TTM Technologies Inc (TTMI) 2022 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the TTM Technologies First Quarter 2022 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded today, May 4, 2022.

各位女士、先生，下午好。感謝您稍候。歡迎參加 TTM Technologies 2022 年第一季財務結果電話會議。（接線員指示）提醒各位，本次會議將於今日 2022 年 5 月 4 日錄音。

Sameer Desai, TTM's Vice President of Corporate Development and Investor Relations, will now review TTM's disclosure statement.

TTM 企業發展與投資人關係副總裁 Sameer Desai 現在將宣讀 TTM 的揭露聲明。

Thank you, Danielle. 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 other filings with the Securities and Exchange Commission.

謝謝你，Danielle。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，實際結果可能與這些前瞻性陳述存在重大差異，其中包括我們最近一期 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。

These forward-looking statements are based on management's expectations and assumptions as of the date of this presentation. TTM does not undertake any obligation to publicly update or revise any of these statements whether as a result of new information, future events or other circumstances, except as required by law. Please refer to the disclosures regarding the risks that may affect TTM, which may be found in the reports on Form 10-K, 10-Q, 8-K, the registration statement on Form S-4 and the company's other SEC filings.

這些前瞻性陳述係基於截至本簡報日期管理層的預期與假設。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。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。

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

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。此類指標應予以考量——但不應被視為依 GAAP 編製與呈列之衡量指標的替代。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；該新聞稿已向 SEC 提交，並可於 TTM 網站 www.ttm.com 取得。我們也已在網站上張貼投資人簡報投影片，通話期間將引用。

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 first quarter fiscal year 2022 conference call.

謝謝你，Sameer。各位下午好，感謝各位參加我們 2022 會計年度第一季電話會議。

I'll begin with a review of our business highlights from the quarter and a discussion of our first quarter results, followed by a summary of our business strategy. Todd Schull, our CFO, will follow with an overview of our Q1 2022 financial performance and our Q2 2022 guidance. We will then open the call to your questions.

我將先回顧本季的業務重點並討論第一季業績，接著總結我們的業務策略。之後，我們的財務長 Todd Schull 將說明 2022 年第一季的財務表現以及 2022 年第二季的財測指引。最後我們將開放提問。

The quarter's highlights are also referenced in Slide 3 of the investor presentation posted on TTM's website. In the first quarter of 2022, TTM delivered revenues at the high end of guidance and non-GAAP EPS above the midpoint of guidance despite a challenging supply chain and labor environment, and the continued impact that COVID-19 is having on our operations. Revenues were up 10.4% year-on-year as commercial end markets performed better than we expected. Our employees did an excellent job of maximizing production despite ongoing operational headwinds, including supply chain constraints for ourselves and our customers, inflationary pressures and continued labor challenges in North America.

本季重點亦可參考 TTM 網站上投資人簡報的第 3 張投影片。2022 年第一季，儘管供應鏈與勞動環境充滿挑戰，且 COVID-19 對我們營運的影響仍在持續，TTM 仍交出位於指引區間高端的營收，以及高於指引中點的非 GAAP 每股盈餘（EPS）。由於商業終端市場表現優於預期，營收年增 10.4%。我們的員工在供應鏈逆風（包括我們自身及客戶的供應鏈限制）、通膨壓力以及北美持續的用工挑戰等不利因素下，仍出色地將產能發揮到最大。

During the first quarter, we mitigated virtually all of the material price increases through additional cost savings, adjustments in mix and product price adjustments. Last quarter, we discussed the pay adjustments that we plan to make during the first quarter of this year in North America to increase our competitiveness. Since then, we have seen a general improvement in our ability to attract and retain talent, though the continued tight labor conditions remain challenging. The price increases that will offset these higher compensation costs are still anticipated to have a positive impact on our margins through the balance of the year.

第一季期間，我們透過額外的成本節省、產品組合調整以及產品價格調整，幾乎抵消了所有重大的價格上漲。上一季我們曾討論，為提升競爭力，我們計畫於今年第一季在北美進行薪酬調整。自那之後，我們在吸引與留任人才方面整體有所改善，但持續緊俏的勞動市場仍具挑戰。用以抵銷較高薪酬成本的漲價措施，預期在今年剩餘期間仍將對我們的毛利率/利潤率帶來正面影響。

I would also like to update you on our COVID situation. COVID-19 impacted our employee base with increased rates in North America earlier in the year. During the quarter, the higher infection rates experienced by employees in our facilities naturally resulted in higher levels of employee quarantines, which along with the general labor shortages, contributed to production inefficiencies and capacity constraints in North America. In Asia Pacific, we saw similar COVID-related disruptions in two of our smaller facilities in Hong Kong and Shanghai, but this was more than offset by stronger growth from our larger Asia Pacific facilities in Southern China.

我也想向各位更新我們的 COVID 情況。年初 COVID-19 使我們北美員工的感染率上升。本季期間，廠區員工較高的感染率自然導致更高比例的員工隔離；再加上整體勞動力短缺，造成北美生產效率下降與產能受限。在亞太地區，我們位於香港與上海的兩座較小廠區也出現類似的 COVID 相關干擾，但這些影響已被我們位於華南的較大型亞太廠區更強勁的成長所抵銷。

Our long-term strategy remains unchanged. TTM is on a journey to transform our business to be less cyclical and more differentiated. As part of this strategic transition, on April 18, we announced the acquisition of Telephonics for $330 million in cash. Over the past several years, TTM has consistently emphasized that a key part of our strategy is to add value to product solutions that we deliver to our customers, particularly in the aerospace and defense market.

我們的長期策略維持不變。TTM 正在推動轉型，使業務更不具循環性並更具差異化。作為此策略轉型的一部分，我們於 4 月 18 日宣布以 3.30 億美元現金收購 Telephonics。過去數年來，TTM 一再強調，我們策略的關鍵之一，是提升我們交付給客戶的產品解決方案價值，特別是在航太與國防市場。

In 2018, we closed the acquisition of Anaren, which broaden TTM's product portfolio into highly engineered RF components and subassemblies as well as adding critical RF engineering capability and resources. Telephonics builds on Anaren, and TTM's customer-driven culture and disciplined approach to manufacturing. By further broadening TTM's aerospace and defense product offering vertically into higher-level engineered system solutions and horizontally into surveillance and communication markets while strengthening our position in radar systems. The transaction is expected to close by the end of the second quarter of 2022 and is expected to be immediately accretive to non-GAAP EPS.

2018 年，我們完成收購 Anaren，將 TTM 的產品組合擴展至高工程化的 RF 元件與次系統（subassemblies），並新增關鍵的 RF 工程能力與資源。Telephonics 將在 Anaren 的基礎上，結合 TTM 以客戶為導向的文化與嚴謹的製造方法，進一步擴大 TTM 的航太與國防產品供應：在垂直面向上延伸至更高階的工程化系統解決方案；在水平面向上拓展至監偵與通訊市場，同時強化我們在雷達系統的地位。該交易預期於 2022 年第二季末前完成，並預期將立即增厚非 GAAP EPS。

Adding another element of our differentiation strategy, on March 1, we announced that we will open a new state-of-the-art, highly automated PCB manufacturing facility in Penang, Malaysia. The decision to build this new factory is a direct response to our customers' increasing concerns about supply chain resiliency and regional diversification, and in particular, the need for advanced multilayer PCB sourcing options in regions outside of China.

作為差異化策略的另一項要素，我們於 3 月 1 日宣布，將在馬來西亞檳城新建一座最先進、高度自動化的 PCB 製造工廠。興建此新廠的決策，是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, telecom, data center computing and medical, industrial and instrumentation. I have the pleasure of attending the groundbreaking ceremony on April 25, where I had an opportunity to thank the local and national governments in Malaysia for their support and our customers for recognizing the long-term value of this facility in improving supply chain resiliency.

馬來西亞新廠將協助我們商業市場的客戶，例如網路、電信、資料中心運算，以及醫療、工業與儀器設備等領域。我很榮幸於 4 月 25 日出席動土典禮，並藉此機會感謝馬來西亞地方與中央政府的支持，也感謝客戶認同此設施在提升供應鏈韌性方面的長期價值。

Now I'd like to review our end markets, which are referenced on Page 4 of the investor presentation on our website. The aerospace and defense end market represented 30% of total first quarter sales, compared to 35% of Q1 2021 sales and 30% of sales in Q4 2021. We continue to experience a positive defense climate, with our A&D program backlog at $768 million, compared to $694 million a year ago. The solid demand in the defense market is a result of a positive tailwind in defense budgets and our strong strategic program alignment and key bookings for ongoing franchise programs.

接下來我想回顧我們的終端市場，相關內容可參考我們網站投資人簡報第 4 頁。航太與國防終端市場占第一季總銷售額的 30%，相較於 2021 年第一季的 35% 以及 2021 年第四季的 30%。我們持續感受到有利的國防環境；我們的航太與國防（A&D）專案在手訂單（backlog）為 7.68 億美元，高於一年前的 6.94 億美元。國防市場的穩健需求，來自國防預算的正向趨勢，以及我們強勁的策略性專案布局一致性，並在持續性的主力（franchise）專案上取得關鍵訂單。

The fiscal year 2022 Omnibus Appropriations Bill was signed into law on March 15 and provides for approximately 4.5% year-on-year growth in defense spending. In addition, the White House request for fiscal year '23 defense spending shows growth of approximately 4% over the fiscal year 2022 enacted budget and is the largest proposed budget to date.

2022 會計年度《綜合撥款法案》（Omnibus Appropriations Bill）已於 3 月 15 日簽署成為法律，國防支出約年增 4.5%。此外，白宮對 2023 會計年度國防支出的預算請求，較 2022 會計年度已核定預算約成長 4%，並為迄今提出的最大規模預算。

During the quarter, we saw significant bookings for the AN/TPS-80 Ground/Air Task-Oriented Radar, or G/ATOR, and the [RSS Skynet] programs. We expect sales in Q2 from this end market to represent about 31% of our total sales. This does not include any contribution from Telephonics as the acquisition has not yet closed.

本季期間，我們在 AN/TPS-80 地面/空中任務導向雷達（Ground/Air Task-Oriented Radar，或 G/ATOR）以及 [RSS Skynet] 專案上取得顯著訂單。我們預期第二季來自此終端市場的銷售額約占總銷售額的 31%。由於收購尚未完成，該比例不包含 Telephonics 的任何貢獻。

The medical/industrial/instrumentation end market contributed 21% of our total sales in the first quarter, compared to 17% in the year ago quarter and 19% in the fourth quarter of 2021. The MI&I market set a new quarterly record as it was up 33% year-on-year, exceeding $100 million in revenue for the fourth quarter in a row and performing much better than expectations, as we saw broad-based strength across all segments. For the second quarter, we expect MI&I to be 19% of revenues with a continued strong demand environment.

醫療/工業/儀器設備（MI&I）終端市場在第一季貢獻我們總銷售額的 21%，相較於去年同期的 17% 以及 2021 年第四季的 19%。MI&I 市場創下新的單季紀錄，年增 33%，營收連續第四季超過 1 億美元，且表現遠優於預期，因我們看到各細分領域均呈現廣泛的強勁動能。對於第二季，我們預期 MI&I 將占營收的 19%，且需求環境將持續強勁。

Automotive sales represented 20% of total sales during the first quarter of 2022, compared to 18% in the year ago quarter and 19% during the fourth quarter of 2021. Automotive grew 21% year-over-year and also exceeded $100 million. There continues to be strong demand for automotive PCB, but the combined impact of supply chain disruptions caused by COVID, the Ukraine-Russia conflict and semiconductor shortages are all impacting automotive OEM production. In the near term, demand remains above our available capacity, particularly in the second quarter, as our largest automotive PCB facility production levels will be slightly impacted by new equipment installations and downtime for scheduled facility maintenance. As a result, we expect our automotive PCB business to contribute 18% of total sales in Q2.

汽車銷售在2022年第一季占總銷售額的20%，相較於去年同期的18%以及2021年第四季的19%。汽車業務年增21%，且亦超過1億美元。汽車PCB需求仍然強勁，但COVID造成的供應鏈中斷、烏克蘭—俄羅斯衝突以及半導體短缺的綜合影響，皆正在影響汽車OEM的生產。短期內，需求仍高於我們可用產能，尤其在第二季，因我們最大的汽車PCB廠之產能水準將因新設備安裝以及例行廠務維護停機而略受影響。因此，我們預期第二季汽車PCB業務將貢獻總銷售額的18%。

Sales in the data center computing end market represented 16% of total sales in the first quarter, compared to 14% in Q1 of 2021 and 15% in the fourth quarter of 2021. This end market was up 27% year-on-year, due primarily to growth from our data center customers. We expect revenues in this end market to represent approximately 17% of second quarter sales as strong data center demand continues to drive year-on-year growth.

資料中心運算終端市場在第一季占總銷售額的16%，相較於2021年第一季的14%以及2021年第四季的15%。此終端市場年增27%，主要來自我們資料中心客戶的成長。我們預期第二季該終端市場營收約占銷售額的17%，因強勁的資料中心需求持續推動年增成長。

Networking/communications accounted for 13% of revenue during the first quarter of 2022. This compares to 15% in the first quarter of 2021 and 16% of revenue in the fourth quarter of 2021. We saw relative strength on a year-on-year basis in networking as compared to telecom as we continue to allocate capacity for high layer count boards to our data center computing and networking customers. In the second quarter, we expect this end market to be 14% of revenue as networking continues to grow.

2022年第一季，網路／通訊占營收的13%。相較之下，2021年第一季為15%，2021年第四季為16%。在網路相較於電信方面，我們在年對年基礎上看到相對強勢，因我們持續將高層數板的產能配置給資料中心運算與網路客戶。第二季，我們預期此終端市場將占營收的14%，因網路業務持續成長。

Next, I'll cover some details from the first quarter. This information is also available on Page 5 of our earnings presentation. During the quarter, our advanced technology business, which includes HDI, rigid flex and RF subsystems and components, accounted for approximately 33% of our revenue. This compares to approximately 31% in the year ago quarter and 31% in the fourth quarter. We are continuing to pursue new business opportunities and increased customer design engagement activities that will leverage our advanced technology capabilities in new programs and in new markets.

接下來，我將說明第一季的一些細節。此資訊亦可在我們財報簡報的第5頁找到。本季，我們的先進技術業務（包含HDI、剛柔結合板以及RF子系統與元件）約占營收的33%。相較於去年同期約31%以及第四季的31%。我們將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能力。

Capacity utilization in Asia Pacific was 85% in Q1, compared to 80% in the year ago quarter and 88% in Q4. Our overall capacity utilization in North America was 46% in Q1, compared to 55% in the year ago quarter and 50% in Q4. This lower rate was caused by the additional plating capacity that we added in North America during the quarter and the challenges posed by COVID-19 absences and direct labor shortages. The quarterly decline in capacity utilization in Asia was due to the Chinese New Year holiday.

亞太地區第一季產能利用率為85%，相較於去年同期的80%以及第四季的88%。北美地區第一季整體產能利用率為46%，相較於去年同期的55%以及第四季的50%。此較低水準係因本季我們在北美新增電鍍產能，以及COVID-19缺勤與直接人力短缺所帶來的挑戰。亞洲產能利用率的季減主要是因中國農曆新年假期所致。

Our top 5 customers contributed 33% of total sales in the first quarter of 2022, compared to 32% in the fourth quarter of 2021. We had one customer above 10% in the quarter. At the end of Q1, our 90-day backlog, which is subject to cancellations, was $605.3 million, compared to $540.5 million at the end of the first quarter last year and $597.2 million at the end of Q4. Our PCB book-to-bill ratio was 1.14 for the 3 months ending April 4. Our backlog is higher than our revenue forecast due to uncertainty around both labor and supply chain challenges for our customers and ourselves.

2022年第一季，我們前五大客戶貢獻總銷售額的33%，相較於2021年第四季的32%。本季有一位客戶占比超過10%。截至第一季末，我們的90天在手訂單（可能被取消）為6.053億美元，相較於去年第一季末的5.405億美元以及第四季末的5.972億美元。截至4月4日止的3個月，我們PCB的接單出貨比（book-to-bill）為1.14。由於我們的客戶與我們自身在勞動力與供應鏈挑戰方面存在不確定性，我們的在手訂單高於營收預測。

I'd like to conclude by again highlighting the significant strategic moves that we made in the quarter, with the announced investment in Malaysia and the Telephonics acquisition, both of which will further differentiate TTM. I also want to thank our employees for continuing to contribute to TTM and our critical mission of inspiring innovation for our customers. Despite the inflationary pressures and labor-related challenges we are facing, our business performed better than we expected as a direct result of our employees' and our supply chain partners' concerted efforts to support TTM and our customers.

最後，我想再次強調我們本季所採取的重要策略性行動，包括宣布在馬來西亞投資以及收購Telephonics，兩者都將進一步強化TTM的差異化。我也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。儘管我們正面臨通膨壓力與勞動力相關挑戰，在員工與供應鏈夥伴共同努力支持TTM與客戶的直接成果下，我們的業務表現優於預期。

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

接下來Todd將回顧我們第一季的財務表現。Todd？

Thanks, Tom, and good afternoon, everybody. I'll be reviewing our financial results for the first quarter that are also shown in the press release distributed today as well as on Slide 6 of our earnings presentation, which is posted on our website.

謝謝你，Tom，各位下午好。我將回顧我們第一季的財務結果，相關內容亦載於今天發布的新聞稿，以及我們已張貼於網站上的財報簡報第6頁。

For the first quarter, net sales were $581.3 million, compared to $526.4 million in the first quarter of 2021. The year-over-year increase in revenue was due to strong growth in virtually all of our commercial end markets, which more than offset a decline in our aerospace and defense market due to commercial aerospace softness and production challenges in North America.

第一季淨銷售額為5.813億美元，相較於2021年第一季的5.264億美元。營收年增主要來自幾乎所有商用終端市場的強勁成長，足以抵銷航太與國防市場的下滑；該下滑係因商用航太需求疲弱以及北美生產挑戰所致。

GAAP operating income for the first quarter of 2022 was $25.9 million, compared to $19.8 million in the first quarter of 2021. On a GAAP basis, net income in the first quarter of 2022 was $17.2 million or $0.17 per diluted share. This compares to a net loss of $3.2 million or $0.03 per diluted share in the first quarter of last year. The remainder of my comments will focus on our non-GAAP financial performance.

2022年第一季GAAP營業利益為2,590萬美元，相較於2021年第一季的1,980萬美元。以GAAP基礎計，2022年第一季淨利為1,720萬美元，或稀釋後每股0.17美元。相較之下，去年第一季為淨損320萬美元，或稀釋後每股虧損0.03美元。接下來我的評論將聚焦於我們的非GAAP財務表現。

Our non-GAAP performance excludes nonroutine tax items, M&A-related costs, restructuring costs, certain noncash expense items and other unusual or infrequent items. We present non-GAAP financial information to enable investors to see the company through the eyes of management and to facilitate comparisons with expectations in prior periods.

我們的非GAAP表現排除非常態稅務項目、併購相關成本、重整成本、特定非現金費用項目以及其他異常或不常發生的項目。我們提供非GAAP財務資訊，旨在讓投資人能以管理階層的視角看待公司，並便於與先前期間的預期進行比較。

Gross margin in the first quarter was 15.9%, compared to 16% in the first quarter of 2021. The year-on-year decline was largely due to labor and production challenges in North America, partially offset by revenue growth in our commercial businesses. During the quarter, we did experience significant material cost increases but we were able to mitigate the profit impact of those increases through manufacturing efficiencies and other price increases. Selling and marketing expense was $17.6 million in the first quarter or 3% of net sales versus $15.6 million or 3% of net sales a year ago. First quarter G&A expense was $29.8 million or 5.1% of net sales, compared to $26.6 million or 5% of net sales in the same quarter of last year.

第一季毛利率為15.9%，相較於2021年第一季的16%。年對年下滑主要是因北美的人力與生產挑戰所致，部分被商用業務營收成長所抵銷。本季我們確實面臨顯著的材料成本上升，但透過製造效率提升及其他漲價措施，我們得以降低這些成本上升對獲利的影響。第一季銷售與行銷費用為1,760萬美元，或占淨銷售額的3%，相較於去年同期的1,560萬美元，亦占淨銷售額的3%。第一季一般及行政（G&A）費用為2,980萬美元，或占淨銷售額的5.1%，相較於去年同季的2,660萬美元，或占淨銷售額的5%。

In the first quarter of 2022, R&D was $5.3 million or 0.9% of revenue, compared to $4.4 million or 0.8% in the year ago quarter. Our operating margin in the first quarter was 6.8%. This compares to 7.2% in the same quarter last year. Interest expense was $10.8 million in the first quarter, unchanged from the same quarter last year. During the quarter, there was a positive $0.1 million of foreign exchange impact below the operating line. Government incentives and interest income increased this to $1 million or a $0.01 impact to EPS. This compares to a $1.8 million or $0.02 impact in Q1 of last year. Our effective tax rate was 15% in the first quarter, resulting in tax expense of $4.5 million. This compares to a rate of 12% or tax expense of $3.4 million in the prior year.

2022年第一季研發費用為530萬美元，或占營收的0.9%，相較於去年同期的440萬美元，或占0.8%。第一季營業利益率為6.8%，相較於去年同季的7.2%。第一季利息費用為1,080萬美元，與去年同季持平。本季在營業利益以下的外匯影響為正向10萬美元。政府補助與利息收入使其增加至100萬美元，或對每股盈餘（EPS）影響0.01美元。相較之下，去年第一季為180萬美元，或對EPS影響0.02美元。第一季有效稅率為15%，稅費為450萬美元；相較於前一年稅率12%或稅費340萬美元。

First quarter net income was $25.3 million or $0.24 per diluted share. This compares to first quarter net income in 2021 of $25.3 million or $0.23 per diluted share. Adjusted EBITDA for the first quarter was $62 million, compared with first quarter 2021 adjusted EBITDA of $61 million. Depreciation for the quarter was $21.5 million. Net capital spending for the quarter was $23.4 million, and cash flow from operations was $36 million.

第一季淨利為2,530萬美元，或稀釋後每股0.24美元。相較之下，2021年第一季淨利亦為2,530萬美元，或稀釋後每股0.23美元。第一季調整後EBITDA為6,200萬美元，相較於2021年第一季調整後EBITDA的6,100萬美元。本季折舊為2,150萬美元。本季淨資本支出為2,340萬美元，營運活動現金流為3,600萬美元。

During the fourth quarter, we repurchased 2.4 million shares of our common stock under our previously announced $100 million stock repurchase program at an average price of $12.74, for a total of $30.2 million. As of today, we have completed the $100 million stock buyback program and have repurchased a total of 7.5 million shares of our stock.

在第四季，我們依據先前宣布的1億美元股票回購計畫，以每股平均12.74美元回購了240萬股普通股，總金額為3,020萬美元。截至今日，我們已完成該1億美元股票回購計畫，累計回購本公司股票共750萬股。

Our balance sheet and liquidity positions remain very strong. Cash and cash equivalents at the end of the first quarter of 2022 were $519.1 million. And our net debt divided by last 12 months EBITDA was 1.5. We plan to fund the $330 million acquisition of Telephonics from our cash balance, which would increase our net leverage to 2.5x, above our target of 2x. We will likely not increase the stock buyback authorization until our leverage comes back down below 2x.

我們的資產負債表與流動性狀況仍然非常強勁。2022年第一季末的現金及約當現金為5.191億美元。我們的淨負債除以過去12個月EBITDA為1.5。我們計畫以現金餘額支付收購Telephonics的3.30億美元，這將使我們的淨槓桿提高至2.5倍，高於我們2倍的目標。我們很可能在槓桿回落至2倍以下之前，不會增加股票回購授權額度。

Now I'd like to turn to guidance for the second quarter. In the second quarter, we expect stronger revenue globally and improving operating conditions in North America. We expect total revenue for the second quarter of 2022 to be in the range of $580 million to $620 million, and we expect non-GAAP earnings to be in the range of $0.30 to $0.36 per diluted share. This guidance does not include any contribution from the previously announced acquisition of Telephonics as we are awaiting regulatory approvals prior to closing.

接下來我想談談第二季的財測指引。第二季，我們預期全球營收將更強勁，北美的營運環境也將改善。我們預期2022年第二季總營收介於5.80億至6.20億美元之間，非GAAP每股盈餘預期介於稀釋後每股0.30至0.36美元。本指引未包含先前宣布之收購Telephonics的任何貢獻，因為我們在完成交割前仍在等待監管核准。

The EPS forecast is based on a diluted share count of approximately 103 million shares, which includes dilutive securities such as options and RSUs. We expect SG&A expense to be about 8% of revenue in the second quarter and R&D to be about 0.9% of revenue. We expect interest expense to total approximately $10.8 million. And finally, we estimate our effective tax rate to be between 12% and 18%.

每股盈餘（EPS）預測係以約1.03億股的稀釋後股數為基礎，其中包含期權與RSU等具稀釋效果的證券。我們預期第二季SG&A費用約占營收的8%，研發（R&D）約占營收的0.9%。我們預期利息費用合計約為1,080萬美元。最後，我們估計有效稅率介於12%至18%之間。

To assist you in developing your financial models, we offer the following additional information. During the second quarter, we expect to record amortization of intangibles of about $9.7 million, stock-based compensation expense of about $4.1 million, noncash interest expense of approximately $0.5 million, and we estimate depreciation expense will be approximately $21.6 million.

為協助各位建立財務模型，我們提供以下補充資訊。第二季，我們預期將認列無形資產攤銷約970萬美元、以股份為基礎的薪酬費用約410萬美元、非現金利息費用約50萬美元，並估計折舊費用約為2,160萬美元。

Finally, I'd like to announce that we'll be participating in several conferences over the next several weeks, starting with the Barclays High Yield Bond and Syndicated Loan Conference on May 24; the JPMorgan Global Technology, Media and Communications Conference on May 25; the Craig-Hallum Institutional Investor Conference on June 1; the UBS Global Industrials and Transportation Conference on June 7; the Baird Global Consumer Technology and Services Conference on June 8; and the Stifel Cross Sector Insight Conference on June 9.

最後，我想宣布未來幾週我們將參與數場會議，首先是5月24日的Barclays高收益債與聯貸會議；5月25日的摩根大通（JPMorgan）全球科技、媒體與通訊會議；6月1日的Craig-Hallum機構投資人會議；6月7日的瑞銀（UBS）全球工業與運輸會議；6月8日的Baird全球消費科技與服務會議；以及6月9日的Stifel跨產業洞察會議。

That concludes our prepared remarks. And now I'd like to open the line for questions. Danielle?

以上是我們準備好的發言。接下來我想開放電話線供各位提問。Danielle？

(Operator Instructions) We'll take our first question from the line of Jim Ricchiuti.

（接線員指示）我們的第一個問題來自Jim Ricchiuti。

A couple of questions. Just first on gross margins. I know there's moving parts here, but is it fair to characterize the Q1 gross margin as a trough here because we've got -- it sounds like a little better mix coming up in Q2 with a higher A&D, the volume, and I don't know if the COVID pressures that you alluded to have continued in areas like China. But I'm wondering how we might think about gross margins.

我有幾個問題。首先關於毛利率。我知道這裡有很多變動因素，但是否可以把第一季毛利率視為谷底？因為聽起來第二季產品組合會稍微好一些，A&D占比更高、出貨量增加；另外我也不確定你們提到的COVID壓力是否仍在中國等地持續。我想了解我們應該如何看待毛利率。

Well, all things being equal, and that's a big qualifier, right? But generally speaking, in a cycle now when you look at our seasonality, Q1 is always going to be a very challenging quarter primarily because of Chinese New Year. And so that always puts pressure on revenue and costs to try to work our way through that holiday season.

嗯，在其他條件相同的情況下——而這是一個很大的前提，對吧？——但一般來說，從目前的週期來看，結合我們的季節性，第一季一向都是非常具挑戰的一季，主要是因為農曆新年。因此，這段假期季節總是會對營收造成壓力，也會讓成本端承受壓力，因為我們必須設法度過那段期間。

This year, that is a little more pronounced because of the strategy that we implemented regarding compensation in North America, to increase our competitiveness and stabilizing our workforce and attracting new workers into our business. And so as I indicated last quarter when we had this call, we were expecting a pretty significant short-term hit in Q1 because we're implementing these costs. And I've estimated those costs to be around 130 basis point margin hit in Q1.

今年這種情況更為明顯，原因是我們在北美實施了薪酬相關策略，以提升競爭力、穩定勞動力並吸引新員工加入我們的業務。因此，正如我在上季電話會議所提到的，我們預期第一季會因為導入這些成本而出現相當明顯的短期衝擊。我估計這些成本在第一季對毛利率的影響約為130個基點。

We also mentioned that we've taken actions to mitigate those costs through price adjustments back in December. But it will be a timing issue before those adjustments actually begin to show up in our P&L as a result of pretty significant backlogs. And so we have to work through those backlogs before the new pricing really takes effect.

我們也提到，早在12月我們就已透過調價採取行動以緩解這些成本。但由於存在相當可觀的積壓訂單，這些調價何時會在損益表（P&L）上反映出來會有時間差。因此，在新價格真正生效之前，我們必須先消化這些積壓訂單。

So Q1 is definitely a low mark, you see our Q2 coming back. And absent some dramatic shifts in the economy, we would expect to regain and improve as we go through the year as a result of these price increases starting to take effect more in the second half of the year.

所以第一季確實是低點，你會看到第二季回升。而且在沒有經濟出現劇烈變化的情況下，我們預期隨著這些漲價在下半年更明顯地開始生效，全年將逐步恢復並改善。

Got it. And a question on the new facility going into Malaysia. First off, I may have missed it. I'm sure you mentioned it, but when do you expect that to be up and running? And -- but the bigger question that I had is just as it relates to the new facility, you've talked in the past about introducing more automation into your facilities, and I'm wondering if there's anything you're doing differently. I know that you still have benefit from low labor costs there. But if there's anything you're doing differently in terms of the type of equipment, the automation that you might be incorporating in this facility.

了解。再問一個關於在馬來西亞的新廠。首先，我可能漏聽了。我確定你們有提到，但你們預期何時開始投產？另外——但我更大的問題是，關於這座新廠，你們過去談過在廠房導入更多自動化，我想知道你們是否有做任何不同的作法。我知道那邊仍有低勞動成本的優勢，但想了解在設備類型或你們可能在這座廠導入的自動化方面，有沒有什麼不同。

Yes. Sure, Jim. Yes. So the facility in the Malaysia will be starting its ramp in the second half of next year. And then we'll be gradually ramping that capacity, so by the end of 2024, we should be close to full capacity. We do have room for an additional 25% or so of additional Phase 2 capacity in the planned building. But first things first, we're going to bring this up throughout -- latter half of '23 into -- through '24, should be at full in the end of 2024 or early 2025, and then we'll be looking at what to do going forward.

好的，當然，Jim。是的，馬來西亞的廠房將在明年下半年開始爬坡量產。之後我們會逐步提升產能，因此到2024年底應該接近滿載。我們在規劃中的建築內，仍有空間可再增加約25%左右的第二期產能。但先把第一期做好，我們會在2023年下半年開始一路提升到2024年，預計在2024年底或2025年初達到滿載，之後再評估下一步要怎麼做。

From an automation standpoint, absolutely right, we have been automating our facilities over time. But that's -- in that case, we're actually going back and incorporating automation into the facilities versus being able to start from a greenfield approach. So what you'll see in this facility, it's a single floor. You're looking at a facility that's a little bit more than 700,000 -- it's about 750,000 square feet. So a very large single-floor facility. We're going to be optimizing production flow.

就自動化而言，你說得完全正確，我們一直在逐步將自動化導入各廠區。但在既有廠區的情況下，我們是回頭把自動化整合進去，而不是能以綠地（greenfield）的方式從零開始規劃。因此你在這座新廠會看到的是單層樓設計。這是一座面積略超過70萬——約75萬平方英尺的廠房，是非常大的單層廠房。我們將最佳化生產流程。

And then the automation -- and when we use the term automation, we're talking not just about robotic loading, we're talking about robots being incorporated into the equipment itself. The plating equipment being a great example. But we're going to be taking a -- it's going to be a great opportunity to incorporate automation from the front of the line to the back of the line as well as Industry 4.0 practices from the standpoint of how we share the data, bring the data in from the various platforms, and then use that data to optimize our production and our yields.

接著談自動化——我們所說的自動化，不只是機器人上料，而是把機器人整合到設備本體之中，電鍍設備就是很好的例子。我們將把握這個絕佳機會，從產線前段到後段全面導入自動化，同時也會從工業4.0的角度導入做法，包括如何共享資料、從各平台匯入資料，並運用這些資料來最佳化我們的生產與良率。

So yes, we're going to be taking a -- this is a facility, you can -- yes, certainly located in Southeast Asia, but we're looking at optimizing that revenue per employee in the facility through the use of automation.

所以是的，我們會採取——這是一座你可以說——是的，確實位於東南亞的廠房，但我們的目標是透過自動化，提高該廠每位員工所創造的營收。

We'll take our next question from the line of Mike Crawford.

我們的下一個問題來自Mike Crawford。

Just further to Malaysia, how much of the capacity of that facility, once it's fully ramped up around the end of 2024, is expected to be shifted from some of your Southern China operations versus any new business won from customers? And then ancillary to that is, what are you looking for that would then reload your China capacity?

再追問一下馬來西亞。當該廠在2024年底左右完全爬坡到滿載後，預期有多少產能是從你們華南的部分營運轉移過去，而不是來自客戶新增的業務？另外相關的一點是，你們希望看到什麼情況，才會讓你們重新把中國的產能再度裝載（reload）起來？

Yes. So -- and of course, that's -- it's difficult to say, Mike, for sure, right, because we have programs that are ongoing in China that almost certainly will stay in China. We have programs that may be early in life where the customers are going to say, "Okay, let's put that program into Southeast Asia, combine with China." And then we'll -- we may see a little bit of transfer from China into Malaysia, but that will be pretty insignificant. I mean I think as we looked at it, somewhere, if you're looking at a facility the size of about $180 million in revenue, looking at 10%-ish of that being potentially transfer, but again, not a bad thing because it's going to help us with the start-up efforts but something that -- as we talk to our customers and as they go through their program planning, we're expecting to be relatively insignificant.

是的。所以——當然，那——很難說，Mike，確切會怎麼樣，對吧，因為我們在中國有一些正在進行中的專案，幾乎可以確定會留在中國。我們也有一些可能還在早期階段的專案，客戶可能會說：「好，那就把那個專案放到東南亞，與中國搭配。」然後我們——可能會看到有一點從中國轉到馬來西亞，但那會相當不顯著。我的意思是，我們在評估時，如果你看的是一個營收規模大約 1.8 億美元的廠區，可能有約 10% 左右存在轉移的可能，但再說一次，這不是壞事，因為它會幫助我們的啟動工作；不過就我們與客戶的討論，以及他們在進行專案規劃的情況來看，我們預期這個轉移會相對不顯著。

The critical advantage here for our customers is that if they'll be able to cross-qualify programs, so put a piece of a program into Southeast Asia or at least a qualification effort in Southeast Asia and know that they have an option outside of our China facilities and vice versa. You do the same thing in terms of placing business into Southeast Asia with the option of ramping either in Southeast Asia or in China. So that's the real opportunity here from a customer standpoint.

對我們客戶而言，這裡的關鍵優勢在於他們能夠對專案進行交叉認證（cross-qualify），也就是把某個專案的一部分放到東南亞，或至少在東南亞進行認證工作，並且知道他們在我們中國廠之外還有一個選項，反之亦然。同樣地，你也可以把業務放到東南亞，同時保留在東南亞或中國擴產爬坡（ramp）的選擇。從客戶角度來看，這才是真正的機會。

Okay. And then just switching gears slightly. You mentioned the new equipment being installed to support your automotive efforts because you're at capacity now. So what kind of lift in capacity will you get from that? And then I guess I'm going to go ancillary to that question as well as, wouldn't automotive be one of the main verticals that would lead you to continue your search for additional regional capacity in Europe?

好的。然後稍微換個話題。你提到正在安裝新設備以支援你們的汽車業務，因為你們現在已經滿載了。所以這會帶來多大的產能提升？另外我也想延伸問一下，汽車業務會不會是促使你們繼續在歐洲尋找額外區域產能的主要垂直領域之一？

So the answer on the first side is actually part of an effort that we have in upgrading the facility, so you're not going to see huge incremental capacity. We'll see a moderate level of capacity increase and you can think about that as on the order over time of approximately $20 million. But the real important aspect of the equipment that we're putting into our automotive facility is that we are upgrading that facility and also incorporating more automation as we do so. And then it replaces equipment that is out of date, if you will, or equipment that is less optimal. So that's what we're doing there. And of course, as you install equipment, it's a little bit disruptive to production flow. So that's where we lose a little bit of the incremental capacity for a quarter and we'll be right back at it next quarter.

第一個問題的答案其實是我們升級該廠的一部分工作，所以你不會看到非常大的額外產能。我們會看到中等程度的產能提升，你可以把它想成隨時間累積大約 2,000 萬美元的量。但我們在汽車廠導入設備最重要的面向，是我們正在升級該廠，並在升級過程中導入更多自動化。同時它也會汰換一些過時的設備，或者說較不理想的設備。這就是我們在做的事。當然，安裝設備會對生產流程造成一些干擾，所以我們在某一季會損失一點增量產能，但下一季就會恢復正常。

Europe was the other question, right? So yes, as we -- certainly from a quick turn standpoint, we continue to be on the watch for what we might be able to do in Europe to support automotive, but also medical/industrial/instrumentation customers in Europe. That's an area that we've been making some progress on. And so as we look at our product mix, our European business continues to grow. It's MII, automotive and actually a little bit of aerospace and defense. As we look at continuing to build out our footprint, that's sort of the one area that we haven't yet got the right facility for, and so we'll continue to look there.

另一個問題是歐洲，對吧？所以是的，從快速交期（quick turn）的角度來看，我們持續關注在歐洲能做些什麼來支援汽車客戶，同時也支援歐洲的醫療／工業／儀器（MII）客戶。這是我們正在取得一些進展的領域。因此，當我們看我們的產品組合時，我們的歐洲業務持續成長，主要是 MII、汽車，另外也有一點航太與國防。當我們考慮持續擴展我們的據點版圖時，這算是我們尚未找到合適廠房的那一個區域，所以我們會持續在那裡尋找。

Certainly with Southeast Asia coming on in a year, that's going to be a big area. That's the real focus for us in terms of volume manufacturer and -- while our automotive customers are satisfied with our capacity in China and looking to even see us build on that over time. It's really our other customer sets in data center, networking and medical/industrial/instrumentation that where they're looking for that supply chain resiliency piece.

當然，東南亞在一年後上線，將會是一個很大的區域。就量產製造而言，那是我們真正的重點——而我們的汽車客戶對我們在中國的產能感到滿意，甚至希望我們隨時間在那裡持續擴建。真正希望取得供應鏈韌性（supply chain resiliency）的是我們其他客群，包括資料中心、網路，以及醫療／工業／儀器。

(Operator Instructions) We'll take our next question from the line of Travis Bucknall.

（接線員指示）我們將接聽下一位來自 Travis Bucknall 的提問。

I'm calling on behalf of Will Stein today. I know you've touched this earlier, you touched on how COVID has impacted your operations. Could you please also tell us if or how you're seeing any supplier demand disruptions from the ongoing war in Ukraine?

我今天代表 Will Stein 來電。我知道你們先前有提到，也談到 COVID 對你們營運的影響。也請你們說明一下，正在進行的烏克蘭戰爭是否、或如何造成你們在供應商端的需求中斷？

So supply chain disruptions from the COVID situation?

所以是 COVID 情況造成的供應鏈中斷嗎？

Well, I'm wondering also...

嗯，我也想問的是……

Sorry, Ukraine, Russia. Okay, I understand. So yes, so in terms of the Ukraine-Russia conflict, the biggest -- there really haven't been direct impacts in terms of the supply chain. What we're seeing are more what I'd call indirect. And that indirect impact has been on metal pricing, particularly if you look at palladium pricing and copper pricing. Bouncing all over the place is one way to put it, but we did see increases early in the quarter as the conflict began. Lately, we've seen that shifting a bit.

抱歉，是烏克蘭、俄羅斯。好的，我明白了。所以是的，就烏俄衝突而言，最大的——在供應鏈方面其實沒有直接影響。我們看到的更多是我所稱的間接影響。而這些間接影響反映在金屬價格上，特別是如果你看鈀金價格和銅價。可以說是到處波動，但我們確實在本季初、衝突開始時看到上漲。最近我們看到情況有些轉變。

We are expecting an impact in terms of our costing as the copper pricing, in particular, flows into laminate. But those increases we contemplated the potential continuing inflationary impacts as we looked at the price adjustments that we had to make back in December. So our view is that we'll be able to absorb those at least short term. And again, watching what is a pretty volatile metal pricing environment to see if there's any real structural cost changes that flow through. So far, I think we're in fairly good shape there.

我們預期在成本方面會受到影響，尤其是銅價會反映到覆銅板（laminate）上。但在我們回頭看 12 月必須做的價格調整時，我們已經把可能持續的通膨影響納入考量。因此我們的看法是，至少短期內我們能夠吸收這些影響。同時，我們也會持續觀察這個相當波動的金屬價格環境，看看是否會有任何真正結構性的成本變化傳導進來。到目前為止，我認為我們的狀況相當不錯。

Okay. And then I have a similar follow-up. I'm curious if you've been seeing that this war -- has it triggered any accelerated design or production activity in your military end market?

好的。然後我有一個類似的追問。我想知道這場戰爭是否引發你們軍用終端市場的設計或生產活動加速？

So yes, interesting question. We have some historical content there with some several programs that have been impacted where inventories are being drawn down. It does take a while. As you know, when budgets are passed, it usually takes a year, 1.5 years for the budget to then impact us in terms of actual program release. In this case, as you watch inventories come down, you can sort of take the same view. It's going to be something that over the course of the year, we'll probably start hearing about from customers and it would have a positive impact on us. But again, relatively small, but certainly a positive development in terms of demand as we look through the sort of the back half of this year into next year.

是的，這是個有趣的問題。我們在那方面有一些歷史內容，涉及幾個受到影響的專案，目前庫存正在被消化。這需要一些時間。你也知道，當預算通過後，通常要一年到一年半，預算才會在實際專案釋出上影響到我們。在這個情況下，當你看到庫存下降，你也可以用同樣的角度來看。這會是在一年之內，我們可能開始從客戶那裡聽到的事情，並對我們帶來正面影響。但再說一次，規模相對小，不過就需求而言，當我們展望今年下半年到明年，這確實是正向的發展。

(Operator Instructions) There are no further questions at this time. Mr. Edman, I'd like to turn the conference back to you for any additional closing remarks.

（接線員指示）目前沒有其他問題。Edman 先生，我想把電話會議交回給您，請您做任何額外的結語。

Thank you, Danielle, and thank you all for joining us. Just wanted to emphasize some of the points that I made earlier.

謝謝你，Danielle，也謝謝各位加入我們。只是想再強調幾點我先前提到的重點。

First, we delivered revenues at the high end and earnings above the midpoint of guidance. We did that in the face of production and labor inefficiencies in North America and global inflationary pressures. Second, our end market diversification allowed us to again experience solid year-on-year revenue growth of 10.4%. Third, we used our cash generation to continue to repurchase our stock. And fourth, we continue to take major steps in moving our strategy forward with differentiation, with the expansion into Malaysia as well as the Telephonics acquisition.

第一，我們的營收達到指引區間的高端，獲利高於指引中點。我們是在北美生產與勞動效率不佳，以及全球通膨壓力之下做到的。第二，我們的終端市場多元化，使我們再次實現 10.4% 的年對年營收穩健成長。第三，我們運用現金創造能力持續回購自家股票。第四，我們持續採取重大步驟推進策略，包括差異化、擴展至馬來西亞，以及收購 Telephonics。

I'd just like to close by thanking all of you again for joining this call, and we look forward to your continued support as we move into next quarter. Thank you very much.

最後我想再次感謝各位參與這通電話會議，我們也期待在邁入下一季時，能持續獲得各位的支持。非常感謝。

This concludes today's call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝各位的參與。您現在可以掛線。