的顏色，恭喜這個消息。

One moment for our next question one. That will come from the line of William Stein with Truist Securities.

請稍等一下我們的下一個問題。這將來自 William Stein 與 Truist Securities 的家族。

In 2019, I think it was the company acquired a company called i3 to help deliver some high-density connectivity technology. And I wonder if that technology could be used in semiconductor packaging considering the pretty well-publicized shortages, there are in things like so-called CoWoS capacity that's persisting. There are some customers that you already have in that space that are short. And I wonder if that's a possibility. It occurred to me that these are maybe similar technologies to what TTM does?

2019年，我認為該公司收購了一家名為i3的公司，以幫助提供一些高密度連接技術。我想知道該技術是否可以用於半導體封裝，考慮到眾所周知的短缺，所謂的 CoWoS 產能等問題仍然存在。您在該領域已經擁有一些客戶，但數量不足。我想知道這是否有可能。我突然想到這些可能和TTM的技術類似？

Yes. It's -- so the CoWoS and technologies, the node there tends to be -- you're looking at, let's just call it, south of 10 microns in terms of lines and spacing requirements. And what we are doing and since that acquisition, we have ported the equipment set over to our Chippewa Falls, Wisconsin Advanced Technology Center. We do quite a bit of substrate and substrate-like PCB work there for primarily defense customers, not exclusively, but primarily defense customers and then our own internal requirements for our RF component line.

是的。它——所以 CoWoS 和技術，那裡的節點往往是——你所看到的，我們就這麼稱呼它，就線路和間距要求而言，在 10 微米以南。自收購以來，我們正在做什麼，我們已將設備轉移到威斯康星州奇珀瓦福爾斯先進技術中心。我們在那裡做了相當多的基板和類似基板的 PCB 工作，主要是為了國防客戶，不僅僅是國防客戶，還有我們自己對射頻元件系列的內部要求。

So as we look at opportunities going forward, Will, we're going to continue to focus that production capability, combined with what we do with our microelectronics business targeted at our defense customer needs, and those tend to be -- they're a little bit behind. They're more on the 18 micron lines and spaces today, we're at 25-ish and moving down to 18 and then very durable constructions and designs. So that's where the work tends to be focused. We're seeing ongoing demand there and really we'll continue to focus that facility on those requirements. So probably will not move in the short-term future into that commercial space.

因此，當我們尋找未來的機會時，威爾，我們將繼續關註生產能力，結合我們針對國防客戶需求的微電子業務所做的工作，而這些往往是——它們是落後一點點。如今，它們更多地採用 18 微米的線條和間距，而我們的線條和間距則在 25 微米左右，並正在下降到 18 微米，然後是非常耐用的結構和設計。這就是工作的重點。我們看到那裡的需求持續存在，我們確實將繼續將該設施的重點放在這些需求上。因此，短期內可能不會進入該商業領域。

One other, if I can. In aerospace defense, for some time, we've seen the backlog continue to grow and revenue not really cooperate this quarter, there was an improvement there. We saw better results. We saw sequential and year-over-year growth. I wonder if you could comment on what the biggest bottlenecks are? I know we've spoken in the past about the complex set of smaller suppliers that are either supply to or potentially be complementary. But any update on supply chain conditions in aerospace defense, any improvement on the horizon?

如果可以的話，再來一張。在航空航天國防領域，一段時間以來，我們看到積壓訂單繼續增長，收入並沒有真正配合，本季度有所改善。我們看到了更好的結果。我們看到了環比和同比增長。不知道您能否評論一下最大的瓶頸是什麼？我知道我們過去曾談到過一組複雜的小型供應商，這些供應商要么是供應商，要么是潛在的補充供應商。但是航空航天國防供應鏈狀況有任何更新嗎？即將出現任何改善嗎？

Yes. Will, yes, a couple of points there. The -- we're -- so if you look about that, I'm going to give you rough order, but roughly half of our Aerospace and Defense business is printed circuit boards, foundational capability there. And then roughly half is what we call integrated electronics, which moves from really subassembly work up to complete mission systems. And when -- my comments here mainly address that second half, so that's 50%. And that's where we've seen the supply chain issues.

是的。威爾，是的，有幾點。我們的航空航天和國防業務大約有一半是印刷電路板，這是那裡的基礎能力。大約一半是我們所說的集成電子設備，它從真正的組件工作轉變為完整的任務系統。當——我在這裡的評論主要針對下半年，所以這是 50%。這就是我們看到的供應鏈問題。

As Todd highlighted, on the PCB side in North America, we actually saw -- second quarter was a strong performance quarter. We're looking for that to continue in Q3, though we may see a slight move off of those highs just because we're going to be in that summer vacation period. And so labor becomes a little bit -- labor tends to take vacations. So Q3 generally on our North America PCB side will tend to be slightly lower for a production optimization standpoint.

正如托德強調的那樣，在北美的 PCB 方面，我們實際上看到——第二季度是一個強勁的業績季度。我們希望這種情況在第三季度繼續下去，儘管我們可能會看到這些高點略有下降，因為我們將處於暑假期間。因此，勞動變得有點——勞動往往會休假。因此，從生產優化的角度來看，我們北美 PCB 方面的第三季度通常會略低。

Integrated Electronics is where the real focus is. And that's where we've been struggling on supply chain. What I can tell you is part of this is external. And as you highlighted, yes, we continue to struggle with -- particularly with some of the smaller vendors. Conditions are improving. Sequentially, we expect those conditions to improve again next quarter. And the other piece of that, which is internal in terms of how we address supply chain challenges, we're making progress there. We have organized, as you know, we've organized operationally now into an integrated electronics organization. That was a critical step. We did that in January. We have a supply chain organization inside of that group that has been also organized. We brought key leaders have been in this last quarter.

集成電子是真正的焦點所在。這就是我們在供應鏈上一直苦苦掙扎的地方。我可以告訴你的是，這一部分是外部的。正如您所強調的，是的，我們繼續與一些較小的供應商鬥爭。條件正在改善。接下來，我們預計這些情況下季度將再次改善。另一方面，就我們如何應對供應鏈挑戰而言，我們正在這方面取得進展。如您所知，我們已經組織起來，現在我們已經在運營上組織成一個綜合電子組織。這是關鍵的一步。我們在一月份就這麼做了。我們在該集團內部也有一個供應鏈組織。我們在上個季度帶來了主要領導人。

So we are generating that we've got the kind of approach that, again, gives me confidence that we will continue to make those sequential improvements as we go through the course of this year and into early next year. So that's where the real focus is. We won't solve all of the issues, but we need to continue to improve there, and we're starting to see our -- certainly, our vendors respond and our own organization doing a really good job in terms of focus.

因此，我們認為我們已經採取了這種方法，這再次讓我相信，在今年和明年初的過程中，我們將繼續進行這些連續的改進。所以這才是真正的焦點所在。我們不會解決所有問題，但我們需要繼續改進，並且我們開始看到我們的——當然，我們的供應商做出了回應，而且我們自己的組織在重點方面做得非常好。

(Operator Instructions) I'm showing no further questions in a queue at this time, I would now like to turn the call back over to Mr. Edman for any closing remarks.

（操作員說明）此時，我在隊列中沒有顯示任何其他問題，我現在想將電話轉回埃德曼先生以獲取任何結束語。

Thank you, Sheri, and a terrific job. I would like to just close by summarizing some of the points I made earlier. First, we delivered revenues in line with the guided range and non-GAAP EPS was well above the guided range. Second, we refinanced our Term Loan B and U.S. and Asia ABL facilities, and that results in a maturity occurring in 2028 and a net leverage ratio of 1.5x at the low end of our target range of 1.5x to 2x. And finally, we continue to see strong demand in Aerospace and Defense, with recoveries beginning in some of -- in a number of our commercial markets.

謝謝你，雪莉，幹得很棒。最後，我想總結一下我之前提出的一些觀點。首先，我們的收入符合指導範圍，並且非公認會計原則每股收益遠高於指導範圍。其次，我們對定期貸款 B 以及美國和亞洲 ABL 設施進行了再融資，到期日為 2028 年，淨槓桿率為 1.5 倍，處於我們目標範圍 1.5 倍至 2 倍的下限。最後，我們繼續看到航空航天和國防領域的強勁需求，一些商業市場開始復蘇。

So in closing, I'd just like to thank our employees, our customers and our investors for your continued support as we continue to move forward as a company. Thank you. Again, thank you for joining us. Take care.

最後，我要感謝我們的員工、客戶和投資者在我們公司不斷向前發展的過程中給予我們的持續支持。謝謝。再次感謝您加入我們。小心。

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。