Crown Crafts Inc (CRWS) 2024 Q4 法說會逐字稿

Good day and welcome to the Crown Crafts Inc fourth quarter fiscal year 2024 conference call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加 Crown Crafts Inc 2024 財年第四季電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to John Beisler, Investor Relations. Please go ahead.

我現在想將會議交給投資者關係部的約翰‧貝斯勒 (John Beisler)。請繼續。

Thank you, Betsy, and good morning, everyone. We appreciate you joining us for the Crown Crafts fourth quarter and fiscal 2024 conference call. Joining me on the call today are Crown Crafts, President and CEO, Olivia Elliott; and the company's CFO, Craig Demarest.

謝謝你，貝特西，大家早安。我們感謝您參加 Crown Crafts 第四季和 2024 財年電話會議。今天和我一起參加電話會議的是 Crown Crafts 總裁兼執行長 Olivia Elliott；以及公司財務長 Craig Demarest。

Earlier this morning, Crown Crafts filed its 10-K and issued a press release regarding the fourth quarter and fiscal 2024 financial results. A copy of this release is available on the company's website, crowncrafts.com. During today's call the company will make certain forward-looking statements and actual results may differ materially from those expressed or implied.

今天早上早些時候，Crown Crafts 提交了 10-K 報告，並發布了有關第四季度和 2024 財年財務業績的新聞稿。新聞稿的副本可在該公司網站 Crowncrafts.c​​om 上取得。在今天的電話會議中，公司將做出某些前瞻性陳述，實際結果可能與明示或暗示的結果有重大差異。

These statements are subject to risks and uncertainties that may be on Crown Crafts control and the company is under no obligation to update these statements. For more information about the company's risk factors and other uncertainties, please refer to the company's filings with the Securities and Exchange Commission.

這些聲明受到 Crown Crafts 控制下的風險和不確定性的影響，公司沒有義務更新這些聲明。有關公司風險因素和其他不確定性的更多信息，請參閱公司向美國證券交易委員會提交的文件。

Finally, I would like to remind you, today's call is being recorded and a replay will be available through the company's Investor Relations page.

最後，我想提醒您，今天的電話會議正在錄音，並且可以透過公司的投資者關係頁面進行重播。

Now I'd like to turn the call over to the President and CEO, Olivia Elliott.

現在我想將電話轉給總裁兼執行長 Olivia Elliott。

Thank you, John, and good morning, everyone. Fiscal 2024 was a transitional year for the company. We started the year on the heels of acquiring and integrating Manhattan toys as well as exploring the cross selling opportunities made possible by the acquisition. We remain enthusiastic about the addition of Manhattan toys as our offerings across the toy category continue to grow.

謝謝約翰，大家早安。 2024 財年是該公司的過渡年。今年伊始，我們收購並整合了曼哈頓玩具，並探索了收購帶來的交叉銷售機會。隨著我們整個玩具類別的產品不斷增長，我們仍然對曼哈頓玩具的加入充滿熱情。

Additionally, we plan to leverage our long-standing relationships with major retailers and specialty stores to gain shelf space and position our brands for future growth. We also continue to proactively manage the impact of the economic headwinds facing our operations and our customers. Inflationary pressures continue to linger, raising costs for materials and labor and reducing the discretionary income of consumers, which has a more meaningful impact of lower income households.

此外，我們計劃利用與主要零售商和專賣店的長期合作關係來獲得貨架空間，並為我們的品牌未來的成長做好準備。我們也持續積極應對我們的營運和客戶面臨的經濟逆風的影響。通膨壓力持續存在，導致材料和勞動成本上升，消費者可自由支配收入減少，對低收入家庭影響更深遠。

We will continue to strategically manage our cost structure and sales process, but remain well positioned with our balance sheet and expect to see some of the macro pressure lessens throughout the remainder of the year. Despite these current challenges, we are -- we were able to minimize the impact on gross margin by proactively managing costs across the business. As a result, we've reported another year of profitability and we reduced our debt by $4.6 million from the end of fiscal 2023.

我們將繼續策略性地管理我們的成本結構和銷售流程，但保持我們的資產負債表處於有利地位，並預計今年剩餘時間內宏觀壓力將有所減輕。儘管目前面臨這些挑戰，但我們能夠透過主動管理整個業務的成本，將對毛利率的影響降至最低。結果，我們又報告了一年的獲利能力，並且自 2023 財年末起我們的債務減少了 460 萬美元。

With that, I would like to turn it over to Craig to cover the financials in more details.

至此，我想將其交給克雷格，以更詳細地介紹財務狀況。

Thank you, Olivia, and good morning, everyone. Net sales for the fourth quarter of 2024 were $22.6 million compared to $21.6 million in the prior year quarter. The increase reflects a full quarter's contribution from Manhattan toy this year compared to two weeks in the fourth quarter of fiscal '23. This more than offset reduced orders from our customers, including a prior year feature from a major customer that was not repeated in the current year, and the impact of consumers' response to the current macroeconomic conditions and adjusted inventory levels.

謝謝你，奧莉維亞，大家早安。 2024 年第四季的淨銷售額為 2,260 萬美元，去年同期為 2,160 萬美元。這一增長反映了曼哈頓玩具今年整個季度的貢獻，而 23 財年第四季的貢獻只有兩週。這足以抵消客戶訂單的減少，包括去年未重複的主要客戶的訂單，以及消費者對當前宏觀經濟狀況和調整庫存水準的反應的影響。

Gross profit for the quarter was 23.2% compared to 21.9% in the fourth quarter of fiscal '23. The margin increase is primarily related to the effect of reserves recorded in the prior year associated with the customer who declared bankruptcy.

該季度的毛利為 23.2%，而 2023 財年第四季的毛利為 21.9%。保證金增加主要與上一年記錄的與宣布破產的客戶相關的準備金的影響有關。

Marketing and administrative expenses were $3.9 million in the fourth quarter of fiscal '24, relatively unchanged to the prior year quarter despite the addition of Manhattan toys, marketing and administrative costs for a full quarter. We worked throughout fiscal '24 to reduce the historical costs of both Manhattan toys and our legacy businesses.

24 財年第四季的行銷和管理費用為 390 萬美元，儘管增加了曼哈頓玩具、整個季度的行銷和管理費用，但與去年同期相比基本上沒有變化。我們在整個 24 財年努力降低曼哈頓玩具和我們的傳統業務的歷史成本。

Net income for the quarter was $1 million or $0.1 per diluted share compared to net income of $828,000 or $0.08 per diluted share in the prior year.

本季淨利為 100 萬美元，即稀釋後每股收益 0.1 美元，而上一年淨利為 828,000 美元，即稀釋後每股收益 0.08 美元。

Turning now to our results for the full year, net sales for fiscal '24 or $87.6 million compared to $75.1 million in the prior year. Increase was primarily driven by the addition of Manhattan toys, which generated $18.5 million of net sales during fiscal '24, partially offset by a decline in our bedding, blankets and accessories business.

現在來看我們全年的業績，24 財年的淨銷售額為 8,760 萬美元，而前一年為 7,510 萬美元。成長主要是由曼哈頓玩具的增加所推動的，該玩具在 24 財年實現了 1850 萬美元的淨銷售額，部分被我們的床上用品、毛毯和配件業務的下降所抵消。

Gross profit for the year was 26.2% compared to 26.4% in fiscal '23, reflecting the rent increase at our California warehouse last February, partially offset by the impact of product mix. Marketing and administrative expenses were $16.1 million versus $12.7 million in the prior year. The increase primarily reflects the addition of Manhattan toy at the end of fiscal '23. Net income for the year was $4.9 million, or $0.48 per diluted share, compared to net income of $5.7 million or $0.56 per diluted share in fiscal '23.

本年度毛利為 26.2%，而 23 財年為 26.4%，反映了去年 2 月我們加州倉庫的租金上漲，部分被產品組合的影響所抵銷。行銷和管理費用為 1,610 萬美元，上一年為 1,270 萬美元。這一增長主要反映了曼哈頓玩具在 23 財政年度結束時的增加。本年度淨利為 490 萬美元，即稀釋後每股收益 0.48 美元，而 23 財年淨利為 570 萬美元，即稀釋後每股收益 0.56 美元。

Turning now to our balance sheet. Cash and cash equivalents as of the end of fiscal '24 totaled $830,000 compared to $1.7 million at the end of the prior year. Inventories at the end of fiscal '24 were $29.7 million compared to $34.2 million at the end of fiscal '23. Our long-term debt at the end of fiscal '24 was $8.1 million compared to $12.7 million at the end of 2023.

現在轉向我們的資產負債表。截至 24 財年末，現金及現金等價物總額為 83 萬美元，而上一財年末為 170 萬美元。 24 財年末的庫存為 2,970 萬美元，而 23 財年末的庫存為 3,420 萬美元。截至 24 財年末，我們的長期債務為 810 萬美元，而 2023 年底為 1,270 萬美元。

And finally, we paid $0.32 per share in cash dividends to shareholders in fiscal 2024. With a yield of 6.4% based on yesterday's close, we continue to believe our dividend is a key component towards offering long-term returns to our shareholders.

最後，我們在 2024 財年向股東支付了每股 0.32 美元的現金股息。

Now I'll turn the call back over to Olivia for additional comments.

現在我將把電話轉回給奧利維亞以徵求更多意見。

Thank you, Craig. We recently passed the one-year mark since our acquisition of Manhattan toys. In that time, we have successfully completed the brand's integration into Sassy and the IT conversion is nearly center. On the operations side, we adjusted the brand's advertising spending and worked through the excess inventory to substantially improve the profitability of the brand compared to pre-acquisition periods.

謝謝你，克雷格。最近，我們收購曼哈頓玩具已經一週年了。至此，我們已經成功完成了品牌對Sassy的整合，IT轉換也已接近尾聲。營運方面，我們調整了品牌的廣告支出，並解決了過剩的庫存，使品牌的獲利能力較收購前大幅提升。

We are very encouraged by the strats Manhattan toy has made on the product development front. Customers have given positive feedback on the items viewed at recent events, and they look forward to having these products on their shelf. As stated earlier, these new designs expand our offerings across the toy category, which now represents the largest portion of sales across our portfolio.

曼哈頓玩具在產品開發上所取得的成就讓我們深受鼓舞。顧客對最近活動中看到的商品給予了正面的回饋，他們期待這些產品上架。如前所述，這些新設計擴展了我們玩具類別的產品範圍，該類別目前占我們產品組合銷售額的最大部分。

Looking ahead to fiscal 2025, we will continue to manage the macroeconomic -- economic challenges facing our business and consumers and expand the product offering across our brands. We believe we are well-positioned for when the economy improves, and our strong balance sheet will allow us to consider favorable acquisition opportunities that can strengthen our existing categories.

展望 2025 財年，我們將繼續應對宏觀經濟—我們的企業和消費者面臨的經濟挑戰，並擴大我們品牌的產品供應。我們相信，當經濟好轉時，我們已做好充分準備，強大的資產負債表將使我們能夠考慮有利的收購機會，以加強我們現有的類別。

We would like to thank our team for their efforts over the past year and our customers and licensors for their continuing support. We look forward to updating you on our progress throughout the year. And thank you our shareholders for your continued support.

我們要感謝我們的團隊在過去一年中的努力以及我們的客戶和授權人的持續支持。我們期待向您通報我們全年的進展。感謝我們的股東一直以來的支持。

With that, I'd like to open up the line for questions.

至此，我想開通提問專線。

(Operator Instructions)

（操作員說明）

Doug Ruth, Lenox Financial Services.

道格‧魯斯 (Doug Ruth)，萊諾克斯金融服務公司。

Olivia and Craig, congratulations. It was a very solid report. It checks all the boxes, revenue growth, margin expansion, strong cash flow, debt reduction and of course, the dividend. So thank you for what you did for the shareholders?

奧莉薇亞和克雷格，恭喜你。這是一份非常可靠的報告。它檢查了所有的條件：收入成長、利潤率擴張、強勁的現金流、債務減少，當然還有股息。那麼感謝您為股東所做的一切？

Thank you, we appreciate your support.

謝謝您，我們感謝您的支持。

Okay. Could you tell us a little bit more about us. So we know you had sales of $18.5 million of Manhattan toys. Would there be an -- are you able to make a projection what the goal might be for Manhattan toy for fiscal 2025?

好的。您能告訴我們更多關於我們的資訊嗎？我們知道您的曼哈頓玩具銷售額為 1,850 萬美元。您是否能夠預測曼哈頓玩具 2025 財政年度的目標是什麼？

Yeah. We really don't give projections we kind of stay away from forecasting. And I think the best thing to do is probably go back to what we said when we acquired Manhattan toys, and that's the goal in the long term. It won't happen in fiscal '25, I think we said it was going to be $24 million. It's going to take three or four years to get there. But the projections are that we will grow steadily over those few years.

是的。我們確實不給預測，我們有點遠離預測。我認為最好的方法可能就是回到我們收購曼哈頓玩具時所說的，這就是長期目標。這不會在 25 財年發生，我想我們說過這將是 2400 萬美元。到達那裡需要三、四年的時間。但預計我們將在這幾年內穩定成長。

Okay. Is it possible to get maybe get some placement from Manhattan toy like in Walmart maybe in fiscal 2025? Or would it take be a longer time period than that.

好的。 2025 財年是否有可能像沃爾瑪一樣從曼哈頓玩具獲得一些職位？或需要比這更長的時間。

No, we have some placement in Walmart already, and that will be shipping sometime between the first and second quarter fiscal '25 or just a handful of items, and it's in a limited number of stores, but it's a start.

不，我們已經在沃爾瑪有了一些佈局，並將在25 財年第一季和第二季之間的某個時間發貨，或者只是少數商品，並且在數量有限的商店中，但這是一個開始。

Very good. Congratulations. And all you also had talked about possibly combining the two warehouses, the Compton warehouse and then Manhattan toy our warehouse or is there any progress on that?

非常好。恭喜。您還談到可能合併兩個倉庫，康普頓倉庫，然後曼哈頓玩具我們的倉庫，或者這方面有什麼進展嗎？

We're still exploring that opportunity. We have engaged a third-party to help us kind of figure out where the best place to place those warehouses are that minimize the impact to our customers as well as to anybody that's working in those warehouses.

我們仍在探索這個機會。我們已經聘請了第三方來幫助我們找出放置這些倉庫的最佳位置，以盡量減少對我們的客戶以及在這些倉庫中工作的任何人的影響。

Or do you expect maybe something that can happen in fiscal 2025 or we'd be looking beyond that?

或者您預計 2025 財年可能會發生一些事情，或者我們會考慮更長遠的事情？

You'll be looking beyond that. I think we by the end of fiscal 2025. I think we will have a plan, but I think any changes will happen in fiscal '26.

你會看到更遠的東西。我認為我們會在 2025 財年末之前完成。

Okay. And what about the of that sales and product development office and Minneapolis. You had previously stated that possibly we're hoping to do something with the leases or is there any progress on that?

好的。那麼銷售和產品開發辦公室和明尼阿波利斯的情況呢？您之前曾表示，我們可能希望對租約進行一些處理，或者這方面有任何進展嗎？

That's one going to be more long term process. I think that lease ends in the beginning of 2027. And unfortunately, downtown Minneapolis has way too much open office space to be able to sublease it. So that's going to be a longer-term issue.

這將是一個更長期的過程。我認為租約將於 2027 年初結束。所以這將是一個長期問題。

Okay. And what about the direct to consumer? How do you feel like you're making any progress with that?

好的。那麼直接面向消費者呢？您覺得自己在這方面有了哪些進展？

We have not gotten anybody except for Manhattan toys up and running on the direct to consumer for our own website. But we have no Joe's website is now complete and able to sell direct to consumer. And we are working through right now getting Sassy website up and running. And so I do believe by the end of fiscal 2025, we will have all of these on subsidiary selling direct to consumers.

除了曼哈頓玩具之外，我們還沒有讓任何人在我們自己的網站上直接面向消費者運作。但我們還沒有喬的網站現在已經完成並且能夠直接向消費者銷售。我們現在正在努力讓 Sassy 網站上線並運行。因此，我確實相信，到 2025 財年末，我們將透過子公司直接向消費者銷售所有這些產品。

Okay. And what about a -- how are things going for the company with buybuy Baby? You had previously told us at buybuy Baby, he'd had opened up to reopen some stores. Is there any progress with that initiative at all?

好的。那麼，buybuy Baby 公司的情況又是如何呢？您之前曾在buybuy Baby 告訴我們，他已經重新開設了一些商店。該倡議有任何進展嗎？

They did reopen, I believe 11 stores and we are shipping to all 11 of those stores. But I believe any expansion by them is slower, I think, than we had hoped it would be and they haven't opened up any new stores since the initial grand openings.

他們確實重新開業了，我相信有 11 家商店，我們正在向所有 11 家商店發貨。但我認為他們的任何擴張都比我們希望的要慢，而且自最初的盛大開幕以來他們還沒有開設任何新店。

Okay. And then a couple more how there was recently an article about expansion of Legoland. And I know that was one of the things that came with Manhattan Toy acquisition, how is that business going for the company?

好的。還有一些最近有一篇關於樂高樂園擴建的文章。我知道這是收購曼哈頓玩具所帶來的事情之一，該公司的業務進展如何？

That business is actually going very well. And we are -- we believe there will be three new parks, two of which will be in China. And those will be opened in, I believe, the summer of 2025. And so we're continuing to grow that business and we look forward to them opening the new parts, the one of the ones in China will be the largest one in the world.

這筆生意其實進展得很好。我們相信將會有三個新公園，其中兩個將在中國。我相信這些將在 2025 年夏天開業 因此，我們將繼續發展這項業務，我們期待他們開設新的部分，中國的其中一個將是世界上最大的一個世界。

Well. So that would potentially really expand the international sales?

出色地。那麼這真的有可能擴大國際銷售嗎？

Correct.

正確的。

And then the last question is I have been you did just did a tremendous job reducing the inventory. Are you happy with the inventory level at where it's at, or is there an objective for that?

最後一個問題是，你們剛剛在減少庫存方面做了巨大的工作。您對目前的庫存水準是否滿意，或者是否有目標？

I always think we have too much inventory. I do think we made great strides. We still have a little bit more and there's a close-out inventory to work through. But I don't think it's not a huge number, but we always have had something that we need to get rid of.

我總覺得我們的庫存太多了。我確實認為我們取得了很大進步。我們還有一點庫存，還有一些清倉庫存需要處理。但我認為這不是一個很大的數字，但我們總是有一些需要擺脫的東西。

Okay. Thank you for answering my questions. Congratulations to the team there. You've just done a really good job integrating the Manhattan toy business into the core operation.

好的。感謝您回答我的問題。祝賀那裡的團隊。您剛剛將曼哈頓玩具業務整合到核心業務中，做得非常好。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

John Deysher, Pinnacle.

約翰·戴舍爾，巔峰之作。

Good morning. Thanks for taking my question. You said I think was at $18.5 million in this fiscal year. I think you indicated last fiscal year was about $25.8 million on a pro forma basis, if that's the case that seems like a pretty significant drop. And I know you're going to let some accounts go, but how should we think about that decline in Manhattan toys year over year?

早安.感謝您提出我的問題。你說我認為本財年的金額是 1850 萬美元。我認為您表示上一財年的預估金額約為 2580 萬美元，如果是這樣的話，這似乎是一個相當大的下降。我知道你會放棄一些帳戶，但我們應該如何看待曼哈頓玩具逐年下降的情況？

Some of the decline was planned. There was -- there were some sales in the legacy business to the original, but about 80, that's bankrupt. So that was a little bit of the decline. We had some customers that we stopped shipping to because they didn't have a good credit. So that was planned as well. But once we got into it a little bit.

部分下降是有計劃的。原來的遺留業務有一些銷售，但大約有 80 個，那就破產了。所以這只是一點點下降。我們已經停止向一些客戶發貨，因為他們沒有良好的信用。所以這也是計劃好的。但一旦我們深入了解了一點。

It was a bigger drop, I guess, than we had planned initially because we realized that, for example, the direct to consumer business, they were spending as much on advertising as the top line sales. So obviously, when you're looking at it, something like that, the sales were at a 30% loss. So we will sacrifice some top line sales to improve the bottom line.

我想，下降幅度比我們最初計劃的要大，因為我們意識到，例如，在直接面向消費者的業務中，他們在廣告上的支出與營收的支出一樣多。很明顯，當你觀察類似的情況時，銷售損失了 30%。因此，我們將犧牲一些頂線銷售額來提高底線。

But we've been working throughout the year to get better costings on to move our products to new factories where we can get better prices out of China. And I think that as time goes by, you'll see those sales pick back up.

但我們全年都在努力獲得更好的成本核算，將我們的產品轉移到新工廠，在那裡我們可以從中國獲得更好的價格。我認為隨著時間的推移，你會看到這些銷售額回升。

Okay. So do you think the $18.5 million this fiscal year was the trough?

好的。那麼您認為本財年的 1,850 萬美元是低潮嗎？

I do think that.

我確實這麼認為。

Okay, let's figure it will go up. And on the flip side, if we back out Manhattan toys from the legacy business, it looks like the legacy your sales were about $69 million versus $49 million. Obviously, a big jump. What do you attribute that?

好吧，我們假設它會上漲。另一方面，如果我們從遺留業務中撤回曼哈頓玩具，看起來您的遺留業務銷售額約為 6,900 萬美元，而對比為 4,900 萬美元。顯然，這是一個很大的跳躍。你認為這是什麼？

That was last year versus this year. Are you looking for your back?

這是去年和今年的對比。你在尋找你的背影嗎？

I'm just going to hear from you subtract the $18.5 million from the $87.6 million, that's about $69 million and if we subtract the $25.8 million, I'm sorry, the apples of eyes, I'd say you're right, you're right. As I delete that last question, that was may be a slight decline? Yeah, slight decline in legacy.

我只是想聽聽你從 8760 萬美元中減去 1850 萬美元，大約是 6900 萬美元，如果我們減去 2580 萬美元，對不起，各位，我會說你是對的，你是對的。當我刪除最後一個問題時，這可能會略有下降？是的，遺產略有下降。

Okay. Okay. That's it for me. Thank you.

好的。好的。對我來說就是這樣。謝謝。

Thank you.

謝謝。

Dennis Scannell, Rutabaga Capital.

丹尼斯‧斯坎內爾，蕪菁甘藍資本。

Yeah, good morning, Olivia and Craig. I just a couple of quick things for me. I had a quick question on gross margins in the fourth quarter. So gross margins were down -- I'm sorry, gross margins were up year over year nicely, but down sequentially, kind of what we were doing in the first three quarters. It looks like we're kind of around 27%. Is that just a seasonal issue or mix or is it just any commentary on the decline relative to the previous three quarters?

是的，早上好，奧莉維亞和克雷格。我只是簡單說幾件事。我有一個關於第四季度毛利率的快速問題。因此，毛利率下降了——我很抱歉，毛利率逐年上升，但連續下降，就像我們前三個季度所做的那樣。看起來我們的比例大約是 27%。這只是一個季節性問題或混合問題，還是只是對相對於前三個季度的下降的任何評論？

And that's more of a timing issue on you see a little bit of a pull back when I hate to talk about, garden variances, et cetera. But I mean, you see a little bit of a negative burden variance when you get into Q4 because of Chinese New Year. So we're bringing less inventory. And during that time, a year. So it's more of a seasonal or a timing thing.

這更多的是一個時間問題，當我討厭談論花園差異等時，你會看到一點點的退縮。但我的意思是，當你進入第四季時，由於農曆新年，你會看到一些負負擔差異。所以我們減少了庫存。而那段時間，整整一年。所以這更多的是季節性或時間性的事情。

Okay, great. Thank you. So and then looking at the full year around 26% you know in past years, certainly before inflation really took off and we saw the softness on the consumer side, we had seen kind of gross margins 29%, maybe even 30% and looks like fiscal '21 is some recognizing that the mix of business has changed somewhat, particularly with the acquisition of Manhattan toys is 29%, 30% gross margins our potential for the business going forward? Or is that not realistic?

好的，太好了。謝謝。所以，然後看看過去幾年的全年毛利率約為26%，當然在通膨真正起飛之前，我們看到消費者方面的疲軟，我們看到毛利率為29%，甚至可能為30%，看起來像21財年，有些人意識到業務組合發生了一些變化，特別是收購曼哈頓玩具後，毛利率為29％，毛利率為30％，我們的業務未來的潛力是什麼？或者說這並不現實？

I mean, I think at the potential in the longer term future. The biggest thing that's impacting us right now is the increase in rent at the warehouse in California. So that had a big impact on us. And until we get that long term solution, there's it's not going to be at 30%, I don't think.

我的意思是，我認為從長遠來看，未來有潛力。目前對我們影響最大的是加州倉庫租金的上漲。所以這對我們產生了很大的影響。在我們找到長期解決方案之前，我認為不會達到 30%。

Okay. Okay. And then just out of curiosity on the insulin for the rents in California, it sounds like you're looking to exit that. Are you looking for another maybe at a lower cost facility, is there a solution to that rent? I guess is my question.

好的。好的。然後出於對加州租金胰島素的好奇，聽起來你正在尋求退出。您是否正在尋找另一個成本較低的設施，租金有解決方案嗎？我想這是我的問題。

We are working on that solution. And so we've engaged a third party to help us with that move because if you're going to move a warehouse that you've been in for 25, 30 years. We need to have the plan to be there for 10 to 20 years, at least on the forward-looking side. So we want to make sure that we do it right. So it is something that's going to take us 18 months to two years to get the long-term solutions.

我們正在研究該解決方案。因此，我們聘請了第三方來幫助我們搬遷，因為如果您要搬遷已經使用了 25、30 年的倉庫。我們需要製定 10 到 20 年的計劃，至少是前瞻性的。所以我們要確保我們做得正確。因此，我們需要 18 個月到兩年的時間才能找到長期解決方案。

Got it. Interesting. Okay. And so an opportunity there. Great. Thank you very much.

知道了。有趣的。好的。這是一個機會。偉大的。非常感謝。

Thank you.

謝謝。

This concludes our question and answer session. I would like to turn the conference back over to Olivia Elliott for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給奧利維亞·埃利奧特（Olivia Elliott）做總結演講。

We just like to thank you for your support over the years, and we look forward to updating you on our Q1 earnings, which will be in mid-August. Thank you very much.

我們只是想感謝您多年來的支持，我們期待在 8 月中旬向您通報我們第一季收益的最新情況。非常感謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。