CEA Industries Inc (BNC) 2023 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the CEA Industries Q1 2023 earnings conference call. Joining us today are the company's Chairman and CEO, Tony McDonald; as well as the company's CFO, Ian Patel. At this time, all participants have been placed on listen-only mode, and we will open the floor for your questions at the end. (Operator Instructions)

女士們、先生們，下午好，歡迎參加 CEA Industries 2023 年第一季度財報電話會議。今天加入我們的是公司董事長兼首席執行官托尼·麥克唐納 (Tony McDonald)；以及該公司的首席財務官伊恩·帕特爾(Ian Patel)。目前，所有參與者均已處於僅聽模式，我們將在最後開放供大家提問。 （操作員說明）

Before we begin, please be advised that this call may contain statements of a forward-looking nature relating to future events. These forward-looking statements are based on what we believe are reasonable assumptions, which ultimately could prove to be inaccurate and are subject to the inherent uncertainties in predicting future results and conditions.

在我們開始之前，請注意，本次電話會議可能包含與未來事件相關的前瞻性聲明。這些前瞻性陳述基於我們認為合理的假設，這些假設最終可能被證明是不准確的，並且受到預測未來結果和條件的固有不確定性的影響。

These statements reflect CEA Industries' current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this call, including the risk factors set forth in the company's Form 10-K, which was filed with the SEC. Please refer to their SEC filings for a more detailed discussion of the risks and uncertainties associated with their business. The forward-looking statements that the company has made are intended to be within the meaning of forward-looking statements in Section 27A of the Securities Act of 1933 as amended.

這些聲明反映了 CEA Industries 目前的信念，許多重要因素可能導致實際結果與本次電話會議中表達的結果存在重大差異，包括該公司向 SEC 提交的 10-K 表格中列出的風險因素。請參閱他們向 SEC 提交的文件，了解與其業務相關的風險和不確定性的更詳細討論。該公司做出的前瞻性陳述符合經修訂的 1933 年《證券法》第 27A 條中前瞻性陳述的含義。

Also, please note that the company filed its quarterly report on Form 10-Q and issued a press release announcing first-quarter results earlier today. These documents can be found on the Investor Relations section of the company's website at ceaindustries.com. If you would like to be added to the company's e-mail distribution list, please send an e-mail to info@ceaindustries.com.

另請注意，該公司已於今天早些時候提交了 10-Q 表格季度報告，並發布了宣布第一季度業績的新聞稿。這些文件可以在公司網站 ceaindustries.com 的投資者關係部分找到。如果您想添加到公司的電子郵件分發列表中，請發送電子郵件至 info@ceaindustries.com。

It is now my pleasure to turn the floor over to Tony MacDonald, Chairman and CEO of CEA Industries. Sir, the floor is yours.

現在我很高興請 CEA Industries 董事長兼首席執行官托尼·麥克唐納 (Tony MacDonald) 發言。先生，地板是你的了。

Well, thank you, and good afternoon, everyone. Our first-quarter performance reflects the completion of several previously delayed projects as well as the successful implementation of our strategic cost cutting initiatives.

好的，謝謝大家，大家下午好。我們第一季度的業績反映了幾個先前推遲的項目的完成以及我們戰略成本削減計劃的成功實施。

These resulted in double-digit revenue growth and material savings in operating expenses. Currently, we are moving in the right direction, though we remain mindful of the ongoing market conditions, and we will proceed cautiously in the periods ahead.

這些帶來了兩位數的收入增長並節省了運營費用。目前，我們正在朝著正確的方向前進，儘管我們仍然關注當前的市場狀況，並且我們將在未來一段時間內謹慎行事。

As we mentioned on our last earnings call, the macroenvironment has continued to present challenges affecting both operators and consumers over the past year. Within the cannabis industry specifically, operators have faced prolonged headwinds from pricing pressure and shrinking consumer wallets as inflation persists.

正如我們在上次財報電話會議上提到的，過去一年宏觀環境繼續帶來影響運營商和消費者的挑戰。特別是在大麻行業內，由於通貨膨脹持續存在，運營商面臨著定價壓力和消費者錢包萎縮的長期阻力。

As a result, capital expenditures in the sector have reduced significantly, resulting in delayed, paused, or eliminated construction projects. These conditions have had an adverse impact on our projected bookings and revenue.

結果，該行業的資本支出大幅減少，導致建設項目被推遲、暫停或取消。這些情況對我們的預計預訂量和收入產生了不利影響。

To help offset the macroenvironment, we have sharpened focus on diversifying our customer base outside of cannabis while actively evaluating our operations to identify and deliver efficiencies and cost savings. Specifically, we reduced our workforce in February in conjunction with several other expense saving programs, which resulted in a 24% reduction of operating expenses compared to the year-ago period and a 9% reduction from fourth quarter of 2022. We plan to continue identifying savings opportunities as we assess each segment of our business to ensure efficiency and effectiveness without compromising the high level of service we provide to our customers.

為了幫助抵消宏觀環境的影響，我們更加註重大麻以外的客戶群多元化，同時積極評估我們的運營，以識別和提高效率並節省成本。具體來說，我們在 2 月份削減了員工人數，並結合了其他幾項費用節省計劃，使運營費用與去年同期相比減少了 24%，與 2022 年第四季度相比減少了 9%。我們計劃繼續確定我們評估業務的每個部分以確保效率和有效性，同時又不影響我們為客戶提供的高水平服務，從而節省成本的機會。

Touching briefly on our customers, subsequent to quarter end, we signed two contracts; one within cannabis, and the other in the vertical agriculture industry. I'd like to briefly highlight each. First, we signed our largest design contract in company history to provide architectural and engineering services to a southeast cannabis cultivator. We expect to complete construction on this 60,000-square-foot cultivation and 20,000-square-foot processing facility by the end of the year.

簡單介紹一下我們的客戶，季度末後，我們簽署了兩份合同；一個是大麻行業，另一個是垂直農業行業。我想簡單地強調一下每一個。首先，我們簽署了公司歷史上最大的設計合同，為東南部大麻種植者提供建築和工程服務。我們預計在今年年底前完成這個 60,000 平方英尺的種植和 20,000 平方英尺的加工設施的建設。

Shortly after this project was signed, we announced another contract win with a vertical ag -- vertical indoor ag farming company called Farm.One. Under the contract, we will leverage our indoor agriculture climate control technologies and mechanical engineering capabilities to deliver a holistic HVAC system designed for their New York-based vertical farming facility. We've already begun working with their team to strategize on the most optimal HVAC equipment for their cultivation goals.

該項目簽署後不久，我們宣布與一家垂直農業公司簽訂了另一份合同——名為 Farm.One 的垂直室內農業農業公司。根據合同，我們將利用我們的室內農業氣候控制技術和機械工程能力，為其位於紐約的垂直農業設施提供整體暖通空調系統。我們已經開始與他們的團隊合作，為他們的種植目標制定最優化的 HVAC 設備戰略。

Although we are navigating a challenging environment, we believe we are well equipped to win more contracts and continue serving customers in both the cannabis and vertical agriculture industries.

儘管我們正在面臨充滿挑戰的環境，但我們相信我們有能力贏得更多合同並繼續為大麻和垂直農業行業的客戶提供服務。

I'll now hand it over to Ian Patel, our Chief Financial Officer, to discuss financial highlights for the quarter before wrapping up with closing remarks. Ian?

現在我將把它交給我們的首席財務官伊恩·帕特爾 (Ian Patel)，他將討論本季度的財務亮點，然後再做結束語。伊恩？

Thanks, Tony, and good afternoon, everyone. Jumping right into our results, Q1 revenue increased to $4.7 million compared to $1.7 million in the year-ago period. The increase was primarily attributable to improvements in our supply chain and deployments of project work as we worked through delayed projects from prior periods.

謝謝托尼，大家下午好。直接看我們的業績，第一季度收入從去年同期的 170 萬美元增至 470 萬美元。這一增長主要歸因於我們的供應鏈的改進以及項目工作的部署，因為我們處理了前期延遲的項目。

Our net bookings in the first quarter were $800,000 compared to $2.1 million in the same period in 2022. Backlog at quarter end was $1.9 million compared to $11.2 million in the year-ago quarter. The decrease in net bookings and backlog was primarily driven by fewer capital projects and expenditures by cannabis operators.

我們第一季度的淨預訂量為 80 萬美元，而 2022 年同期為 210 萬美元。季度末的積壓訂單為 190 萬美元，而去年同期為 1,120 萬美元。淨預訂量和積壓訂單的減少主要是由於大麻運營商的資本項目和支出減少所致。

Gross profit for the first quarter of 2023 increased to $900,000 or 18.2% of revenues compared to $100,000 or 5.2% of revenue for the same period in 2022. The increase in gross margin was primarily driven by higher revenue and a decrease in fixed costs as a percentage of revenue, which includes the cost of services, engineering, manufacturing, and project management.

2023 年第一季度的毛利潤增至 90 萬美元，佔收入的 18.2%，而 2022 年同期為 10 萬美元，佔收入的 5.2%。毛利率的增長主要是由於收入增加和固定成本下降推動的。收入的百分比，包括服務、工程、製造和項目管理的成本。

Operating expenses in the first quarter decreased 24% to $1.3 million compared to $1.7 million in the year-ago quarter. The decrease was primarily driven by lower product development expenses as well as decreased personnel and marketing costs. It's worth noting that our OpEx is down 9% from Q4 2022, reflecting the benefit of our recently implemented cost-savings initiatives. We expect OpEx levels to further reduce in 2023 as we are intently focused on our bottom line.

第一季度運營費用下降 24% 至 130 萬美元，而去年同期為 170 萬美元。下降的主要原因是產品開發費用減少以及人員和營銷成本減少。值得注意的是，我們的運營支出較 2022 年第四季度下降了 9%，反映了我們最近實施的成本節約計劃的好處。由於我們專注於盈利，我們預計 2023 年運營支出水平將進一步下降。

Net loss for the first quarter of 2023 improved to $400,000 or negative $0.05 per share as compared to a net loss of $1.4 million or negative $0.41 per share in the year-ago quarter. As of March 31, 2023, cash and cash equivalents were $15.9 million compared to $18.6 million as of December 31, 2022, while working capital decreased by $200,000 during this period. At March 31, 2023, we remain debt-free.

2023 年第一季度的淨虧損改善至 40 萬美元，即每股負 0.05 美元，而去年同期淨虧損為 140 萬美元，即每股負 0.41 美元。截至2023年3月31日，現金和現金等價物為1590萬美元，而截至2022年12月31日為1860萬美元，而在此期間營運資金減少了20萬美元。截至 2023 年 3 月 31 日，我們仍然沒有債務。

This concludes my prepared remarks. I'll pass it back to you, Tony.

我準備好的發言到此結束。我會把它傳回給你，托尼。

Thank you, Ian. As I mentioned, going forward, we will continue to focus on running a lean operation while securing new wins in the cannabis and traditional agriculture verticals. We have robust liquidity position, and we believe our cost saving initiatives and prudent approach to capital allocation will enable us to weather the challenging macroenvironment.

謝謝你，伊恩。正如我所提到的，展望未來，我們將繼續專注於精益運營，同時在大麻和傳統農業垂直領域取得新的勝利。我們擁有強勁的流動性狀況，我們相信我們的成本節約舉措和審慎的資本配置方法將使我們能夠應對充滿挑戰的宏觀環境。

Operator, at this time, we will open the floor for questions.

接線員，現在我們開始提問。

(Operator Instructions)

（操作員說明）

As we wait for people to enter the queue, I will field some questions received by e-mail and the webcast. One, given the meaningful slowdown in cannabis projects, how are you thinking about allocating your sales force's time to find new opportunities?

當我們等待人們進入隊列時，我將回答通過電子郵件和網絡廣播收到的一些問題。第一，鑑於大麻項目大幅放緩，您如何考慮分配銷售人員的時間來尋找新機會？

Great question. The cannabis end market will certainly continue to be a focus. But given some of the challenges facing the industry, we are keen on continuing to diversify our customer mix. So more and more time is being spent on winning projects in the vertical agriculture. This has been reflected in the several new wins outside of cannabis in recent quarters.

很好的問題。大麻終端市場肯定將繼續成為焦點。但考慮到該行業面臨的一些挑戰，我們熱衷於繼續實現客戶組合多元化。因此，越來越多的時間花在贏得垂直農業項目上。這已經反映在最近幾個季度大麻以外的幾項新勝利中。

Next question, of the project backlog, how much is in cannabis versus other industries? Well, the majority of our backlog is still primarily comprised of cannabis operators. However, we would expect that mix to evolve as we work to sell more to non-cannabis verticals.

下一個問題是，在項目積壓中，大麻與其他行業相比有多少？好吧，我們的大部分積壓仍然主要由大麻經營者組成。然而，隨著我們努力向非大麻垂直行業銷售更多產品，我們預計這種組合會不斷發展。

Next question, how should we be thinking about operating expense run rate moving forward? Can you get to under $1 million per quarter without impacting the necessary investments in people and sales to grow the business?

下一個問題，我們應該如何考慮未來的運營費用運行率？您能否在不影響業務發展所需的人員和銷售投資的情況下，將每季度的收入控制在 100 萬美元以下？

Well, I'd say that we aren't going to assign a specific target. But as I stated in the prepared remarks, we do expect to reduce OpEx further. Whether that gets to under $1 million per quarter or around that run rate is something we are working towards.

嗯，我想說我們不會指定一個具體的目標。但正如我在準備好的發言中所說，我們確實希望進一步減少運營支出。無論是每季度低於 100 萬美元還是圍繞這個運行率，都是我們正在努力的方向。

Another question, do you have any comments related to the Nasdaq delisting notice you received last month? Sure. We were recently notified by Nasdaq that we didn't meet their minimum bid price as a result of our stock trading under $1 for 30 consecutive business days.

另外一個問題，您對上個月收到的納斯達克退市通知有何評論？當然。最近，我們接到納斯達克的通知，由於我們的股票交易價格連續 30 個工作日低於 1 美元，因此我們沒有達到他們的最低買入價。

We have every intention of regaining compliance and maintaining our NASDAQ listing, and we plan to take the appropriate steps as needed. However, we cannot provide any assurance or guarantee of maintaining the listing.

我們完全有意恢復合規性並維持我們在納斯達克的上市地位，並且我們計劃根據需要採取適當的措施。但是，我們不能提供任何維持上市的保證或保證。

Next question, you've previously spoken about M&A opportunities given the environment for cannabis. Can you provide an update as you've evaluated the landscape over the past several months?

下一個問題，您之前談到了大麻環境下的併購機會。您能否提供對過去幾個月的情況評估的最新情況？

A couple of thoughts come to mind. First, we continue to patiently identify and evaluate opportunities within both the cannabis and traditional vertical ag markets. And secondarily, with our strong balance sheet, we can remain diligent in our pursuit of accretive opportunities that will bolster our service and product offerings, which we believe can accelerate our growth and profitability in the future.

我想到了一些想法。首先，我們繼續耐心地識別和評估大麻和傳統垂直農業市場中的機會。其次，憑藉我們強大的資產負債表，我們可以繼續努力追求增值機會，以增強我們的服務和產品供應，我們相信這可以加速我們未來的增長和盈利能力。

That concludes the pre-submitted questions. Operator, are there any questions from the lines at this time?

預先提交的問題到此結束。接線員，此時線路有什麼問題嗎？

Lance Finlandson, Private Investor.

蘭斯·芬蘭森，私人投資者。

Thanks. Can you guys hear me okay?

謝謝。你們能聽到我說話嗎？

Yeah, I hear you.

是的，我聽到了。

Okay. Hey, congratulations. That was a strong quarter. It was kind of unexpected. But I'm a fairly large investor of you, guys, and I follow your company pretty close.

好的。嘿，恭喜。那是一個強勁的季度。這有點出乎意料。但我是你們的相當大的投資者，伙計們，我非常密切地關注你們的公司。

I know you guys have a lot of cash, and I just wanted to know what is it that you guys are actually -- what do you see your company as, say a year or two years from now? What is it that you're actually striving to become with that cash?

我知道你們有很多現金，我只是想知道你們實際上是什麼——你們認為你們的公司是什麼樣的，比如說一年或兩年後？你真正想用這筆錢實現什麼目標？

Good question. I think our vision is pretty straightforward, is that we believe in this industry that we're in. Cannabis is going through a bit of a construction lull right now, but both it and the vertical ag markets, indoor ag markets are going to continue to grow.

好問題。我認為我們的願景非常簡單，就是我們相信我們所處的這個行業。大麻目前正在經歷一些建設平靜期，但它和垂直農業市場、室內農業市場都將繼續下去成長。

And if you -- at least from the forecasts that we can see through credible industry sources, that both are going to continue to grow reasonably aggressively. And our objective is to continue to be able to serve that industry, both with our existing business and potentially through other companies we might acquire or partner with. So we should continue to grow along with this industry.

如果你——至少從我們通過可靠的行業來源看到的預測來看，兩者都將繼續相當積極地增長。我們的目標是繼續能夠通過我們現有的業務以及我們可能收購或合作的其他公司為該行業提供服務。所以我們應該繼續與這個行業一起成長。

So that's a good point. And that was another question I had is that, do you guys have any other companies picked out? Or have you guys been approached by any other companies as a partnership?

所以這是一個很好的觀點。我的另一個問題是，你們還選擇了其他公司嗎？或者有其他公司與你們聯繫過作為合作夥伴嗎？

I wouldn't be able to comment on any specifics other than to say that we're active in the marketplace, discussing potential opportunities with folks that we see and folks that may see us. So we're -- like I said we're actively in the marketplace looking for good opportunities.

我無法評論任何具體細節，只能說我們在市場上很活躍，與我們看到的人和可能看到我們的人討論潛在的機會。所以，就像我說的，我們正在市場上積極尋找良好的機會。

Well, I think that pretty much answers all my questions. Like I said, that was a strong revenue number, and I just hope that you guys can continue to control your expenses and at least get close to that breakeven until you can find something or the business picks back up in the cannabis sector.

嗯，我想這幾乎回答了我所有的問題。就像我說的，這是一個強勁的收入數字，我只是希望你們能夠繼續控制開支，至少接近收支平衡，直到你們能找到一些東西或者大麻行業的業務回升。

I follow the whole sector. I've known it. I've been involved in this sector since 2014 and have been in -- invested in a lot of these companies since then, and I actually am a fairly large investor of you guys. And so I'm hoping that in the future that you guys could continue to build on this business.

我關注整個行業。我已經知道了。我自 2014 年起就參與了這個領域，從那時起我就投資了很多這樣的公司，實際上我是你們中相當大的投資者。所以我希望你們將來能夠繼續發展這項業務。

Well, we appreciate your support, and we certainly appreciate your continued interest, and we're doing our best to make something good happen.

好吧，我們感謝您的支持，當然也感謝您持續的關注，我們正在盡最大努力讓好事發生。

Thank you.

謝謝。

Operator, other questions?

接線員，還有其他問題嗎？

There are no other questions at this time.

目前沒有其他問題。

Well, this concludes today's conference call. We look forward to presenting our second-quarter results in the coming months.

好了，今天的電話會議到此結束。我們期待在未來幾個月內公佈第二季度業績。

Thank you. An audio replay of this call will be available on ceaindustries.com/investors beginning on May 15 at 5:15 PM Eastern Time and will remain available until May 29, 2023.

謝謝。本次電話會議的音頻重播將於美國東部時間 5 月 15 日下午 5:15 起在 ceaindustries.com/investors 上提供，並將持續到 2023 年 5 月 29 日。

You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.

此時您可以斷開線路，度過美好的一天。感謝您的參與。