Applied UV Inc (AUVI) 2021 Q3 法說會逐字稿

Good morning. My name is Holly, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Q3 2021 Applied UV financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded.

早安.我叫霍莉，今天我將擔任你們的會議主持人。此時，我謹歡迎大家參加 2021 年第三季 Applied UV 財務業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Mr. Kevin McGrath, Investor Relations for Applied UV. Thank you. You may begin.

現在我很高興向您介紹主持人，Applied UV 投資者關係部門的 Kevin McGrath 先生。謝謝。你可以開始了。

Thank you, Holly, and good morning, everyone. Welcome to our third quarter 2021 earnings conference call. I'd like to remind you that our earnings call press release is available in the Investor Relations section of our website at www.applieduv.com. Before we begin, please take a moment to read the forward-looking statements in our earnings press release.

謝謝你，霍莉，大家早安。歡迎參加我們的 2021 年第三季財報電話會議。我想提醒您，我們的財報電話會議新聞稿可在我們網站 www.applieduv.com 的投資者關係部分取得。在我們開始之前，請花點時間閱讀我們的收益新聞稿中的前瞻性陳述。

During today's call, we make certain predictive statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recent Form 10-K and 10-Q lists some of the most important risk factors that could cause actual results to differ from our predictions.

在今天的電話會議中，我們做出了一些預測性陳述，反映了我們目前對未來業績和財務表現的看法。我們的這些陳述以及某些假設和預期是基於存在風險和不確定性的未來事件。我們最新的表格 10-K 和 10-Q 列出了一些可能導致實際結果與我們的預測不同的最重要的風險因素。

Speaking on our call today will be Keyou Saeed, Chief Executive Officer; and Mike Riccio, CFO of Applied UV. With that, I'll turn the call over to Keyou.

執行長 Keyou Saeed 將在今天的電話會議上發言。以及 Applied UV 財務長 Mike Riccio。說完，我就把電話轉給科友。

Thank you, Kevin, and good morning, everyone. Once again, it's my pleasure to be with you this morning to review the highlights for our third-quarter performance. Third quarter net sales increased by over 127% to approximately $3.5 million, from approximately $1.5 million in the past quarter -- in the third quarter in 2020.

謝謝你，凱文，大家早安。我很高興今天早上再次與您一起回顧我們第三季業績的亮點。 2020 年第三季度，第三季淨銷售額從上一季的約 150 萬美元增至約 350 萬美元，增幅超過 127%。

Like so many companies globally, we experienced continuing logistics and transportation challenges in many regions, which resulted in delays in fulfilling customer orders in the second quarter. As we shared with you in the last call, we anticipated many of those orders to be shipped to customers in the third quarter, while others expected to ship in the fourth quarter.

與全球許多公司一樣，我們在許多地區經歷了持續的物流和運輸挑戰，導致第二季履行客戶訂單的延遲。正如我們在上次電話會議中與您分享的那樣，我們預計其中許多訂單將在第三季度發貨給客戶，而其他訂單則預計在第四季度發貨。

Net loss for the third quarter of 2021 was approximately $1 million compared to a net loss of approximately $900,000 last year in the third quarter of 2020. The net loss in 2021 was due primarily to an increase in SG&A costs to improve future operation and expand the disinfection segment of our business.

2021 年第三季的淨虧損約為100 萬美元，而去年2020 年第三季的淨虧損約為90 萬美元。2021 年的淨虧損主要是由於SG&A 成本增加，以改善未來營運並擴大業務規模。我們業務的消毒部分。

Reviewing our Q3 2021 results against our Q2 2021 results, we reported more than an 88% increase in revenue and improvement in gross profit. Our net loss for the third quarter of 2021 improved more than 49%. Our net loss per share improved to negative $0.14, inclusive of preferred dividends of $241,500.

對照 2021 年第二季的業績回顧 2021 年第三季的業績，我們發現營收成長了 88% 以上，毛利也有所改善。我們 2021 年第三季的淨虧損改善了 49% 以上。我們的每股淨虧損改善至負 0.14 美元，其中包括 241,500 美元的優先股股息。

This compares to a negative $0.23 net loss per share in Q2 of this year, as we continue to drive sales and our momentum towards achieving profitable growth. We ended the quarter with approximately $11.7 million dollars of cash available on our balance sheet. We're optimistic about closing this year on a high note with a good momentum heading into 2022.

相比之下，今年第二季每股淨虧損為負 0.23 美元，因為我們繼續推動銷售和實現獲利成長的勢頭。本季結束時，我們的資產負債表上有大約 1,170 萬美元的可用現金。我們對今年高調結束並在進入 2022 年保持良好勢頭持樂觀態度。

A strong volume momentum is expected to result in Q4 showing better year-over-year sales growth than what we've seen in Q3. We expect continued improvement in some of the logistics issues, and most importantly, we continue to benefit from a growing demand for air purification technology and solutions across a wide range of commercial health care and other large public facilities.

強勁的銷售勢頭預計將導致第四季度的銷售年增率優於第三季。我們預計一些物流問題將持續改善，最重要的是，我們將繼續受益於各種商業醫療保健和其他大型公共設施對空氣淨化技術和解決方案不斷增長的需求。

At the end of Q3 and very early in Q4, we announced two significant strategic acquisitions as a part of our plan to significantly grow our air purification product portfolio, and expand our customer base. On September 28, we closed the acquisition of KES Science & Technology.

在第三季末和第四季初，我們宣布了兩項重大策略收購，作為我們顯著擴大空氣清淨產品組合併擴大客戶群計畫的一部分。 9月28日，我們完成了對KES Science & Technology的收購。

The KES acquisition gave us the opportunity to consolidate all of our Airocide technologies under the SteriLumen brand and enhance our presence in some major markets, including food distribution, winery, and the retail sector. The KES Airocide system are purpose-built for perishable food processing; and storage post-harvest; and transportation industries.

KES 收購使我們有機會將所有 Airocide 技術整合到 SteriLumen 品牌下，並增強我們在一些主要市場的影響力，包括食品分銷、釀酒廠和零售行業。 KES Airocide 系統專為易腐食品加工而設計；和收穫後的儲存；和交通運輸業。

These industries faced a challenge of finding effective ways to reduce spoilage due to ethylene gas, which is often a major issue in wine, beer, and other beverage in food processing facilities.

這些行業面臨著尋找有效方法來減少乙烯氣體引起的腐敗的挑戰，而乙烯氣體通常是食品加工設施中葡萄酒、啤酒和其他飲料的主要問題。

Holly, can you mute the other lines, please?

荷莉，你能把其他線靜音嗎？

All lines are muted. I'm showing it is coming from [Hugh's] line.

所有線路均靜音。我表明它來自[休的]線。

Bacteria and microbes also cause molds which Airocide destroys. The KES product portfolio is well suited to address these issues while also reducing the threat of pulmonary problems, and respiratory infections, and other diseases for employees. As we've previously stated, KES is expected to contribute approximately $5 million to $7 million in annualized revenues, and be immediately accretive to our earnings per share.

細菌和微生物也會產生黴菌，而空氣殺滅劑可以消滅黴菌。 KES 產品組合非常適合解決這些問題，同時也能減少員工肺部問題、呼吸道感染和其他疾病的威脅。正如我們之前所說，KES 預計將貢獻約 500 萬至 700 萬美元的年化收入，並立即增加我們的每股盈餘。

Following KES, which closed on September 28, on October 13 of this quarter, we announced the closing of the acquisition of Scientific Air Management. We believe this acquisition is transformative for a number of reasons.

繼 KES 於 9 月 28 日關閉後，本季的 10 月 13 日，我們宣布完成對 Scientific Air Management 的收購。我們相信此次收購具有變革性，原因有很多。

First, it establishes us as a recognized leader in one of the largest verticals, that being health care. Scientific Air product was exclusively developed for health care facilities to address the growing need for effective, safe airborne disinfection, particularly the persistent health challenges caused by hospital acquired infections or HAIs. We're seeing the growing need and the key demand drivers for effective and safe airborne disinfection with no harmful byproducts.

首先，它使我們成為醫療保健這一最大垂直行業公認的領導者。 Scientific Air 產品專為醫療保健機構開發，旨在滿足對有效、安全的空氣消毒日益增長的需求，特別是醫院獲得性感染或 HAI 造成的持續健康挑戰。我們看到對有效、安全、無有害副產品的空氣消毒的需求不斷增長，這也是關鍵的需求驅動因素。

Second, Scientific Air's flagship product, the S400, is a mobile disinfection control unit, like all of our Airocide products, can run 24/7, and deliver what we look for in target acquisition products capabilities. Top items are: is independently tested disinfection with no harmful byproducts.

其次，Scientific Air 的旗艦產品 S400 是一款行動消毒控制單元，與我們所有的 Airocide 產品一樣，可以 24/7 運行，並提供我們在目標採集產品功能中尋找的功能。最重要的項目是： 經過獨立測試的消毒，無有害副產物。

Then this unit, while mobile, is simple to anchor or move while delivering the best whole-room, clean air solution safely by just plugging into the wall outlet. And finally, it works while the room is occupied with humans.

然後，裝置在移動時易於固定或移動，同時只需插入牆壁插座即可安全地提供最佳的全房間清潔空氣解決方案。最後，當房間裡有人時它就能工作。

Third, Scientific Air has been in the market for more than five years, and has developed an enviable customer and fan base among experts. Its excellent performance data helps explain why the S400 will complement our Airocide product portfolio and give us the potential to expand our presence in some of the most prestigious healthcare institutions throughout the country by extending our clean air solution to the frontline personnel, and delivering better patient experiences and outcomes in medical communities.

第三，科學空氣已經進入市場五年多了，並在專家中建立了令人羨慕的客戶和粉絲群。其出色的性能數據有助於解釋為什麼S400 將補充我們的Airocide 產品組合，並透過將我們的清潔空氣解決方案擴展到一線人員並為患者提供更好的治療，使我們有可能擴大在全國一些最負盛名的醫療機構中的業務醫學界的經驗和成果。

Finally, the acquisition of Scientific Air comes with a strong relationship with one of the largest distributors of healthcare supplies in North America. This relationship provides a well-established distribution channel to the large hospitals and healthcare facilities throughout the nation. We expect to further leverage that successful relationship as we look to further expand our penetration into the healthcare verticals.

最後，收購 Scientific Air 也與北美最大的醫療用品分銷商之一建立了牢固的關係。這種關係為全國的大型醫院和醫療機構提供了完善的分銷管道。當我們希望進一步擴大對醫療保健垂直領域的滲透時，我們希望進一步利用這種成功的關係。

From a financial perspective, as we've previously said, Scientific Air is expected to contribute approximately $5 million to $7 million in annualized revenues, and will be immediately accretive to our earnings per share. As such, when considering the combined revenue from these two acquisitions, we expect them to contribute approximately $10 million to $14 million in our current annualized revenue run rate.

從財務角度來看，正如我們之前所說，Scientific Air 預計將貢獻約 500 萬至 700 萬美元的年化收入，並將立即增加我們的每股盈餘。因此，在考慮這兩項收購的合併收入時，我們預計它們將為我們目前的年化收入運行率貢獻約 1,000 萬至 1,400 萬美元。

Although early in the process, we're making excellent progress on the integration of both KES and Scientific Air, and aligning each functional domain with our subsidiary, SteriLumen, to better serve our customers. This positions us for growth going forward, contributing to cost synergies, and more importantly, providing a much more elegant customer journey and a more complete solution set.

儘管處於這一過程的早期階段，我們在 KES 和 Scientific Air 的整合方面取得了巨大進展，並將每個功能領域與我們的子公司 SteriLumen 保持一致，以更好地為我們的客戶服務。這使我們能夠實現未來的成長，促進成本協同效應，更重要的是，提供更優雅的客戶旅程和更完整的解決方案集。

Collectively, these acquisitions create a broad portfolio of patented air disinfection purification technologies under the SteriLumen brand, capable of addressing virtually every major commercial market, including hospitals and assisted-living facilities; schools; food processing; post-harvest facilities; and as always, other large public spaces. We believe they are complementary technologies -- other complementary technologies or companies that would enrich and expand our portfolio of disinfecting solutions and open new markets to us.

總的來說，這些收購在 SteriLumen 品牌下創建了廣泛的專利空氣消毒淨化技術組合，能夠滿足幾乎所有主要商業市場的需求，包括醫院和輔助生活設施；學校；食品加工;收穫後設施；和往常一樣，其他大型公共空間。我們相信它們是互補技術——其他互補技術或公司將豐富和擴大我們的消毒解決方案組合併為我們打開新市場。

We continue to carefully evaluate how to accelerate our growth strategy through a targeted and scalable M&A approach to build on existing capabilities and potential growth areas. All this provides us with confidence about our expected performance in the fourth quarter and that 2022 will be another strong year for Applied UV.

我們繼續仔細評估如何透過有針對性的、可擴展的併購方法來加速我們的成長策略，以建立現有的能力和潛在的成長領域。所有這些都讓我們對第四季度的預期業績充滿信心，並且 2022 年將是 Applied UV 又一個強勁的一年。

We look forward to continuing to update all of you on our progress. And with this, concludes my remarks this morning. Holly, we're ready to get going on any questions that are out there.

我們期待繼續向大家通報我們的進展。我今天早上的發言就到此結束。霍莉，我們已準備好解決任何問題。

Ladies and gentlemen, the floor is now open for questions. (Operator Instructions) Jeffrey Cohen, Ladenburg.

女士們、先生們，現在可以提問。 （操作員說明）Jeffrey Cohen，拉登堡。

Hi Keyou, how are you?

嗨，柯佑，你好嗎？

Good morning, Jeff. Good to hear from you.

早安，傑夫。很高興聽到你的消息。

Yes. So, sorry, I only caught most of the call. Can you give us any indication of revenues for the quarter as far as composition [in this third] quarter? And congratulations on the strong top line.

是的。所以，抱歉，我只接了大部分電話。您能否向我們提供有關本季[第三]季度收入構成的任何資訊？祝賀您取得了強勁的營收。

Thank you. Mike, do you want to answer that?

謝謝。麥克，你想回答這個問題嗎？

Yeah, for the third quarter, it was roughly 50-50. Our traditional hospitality business, a little bit higher than 50, maybe 51/49, 51 being our SteriLumen or disinfection segment of the business.

是的，第三節的比數大約是50-50。我們傳統的酒店業務，比 50 稍高一些，可能是 51/49，51 是我們的 SteriLumen 或消毒業務部分。

Okay, got it. (multiple speakers)

好，知道了。 （多個發言者）

I'm sorry, Jeff, just to expand on that a teeny bit. We -- in the Q, we started segment reporting since SteriLumen is growing substantially. And so, it's broken out a little bit better and it will be passing the hospitality segment, the disinfection, since that's our growth engine.

很抱歉，傑夫，我只是稍微擴展一下這一點。由於 SteriLumen 大幅成長，我們在第四季度開始進行分部報告。因此，它的突破稍好一些，它將通過酒店業、消毒業，因為這是我們的成長引擎。

Okay. And was there any update on the hospital markets, or was there any update specifically on Airocide, as far as placements and information regarding SKUs being the commercial units, or the consumer units?

好的。就商業單位或消費者單位的 SKU 的放置和資訊而言，醫院市場是否有任何更新，或者 Airocide 是否有專門的更新？

You mean the breakout as to -- it's still more than almost 100% commercial. So, we're just wading into the consumer portion of the business, if that's answering your question. Does that answer your question?

你指的是突破——它仍然超過幾乎 100% 的商業化。因此，如果這能回答您的問題，我們只是涉足業務的消費者部分。這是否回答你的問題？

Yes, that's helpful. Did you say anything about fourth quarter? Did you say anything about pull through or any order backlog for the balance of the year?

是的，這很有幫助。你對第四季有什麼想說的嗎？您是否提到今年剩餘時間的完成或訂單積壓的情況？

Yeah. So, we did experience a little bit, obviously, of the logistics and getting goods out in the second quarter. That slowed us down, both with the Delta variant spiking and the, kind of, the crumbling of the supply chain infrastructure. The -- most of our problems in the second quarter were shipping.

是的。因此，顯然，我們確實在第二季的物流和出貨方面經歷了一些。這讓我們放慢了速度，無論是達美型號的激增，還是供應鏈基礎設施的崩潰。第二季度我們的大部分問題都是運輸。

And so, we realized -- we're realizing some of that backlog, and it start -- it'll start smoothing out going into -- I guess we saw some of it in third quarter, and we'll continue to see some of that pull through, we think, in the fourth quarter, and also, the beginning of the first quarter in 2022.

因此，我們意識到 - 我們正在意識到一些積壓，並且它開始 - 它將開始平滑進入 - 我想我們在第三季度看到了其中的一些，並且我們將繼續看到一些我們認為，這一目標將在第四季以及2022 年第一季初實現。

Okay. Perfect. Thank for [both].

好的。完美的。感謝[兩者]。

Yeah, Jeff, can I just add one -- sorry, Jeff, can I just add one thing? This is Mike. Yeah. So, in Q4, too, you're going to see not only continued improvement in hospitality and disinfection as it is today, but also you're going to see the impact of our KES and SAM acquisition. So, we're expecting -- obviously, our largest quarter, and you'll start to see the return on those investments that were just -- that Keyou had mentioned in his presentation.

是的，傑夫，我可以添加一件事嗎？抱歉，傑夫，我可以添加一件事嗎？這是麥克。是的。因此，在第四季度，您不僅會像今天一樣看到接待和消毒方面的持續改進，而且還會看到我們收購 KES 和 SAM 的影響。因此，我們預計——顯然，這是我們最大的季度，你將開始看到那些投資的回報——Keyyou 在他的演講中提到的。

I got it, Mike. So you're implying sequential growth, by your statement, largest quarter, over Q3, correct?

我明白了，麥克。所以你的意思是，根據你的聲明，第三季度是最大的季度，對嗎？

Yes.

是的。

Okay. Perfect. That does it for me. Thank you very much.

好的。完美的。這對我來說就是這樣。非常感謝。

Thank you, Jeff.

謝謝你，傑夫。

(Operator Instructions) There are no questions in queue. I would now like to turn the floor back over to Keyou.

（操作員說明）隊列中沒有問題。我現在想把發言權交還給科友。

Thank you very much, Holly. I'd like to thank everybody for -- on my team, especially, for a terrific third quarter, and especially our finance team for helping with the acquisitions and getting our Q out, which was a heavy lift. And I wish everyone a happy Thanksgiving. Thank you.

非常感謝你，霍莉。我要感謝我的團隊中的每個人，尤其是出色的第三季度，特別是我們的財務團隊，他們幫助我們完成了收購，並讓我們的 Q 脫穎而出，這是一個沉重的提升。祝大家感恩節快樂。謝謝。

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

謝謝。女士們先生們，今天的電話會議到此結束。此時您可以斷開電話線，度過美好的一天。感謝您的參與。