Vuzix Corp (VUZI) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Vuzix second quarter for the period ending June 30, 2024, financial results and business update conference call. (Operator Instructions) As a reminder, this call is being recorded.

您好，歡迎參加截至 2024 年 6 月 30 日的 Vuzix 第二季財務業績和業務更新電話會議。（操作員說明）謹此提醒，此通話正在錄音。

And now I would like to turn the call over to Ed McGregor, Director of Investor Relations at Vuzix. Thank you, Mr. McGregor. You may begin.

現在我想將電話轉給 Vuzix 投資者關係總監 Ed McGregor。謝謝你，麥格雷戈先生。你可以開始了。

Thank you, operator, and good afternoon, everyone. Welcome to the Vuzix second quarter 2024 ending June 30 financial results and business update conference call. With us today are Vuzix's CEO, Paul Travers; and our CFO, Grant Russell.

謝謝接線員，大家下午好。歡迎參加截至 6 月 30 日的 Vuzix 2024 年第二季財務業績和業務更新電話會議。今天與我們在一起的有 Vuzix 執行長 Paul Travers；和我們的財務長格蘭特·拉塞爾。

Before I turn the call over to Paul, I would like to remind you that, on this call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements during the question-and-answer session. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that are contained in the Private Securities Litigation Reform Act of 1995.

在我將電話轉交給保羅之前，我想提醒您，在這次電話會議中，管理層準備的言論可能包含前瞻性陳述，這些陳述受到風險和不確定性的影響，並且管理層可能會在會議期間做出額外的前瞻性陳述。因此，該公司聲稱 1995 年《私人證券訴訟改革法案》中包含的前瞻性聲明受到安全港的保護。

Actual results could differ materially from those contemplated by any forward-looking statements, as a result of certain factors, including, but not limited to, general economic and business conditions, competitive factors, changes in business strategy or development plans, the ability to attract and retain qualified personnel, as well as changes in the legal and regulatory requirements. In addition, any projections as to the company's future performance represent management's estimates as of today, August 14, 2024.

由於某些因素，包括但不限於總體經濟和商業狀況、競爭因素、商業策略或發展計劃的變化、吸引人才的能力，實際結果可能與任何前瞻性陳述預期的結果有重大差異。人員，以及法律和監管要求的變化。此外，對公司未來業績的任何預測均代表管理層截至今天（2024 年 8 月 14 日）的估計。

Vuzix assumes no obligation to update these projections in the future as market conditions change. This afternoon, the company issued a press release announcing its 2Q 2024 financial results and filed its 10-Q with the SEC. So participants on this call who may not have already done so may wish to look at those documents as the company will only provide a summary of the results discussed on today's call.

Vuzix 不承擔在未來隨著市場條件變化而更新這些預測的義務。今天下午，該公司發布新聞稿，宣布 2024 年第二季財務業績，並向 SEC 提交了 10-Q 財報。因此，本次電話會議的參與者可能還沒有這樣做，可能希望查看這些文件，因為該公司只會提供今天電話會議中討論的結果的摘要。

Today's call may include certain non-GAAP financial measures. When required, reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in the company's filing at sec.gov, which is also available at www.vuzix.com.

今天的電話會議可能包括某些非公認會計準則財務指標。如有需要，可以在公司在 sec.gov 上提交的文件中找到根據 GAAP 計算和提出的最直接可比較的財務指標的調節表，該文件也可以在 www.vuzix.com 上找到。

I'll now turn the call over to Vuzix CEO, Paul Travers, who will give an overview of the company's operating results and business outlook. Paul will then turn the call over to Grant Russell, Vuzix CFO, who will provide an overview of the company's second-quarter financial results, after which we'll move on to the Q&A session. Paul?

我現在將把電話轉給 Vuzix 執行長 Paul Travers，他將概述公司的營運業績和業務前景。然後，Paul 將電話轉給 Vuzix 財務長 Grant Russell，他將概述公司第二季的財務業績，之後我們將進入問答環節。保羅？

Thank you, Ed. Hello, everyone, and welcome to the Vuzix Q2 2024 conference call. A high-performance waveguide that can be produced in the millions at optimal price points is a critical enabling component for the next generation of smart glasses for the consumer and enterprise markets. We believe there is not a company on the planet better positioned in this regard than Vuzix. Our unique competitive core competencies of extensive waveguide design capability and production scalability, competitive cost, and volume manufacturing have been forged from well over a decade of product evolution and technology investment and development in this space.

謝謝你，艾德。大家好，歡迎參加 Vuzix 2024 年第二季電話會議。高性能波導可以以最佳價格點生產數百萬件，是面向消費者和企業市場的下一代智慧眼鏡的關鍵支援組件。我們相信，世界上沒有一家公司在這方面比 Vuzix 更有優勢。我們獨特的競爭核心能力包括廣泛的波導設計能力和生產可擴展性、有競爭力的成本和批量製造，這些都是經過十多年在該領域的產品演進以及技術投資和開發而形成的。

Our conviction, which is stronger than it's ever been, is that Vuzix will play a key role in the supply chain plans of many global product suppliers that intend to compete in the smart glasses industry. We believe our ability to offer and support custom optical and mechanical designs for OEMs and ODMs, and then ultimately produce millions of waveguides to support the broad consumer and enterprise markets is game-changing.

我們比以往任何時候都更加堅信，Vuzix 將在許多打算參與智慧眼鏡行業競爭的全球產品供應商的供應鏈計劃中發揮關鍵作用。我們相信，我們為 OEM 和 ODM 提供和支援客製化光學和機械設計​​，然後最終生產數百萬個波導來支援廣泛的消費者和企業市場的能力正在改變遊戲規則。

It's important for investors to realize that we have built a world-class capability around the core technologies and manufacturing facilities needed for design through high-volume production waveguides, a very difficult component in the supply chain for the coming AI-driven smart glasses market. Without solutions like those that Vuzix can offer, the broader smart glasses market, especially for consumer, will be significantly challenged. We believe there is currently nobody else in the market that can deliver the needed waveguides at the rates, and at the same time hit the quality and costing models required to meet consumer expectations.

對於投資者來說，重要的是要認識到，我們已經圍繞著透過大批量生產波導進行設計所需的核心技術和製造設施建立了世界一流的能力，而波導是即將到來的人工智慧驅動的智慧眼鏡市場供應鏈中非常困難的組成部分。如果沒有 Vuzix 可以提供的解決方案，更廣泛的智慧眼鏡市場，尤其是消費者市場，將受到重大挑戰。我們相信，目前市場上沒有其他公司能夠以相同的價格提供所需的波導，同時達到滿足消費者期望所需的品質和成本模型。

We fully understand our cash position and concerns that some of you may have in this regard. I want you to know we are actively working to close with strategic partners a deal that will provide manufacturing assets and value for our partner, and provide Vuzix with cash and market access. They understand the challenges to high-volume smart glasses manufacturing and believe Vuzix can play a key role in supporting their plans for product development and manufacturing in the smart glasses industry.

我們完全理解我們的現金狀況以及你們中的一些人在這方面可能存在的擔憂。我想讓您知道，我們正在積極努力與策略合作夥伴達成一項交易，該交易將為我們的合作夥伴提供製造資產和價值，並為 Vuzix 提供現金和市場准入。他們了解大量智慧眼鏡製造面臨的挑戰，並相信 Vuzix 可以在支援他們的智慧眼鏡產業產品開發和製造計劃方面發揮關鍵作用。

This sort of commitment to Vuzix would be substantial, and part of a multi-year supply strategy that will be game-changing for us and the broader industry. We're hopeful we can share more about this relationship in the very near future.

對 Vuzix 的這種承諾將是重大的，也是多年供應策略的一部分，這將為我們和更廣泛的產業帶來改變。我們希望在不久的將來能夠分享更多有關這種關係的資訊。

Back with an IP portfolio approaching 400 patents and patents pending, almost double the level of just three years ago, we are on a continual path of innovation, the innovation that is required for the market to evolve with previously stated optical capabilities for see-through waveguides like INCOGNITO, integrated vision correction, low-index high-performance materials, and a second-to-none production facility with unique Vuzix-developed process capabilities and trade secrets. The micro-touch production process improvement just announced this week will further distance our production speeds, yields, and volume capabilities relative to other would-be industry competitors.

我們的智慧財產權組合已接近400 項專利和正在申請的專利，幾乎是三年前水準的兩倍，我們正走在持續創新的道路上，這種創新是市場與前面提到的透視光學功能一起發展所需的創新諸如 INCOGNITO 之類的波導、整合視力矯正、低折射率高性能材料，以及擁有 Vuzix 開發的獨特工藝能力和商業機密的首屈一指的生產設施。本週剛宣布的微觸控生產流程改進將進一步拉開我們相對於其他潛在產業競爭對手的生產速度、良率和產量能力。

The consumer smart glasses era is just about to commence, and we clearly believe our waveguide technology is a cornerstone component to enabling mass adoption. Meta's CEO predicted a future where hundreds of millions of people are regularly wearing AI-powered smart glasses.

消費者智慧眼鏡時代即將開始，我們顯然相信我們的波導技術是實現大規模採用的基石組件。Meta 的執行長預測，未來將有數億人經常戴著人工智慧驅動的智慧眼鏡。

What Vuzix has here is unique. The ability to produce waveguides in volume at a fraction of the cost of our competitors is again a game-changer. And unlike that of most others, our waveguide technology is flexible and can support a large array of optical capabilities, and industrial designs for smart glasses products. Our current facility has the capability to drive capacity to as much as a million units annually and is scalable beyond this level with minimal investment and operating costs. These are just some of the reasons why third parties are interested in investing in Vuzix and why we are excited about these potential partnerships to help make this happen.

Vuzix 所擁有的東西是獨一無二的。我們能夠以競爭對手的一小部分成本批量生產波導，這再次改變了遊戲規則。與大多數其他技術不同的是，我們的波導技術非常靈活，可以支援智慧眼鏡產品的大量光學功能和工業設計。我們目前的工廠每年能夠將產能提高到 100 萬台，並且可以以最低的投資和營運成本擴展到超出這一水平。這些只是第三方有興趣投資 Vuzix 的部分原因，也是我們對這些潛在合作夥伴關係幫助實現這一目標感到興奮的部分原因。

The micro display to drive the image into the waveguide is the second most critical components for smart glasses. Today, there are multiple companies working on new, very compact, LCoS-based display projection engines. They will be a great option until either efficient full-color microLEDs or other display technologies arrive on the scene, which practically could be several more years. Knowing that the fashion-forward smart glasses opportunity is right around the corner, there are a couple of handfuls of companies investing in these LCoS solutions. And it is interesting to note that many of them, like our recent announcement with Avegant, are now working with Vuzix for a viable source of supply for cost-effective waveguides that can be delivered in volume and perform to end customer expectations.

將影像驅動到波導的微顯示器是智慧眼鏡的第二個最關鍵的組件。如今，有多家公司致力於開發新型、非常緊湊、基於 LCoS 的顯示投影引擎。在高效的全彩 microLED 或其他顯示技術出現之前，它們將是一個不錯的選擇，這實際上可能還需要幾年時間。知道時尚前衛的智慧眼鏡機會即將來臨，有幾家公司投資於這些 LCoS 解決方案。值得注意的是，其中許多公司（例如我們最近與 Avegant 宣布的合作）現在正在與 Vuzix 合作，為具有成本效益的波導提供可行的供應來源，這些波導可以批量交付並滿足最終客戶的期望。

Our OEM business opportunities remain robust. We have a backlog of business to deliver against, and we expect at least one of our defense contractors and one of our commercial enterprise customers to move into production later this year.

我們的 OEM 業務機會依然強勁。我們有大量積壓的業務需要交付，我們預計至少一家國防承包商和一家商業企業客戶將在今年稍後投入生產。

Our partnership with Garmin, with whom we are developing waveguide-based optical systems with full custom projection engines, is another milestone relationship. These products will power solutions for Garmin that will help them to offer significant cost, form factor, and space savings versus current deployed technologies.

我們與 Garmin 的合作是另一個里程碑式的合作關係，我們正在與 Garmin 開發具有完全客製化投影引擎的波導光學系統。這些產品將為 Garmin 的解決方案提供動力，與目前部署的技術相比，幫助他們大幅降低成本、外形尺寸並節省空間。

On the waveguide manufacturing front, we will continue to implement process improvements as we prepare to ramp production capabilities to support underlying demand from partners in the broader markets. As the industry increasingly views Vuzix as a waveguide supplier of choice, more and more projection engine partners are lining up discussions and programs to partner with us. And again, we recently announced a collaboration with Avegant to develop optimized waveguide optical modules for use in future AI-enabled smart glasses, and we have a handful of other unannounced relationships currently underway.

在波導製造方面，我們將繼續實施製程改進，準備提高生產能力，以滿足更廣泛市場合作夥伴的潛在需求。隨著業界越來越將 Vuzix 視為首選的波導供應商，越來越多的投影引擎合作夥伴正在排隊討論並製定與我們合作的計劃。此外，我們最近宣布與 Avegant 合作開發優化的波導光學模組，用於未來支援人工智慧的智慧眼鏡，目前我們還有一些其他未宣布的合作關係正在進行中。

All of these firms realize that their display projectors can't stand alone. They must be paired with the best waveguide solutions available to optimize the end-wearers' viewing experience -- most importantly, ones that can allow finished products to be produced in high volumes at affordable prices. Our uniqueness in this space cannot be underestimated.

所有這些公司都意識到他們的顯示投影機不能獨立存在。它們必須與最好的波導解決方案搭配使用，以優化最終佩戴者的觀看體驗——最重要的是，能夠以實惠的價格大量生產成品。我們在這個領域的獨特性不容小覷。

Cognizant of our cost competitiveness and cash needs, our strategy will be to utilize third-party manufacturers for select Vuzix-branded and OEM products based on projected volumes and costs. Of course, this will not include our defense products, nor our waveguide manufacturing, which is planned for production right here in Rochester, New York.

考慮到我們的成本競爭力和現金需求，我們的策略將是根據預期的產量和成本，利用第三方製造商來選擇 Vuzix 品牌和 OEM 產品。當然，這不包括我們的國防產品，也不包括我們的波導製造，波導製造計劃在紐約羅徹斯特進行生產。

The enterprise market continues to be challenged just yet, as the market slowly matures. Deploying whole product, smart glasses solutions in an industrial environment has proven to be a journey involving pilots, software, IT integration, and ROI determination, among other things.

隨著市場慢慢成熟，企業市場仍面臨挑戰。事實證明，在工業環境中部署整個產品、智慧眼鏡解決方案是一個涉及試點、軟體、IT 整合和投資回報率確定等的過程。

That said, we have a nice pipeline of business opportunities, and we have a number of enterprise accounts that are on a path to volume deployment of our smart glasses and solution within their operations to deliver improved productivity, lower onboarding times, and fewer errors. Although we are refocusing ourselves, as I said, to waveguides and OEMs, we also remain committed to our network of ISVs and resellers, and to our end customers. These use case ecosystems continue to evolve, with emerging applications, such as artificial intelligence, transcription, and language transcription. Moreover, as was the case with cell phones and tablets, we believe advancements and volume penetration in the broader markets will also help attract and accelerate wider enterprise adoption in due course.

也就是說，我們擁有大量的商機，我們有許多企業客戶正在其營運中批量部署我們的智慧眼鏡和解決方案，以提高生產力、縮短入職時間並減少錯誤。正如我所說，儘管我們正在重新關注波導和 OEM，但我們仍然致力於我們的 ISV 和經銷商網路以及我們的最終客戶。隨著人工智慧、轉錄和語言轉錄等新興應用的出現，這些用例生態系統不斷發展。此外，與手機和平板電腦的情況一樣，我們相信更廣泛市場的進步和銷售滲透也將有助於在適當的時候吸引和加速更廣泛的企業採用。

At the same time, we absolutely recognize the importance of liquidity and cash management. And as a result, Vuzix has made significant reductions across the board to right-size our organization to deliver top-line revenue without losing sight of our core technology aspirations on the R&D side of the house. And as I mentioned previously, we are working to close with strategic partners a deal that would provide manufacturing access and value for our partner, and provide Vuzix with cash and market access.

同時，我們絕對認識到流動性和現金管理的重要性。因此，Vuzix 全面大幅裁員，以調整我們的組織規模，以實現最高收入，同時又不忽視我們在研發方面的核心技術意願。正如我之前提到的，我們正在努力與策略合作夥伴達成一項交易，為我們的合作夥伴提供製造准入和價值，並為 Vuzix 提供現金和市場准入。

Grant will now take you through our numbers, after which we will move on to Q&A. Grant?

格蘭特現在將帶您瀏覽我們的數據，然後我們將進入問答環節。授予？

Thank you, Paul. As Ed mentioned, the 10-Q we filed this afternoon with the SEC offers a detailed explanation of our quarterly financials. So I'm just going to provide you with a bit of color on some of the numbers.

謝謝你，保羅。正如艾德所提到的，我們今天下午向美國證券交易委員會提交的 10-Q 報告詳細解釋了我們的季度財務狀況。所以我只想為您提供一些數字的一些顏色。

Our second-quarter 2024 revenues was $1.1 million, down substantially year over year, due to decreased sales of smart glasses, particular M400, which had benefited in the prior year's period, from a very large order from an Asian distributor in our second quarter of 2023. Engineering service sales were $0.5 million for the three months ended June 30, 2024, versus $0.3 million in the prior year's period.

我們 2024 年第二季的營收為 110 萬美元，年比大幅下降，原因是智慧眼鏡銷量下降，尤其是 M400，在去年同期受益於我們第二季來自亞洲經銷商的大訂單。年。截至 2024 年 6 月 30 日的三個月，工程服務銷售額為 50 萬美元，去年同期為 30 萬美元。

As of June 30, 2024, the company had $2.4 million of remaining performance obligations under our waveguide development project, of which approximately 18% we expect to realize in 2024 with the remainder being completed in 2025. There was an overall gross loss of $0.3 million for the three months ended June 30, 2024, as compared to a gross profit of $1 million for the same period in 2023.

截至 2024 年 6 月 30 日，該公司在波導開發專案下還有 240 萬美元的剩餘履約義務，我們預計將在 2024 年實現其中約 18%，其餘部分將在 2025 年完成。截至 2024 年 6 月 30 日的三個月，整體毛虧損為 30 萬美元，而 2023 年同期的毛利為 100 萬美元。

The gross loss was the result of lower revenues to absorb many of our relatively fixed manufacturing and [plant] overhead costs. These manufacturing overhead costs as a percent of total product sales increased to 42% from 8% for the same period in 2023 as a result.

總虧損是由於收入減少而導致我們吸收了許多相對固定的製造和[工廠]間接費用。因此，這些製造費用佔產品總銷售額的百分比從 2023 年同期的 8% 增加到 42%。

Research and development expense was $2.4 million for the three months ended June 30, 2024, compared to $2.8 million for the comparable 2023 period, a decrease of approximately 17%. The reduction in R&D expense was largely due to a $0.3 million decrease in external development costs, and a $0.2 million drop in salary and benefit-related expenses after further severance costs implemented at the end of June.

截至 2024 年 6 月 30 日止三個月，研發費用為 240 萬美元，而 2023 年同期為 280 萬美元，下降約 17%。研發費用的減少主要是由於外部開發成本減少了 30 萬美元，以及 6 月底實施進一步的遣散費後工資和福利相關費用減少了 20 萬美元。

Sales and marketing expense was $2.2 million for the three months ended June 30, 2024, as compared to $2.5 million in the same period of 2023, a decrease of approximately 11%. The reduction was primarily due to lower advertising and trade show spending and reduced salary and benefits expense, partially offset by an increase in allowance for credit losses, and further severance costs implemented at the end of June.

截至2024年6月30日止三個月，銷售及行銷費用為220萬美元，較2023年同期的250萬美元減少約11%。減少的主要原因是廣告和貿易展覽支出減少以及工資和福利支出減少，但部分被信貸損失準備金的增加以及六月底實施的進一步遣散費所抵消。

General and administrative expenses for the three months ended June 30, 2024, was $4.5 million versus $4.3 million for the comparable 2023 period, an increase of approximately 5%. The rise was primarily due to a $0.3 million increase in accounting and audit fees related to finalizing our 2023 audit, and increased legal costs related to our S-3 filing.

截至 2024 年 6 月 30 日止三個月的一般及行政費用為 450 萬美元，而 2023 年同期為 430 萬美元，增長約 5%。這一增長主要是由於與完成 2023 年審計相關的會計和審計費用增加了 30 萬美元，以及與 S-3 備案相關的法律費用增加。

Included in our operating expenses for the three months ended June 30, 2024, was a non-cash charge of $30.1 million related to the impairment of intangible assets, and our equity investment in Atomistic. Atomistic exercised on July 1, 2024, its option to terminate its previously granted license related to certain microLED technologies it was developing. And as a result of the termination of the granted license, which was effective June 30, 2024, the company determined that the technology license asset, having a net book value of $24.3 million, have been fully impaired as the company no longer had exclusive licensing rights to the technology for its [use].

截至 2024 年 6 月 30 日止三個月的營運費用中包括與無形資產減損以及我們對 Atomistic 股權投資相關的 3,010 萬美元非現金費用。Atomistic 於 2024 年 7 月 1 日行使了終止其先前授予的與其正在開發的某些 microLED 技術相關的許可的選擇權。由於所授予的許可終止（於 2024 年 6 月 30 日生效），該公司確定賬面淨值為 2,430 萬美元的技術許可資產已完全減值，因為該公司不再擁有獨家許可該技術的權利[使用]。

The company had a related equity interest in Atomistic, a private French company, and determined that at this point in time, the company is unable to reasonably estimate its future value, and therefore recorded a full impairment of its investment in Atomistic preferred shares, resulting in write-down charge of $5.7 million for the period ended June 30, 2024.

該公司擁有法國私人公司Atomistic的相關股權，並確定該公司此時無法合理估計其未來價值，因此對其對Atomistic優先股的投資全額提列減值，導致截至2024 年6 月30 日止期間的減記費用為570 萬美元。

Notwithstanding our impairment of these assets, we continue to support the development path of Atomistic that it is on, and we have previously indicated Vuzix is entitled to 49% of distributed assets in the event Atomistic is liquidated, as well as certain license royalties. Overall, the net loss for the three months ended June 30, 2024, was $40.6 million or $0.62 per share versus a net loss of $9 million or $0.14 per share for the same period in 2023.

儘管我們對這些資產進行了減值，但我們繼續支持 Atomistic 的發展道路，並且我們之前曾表示，如果 Atomistic 被清算，Vuzix 有權獲得 49% 的已分配資產，以及某些許可使用費。整體而言，截至 2024 年 6 月 30 日的三個月淨虧損為 4,060 萬美元，即每股 0.62 美元，而 2023 年同期淨虧損為 900 萬美元，即每股 0.14 美元。

Now for some balance sheet and cash flow highlights. Our cash and cash equivalents position as of June 30, 2024, was $9.9 million, and our net working capital was $22.1 million. The net cash flows used in operating activities was $5.6 million in the second quarter of 2024, as compared to a net use of $7.9 million for the second quarter of 2023.

現在我們來看看一些資產負債表和現金流的亮點。截至 2024 年 6 月 30 日，我們的現金及現金等價物部位為 990 萬美元，淨營運資本為 2,210 萬美元。2024 年第二季經營活動使用的現金流量淨額為 560 萬美元，而 2023 年第二季的淨現金流量為 790 萬美元。

Cash used for investing activities for the second quarter of 2024 was $1 million as compared to $6.7 million in the prior year's period, with the current period investment being all in fixed asset purchases and none for license fee payments. During the second quarter of 2024, the company implemented a voluntary company-wide payroll reduction plan for all individuals with optional salary reductions of 10% to 50% depending upon their respective base salary level for the period running May 1, 2024 to April 30, 2025. The expected savings achieves will be approximately $2.1 million and will result in the issuance of stock awards and stock options for the net cash wage reductions.

2024 年第二季投資活動使用的現金為 100 萬美元，而去年同期為 670 萬美元，本期投資全用於固定資產購買，沒有用於支付許可費。2024年第二季度，公司對所有個人實施了自願全公司範圍的減薪計劃，根據2024年5月1日至4月30日期間各自的基本工資水平，可選減薪10%至50%， 2025 年。預計節省的資金約為 210 萬美元，並將因淨現金工資減少而發行股票獎勵和股票選擇權。

After the impact of the payroll reduction program for equity and two major rounds of staff reductions in January '24 and June 2024, the company's current weekly gross salary cost decreased 38.4% or $5.3 million on an annual basis. And while we have greatly reduced CapEx plans for the balance for 2024 and into 2025, we intend to reduce our large current investment in smart glass inventories.

受股權減薪計畫以及2024年1月和2024年6月兩輪大規模裁員的影響，該公司目前的每週毛工資成本年減了38.4%，即530萬美元。雖然我們大幅減少了 2024 年和 2025 年剩餘時間的資本支出計劃，但我們打算減少目前對智慧玻璃庫存的大量投資。

As a result, we plan for existing products to reduce their selling prices and offer a higher volume discount levels to turn as much of our inventory of finished goods and assemblies into cash. We have over $9 million in finished goods and semi-finished products, and we intend to turn that into cash as we move forward with future models and technologies.

因此，我們計劃降低現有產品的售價並提供更高的批量折扣水平，以將盡可能多的成品和組件庫存轉化為現金。我們擁有超過 900 萬美元的成品和半成品，隨著我們推進未來的模型和技術，我們打算將其轉化為現金。

Furthermore, we have paused further M400 smart glasses production in Rochester, and we are actively pursuing the use of external manufacturers for most of the non-waveguide production needs of Vuzix. Currently, we are seeing some good opportunities to reduce our manufacturing costs going forward, especially if we are able to achieve higher production volumes.

此外，我們已經暫停了在羅徹斯特的進一步 M400 智慧眼鏡生產，我們正在積極尋求利用外部製造商來滿足 Vuzix 的大部分非波導生產需求。目前，我們看到了一些降低未來製造成本的好機會，特別是如果我們能夠實現更高的產量。

We are also actively continuing with the pursuit of licensing and strategic opportunities around our waveguide technologies with potential OEMs, which would include the receipt of upfront licensing fees and ongoing volume supply agreements. And as most of you are aware, the company went effective with a new registration statement on Form S-3 in May 2024, which included a sales agreement with an investment banking firm for the issuance and sale of up to $50 million over common stock that may be issued and sold from time to time in an at the market or ATM offering. Management monitors the capital markets on an ongoing basis and may consider raising capital via the ATM if favorable market conditions develop.

我們也積極繼續與潛在的原始設備製造商尋求圍繞我們的波導技術的授權和策略機會，其中包括收取預付許可費和持續的批量供應協議。正如你們大多數人所知，該公司於2024 年5 月在S-3 表格上發布了新的註冊聲明，其中包括與一家投資銀行公司簽訂的銷售協議，發行和出售最多5000 萬美元的普通股，可能會不時在市場或 ATM 上發行和出售。管理層持續監控資本市場，如果市場條件有利，可能會考慮透過 ATM 籌集資金。

And finally as of June 30, 2024, the company continued to have no current or long-term debt obligations outstanding. With that, I would like to turn the call over to the operator for Q&A.

最後，截至 2024 年 6 月 30 日，該公司仍然沒有未償還的當前或長期債務。這樣，我想將電話轉給接線生進行問答。

Thank you, sir. At this time, we will be conducting the question-and-answer session. (Operator Instructions) Matt VanVliet, BTIG.

謝謝您，先生。此時，我們將進行問答環節。（操作員說明）Matt VanVliet，BTIG。

I guess, first, you mentioned a couple of opportunities on the engineering services side that should go into production later this year. Can you give us a sense of what level of revenue you expect could be recognized from either one or both of those potentially going in? And then anything else in the pipeline that you have that you feel fairly confident will go into production at some point in the future?

我想，首先，您提到了工程服務的一些機會，這些機會應該在今年稍後投入生產。您能否讓我們了解一下您期望從其中一個或兩個可能進入的項目中確認的收入水平？那麼您有信心在未來某個時候投入生產的其他產品嗎？

So let's just qualify those first two. One of them is on the defense side and one of them is a commercial opportunity. On the defense side, it's probably going to be $5,000 to $7,000 per asset that we sell into that piece of business. And the first sort of salable or opportunity that it's going to be filling is upwards of 2,000 pieces.

因此，讓我們限定前兩者。其中之一是防守方面，其中之一是商業機會。在防禦方面，我們向該業務出售的每項資產的價格可能為 5,000 至 7,000 美元。它將填補的第一類銷售或機會是 2,000 件以上。

So, like, do the math, it's pretty easy. It's $10 million to $14 million worth of business, I think, for -- and that -- the solution that we've built can go into multiple different places, and this is just one spot that it was initially designed for. So that's pretty significant revenues for just one project.

所以，就像做數學題目一樣，這很容易。我認為，這是價值 1000 萬至 1400 萬美元的業務，因為我們建造的解決方案可以應用於多個不同的地方，而這只是它最初設計的一個地方。因此，對於一個專案來說，這已經是相當可觀的收入了。

And then the other one is an imaging system for temperature-related inside of enterprise operations or its maybe places where there's hot equipment around, motors that might get hot. You put the glasses on and they can help you determine whether or not there's maintenance or safety issues or whatever. And that's an enterprise product that could have significant volumes associated with it, upwards of 20,000 to 30,000 pieces. I'm not sure when that's going to roll out in that kind of volumes, quite frankly. We're hoping that it starts to move by the end of this year.

另一個是用於企業營運內部或周圍可能有熱設備、馬達可能變熱的溫度相關的成像系統。你戴上眼鏡，它們可以幫助你確定是否有維護或安全問題或其他問題。這是一種企業產品，其相關數量可能高達 20,000 到 30,000 件。坦白說，我不確定什麼時候會以這樣的數量推出。我們希望它能在今年年底開始移動。

Okay. And I think going back a couple of quarters, you had four or five projects in the works and it sounds like these two are may be further along, but do you still have the other ones with long-term viability there? Any update on those?

好的。我認為回顧幾個季度，你們有四、五個項目正在進行中，聽起來這兩個項目可能會進展得更遠，但你們還有其他具有長期生存能力的項目嗎？有更新嗎？

Yes, we definitely do. I mean, one of them is Garmin, which we mentioned earlier in the call. And yeah, that project is moving along nicely. And there's more than a handful of other companies that are working with Vuzix to develop their next-generation products.

是的，我們絕對這樣做。我的意思是，其中之一是 Garmin，我們之前在電話中提到過。是的，該專案進展順利。還有不少其他公司正在與 Vuzix 合作開發下一代產品。

Okay, helpful. And then lastly, talking about potential strategic partners, could you potentially give a little bit more detail in terms of what kind of arrangements might be in place? Would it be kind of a pre-order of waveguides or certain blocks of performance for investment into Vuzix? Or what kind of, I guess, overall arrangement are you looking at?

好的，有幫助。最後，談到潛在的策略夥伴，您能否就可能採取的安排提供更多細節？這是否是為了投資 Vuzix 而預訂波導或某些效能模組？或者我想您正在尋找什麼樣的整體安排？

Yeah, Matt, I can't share a whole lot other than to say that for these guys, volume production is key. This business is right around the corner. There's amazing potential. The problem is making waveguides at a price point that works for the market is almost impossible.

是的，馬特，我不能分享太多，只能說，對這些人來說，大量生產是關鍵。這項業務指日可待。有驚人的潛力。問題是，以適合市場的價格生產波導幾乎是不可能的。

Competitive solutions today take literally hours to make a waveguide, and you can only do just so many at a time. So the price per waveguide is super expensive. And with those higher prices, it will never enable the mass market.

如今，具有競爭力的解決方案需要花費數小時來製造波導，而且一次只能做這麼多。所以每個波導的價格都非常昂貴。由於價格較高，它永遠無法進入大眾市場。

Vuzix can literally make them -- well, our current facility, when it's fully turned on, every 6 seconds, it ought to be able to pump out a waveguide. And that's what these guys are interested in. There's actually more than one that are interested in that. And it's all revolving around -- well, you hear things like Mark Zuckerberg talk about hundreds of millions of users of smart glasses, and it's all revolving around that kind of business and in those markets. So you might imagine that there's some investments that will probably be part of it and there will be some supply components to it.

Vuzix 確實可以製造它們——好吧，我們目前的設施，當它完全打開時，每 6 秒，它應該能夠抽出一個波導。這就是這些人感興趣的。事實上，對此感興趣的人不只一個。這一切都圍繞著——嗯，你會聽到馬克·祖克柏談論數億智慧眼鏡用戶，而這一切都圍繞著這種業務和這些市場。所以你可能會想像，其中可能會有一些投資，並且會有一些供應組件。

Christian Schwab, Craig-Hallum Capital Group.

克里斯蒂安·施瓦布，克雷格·哈勒姆資本集團。

Thanks, guys. This is Tyler on behalf of Christian. Thanks for allowing us to ask a couple of questions. Maybe first, just kind of following up on that last question, the last line of commentary there. You talked about your waveguide production being the market leader there. I guess, competitively, if someone wasn't going to come to you to use a waveguide, competitively, what would they do otherwise? Just produce themselves? Have to make that investment and ultimately produce them less efficiently, more expensively? Or competitively, what would someone do if they weren't going to use you for their waveguides?

謝謝，夥計們。這是泰勒代表克里斯蒂安。感謝您允許我們問幾個問題。也許首先，只是跟進最後一個問題，即最後一行評論。您談到您的波導生產是那裡的市場領導者。我想，從競爭的角度來看，如果有人不打算來找你使用波導，那他們會怎麼做呢？就自己生產嗎？是否必須進行投資並最終降低生產效率、提高成本？或是在競爭中，如果有人不使用你作為他們的波導，他們會怎麼做？

So, Tyler, this is a great question. It's more than even manufacturing. You've got to know how to do a design. You've got to know how to do the production for it when it's finally there. And you have to know how to, in that design, integrate it with the rest of the components that make these optical systems work. And when you come to a company like Vuzix, we offer all of the services associated with that. So it's soup to nuts.

所以，泰勒，這是一個很好的問題。這甚至不僅僅是製造業。你必須知道如何進行設計。當它最終出現時，你必須知道如何進行製作。您必須知道如何在該設計中將其與使這些光學系統正常工作的其他組件整合。當您來到 Vuzix 這樣的公司時，我們會提供與之相關的所有服務。所以這是一樁湯汁。

There are other companies that are out there trying to make a waveguide and you're stuck with the one-size-fits-all. You can't get it easily customized for what you want to have. And then the problem comes down to just literally how you get a waveguide every six seconds.

還有其他公司正在嘗試製造波導，而您卻只能採用一刀切的方法。您無法輕鬆地將其定制為您想要的東西。然後問題就歸結為如何每六秒獲得一個波導。

And then some of these people we're working with, they want 20 times that kind of volume. If you think about on an annual basis, it could be 100 million to 300 million smart glasses that get sold. That is one pile of waveguides.

然後我們正在合作的一些人，他們想要 20 倍的數量。如果以每年計算，智慧眼鏡的銷售量可能會達到 1 億至 3 億副。那是一堆波導。

And you'd go to a third-party to have them produced and they would be expensive. Or you might buy somebody's property so that you could produce them, but the competitors that might be able to set you up like that today, it's 400 or 500 steps to make a waveguide. And so the price, the quality, the yield, it's really, really difficult to see how any of that stuff could ultimately get there. We are in a very unique circumstance, our ability to produce in volume the way we can and to offer the services associated with actually making it work in the glasses.

而且你會去找第三方生產它們，而且價格會很昂貴。或者你可能會購買某人的財產，以便你可以生產它們，但競爭對手可能能夠像今天一樣為你設置，製造波導需要 400 或 500 個步驟。因此，價格、品質、產量，真的很難看出這些東西最終是如何實現的。我們處於一個非常獨特的環境中，我們有能力盡可能地進行批量生產，並提供與實際使其在眼鏡中發揮作用相關的服務。

All right, that's perfect. That's very helpful. And then maybe, Grant, with all these cost saving efforts you guys are putting in place, maybe just a summary update, what kind of revenue level are we looking at now to kind of get to a breakeven-type point?

好吧，那就完美了。這非常有幫助。然後，格蘭特，也許你們正在採取所有這些節省成本的努力，也許只是一個總結更新，我們現在要考慮什麼樣的收入水平才能達到盈虧平衡點？

Well, it's a lot less and we're still making refinements. But I mean, we're effectively going to need about $20 million of margin to achieve breakeven, so -- because I think our goal is to get between -- potentially down to $4 million per quarter in operating costs. So we're going to need the margin on the top line of $16 million to $20 million.

好吧，它少了很多，而且我們仍在進行改進。但我的意思是，我們實際上需要大約 2000 萬美元的利潤才能實現盈虧平衡，因此——因為我認為我們的目標是——可能將營運成本每季降至 400 萬美元。因此，我們需要 1,600 萬至 2,000 萬美元的營收利潤。

Thank you. And at this time, we have reached the end of the question-and-answer session. And I would like to turn the call back over to Paul Travers for any closing comments.

謝謝。此時，我們的問答環節已經結束了。我想將電話轉回保羅·特拉弗斯以徵求結束意見。

Yes. Everybody, thank you for listening in. Look, I know it's been a rough ride. The smart glasses industry is a challenge, but this business is coming. It's never been more exciting for us, and I know I happen to be an enthusiastic person, but it is right around the corner and it should be a fantastic fall for Vuzix. So we really appreciate you hanging in there through the tough times. The better parts are coming.

是的。各位，謝謝你們的收聽。聽著，我知道這是一段艱難的旅程。智慧眼鏡產業是一個挑戰，但這個生意正在到來。這對我們來說從未如此令人興奮，我知道我碰巧是一個熱情的人，但它就在眼前，這對 Vuzix 來說應該是一個美妙的秋天。因此，我們非常感謝您在困難時期堅持不懈。更好的部分即將到來。

Thanks again, everybody. Look forward to the next call and to share with you as the fall unfolds.

再次感謝大家。期待下一次電話會議，並隨著秋天的到來與您分享。

And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。