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.

各位女士、先生，下午好。感謝您撥冗等候。歡迎參加 TTM Technologies 2023 會計年度第二季財務業績電話會議。（接線員指示）。提醒各位，本次會議將於今日 2023 年 8 月 2 日錄音。

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.

現在我想把電話交給 TTM 企業發展與投資人關係副總裁 Sameer Desai，請他說明 TTM 的揭露聲明。Desai 先生，請開始。

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.

謝謝你，[Sheri]。在開始之前，我想提醒各位，今天的電話會議包含《1995 年私人證券訴訟改革法》所定義的前瞻性陳述，包括與 TTM 未來業務展望相關的陳述。由於一項或多項風險與不確定性（包括我們最近一期 Form 10-K 年報及向美國證券交易委員會提交的其他文件中所說明的因素），實際結果可能與這些前瞻性陳述有重大差異。

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.

這些前瞻性陳述係基於管理層截至本次簡報日期的預期與假設。除法律要求外，TTM 不承擔因新資訊、未來事件或其他情況而公開更新或修訂任何此類陳述的義務。

Please refer to disclosures regarding the risks that may affect TTM, which may be found in the report on Form 10-K, 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.

請參閱可能影響 TTM 的風險揭露，相關內容可見於 Form 10-K、10-Q、8-K 報告、Form S-4 註冊聲明以及公司向 SEC 提交的其他文件。我們也將在本次電話會議中討論若干非 GAAP 財務衡量指標，例如調整後 EBITDA。此類指標不應被視為依 GAAP 編製與呈列之指標的替代，我們請各位參閱公司新聞稿中所載的非 GAAP 與 GAAP 指標調節表；該新聞稿已提交 SEC，並可於 TTM 的網站 www.ttm.com 取得。我們也已在網站上張貼本次電話會議將引用的簡報投影片。

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

現在我想把電話交給 TTM 執行長 Tom Edman。Tom，請開始。

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，Sameer。各位下午好，感謝各位參加我們 2023 會計年度第二季電話會議。首先，我想談談今天早上發布的新聞稿，該新聞稿宣布 Todd 有意自 TTM 退休。

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.

如各位所知，自 2013 年以來，Todd 與我在 TTM 一起共事，推動公司業務向前發展。在那段期間，我再也找不到比他更好的夥伴。我代表 TTM 董事會與管理團隊，感謝 Todd 對 TTM 的巨大投入與服務。我一直都能仰賴 Todd 緊貼業務脈動，同時審慎管理資產負債表並優化財務表現。此外，他也是管理團隊成員與我個人的摯友。

Todd 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.

Todd 已同意將退休時間稍微延後至年底，以便我們順利交接給接任者 Dan Bailey。我也要在此歡迎 Dan Bailey 加入 TTM；他是在 Aerojet Rocketdyne 成功出售給 L3Harris 之後加入我們的。Dan 具備豐富的財務長經驗以及國防產業專業。隨著我們規劃策略方向，目標是將航太與國防（A&D）業務的營收占比，從第二季末的 47% 提升至未來超過 50%，因此對我們而言，持續打造一支深刻理解國防產業動態的管理團隊至關重要。我相信 Dan 的加入，將為我們的管理團隊再增添一位強而有力、見識廣博且具高度操守的領導者。

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.

接下來我們進入本季的討論。我將先回顧本季的業務重點並說明第二季業績，接著總結我們的業務策略。之後 Todd Schull 將概述 2023 年第二季的財務表現以及 2023 年第三季的財測指引。最後我們將開放提問。

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.

本季結果也呈現在 TTM 網站投資人簡報的第 4 頁投影片。2023 年第二季，營收落在指引區間內，主要受惠於航太與國防終端市場的持續強勁，以及資料中心運算終端市場優於預期的表現。這兩個市場抵銷了醫療、工業與儀器（MI&I）以及汽車終端市場低於預期的結果。由於產品組合改善與營運執行到位，特別是在北美 PCB 營運方面，非 GAAP 每股盈餘（EPS）明顯高於指引區間。航太與國防市場需求仍然強勁，未交貨訂單（backlog）持續創新高，但部分商用終端市場需求轉弱形成抵銷。

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.

展望第三季，我們在商用市場看到的情況較為分歧：資料中心運算與 MI&I 市場呈現季增；汽車市場維持穩定；網通市場則持續下滑。航太與國防市場需求依然強勁，目前已占我們營收的 47%。接下來我想提供策略更新。TTM 正在推動轉型之路，使業務更不具循環性並更具差異化。過去幾年，TTM 一直強調，我們策略的關鍵之一，是提升交付給客戶的產品解決方案附加價值，特別是在航太與國防市場。

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 Anaren，將 TTM 的產品組合擴展至高度工程化的射頻（RF）元件與次系統，同時增添關鍵的 RF 工程能力與資源。2022 年，我們收購 Telephonics，延續 Anaren 與 TTM 以客戶為導向的文化，以及在工程與製造方面的紀律化方法。納入 Telephonics 後，TTM 的航太與國防產品供應在垂直面向延伸至更高層級的工程化系統解決方案，在水平面向擴展至監偵與通訊市場，同時強化我們在雷達系統的地位。

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.

由於這些策略性布局，航太與國防營收中超過 50% 來自工程化與整合式電子產品，而 PCB 的貢獻占比低於整體的 50%。自今年 1 月起，我們的航太與國防事業部以兩個事業單位運作：雷達，以及 C4ISR 加太空。我們以此新組織架構的目標，是讓各項業務與客戶群的關鍵專案優先事項更一致。我很高興看到這個新組織逐步成形，成為我們策略中的關鍵一環。

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.

我們差異化策略的另一個重要要素，是目前正在馬來西亞檳城興建一座全新、最先進且高度自動化的 PCB 製造工廠。決定興建此新廠，是為了直接回應客戶對供應鏈韌性與區域多元化日益增加的關切，尤其是對於在中國以外地區取得先進多層板 PCB 供應選項的需求。

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.

馬來西亞新廠將協助我們商用市場的客戶，例如網通、資料中心運算，以及醫療、工業與儀器。我們持續推進馬來西亞廠的進度，工程建設約完成 75%，並按目標時程推進。我們已於第二季開始進場搬入設備，並將在第三季持續進行。我們仍按計畫在第四季提供首批試產樣品。

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，我想向各位更新我們製造據點整併的進展。我們先前已宣布計畫關閉 3 座小型製造廠，以提升整體廠房稼動率、營運表現、客戶聚焦與獲利能力。位於加州 Anaheim 與 Santa Clara，以及香港的 PCB 製造營運將關閉，並整併至 TTM 其餘廠區。我們已於第二季停止香港廠的生產，並仍按計畫在年底前結束北美兩座廠的生產。客戶對此整併表示支持，我們預期將保留從關閉廠區轉移之業務中的大部分。

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.

現在我想回顧我們的終端市場，相關內容可參考我們網站上盈餘簡報第 4 頁。航太與國防（A&D）終端市場占第二季總銷售額的 47%，相較於 2022 年第二季的 30% 以及 2023 年第一季的 43%。年對年成長的大部分來自納入 Telephonics。若排除該影響，我們第二季 A&D 營收以有機方式年對年成長 5.9%。我們持續受惠於正向的國防景氣，我們的 A&D 專案在手訂單為 13.9 億美元（包含 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. 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.

國防市場的穩健需求，來自國防預算的正向順風、我們強勁的策略性專案布局一致性，以及持續性主力專案的關鍵接單。就國防預算背景而言，已達成債務上限協議，使 2024 會計年度國防部（DoD）預算較 2023 會計年度已核定資金增加 3%，與 2024 會計年度總統預算請求（PBR）一致。

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.

本季我們在多項關鍵專案取得顯著接單，包括「標槍」（Javelin）反戰車導引彈藥系統，以及陸軍的防空飛彈防禦規劃與控制系統與整合戰鬥指揮系統（Integrated Battle Command system）。儘管需求面看起來有利，我們仍持續面臨整合式電子產品的供應鏈挑戰，原因在於供應鏈複雜，包含多家較小型的組織難以滿足 TTM 與我們客戶的交期要求。

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.

我們預期第三季該終端市場的銷售將約占總銷售額的 45%。汽車業務在 2023 年第二季占總銷售額的 17%，相較於去年同期的 18% 以及 2023 年第一季的 17%。汽車業務年對年下滑主要是因為多家客戶持續進行庫存調整。我們預期第三季汽車業務將貢獻總銷售額的 16%，因客戶預計將持續依照預期的半導體及其他關鍵材料交付情況調整庫存水位。

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、工業與儀器（MI&I）終端市場在第二季貢獻我們總銷售額的 16%，相較於去年同期的 21% 以及 2023 年第一季的 19%。季對季下滑主要是由於多家客戶降低庫存。此外，儀器（Instrumentation）部門的比重偏向半導體資本設備市場，而該市場需求較弱。第三季我們預期 MI&I 將占營收的 17%。資料中心運算（Data Center Computing）終端市場在第二季占總銷售額的 12%，相較於 2022 年第二季的 17% 以及 2023 年第一季的 10%。該終端市場表現優於預期，並因我們資料中心客戶的強勁表現而呈現季對季成長，這些客戶正為生成式 AI 應用打造產品。

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.

我們預期第三季該終端市場營收約占總銷售額的 15%，因我們持續看到來自同一批客戶的季對季成長。網通（Networking）在 2023 年第二季占營收的 8%。相較之下，2022 年第二季為 14%，2023 年第一季為 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.

本季下滑的大部分原因是我們出售上海背板組裝廠，該廠在第一季貢獻 800 萬美元營收，而第二季則無營收。此外，因客戶著重去化庫存，需求也較為疲弱。第三季我們預期該終端市場將占營收的 7%，因市場狀況轉弱以及客戶進行庫存管理，預計疲弱態勢將持續。

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.

接下來我將說明第二季的一些細節，相關資訊亦可參考我們盈餘簡報第 5 頁。本季我們的先進技術與工程產品業務（包含 HDI、高密度互連，剛柔結合板（rigid-flex）、RF 子系統與元件，以及工程系統）約占營收的 43%。相較之下，去年同期約為 33%，第一季為 41%。我們持續尋求新的業務機會並增加客戶設計導入（design engagement）活動，以在新專案與新市場中運用我們的先進技術與工程產品能力。

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.

亞太地區 PCB 產能利用率在第二季為 46%，相較於去年同期的 81% 以及第一季的 52%。北美地區整體 PCB 產能利用率在第二季為 38%，相較於去年同期的 44% 以及第一季的 39%。亞太地區較低的比率是由於產量下滑；北美地區年對年較低則是因新增電鍍產能，以及產品組合中較高技術產品占比提高，這類產品所需的成品電鍍較少。我們前五大客戶在 2023 年第二季貢獻總銷售額的 40%，相較於 2023 年第一季的 36%。本季有一位客戶占比超過 10%。

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.

截至第二季末，我們的 90 天在手訂單（不含可被取消的 Telephonics）為 5.057 億美元，相較於去年第二季末的 6.357 億美元。若包含 Telephonics，第二季末在手訂單為 5.562 億美元。包含 Telephonics 在內，截至 7 月 3 日止的 3 個月接單出貨比（book-to-bill）為 1.04。展望第三季，我們看到商業市場表現略為分歧：資料中心運算在人工智慧進展帶動的動能下呈現改善趨勢；醫療、工業與儀器市場需求成長；汽車市場趨於穩定；網通則持續疲弱。

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.

在我們業務的航太與國防（A&D）方面，我們持續專注於逐步提升出貨，並與供應鏈夥伴合作以疏通瓶頸，同時把握勞動市場改善的機會。我有信心在員工與供應鏈夥伴的努力下，我們將能在 2023 年逐步克服這些挑戰。與此同時，我要感謝我們的員工持續為 TTM 以及我們「為客戶啟發創新」的關鍵使命做出貢獻。

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

接下來 Todd 將回顧我們第二季的財務表現。Todd？

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.

謝謝你，Tom，對我的友善評語，各位下午好。我將回顧我們第二季的財務結果，這些結果已包含在今天發布的新聞稿中，也可在我們網站上張貼的盈餘簡報第 6 頁看到。第二季淨銷售額為 5.465 億美元，相較於 2022 年第二季的 6.256 億美元。營收年對年下降是由於我們商業市場下滑，部分被納入 Telephonics 以及航太與國防終端市場的有機成長所抵銷。

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 GAAP 營業利益為 2,140 萬美元，相較於 2022 年第二季的 3,720 萬美元。以 GAAP 基礎計算，2023 年第二季淨利為 680 萬美元，或稀釋後每股盈餘 0.07 美元。相較之下，去年第二季 GAAP 淨利為 2,780 萬美元，或稀釋後每股盈餘 0.27 美元。接下來我的評論將聚焦於我們的非 GAAP 財務表現。我們的非 GAAP 表現排除併購相關成本、重整成本、若干非現金費用項目（例如無形資產攤銷與股票酬勞）、處分資產收益，以及其他異常或不常發生的項目。

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 GAAP 財務資訊，讓投資人能以管理層的視角看待公司，並便於與前期的預期進行比較。第二季毛利率為 19.2%，相較於 2022 年第二季的 20%。年對年下降主要由於商業部門營收下滑，包括較低的溢價營收與價格，以及生產效率不佳；其中包含我們 A&D 業務整合電子（integrated electronics）部分的供應鏈挑戰。上述影響部分被有利的產品組合、納入 Telephonics，以及有利的匯率所抵銷。

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.

第二季銷售與行銷費用為 1,750 萬美元，占淨銷售額 3.2%，相較一年前為 1,690 萬美元，占淨銷售額 2.7%。第二季一般及行政（G&A）費用為 3,510 萬美元，占淨銷售額 6.4%，相較一年前同季為 3,540 萬美元，占淨銷售額 5.7%。2023 年第二季研發（R&D）費用為 620 萬美元，占營收 1.1%，相較一年前同季為 500 萬美元，占 0.8%。SG&A 與 R&D 的年對年增加主要是因為新增 Telephonics。我們第二季營業利益率為 8.4%，相較去年同季為 10.8%。第二季利息費用為 1,130 萬美元，相較去年同季為 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.

本季在營業利益以下項目，外匯影響為正向 320 萬美元。政府補助與利息收入合計 190 萬美元，使淨收益達 510 萬美元，或對每股盈餘（EPS）帶來 0.04 美元的正向影響。相較之下，去年第二季為 760 萬美元收益，或對 EPS 影響 0.06 美元。第二季有效稅率為 17%，稅費為 680 萬美元；相較前一年稅率 15% 或稅費 980 萬美元。第二季淨利為 3,300 萬美元，或稀釋後每股 0.32 美元；相較 2022 年第二季淨利 5,530 萬美元，或稀釋後每股 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.

第二季調整後 EBITDA 為 7,470 萬美元，占營收 13.7%，相較 2022 年第二季調整後 EBITDA 為 9,690 萬美元，占營收 15.5%。本季折舊為 2,490 萬美元。本季淨資本支出為 4,940 萬美元，高於正常水準，主要因為與檳城（Penang）新大樓相關的 2,000 萬美元押金；我們預期該押金將於第三季作為該設施整體租賃架構的一部分予以退還。

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 年第二季營運活動現金流量為 2,590 萬美元。營運現金流較第一季偏低，原因是營收與前一季相對一致，但應收帳款回收較少；部分被應付帳款支付較少所抵銷。2023 年第二季末現金及約當現金為 3.987 億美元。我們淨負債除以過去 12 個月 EBITDA 為 1.5 倍，位於我們目標區間 1.5 至 2 倍的低端。本季我們完成了 Term Loan B 以及美國與亞洲 ABL 的再融資。新的 ABL 額度將於 2028 年到期，優先票據將於 2029 年到期，而新的定期貸款將於 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.

接下來我想談談我們對第三季的指引。我們預估 2023 年第三季總營收介於 5.50 億至 5.90 億美元之間，非 GAAP 盈利介於稀釋後每股 0.25 至 0.31 美元之間。預期 EPS 的季對季下滑主要是因為第三季外匯與其他收入預估為 0，而第二季為 510 萬美元收益。此外，今年預計關閉的兩座北美工廠在逐步縮減營運期間，表現較弱，預期將影響本季毛利率。EPS 預測係以約 1.05 億股稀釋後股數為基礎，其中包含選擇權與限制型股票單位（RSU）等具稀釋性的證券。

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.

我們預期第三季 SG&A 費用約占營收 10%，研發約占營收 1.2%。我們預期利息費用合計約 1,130 萬美元。最後，我們估計有效稅率介於 15% 至 19%。為協助您建立財務模型，我們提供以下補充資訊：第三季我們預期認列無形資產攤銷約 1,380 萬美元、股份基礎給付費用約 650 萬美元、非現金利息費用約 40 萬美元，並估計折舊費用約 2,390 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 Needham Virtual Industrial Tech, Robotics and Clean Tech 1x1 Conference（8 月 7 日）、Jefferies Semiconductor, IT Hardware & Communications Technology Summit（8 月 29 日於芝加哥），以及 Jefferies Industrial Conference（9 月 6 日於紐約市）。以上為我們事先準備的發言。

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

現在我想開放提問。[Sheri?]

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

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?

恭喜獲利能力改善以及展望。首先，我希望你們能提醒我們先前提到的工廠關閉所帶來的成本節省，其時間點與規模大概是如何？

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。Will，我是 Todd。我們的預期是，與關閉這些設施相關的成本大約會發生 2,500 萬美元，上下可能差個幾百萬美元。這包括與人力相關的成本（例如資遣費）、合約終止，以及部分設備減記、處置等。我們預期其中大部分會在 2023 年發生。可能會有一小部分延續到之後，但絕大多數成本將在 2023 年內發生。接著往後，我們預期會把大部分該等營收轉移到其他設施，因此流失會非常少。這也將有利於其他設施，因為我們將能從這些營收中獲得強勁的利潤轉換（profit flow-through）。

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，我們也預期在完成轉移、且新設施的產品達到穩定量產後，效益約為每年 2,500 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?

所以我們應該把它想成會在 24 年第一季開始反映嗎？還是需要好幾個季度才能把這個效益完全實現？

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——至少在上半年應該會逐步拉升（ramp up），到下半年我們應該會達到全速。因為當你在工廠導入新產品時，會有一些良率曲線需要爬升等等。因此第一季不會就完全達到全速，但我預期到年中時應該就能完全到位。

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?

接著我的追問是關於你們本季看到的毛利率改善。我想新聞稿提到北美營運效率提升。不過，Tom，在你事先準備的發言中，我記得你也提到了產品組合（mix）。你能否大概說明一下，哪一個因素是主要驅動？另外，當我們談到北美營運效率提升時，也許你可以談談那邊有哪些改變，以及我們應該預期其可持續性如何？是否會從這裡繼續改善？

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.

好的，你會記得我們在5月底的分析師日（Analyst Day）分享過一些關於我們業務不同部分的數據，讓投資人更了解我們的表現。我們也提到北美PCB營運——過去幾年我們確實遇到一些挑戰。這與COVID相關因素有很大關係。人力成本通膨也是另一個因素，而我們一段時間以來一直在逐步走出那個困境。很高興地說，我們在幾個廠區看到非常好的進展。我們還沒有做到100%。當你像我們一樣擁有一個工廠組合時，總會有一些地方仍有改善空間，我們當然也仍然這麼認為。但我們確實有一些非常出色的表現。

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.

產品組合在某種程度上也有幫助，因為我們正在生產一些毛利較高的產品；但同時也與這些工廠的產量水準有關，包括產量的高低以及執行能力。我們一直在導入新工具，幫助我們的總經理獲得更好的可視性，讓他們能更有效地經營業務，這也帶來了一些成效。所以我們把它們合併來看，但這兩個因素都是北美營運的重要貢獻者。

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

請稍候，我們進入下一個問題。下一位是來自Stifel的Matt Sheerin。

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?

Todd，恭喜你退休。關於毛利率指引我有個問題。你提到北美關廠帶來的一些逆風。那麼，未來幾季馬來西亞產能爬坡（ramp）是否也會帶來任何逆風？我知道你過去曾提到那可能是毛利率的逆風。你能談談嗎？

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.

當然可以，Matt。我們預期在今年下半年於檳城（Penang）爬坡時會產生額外成本，這已納入我們的預測中。而且，從損益表（P&L）的角度來看，我們在Q3的投資水準相較Q2確實會提高，這也反映在我們的預測裡。即使——它們其實還可以有更多營收——我們的亞洲營運仍持續維持非常高的表現。商業市場的下滑確實對該區域的影響比北美更深，因為他們不像北美那樣享有航太與國防（A&D）業務。但——他們執行得非常好，並且正在彌補這些影響。

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.

所以這些都已反映在我們的預測中，與我們先前談到的一致。確實會有一個拖累（drag）。但同時，隨著香港廠關閉的進展——如Tom在發言中提到的——我們在Q2末已停止那邊的生產。因此，我們不會再承擔Q2所發生的那部分虧損。而這大致上會抵銷檳城的成本投資。因此，受這些因素影響，我們的亞洲營運在季度之間大致上相對中性。

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?

我知道你們尚未提供Q4指引，我也理解。但就這些成本逆風而言，在毛利率方面，Q4也會持續嗎？

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.

我們可能會再爬坡一些。我想我們之前的指引提到，在其他條件不變（all things being equal）的情況下，檳城廠爬坡可能會對毛利率造成約30到50個基點的影響。當然，Matt，實際上不可能所有條件都不變，每一季總會有事情發生。所以你在Q3不會那麼明顯地看到它，但這個拖累是存在的。而我們能透過其他領域的進展與更好的執行來加以補償。

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，關於你提到與AI相關的雲端與資料中心需求回升。你能談談你們在那裡的產品，以及你們的技術在AI應用上可能有哪些不同嗎？是否有更高的內容量（content）？另外，就展望而言——我們是在談你們正為多個客戶進行爬坡嗎？以及進入明年後那邊的展望如何？

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.

當然可以。是的。我想如果你看資料中心——我們稱之為資料中心運算（Data Center Computing）市場——整體來看，大約75%是資料中心，另外約25%其實是半導體。很明顯，那25%今年有點拖累表現。若再進一步拆解資料中心本身，目前其中超過一半其實是由AI設計所驅動。正如你所說，電路板的複雜度主要是由所使用的晶片組（chipsets）所驅動。因此，隨著這些晶片組設計的演進，會對電路板提出更多要求。這會反映在所使用的材料上，特別是材料的散熱（thermals）與速度（speeds）特性，以及層數（layer count）。

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，我們持續提高我們所生產電路板的層數。對於AI應用而言，設計工作通常是在相對保密的環境中進行。所以，這些是會被釋出的專有（proprietary）設計。我認為，以目前TTM在北美的佈局，以及能在北美與客戶手把手合作的能力，長期來看是一項真正的優勢；而隨著馬來西亞投產，將再次提供一個很好的量產基地，讓這些應用的產能可以移入；再加上我們在中國既有的能力，我們在那裡也正為這些客戶進行一些先進技術工作。所以我們的佈局很到位。

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.

我認為，這不只是少數客戶的高度活動——雖然確實是由一小部分客戶帶動——但確實是多個客戶，Matt。所以我們在多個客戶那裡都看到這樣的活動。我們希望目前看到的趨勢，能在進入明年時擴散到雲端與資料中心其他領域的效能需求上。總體來說——我會這樣描述——是多個客戶，但對於我們希望在今年剩餘時間、以及真正進入明年時看到的規模而言，仍然太集中、範圍還不夠廣；我們希望看到更多業務量的擴散。這就是我們目前看到的情況。若看資料中心的序列成長（sequential growth），這確實令人鼓舞。

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

請稍候，我們進入下一個問題。下一位是來自B. Riley Securities的Griffin Boss。

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，我有點漏聽了一部分，但你提到檳城廠的2,000萬美元押金（deposit）。你是說你們預期在第三季拿回來嗎？或者那筆款項——我們應該何時預期會回收？

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，Griffin，我們有提到。我說過我們先支付押金以確保進度能持續推進，但我們正在為該廠安排融資方案，並預期在第三季完成，屆時就會退回那2,000萬美元。所以可以說這是一個臨時性的過橋（bridge）安排，用於我們的開發，讓檳城廠的施工可以持續往前推進。

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?

然後也跟檳城以及未來的資本支出（CapEx）有關，我想我聽到你說，相較於第二季，你預期第三季的投資水準會提高。所以我們是否可以預期，之後的 CapEx 會在第四季或 2024 年回落到更接近你們所設定的「營收的 4% 到 5%」目標？或者你們是怎麼看待這件事的？

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。所以我們對今年的預期是 CapEx 約 1.4 億美元，上下浮動一些，而這會高於 5% 的區間；我們之前也大致跟大家說過今年會是這樣。我也預期明年的 CapEx 支出仍會維持在較高水準，但會開始逐步往下走。所以——也就是說，2023 年和 2024 年這兩年將會是為了讓檳城廠啟動並爬坡而投入的高峰投資年。之後我預期我們會回到較正常的水準。

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.

通常在維持性支出（sustaining basis）方面，我們的 CapEx 更接近營收的 4%，而不是 5%。但如果我們有新廠或大型技術導入，我們偶爾會衝高。而我們現在正處於這樣的階段。

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

然後我最後一個問題。你能否更新一下，本季結束時汽車業務的總專案價值（total program value）是多少？

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.

喔，可以，當然。本季在汽車領域，我們拿下的全生命週期專案價值大約是 9,500 萬美元。若跟去年相比，這通常算是較低的一季。去年同一季我們拿下約 6,000 萬美元。不過——我們今年的進度追蹤得很好。提醒一下，上季我們是 2.67 億美元，而去年全年是 5.3 億美元。所以把這季的 9,500 萬美元加到 2.67 億美元上，我們今年的進度非常不錯。展望未來，當然也期待在今年剩餘期間有更多得標。也提醒一下，這些是專案得標，會轉化為營收；一般而言，我們會在隔年開始執行該專案，通常會在 3 年期間逐步爬坡，你會看到 3 到 5 年的專案期間，讓你對此有個概念。

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提問。接下來是 Needham 的 Jim Ricchiuti。

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?

我想我聽到你提到亞洲的稼動率（utilization rate）。但我好奇的是，依照你們給出的指引以及部分業務領域的回升，你們是否預期本季的稼動率會有顯著上升？

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.

是的，Jim。我想我們看到的情況——如 Todd 提到的——你確實可以把我們的亞洲廠區幾乎 100% 與商用（commercial）部門業務連結在一起。因此，當我們開始看到其中一些市場改善時，若以季對季來看，我們確實預期第三季資料中心會有強勁改善。

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.

另外在醫療、工業與儀器（Instrumentation）方面，我們也預期會有季對季改善，這些都會帶來助益。網通（networking）會有些許下滑。但整體而言，如果你看我們在市場改善上的指引，我們應該會因此看到亞洲的稼動率上升。當然，我們仍持續對這些廠區投入資本，但這些資本多半是聚焦在技術而非產能。因此，這應該會帶來稼動率的一些改善。

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?

那在毛利率方面也會帶來一些順風嗎？我知道其中總是牽涉到產品組合（mix）問題。但我只是好奇，這樣理解是否合理？

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，你說得對，Jim。當我們——而且我在先前回答 Matt 的問題時提到檳城的評論，你必須把那部分因素納入考量來稍微調整。但一般來說，我們在那些商用市場所強調的營收回升，將有利於我們的亞洲營運、提升稼動率，這也包含獲利能力的改善。然後這會被我們加拿大營運的爬坡所稍微抵銷一點。

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，我只是說這是好消息。我的意思是，我們期待能夠轉折向上，並在商用市場開始取得一些進展。我們還不準備說已經觸底，但看到一些回升讓我感到鼓舞。

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?

那我想這也引出下一個問題。在許多這些市場中，你們在商用端的能見度並不高，情況也會變動。但聽起來你描述的資料中心需求似乎有延續性。我想問的是，當你們看向本季之後，在其他一些商用市場的整體環境中，你們看到哪些變化（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。我想——當我們進入下半年，除了資料中心之外，而且資料中心本身——這是對關鍵需求的反應，因為 AI 正在快速席捲而來。看到這點很棒，因為它也會影響其他領域。如果你——我先從我認為今年可能仍會持續有些吃力的市場談起。我認為半導體資本設備（semiconductor capital equipment）在進入明年之前，真的不太預期會看到太多活動。半導體本身可能也會維持相對低迷。所以這兩個市場，我們仍在觀察是否有需求回升的跡象。

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，AI 對那裡也有幫助，但我認為他們需要看到更廣泛的復甦，才能真正帶動半導體需求，進而帶動資本設備。如果轉到網通，這裡有庫存——確實正在進行庫存去化（inventory digestion）。而在電信端，服務供應商的支出也相當低迷。所以同樣地，至少在第三季，我們不預期會有太亮眼的表現。第四季可能會看到改善，我們再觀察。我認為這將會很大程度取決於服務供應商以及他們——以及他們接下來的方向。汽車表現仍然穩健。如果你看整體年對年，沒錯，我們是下滑，但——但我們並不是大幅下滑。

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.

所以汽車持續撐住。我也預期汽車會持續如此。而且如我上季所說，我們仍在等待半導體——特別是此處的類比（analog）——在汽車端追上需求。因此，供給短缺的那一塊讓預測變得非常困難。我認為汽車客戶群對第四季抱持一些樂觀，但同時也因為供應鏈仍有一些挑戰而對我們有所保留。

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.

接著是醫療與工業，這一塊看起來——我們開始看到客戶已經走過庫存修正，而我們——也開始看到需求有所改善。我預期隨著許多客戶的庫存去化已經結束，該市場會持續如此。因此我們預期那裡會持續出現逐季改善。最後是航太與國防，如我所強調的，需求輪廓非常強勁，我認為會持續。對我們而言，主要是當我們處理供應鏈問題時，如何逐季改善，並持續推動 PCB 業務以及我們的整合電子（integrated electronics）營運。Jim，這大致就是我們目前看到的情況。

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

謝謝你提供的補充說明，Tom，也恭喜你，Todd，這個消息。

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

請稍候，我們進行下一個提問。下一位提問者是來自 Truist Securities 的 William Stein。

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?

我記得在 2019 年，公司收購了一家名為 i3 的公司，以協助提供一些高密度互連技術。我想知道，考量到目前相當廣為人知的短缺情況，例如所謂 CoWoS 產能短缺仍在持續，這項技術是否可能用於半導體封裝？你們在那個領域已經有一些客戶也面臨供給不足。我想知道這是否有可能。因為我想到，這些技術或許與 TTM 所做的事情有些相似？

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。這個——就 CoWoS 與相關技術而言，那裡的製程節點通常是——你要看的，我們就說是線寬與線距需求在 10 微米以下。而我們正在做的事情，以及自那次收購以來，我們已將那套設備移轉到我們位於威斯康辛州 Chippewa Falls 的先進技術中心。我們在那裡做了相當多的載板與類載板 PCB 工作，主要是為國防客戶服務，雖非完全僅限於此，但主要是國防客戶；另外也滿足我們 RF 元件產品線的內部需求。

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，展望未來的機會，Will，我們將持續把這項製造能力，結合我們微電子業務所做的事情，聚焦在國防客戶的需求上；而那些需求通常——會稍微落後一些。目前大多是在 18 微米的線寬與線距；我們現在大約在 25 微米左右，並正往 18 微米下降，同時需要非常耐用的結構與設計。因此工作重點通常會集中在那裡。我們看到那邊仍有持續需求，並且確實會繼續讓該廠區聚焦於這些需求。所以短期內可能不會進入那個商用領域。

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，我再問一個。在航太國防方面，一段時間以來我們看到積壓訂單持續增加，但本季營收並未真正配合，不過這一季有所改善，結果更好，呈現季增與年增。我想請你評論一下目前最大的瓶頸是什麼？我知道過去我們談過一個由較小供應商組成的複雜體系，他們可能是供應端或可能是互補端。但想請問航太國防的供應鏈狀況是否有任何更新？未來是否有改善的跡象？

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。Will，是的，有幾點。——我們——所以如果你看，我先給你一個大概的比例，但我們航太與國防業務大約一半是印刷電路板（PCB），這是基礎能力；另外大約一半是我們所稱的整合式電子（Integrated Electronics），涵蓋從次組裝工作一路到完整任務系統。而——我接下來的評論主要針對後面那一半，也就是 50% 的部分；供應鏈問題主要出現在那裡。

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.

如 Todd 所強調，在北美的 PCB 端，我們其實看到——第二季表現強勁。我們預期第三季會延續這個趨勢，雖然可能會從高點略為回落，因為會進入暑期休假期間，因此人力會有點——員工通常會休假。所以從生產最佳化的角度來看，我們北美 PCB 端第三季一般會略低一些。

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.

真正的重點在整合式電子。那也是我們在供應鏈上一直比較吃力的地方。我可以告訴你，其中一部分是外部因素。正如你提到的，是的，我們仍持續面臨困難——特別是一些較小的供應商。不過情況正在改善；就序列而言，我們預期下個季度會再改善。另一部分則是內部因素，也就是我們如何因應供應鏈挑戰；在這方面我們也在取得進展。如你所知，我們在營運上已組織成一個整合式電子的組織，這是關鍵一步。我們在一月完成了這件事。我們也在該團隊內建立並整編了供應鏈組織；在上一季我們引進了關鍵領導人。

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，我們正在形成一套方法——再次強化了我的信心：我們將在今年的過程中並延伸到明年初，持續取得這些逐季改善。這就是真正的重點。我們不會解決所有問題，但我們必須持續改善，而我們也開始看到——當然，我們的供應商正在回應，我們自己的組織在聚焦方面也做得非常好。

(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.

（接線員指示）目前我看到佇列中沒有其他問題。現在我想把電話交回給 Edman 先生，請他做結語。

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 1.5 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，[Sheri,]，表現非常出色。我想用總結我先前提到的一些重點來作結。第一，我們的營收符合指引區間，而非 GAAP 每股盈餘（EPS）遠高於指引區間。第二，我們為 Term Loan B 以及美國與亞洲的 ABL 額度進行再融資，使到期日延至 2028 年，且淨槓桿比率為 1.5 倍，位於我們 1.5 至 2 倍目標區間的低端。最後，我們持續看到航太與國防需求強勁，同時在我們若干商用市場也開始出現復甦。

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，我想感謝我們的員工、客戶與投資人，在我們持續推動公司向前之際給予的持續支持。謝謝。再次感謝各位加入我們。保重。

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

感謝各位參與。今天的活動到此結束。您現在可以掛線。