Charles & Colvard Ltd (CTHR) 2023 Q2 法說會逐字稿

Good afternoon and welcome to the Charles & Colvard, Ltd. Second Quarter Fiscal Year 2023 Earnings Conference Call. (Operator Instructions)

下午好，歡迎來到 Charles & Colvard, Ltd. 2023 財年第二季度收益電話會議。 （操作員說明）

This earnings call may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended, including statements regarding, among other things the company's business strategy and growth strategy. Expressions which identify forward-looking statements speak only as of the date the statement is made. These forward-looking statements are based largely on our company's expectations and are subject to a number of risks and uncertainties, some of which cannot be predicted or quantified and are beyond our control. Future developments and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking information will prove to be accurate.

本次財報電話會議可能包含經修訂的 1933 年證券法第 27A 條所定義的前瞻性陳述，包括關於公司業務戰略和增長戰略等的陳述。識別前瞻性陳述的表述僅在陳述作出之日有效。這些前瞻性陳述主要基於我們公司的預期，並受到許多風險和不確定性的影響，其中一些無法預測或量化，並且超出我們的控制範圍。未來的發展和實際結果可能與前瞻性陳述中闡述、考慮或支持的內容存在重大差異。鑑於這些風險和不確定性，無法保證前瞻性信息將被證明是準確的。

Accompanying today's call is a supporting PowerPoint slide deck, which is available in the Investor Relations section of the company's website at ir.charlesandcolvard.com/events. The company will be hosting a Q&A session at the conclusion of prepared remarks. (Operator Instructions) Please note, this event is being recorded.

今天的電話會議附帶一個支持性的 PowerPoint 幻燈片，可在公司網站 ir.charlesandcolvard.com/events 的投資者關係部分獲取。該公司將在準備好的評論結束時舉辦問答環節。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Don O'Connell, President and Chief Executive Officer. Please go ahead.

我現在想將會議轉交給總裁兼首席執行官 Don O'Connell。請繼續。

Good afternoon, everyone. Over the past few years, our focus has been to build a company that can take advantage of the longer term movement in the marketplace towards responsibly sourced gems and jewelry to capture greater market share. A recent McKinsey report noted that consumer shopping for fine jewelry are increasingly favoring brands that act responsibly value diversity and have a compelling brand presence both online and offline.

大家下午好。在過去的幾年裡，我們的重點一直是建立一家公司，該公司可以利用市場上長期向負責任採購的寶石和珠寶發展的趨勢，以佔領更大的市場份額。麥肯錫最近的一份報告指出，購買高級珠寶的消費者越來越青睞那些負責任地重視多樣性並在線上和線下都擁有引人注目的品牌形象的品牌。

In years past, when people shot for high-end jewelry, design would be at the forefront of their mind. However, in recent years, research shows that consumers now also search for a brand that resonates with them and is socially and ethically responsible, which we believe is one of our key differentiators. Millennial customers in particular won't even consider a brand that doesn't prioritize sustainability according to McKinsey.

在過去的幾年裡，當人們追求高端珠寶時，設計是他們的首要考慮因素。然而，近年來的研究表明，消費者現在也在尋找一個能引起他們共鳴並且對社會和道德負責的品牌，我們認為這是我們的關鍵差異化因素之一。根據麥肯錫的說法，尤其是千禧一代的客戶甚至不會考慮一個不優先考慮可持續性的品牌。

Since the pandemic began, the consumer buying journey has fundamentally changed, while previously customers would visit a brick and mortar store in order to try on fine jewelry items in person, the pandemic moved consumers online. Research has also shown that sustainability considerations across product categories are growing. Within high-end jewelry, the consumer cares much more about ethics than they did before the pandemic.

自大流行開始以來，消費者的購買旅程發生了根本性的變化，而以前顧客會去實體店親自試戴高級珠寶，而大流行將消費者轉移到了網上。研究還表明，跨產品類別的可持續性考慮因素正在增加。在高端珠寶中，消費者比大流行之前更關心道德。

McKenzie projects that sustainability influence purchases while account for 20% to 30% of all fine jewelry sales by 2025. Perhaps as much as $110 billion, which is more than triple the number of sustainability influence purchases in 2019.

McKenzie 預計，到 2025 年，可持續性影響的購買量將佔所有高級珠寶銷售額的 20% 至 30%。可能高達 1100 億美元，是 2019 年可持續性影響購買量的三倍多。

The lab grown jewelry market, which represents one of the hottest growing categories in the jewelry space and as a subset of sustainability influence purchases, is forecasted to exceed $9 billion this year. We believe that Charles & Colvard is ideally positioned with our Made, not Mined strategy and campaign to benefit from what McKinsey has dubbed the sustainability search, as well as our broader direct-to-consumer initiatives providing us optimism for growth opportunities for the future of the company.

實驗室種植的珠寶市場代表了珠寶領域最熱門的增長類別之一，並且作為可持續性影響購買的一個子集，預計今年將超過 90 億美元。我們相信 Charles & Colvard 憑藉我們的 Made, not Mined 戰略和活動處於理想位置，可以從麥肯錫所謂的可持續發展搜索中獲益，以及我們更廣泛的直接面向消費者的計劃，為我們的未來增長機會提供樂觀態度公司。

In order to take advantage of the movement in the market, we have undertaking key initiatives to drive long-term value in the company. This includes focusing on finished jewelry products, the utilization of one of our long-standing core strengths in the production and faceting of loose gemstones to now include lab grown diamonds.

為了利用市場的變化，我們採取了關鍵舉措來推動公司的長期價值。這包括專注於成品珠寶產品，利用我們在裸寶石生產和刻面方面的長期核心優勢之一，現在包括實驗室培育鑽石。

Diversifying our product offering beyond created moissanite to include lab grown diamonds and colored gemstones. Expanding our direct-to-consumer footprint, which includes our online focus, our signature showroom initiative, and some exciting opportunities we will be exploring in the coming quarters and building up branded distribution assets of our owned properties to become more self-sustaining while allowing us to leverage our infrastructure in the future.

使我們的產品多樣化，超越人造莫桑石，包括實驗室培育的鑽石和彩色寶石。擴大我們直接面向消費者的足跡，包括我們的在線重點、我們的標誌性陳列室計劃以及我們將在未來幾個季度探索的一些令人興奮的機會，並建立我們自有物業的品牌分銷資產，以變得更加自我維持，同時允許我們在未來利用我們的基礎設施。

While the macroeconomic environment is certainly providing some near-term pressure to the industry right now, we have begun to take steps to diligently manage our expenses when possible, and overall inventory position. We believe the underlying results of the quarter are an indication that we are executing against our long-term initiatives while maintaining the strength of our balance sheet, positioning us well within the growing transformation that is taking place within the jewelry industry.

雖然宏觀經濟環境目前肯定給行業帶來了一些短期壓力，但我們已經開始採取措施，在可能的情況下努力管理我們的費用和整體庫存狀況。我們認為本季度的基本結果表明我們正在執行我們的長期計劃，同時保持我們資產負債表的實力，使我們在珠寶行業正在發生的不斷發展的轉型中處於有利地位。

So when I talk about execution against our key initiatives, what does that mean? First, as I mentioned, we are expanding our focus on enhancing our finished jewelry assortment and showcasing our value proposition with its core and original designs. Featuring moissanite gemstones in premium quality.

因此，當我談到針對我們的關鍵舉措執行時，那是什麼意思？首先，正如我提到的，我們正在擴大我們的重點，以增強我們的成品珠寶種類，並通過其核心和原創設計展示我們的價值主張。採用優質莫桑石寶石。

In fiscal year 2021, approximately 62% of our total revenue was attributed to finished jewelry. That number was 68% in fiscal 2022, and during the most recent quarter end of December 31, 2022, it comprised 81%. Why the added focused on finished jewelry versus loose gemstones. For several years, we've worked diligently to become a globally recognized fine jewelry destination, rather than simply a single gemstone supplier in the wholesale capacity, which we believe limited our future growth opportunities and overall total achievable market or tam.

在 2021 財年，我們總收入的大約 62% 來自成品珠寶。這一數字在 2022 財年為 68%，而在 2022 年 12 月 31 日的最近一個季度末，這一比例為 81%。為什麼增加的重點是成品珠寶而不是未鑲嵌的寶石。幾年來，我們一直努力成為全球公認的高級珠寶目的地，而不僅僅是批發能力中的單一寶石供應商，我們認為這限制了我們未來的增長機會和總體可實現的市場或 tam。

Our second key focus area is broadening our footprint to capture a greater share of the lab grown diamond market. Data shows the number of engagement rings sold that featured a lab grown diamond jumped 63% from March 2021, to March of last year. While the number of engager rings sold with a mine diamond declined 25% in the same period. Lab grown diamonds comprised about 3% of the specialty diamond jewelry market in 2020, and that figure grew 7% in 2021. This is a growing market and we intend to be a major voice within the industry.

我們的第二個重點領域是擴大我們的足跡，以在實驗室培育鑽石市場中佔據更大的份額。數據顯示，從 2021 年 3 月到去年 3 月，售出的帶有實驗室培育鑽石的訂婚戒指數量增長了 63%。而同期與礦鑽一起售出的訂婚戒指數量下降了 25%。 2020 年，實驗室培育鑽石約佔特種鑽石珠寶市場的 3%，而這一數字在 2021 年增長了 7%。這是一個不斷增長的市場，我們打算成為行業內的主要聲音。

In September of 2020, we launched Arcadia Lab Grown diamonds. While still a fraction of overall sales, it is clearly the fastest growing product category for us, with sales of 19% compared to last year's second quarter and year to date, we are up over 600% compared to the same period in fiscal 2021. Moissanite will continue to be a huge focus and key differentiator for us, but we intend decimally compete in the diamond space, adding to our incredible line-up of Made, not Mined gems and jewelry.

2020 年 9 月，我們推出了 Arcadia 實驗室培育鑽石。雖然仍然只佔總銷售額的一小部分，但它顯然是我們增長最快的產品類別，與去年第二季度和年初至今的銷售額相比增長了 19%，與 2021 財年同期相比增長了 600% 以上。莫桑石將繼續成為我們的巨大關注點和關鍵差異化因素，但我們打算在鑽石領域進行十進制競爭，增加我們令人難以置信的製造而非開採寶石和珠寶系列。

As mentioned, another key focus for us is on expanding our direct-to-consumer focus, thereby broadening our footprint and providing the ability for our consumers to experience our product firsthand.

如前所述，我們的另一個重點是擴大我們直接面向消費者的關注點，從而擴大我們的足跡並讓我們的消費者能夠親身體驗我們的產品。

As a report I mentioned at the beginning discussed there is increasing movement towards online and non-brick and mortar purchases. Clearly brick and mortar is not going away. In fact, we recently opened a flagship store in Research Triangle Park, North Carolina to expand our reach, but the growth especially amongst younger individuals is moving towards online.

正如我在開頭提到的一份報告所討論的那樣，越來越多的人轉向在線和非實體購買。顯然，實體店不會消失。事實上，我們最近在北卡羅來納州三角研究園開設了一家旗艦店，以擴大我們的影響力，但尤其是年輕人的增長正在轉向在線。

We have expanded our capabilities online over the last number of years to enhance the customer experience, while also looking to improve our advertising and marketing focus to build greater brand awareness. That said, the investment to capture the direct-to-consumer and online sales do come to cost.

在過去的幾年裡，我們擴大了我們的在線能力以提升客戶體驗，同時也希望改進我們的廣告和營銷重點以建立更大的品牌知名度。也就是說，獲取直接面向消費者和在線銷售的投資確實會產生成本。

Digital advertising costs have increased substantially in the ROI fluctuates. Like many in the industry, we have refocused efforts to find ways to reach the consumer more effectively, strategically focusing our marketing efforts to find customers predisposed to our Made, not Mined product assortment.

數字廣告成本大幅增加，投資回報率波動。與業內許多人一樣，我們已經重新調整工作重點，尋找更有效地接觸消費者的方法，戰略性地集中我們的營銷工作，以尋找傾向於我們的“製造”而非“開採”產品系列的客戶。

At a high level, online channels comprised 76% of our second quarter sales in fiscal 2023 compared to 66% during Q1 of fiscal 2023 and just 62% for full fiscal year 2022. Our strategic focus remains continuing to drive and elevate our direct-to-consumer presence and brand strategy, which we believe will better position us from long-term growth and help bolster against the current macroeconomic uncertainty and geopolitical unrest.

在高水平上，在線渠道占我們 2023 財年第二季度銷售額的 76%，而 2023 財年第一季度為 66%，而整個 2022 財年僅為 62%。我們的戰略重點仍然是繼續推動和提升我們的直銷業務-消費者存在和品牌戰略，我們認為這將使我們更好地從長期增長中定位，並有助於抵禦當前的宏觀經濟不確定性和地緣政治動盪。

We continue to make strategic investments in our direct-to-consumer initiatives, which we believe will further strengthen our moat and overall position in the market. Our goal is to leverage our assets in order to make Charles & Colvard synonymous with responsible moissanite fine jewelry and gemstones for the conscious consumer, which we believe is the largest growing category and opportunity in the jewelry space.

我們繼續對直接面向消費者的計劃進行戰略投資，我們相信這將進一步加強我們的護城河和市場整體地位。我們的目標是利用我們的資產，使 Charles & Colvard 成為有意識的消費者負責任的莫桑石高級珠寶和寶石的代名詞，我們認為這是珠寶領域最大的增長類別和機會。

We want to own more of our destiny and become a top destination of choice where our customers can satisfy all of their jewelry needs. Our web properties and flagship stores are examples of this. With a large portion of our capital investments funded and key personnel added in support of these strategies, we can now focus on ways to monetize these initiatives in a meaningful way. This will take some time to bear fruit, but we believe we have strengthen our resources and capabilities building upon our past successes infrastructure and brand equity to take the company to the next level.

我們希望擁有更多的命運，並成為客戶可以滿足其所有珠寶需求的首選目的地。我們的網絡資產和旗艦店就是這方面的例子。隨著我們的大部分資本投資得到資助並增加了關鍵人員來支持這些戰略，我們現在可以專注於以有意義的方式將這些計劃貨幣化的方法。這需要一些時間才能取得成果，但我們相信，我們已經在過去成功的基礎設施和品牌資產的基礎上加強了我們的資源和能力，將公司提升到一個新的水平。

Clearly, the challenges in the economy are playing a part in our results. Domestic and global inflation and rising interest rates, coupled with ongoing fears of recession continue to erode consumer confidence and present major challenges for the global retail and jewelry industry.

顯然，經濟中的挑戰正在影響我們的業績。國內和全球通貨膨脹和利率上升，加上對經濟衰退的持續擔憂，繼續削弱消費者信心，並為全球零售和珠寶行業帶來重大挑戰。

While American consumers spent more this holiday season to keep up with higher prices, we experience lulls during the calendar year end holiday season, and we expect that consumers will continue to feel pressured financially, particularly during the second half of fiscal 2023. This is not unique to Charles & Colvard and we are facing similar challenges of retailers in the fine jewelry space.

雖然美國消費者在這個假日季節花費更多以跟上更高的價格，但我們在日曆年末的假日季節經歷了平靜，我們預計消費者將繼續感到財務壓力，特別是在 2023 財年下半年。這不是Charles & Colvard 獨有，我們在高級珠寶領域面臨著與零售商類似的挑戰。

At the same time however, these same challenges are providing us the opportunity to continue reevaluating technologies and strategies to better position us in the future. Some of these I've discussed already on this call, but another important aspect has been our ability to manage our inventory and cash flow.

然而與此同時，這些相同的挑戰為我們提供了繼續重新評估技術和戰略的機會，以便我們在未來更好地定位。其中一些我已經在這次電話會議上討論過，但另一個重要方面是我們管理庫存和現金流的能力。

As you will see in the results, our cash position increased during the quarter, despite the net loss. Cash increased from $16.6 million last quarter to $17 million this quarter. Further, our cash flows from operations were also positive this quarter. We expect that our inventory levels, which were down $1.6 million from the most recent quarter, should continue to decrease in the quarters to come.

正如您將在結果中看到的那樣，儘管存在淨虧損，但我們的現金頭寸在本季度有所增加。現金從上一季度的 1660 萬美元增加到本季度的 1700 萬美元。此外，本季度我們的運營現金流量也為正。我們預計我們的庫存水平比最近一個季度下降了 160 萬美元，在未來幾個季度應該會繼續下降。

We feel confident that we have taken decisive actions to align our go-forward growth and profitability strategies with the near term economic backdrop, to help maintain a strong balance sheet going forward.

我們相信，我們已採取果斷行動，使我們的前瞻性增長和盈利戰略與近期經濟背景保持一致，以幫助維持強勁的資產負債表。

I would like to highlight again to everyone that we currently have $17 million cash and cash equivalents and inventory valued at $35 million, for a combined total of $52 million with only $10 million in total liabilities, including zero debt. So even if you ignore all the other assets we have, including net fixed assets and equipment, intangible assets such as our intellectual property, receivables and excluding any value for our brand equity, etcetera, and only account for cash, cash equivalents and inventory, less all liabilities. it comes to approximately $42 million compared to a current market cap of approximately $29 million. We believe this showcases our demonstrated value.

我想再次向大家強調，我們目前擁有 1700 萬美元的現金和現金等價物以及價值 3500 萬美元的庫存，總計 5200 萬美元，總負債僅為 1000 萬美元，包括零債務。因此，即使您忽略我們擁有的所有其他資產，包括淨固定資產和設備、我們的知識產權、應收賬款等無形資產，不包括我們品牌資產的任何價值等，只考慮現金、現金等價物和存貨，減去所有負債。與目前約 2900 萬美元的市值相比，它約為 4200 萬美元。我們相信這展示了我們展示的價值。

As I turn it over to Clint to review our financial statement in more detail, let me just quickly summarize. Despite the challenges in the industry, we still deliver $10.4 million in revenue, a level that's only been achieved a handful of times in the company's history. We generated positive cash flow from operations this quarter. We are transitioning the business to focus on areas that create long-term value, such as focusing on finished jewelry products and allow us to capitalize on key consumer opportunities such as diversifying our offering to include lab grown diamonds and colored gemstones, while expanding our direct-to-consumer footprint.

當我把它交給克林特更詳細地審查我們的財務報表時，讓我快速總結一下。儘管行業面臨挑戰，我們仍然實現了 1040 萬美元的收入，這個水平在公司歷史上只達到過幾次。本季度我們從運營中產生了正現金流。我們正在將業務轉變為專注於創造長期價值的領域，例如專注於成品珠寶產品，並使我們能夠利用關鍵的消費機會，例如使我們的產品多樣化以包括實驗室培育的鑽石和彩色寶石，同時擴大我們的直接-對消費者的足跡。

These key areas of focus outperformed the larger top line number during the quarter, which was largely impacted by non-direct consumer sales and our wholesale loose gemstone business. Clint will expand more on this shortly.

這些重點關注領域在本季度的表現優於較大的營收數字，後者主要受到非直接消費者銷售和我們的裸石批發業務的影響。克林特將很快對此進行更多擴展。

We are building value in our distribution capabilities and brand equity to better control our own destiny, meeting the consumer directly where they're shopping. And finally, our balance sheet remains strong, affording us the ability to invest in areas to enact these strategic initiatives and take advantage of key opportunities in the marketplace.

我們正在為我們的分銷能力和品牌資產創造價值，以更好地掌控自己的命運，在消費者購物的地方直接與他們會面。最後，我們的資產負債表依然強勁，使我們能夠投資於實施這些戰略舉措並利用市場關鍵機遇的領域。

At this time, I'd like to turn the call over to Clint Pete, our CFO for an overview of our Q2 financials. I'll return to wrap things up after. Clint?

此時，我想將電話轉給我們的首席財務官克林特皮特，了解我們第二季度的財務狀況。之後我會回來收拾東西。克林特？

Thanks Don. Today I'll provide a summary of key financials for the second quarter ended December 31, 2022. Additional detail can be found in our earnings press release that we issued this afternoon and our form 10-Q, which we expect to file tomorrow. Please note that all percentage comparisons are to the second quarter end December 31, 2021 unless specified otherwise.

謝謝唐。今天，我將提供截至 2022 年 12 月 31 日的第二季度的主要財務摘要。更多詳細信息可以在我們今天下午發布的收益新聞稿和我們預計明天提交的 10-Q 表格中找到。請注意，所有百分比比較均與截至 2021 年 12 月 31 日的第二季度相比，除非另有說明。

First, we'll start on Slide 11 with comparative analysis of the second quarter of fiscal 2023 compared to the same period 1 year ago. In total net sell for Q2 2023, total $10.4 million versus $13.8 million, a decrease of 25%, due primarily to the economic factors Don alluded to. While revenues were lowered in a quarter, the decline was slightly less than what we experienced in the first quarter when compared to the comparable prior year period.

首先，我們將從幻燈片 11 開始，對 2023 財年第二季度與一年前同期進行比較分析。在 2023 年第二季度的淨銷售總額中，總額為 1040 萬美元，而 1380 萬美元下降了 25%，這主要是由於 Don 提到的經濟因素。雖然一個季度的收入有所下降，但與去年同期相比，降幅略低於我們在第一季度的經歷。

Net sales for online channel segment, which is primarily direct-to-consumer and includes charlesandcolvard.com, moissaniteoutlet.com, marketplaces, drop ship retail, another pure play outlet totaled $7.8 million for the quarter or a decrease of 16%, but now representing 76% of total net sales up from 68% 1 year ago.

在線渠道部分的淨銷售額主要是直接面向消費者的，包括 charlesandcolvard.com、moissaniteoutlet.com、市場、直銷零售和另一家純零售店，本季度總銷售額為 780 萬美元，下降了 16%，但現在佔總淨銷售額的 76%，高於一年前的 68%。

Net sales for our traditional segment, which consist of wholesale and brick and mortar customers, totaled $2.5 million for the quarter or a decrease of 43%, representing now approximately 24% of total net sales. Finished jewelry net sales decreased 20% for the quarter, but represented 81% of total sales in the quarter up from 77% of sales in the second quarter 1 year ago.

我們傳統部門（包括批發和實體客戶）的淨銷售額本季度總計 250 萬美元，下降 43%，目前約佔總淨銷售額的 24%。本季度成品珠寶淨銷售額下降 20%，但佔本季度總銷售額的 81%，高於一年前第二季度銷售額的 77%。

Loose jewel net sales decreased 40% for the quarter. As we mentioned above, due impart to our shift towards finished jury and directing consumer strategies while many domestic and international distributors reduced third calendar year forecast in overall inventory due the softer economic environment.

本季度散裝珠寶淨銷售額下降了 40%。正如我們上面提到的，由於經濟環境疲軟，許多國內和國際分銷商降低了第三個日曆年的整體庫存預測，這影響了我們轉向完成陪審團和指導消費者戰略。

International net sales decreased 49% as certain of our distribution partners continue to face ongoing COVID-19 restrictions and closures as well as lower calendar year end holiday demand due to consumer inflation and recessionary concerns and the global geopolitical unrest.

國際淨銷售額下降了 49%，因為我們的某些分銷合作夥伴繼續面臨持續的 COVID-19 限制和關閉，以及由於消費者通脹和經濟衰退擔憂以及全球地緣政治動盪而導致的日曆年末假期需求下降。

As you can see at the high levels, our areas of strategic focus including direct-to-consumer and finished jewelry, were somewhat less impacted.

正如您在高層看到的那樣，我們的戰略重點領域（包括直接面向消費者和成品珠寶）受到的影響較小。

We want to point out changes in our online channel segment as well as in the finished jewelry as they relate to the percentage increases of these 2 total revenue. We have seen increases not only in the current quarters as discussed above compared to year ago quarter, but also comparable to the trends we saw in Q1 of fiscal 2023 that had similar increases when compared to the prior year period.

我們想指出我們的在線渠道部分以及成品珠寶的變化，因為它們與這兩個總收入的百分比增長有關。與去年同期相比，我們不僅看到了上述當前季度的增長，而且與我們在 2023 財年第一季度看到的趨勢相比，與去年同期相比也有類似的增長。

We are also seeing these same increases when comparing Q2 2023 to Q1 2023. Accordingly, we are becoming less dependent on the distribution network in our traditional segment as we continue to shift to a more of a direct and consumer focus in which Don alluded to earlier and is by design.

將 2023 年第二季度與 2023 年第一季度進行比較時，我們也看到了這些相同的增長。因此，隨著我們繼續轉向更加直接和以消費者為中心，我們對傳統細分市場中的分銷網絡的依賴程度越來越低，唐之前提到過並且是設計使然。

Moving to Slide 12 to discuss gross margin and profit, we delivered a gross margin of 41% versus 49% in the year ago quarter, delivering 4.3 million in gross profit versus $6.7 million in a year ago quarter. Most notably, the decrease in the gross margin during the quarter was related to an approximately 7 percentage point impact due to our applied labor cost that are capitalized to inventory with an additional approximately 3 percentage point impact due to the shift and our product makes towards Lab Grove Diamond accordingly, most of the decrease in our gross margin was due to the adverse change in applied labor cost and not the result of any large scale discounting.

轉到幻燈片 12 討論毛利率和利潤，我們的毛利率為 41%，而去年同期為 49%，毛利潤為 430 萬美元，而去年同期為 670 萬美元。最值得注意的是，本季度毛利率的下降與大約 7 個百分點的影響有關，這是由於我們的應用勞動力成本被資本化為庫存，另外還有大約 3 個百分點的影響是由於轉移和我們的產品轉向實驗室因此，Grove Diamond 的毛利率下降主要是由於應用勞動力成本的不利變化，而不是任何大規模折扣的結果。

During the period for Q2 2023, total operating expenses increased 5%, representing 53% of total net sales compared to 38% in a year ago quarter. Sales and marketing expenses increased 6% to $4.3 million in support of our growth and brand awareness initiatives and G&A expenses remained flat at $1.2 million for the quarter. We explored alternative marketing efforts to reach a broader audio with some initiatives admitted Italy falling flat of expectations.

在 2023 年第二季度期間，總運營費用增長了 5%，占淨銷售額的 53%，而去年同期為 38%。銷售和營銷費用增長 6% 至 430 萬美元，以支持我們的增長和品牌知名度計劃，本季度的 G&A 費用保持在 120 萬美元不變。我們探索了替代營銷努力，以實現更廣泛的音頻，承認意大利的一些舉措未能達到預期。

We reported in net loss for Q2 2023 of $1 million or 3 cents loss per diluted share compared with a net income of 1.2 million or 4 cents earnings per diluted share in a year ago period. Included in our net loss per Q2, 2023 is an income tax benefit of $132,000 compared to an income tax expense to $283,000 in a year ago period.

我們報告 2023 年第二季度的淨虧損為 100 萬美元或每股攤薄虧損 3 美分，而去年同期的淨收入為 120 萬美元或每股攤薄收益 4 美分。我們 2023 年第二季度的淨虧損中包括 132,000 美元的所得稅收益，而去年同期的所得稅費用為 283,000 美元。

Our weighted average diluted shares outstanding used in the calculation of diluted loss per share for the quarter were approximately 30.3 million shares for the period ended December 31, 2022 compared to 31.3 million shares for the period ended December 31st, 2021. The decrease in shares outstanding is partially driven by the impact of the company's share repurchase program.

截至 2022 年 12 月 31 日止期間，我們用於計算本季度每股攤薄虧損的加權平均稀釋流通股約為 3030 萬股，而截至 2021 年 12 月 31 日止期間為 3130 萬股。流通股減少部分受到公司股票回購計劃的影響。

Now let's move on to a snapshot of our balance sheet. As Don alluded to the liquidity and capital position remained strong as we ended the quarter with $17 million of total cash compared to $16.6 million at the end of the first quarter that ended September 30, 2022. Working capital is also strong ending at $26.3 million, up from approximately $25 million at the end of the first quarter of fiscal 2023.

現在讓我們繼續看資產負債表的快照。正如唐提到的那樣，流動性和資本狀況仍然強勁，因為我們在本季度結束時擁有 1700 萬美元的總現金，而截至 2022 年 9 月 30 日的第一季度末為 1660 萬美元。營運資金也很強勁，最終達到 2630 萬美元，高於 2023 財年第一季度末的約 2500 萬美元。

In addition, the company continues to be debt free. We believe our capo structure remains strong and able to weather inflationary and geopolitical factors in the near term. Our cash flow provided by operations was $617,000 during the quarter compared to $3.1 million used in operating activities during the first 6 months of fiscal 2023 and $121,000 provided by operations in the year ago period. The improvement and the current quarter primary reflex are continued inventory management efforts.

此外，該公司繼續沒有債務。我們相信我們的變調夾結構依然強勁，能夠在短期內抵禦通脹和地緣政治因素。本季度我們的運營現金流為 617,000 美元，而 2023 財年前 6 個月運營活動使用的現金流為 310 萬美元，去年同期運營現金流為 121,000 美元。改善和本季度的主要反應是持續的庫存管理工作。

In terms of other sources of liquidity, we have access to our $5 million cash secured credit facility with JPMorgan Chase Bank, which we renewed on July 29, 2022 for 1 year as of December 31, 2022 and through today, we have not access funds to our credit facility agreement as Don discussed inventory as December 31, 2022, total $35 million compared to $36.6 million as of September 30, 2022, a reduction of $1.6 million whose jewels inventory was $15.9 million as of December 31, 2022 and compares to $16.6 million as of September 30, 2022, a reduction of approximately $700,000 finished jury inventory was $18.8 million compared to $19.9 million as of September 30, 2022, a reduction of $1.1 million demonstrating a solid sell through of our finished jury in the direct-to-consumer online channels, while still maintaining a high percentage of in-stock rates to meet our SLAs.

在其他流動性來源方面，我們可以獲得與摩根大通銀行的 500 萬美元現金擔保信貸額度，我們於 2022 年 7 月 29 日將其續期 1 年，截至 2022 年 12 月 31 日，直到今天，我們還沒有獲得資金根據我們的信貸安排協議，Don 討論了截至 2022 年 12 月 31 日的庫存，總額為 3500 萬美元，而截至 2022 年 9 月 30 日為 3660 萬美元，減少了 160 萬美元，截至 2022 年 12 月 31 日其珠寶庫存為 1590 萬美元，相比之下為 16.6 美元與截至 2022 年 9 月 30 日的 1990 萬美元相比，截至 2022 年 9 月 30 日減少了約 700,000 美元的成品陪審團庫存為 1880 萬美元，減少了 110 萬美元，這表明我們的成品陪審團在直接面向-消費者在線渠道，同時仍保持高比例的庫存率以滿足我們的 SLA。

As Don discussed, we plan to remain focused on prudent inventory management strategies going forward. In summary, we remain confident in our financial strength and our continued efforts to increase shareholder of value.

正如 Don 所討論的那樣，我們計劃繼續專注於審慎的庫存管理策略。總之，我們對我們的財務實力和我們為增加股東價值所做的持續努力充滿信心。

With that, I'll turn the call back over to Don.

有了這個，我會把電話轉回給唐。

Thanks, Clint. To wrap things up, the jewelry industry is undergoing an incredible transformation, one that I believe we are in the strong position to capitalize on in the years to come. The results of the quarter, despite the macroeconomic backdrop show that we are executing on our key initiatives that we believe are driving long-term value in the company initiatives that we believe allow us to take advantage of our branding and distribution capabilities to enable customers to find, engage and transact with us on a greater scale. And finally, I'm appreciative of the hard work and dedication of our employees and the continued support from our shareholders.

謝謝，克林特。總而言之，珠寶行業正在經歷一場令人難以置信的變革，我相信我們在未來幾年中處於有利地位，可以利用這一變革。本季度的結果，儘管宏觀經濟背景表明，我們正在執行我們認為正在推動公司計劃長期價值的關鍵計劃，我們相信這些計劃使我們能夠利用我們的品牌和分銷能力，使客戶能夠更大規模地尋找、參與並與我們進行交易。最後，我感謝我們員工的辛勤工作和奉獻精神以及股東們的持續支持。

With that, I would be happy to now take any questions you might have.

有了這個，我很樂意現在回答你可能有的任何問題。

(Operator Instructions) Our first question is from Matt Koranda with ROTH Capital.

（操作員說明）我們的第一個問題來自 ROTH Capital 的 Matt Koranda。

Just starting out with the online channel, I guess I was just a little bit surprised with a bit of the deceleration there. If I look at it sequentially on a year-over-year basis, and just wondering if you could break out the puts and takes of the different underlying channels in online maybe at the very least, if you could just kind of call out sort of how your own site performed during the quarter relative to some of the other items like marketplace and whatnot.

剛從在線渠道開始，我想我只是對那裡的一些減速感到有點驚訝。如果我逐年按順序查看它，只是想知道您是否可以至少在網上打破不同基礎渠道的看跌期權和看跌期權，如果您可以大聲疾呼您自己的網站在本季度相對於其他一些項目（如市場等）的表現如何。

Yes, Matt. Appreciate the question as usual. Certainly we had some headwinds within our online segment too as well. We attributed those to a lot of various reasons. Certainly the macro, as we stated multiple times within kind of our script the advertising spend and campaigns that we ran did not generate the ROAS that it traditionally did.

是的，馬特。像往常一樣欣賞這個問題。當然，我們的在線業務也遇到了一些不利因素。我們將這些歸因於很多不同的原因。當然，宏觀上，正如我們在腳本中多次聲明的那樣，我們運行的廣告支出和活動並沒有產生傳統上產生的 ROAS。

So if you're basing the historical ROAs that we had, cost per clicks plus the competitive landscape, plus the economy, plus the higher interest rates to purchase or finance jewelry and gemstones, we believe it just contributed to a softer holiday, much softer. Certainly it began in October for us, and then we started to increase velocity towards November and December.

因此，如果您基於我們擁有的歷史 ROA、每次點擊成本加上競爭格局、經濟以及購買或融資珠寶和寶石的更高利率，我們相信這只會導致假期更輕鬆，更輕鬆.當然，它是從 10 月開始的，然後我們開始加快速度，直至 11 月和 12 月。

But to answer your question, our direct-to-consumer presence, CDC and Charles & Colvard and owned properties performed well. We had in the marketplaces, as we had a couple individual direct distributors that were very weak and really participated in a heavy sales cadence or on sale cadence, but then kind of shifted and where they had a nice steady cadence of product and sales over last year they ran toward the end of the season in a very, very heavy, strong sale cadence. So it reduced the overall revenue in those categories too as well.

但要回答你的問題，我們直接面向消費者的業務、CDC 和 Charles & Colvard 以及自有物業表現良好。我們在市場上，因為我們有幾個非常薄弱的個人直銷商，他們確實參與了沉重的銷售節奏或銷售節奏，但隨後發生了一些變化，他們在過去的產品和銷售節奏中保持穩定那一年，他們以非常、非常沉重、強勁的銷售節奏跑到季末。因此，它也減少了這些類別的總收入。

So it's a combination of a multiple things within that sector, but really the wholesale piece of the business is what really know of shifted for us most but I do get your question though.

所以它是該行業內多種事物的結合，但實際上批發業務才是我們真正知道的最重要的轉移，但我確實得到了你的問題。

Okay. Yes, I want to address wholesale in just a moment, but just spinning back to your ROAs comment there. Don, just curious how you think about sort of, I guess, if you're not seeing the efficacy from that ad spend that and it's understandable, I guess just given where the economy sits and to your point, cost of financing and higher ticket items and stuff like that might be seeing some more pressure on the consumer discretionary front.

好的。是的，我想馬上解決批發問題，但只是回到你的 ROA 評論。唐，只是好奇你是怎麼想的，我想，如果你沒有看到廣告支出的效果，這是可以理解的，我想只是考慮到經濟狀況和你的觀點，融資成本和更高的票價諸如此類的物品可能會在非必需消費品方面面臨更大的壓力。

But how do you think about the ad spend on a go-forward basis, and do you lean out of that a little bit while we go through a softer patch, or do you just redeploy the marketing dollars in a different way to try to boost that rowhouse again?

但是你如何看待未來的廣告支出，在我們經歷一個更溫和的補丁時你會稍微傾斜一點，還是你只是以不同的方式重新部署營銷資金以試圖提高又是那個聯排別墅？

Well, we started to see the softness and the conversion rates decline in the October timeframe, right when the interest rates started climbing up, right when really the tail end of discretionary started to go away. And then we said, okay, what do we need to do? What do we need to kind of refocus our ad dollars on and we tried some alternative types of marketing campaigns more top of funnel, which did not bear fruit.

好吧，我們開始看到 10 月份的疲軟和轉換率下降，就在利率開始攀升的時候，就在可自由支配的尾端真正開始消失的時候。然後我們說，好吧，我們需要做什麼？我們需要將廣告資金重新集中在什麼上，我們嘗試了一些替代類型的營銷活動，這些活動更靠近渠道頂部，但沒有取得成果。

The results weren't as satisfactory as we were. So that's why we've got such an increased spend with less revenue there. So we did try to branch out just because basically the average cost per click was rising between even our own search terms and keywords and phrases. We were definitely digging into the analytics and into the analysis and trying to pivot the company to find other alternative ways to drive traffic.

結果不如我們滿意。所以這就是為什麼我們在收入減少的情況下增加了支出。所以我們確實嘗試擴展，因為基本上每次點擊的平均成本甚至在我們自己的搜索詞和關鍵字和短語之間都在上升。我們肯定是在深入分析和分析，並試圖推動公司尋找其他替代方法來增加流量。

Certainly organic is really important to us. Certainly we need to do a better job on the marketing side, but the competitive landscape for our own keywords, phrases, we've even had certain top leading customers that would really go heavy handed on our own namesake and so forth. So it's always a challenge in that category, but seen the pricing go up sixfold and specifically to some of our key search words. So we have to pivot. We have to do better, and we just need to figure it out.

當然有機對我們來說真的很重要。當然，我們需要在營銷方面做得更好，但我們自己的關鍵詞、詞組的競爭格局，我們甚至有一些頂級領先客戶，他們真的會對我們自己的名字等採取嚴厲措施。因此，在該類別中這始終是一個挑戰，但看到價格上漲了六倍，特別是對於我們的一些關鍵搜索詞。所以我們必須轉向。我們必須做得更好，我們只需要弄清楚。

Okay. All right. That's helpful color. And then just on the traditional channel, you mentioned sort of the distribution side of things being the real culprit here. It has been, I guess, for the better part of the last year plus maybe, maybe even longer at this point.

好的。好的。這是有用的顏色。然後就在傳統渠道上，你提到了事情的分發方面才是真正的罪魁禍首。我想，在去年的大部分時間裡，也許在這一點上，甚至更長。

How small a piece of the traditional channel is that distro and international piece at this point? It seems like it just should be a lot less meaningful on a go forward basis, but if you can just help us understand how to quantify that and how it, how it moves on a go forward basis to be helpful.

在這一點上，發行版和國際版在傳統渠道中的份額有多小？看起來它在前進的基礎上應該沒有那麼大的意義，但如果你能幫助我們理解如何量化它以及如何量化它，它如何在前進的基礎上有所幫助。

Yes, sure. So right now we're looking at almost 3 quarters of our business is online. So that's really important, and that's by design. That's literally at the base of all our initiatives moving forward. That's where our spend is going. That's where our investments are going because we believe that generates the long dollar and the highest value proposition for us as a company and a brand.

是的，當然。所以現在我們正在尋找將近四分之三的業務在線。所以這真的很重要，這是設計使然。這實際上是我們所有向前推進的舉措的基礎。這就是我們花錢的地方。這就是我們的投資方向，因為我們相信這會為我們公司和品牌帶來長期收益和最高價值主張。

So that's most critical. Going back to your question, which specific to traditional, which is now a quarter of the business, and then you would break out the brick and mortar part of that. So the wholesale business is a much smaller representation of our overall revenue.

所以這是最關鍵的。回到你的問題，具體到傳統，現在是業務的四分之一，然後你會打破其中的實體部分。因此，批發業務占我們總收入的比例要小得多。

And then, going forward, we speak about other initiatives that we have in place in other areas like our signature showroom, which if I could report on the signature showroom was incredibly exciting category and a channel for us this holiday season, and it's taking shape just right now and, and really performing better than expectations.

然後，展望未來，我們談到了我們在其他領域實施的其他舉措，比如我們的標誌性陳列室，如果我能在標誌性陳列室上報告的話，這是一個令人難以置信的令人興奮的類別，也是我們這個假期的一個渠道，它正在形成就在現在，而且確實表現得比預期的要好。

So we're pretty excited about that. So anywhere we can control our own destiny is really important to us. So we all know that the wholesale business, has different challenges, right? So our dis our distribution partners are managing their inventories differently. They're trying to practice just in time, they don't have the capital or they don't want to make the capital investments to hold inventory, especially given the economy and what's happening in the environment.

所以我們對此感到非常興奮。所以任何我們可以控制自己命運的地方對我們來說真的很重要。所以我們都知道批發業務面臨著不同的挑戰，對嗎？因此，我們的分銷合作夥伴正在以不同的方式管理他們的庫存。他們試圖及時實踐，他們沒有資本，或者他們不想進行資本投資來持有庫存，特別是考慮到經濟和環境正在發生的事情。

So in doing so they're reducing their overall positions and exposure. So we understand that. So that's why early on we started this shift, as we stated over, the last couple years to be able to go more direct to consumer, to look for more channels to create our own owned properties multiple owned properties, and then really reach that consumer digitally and virtual whenever we can.

因此，他們這樣做是在減少整體頭寸和風險敞口。所以我們明白這一點。所以這就是為什麼我們很早就開始了這種轉變，正如我們在過去幾年所說的那樣，以便能夠更直接地面向消費者，尋找更多渠道來創建我們自己的財產，多個財產，然後真正接觸到消費者盡可能以數字和虛擬方式進行。

We talked about live streaming. We talked about shopping direct response, more of a linear comment that's going to actually be monetized in the future as we become less dependent on the wholesale arm. The pricing pressure right now between the race to the bottom and lab grown diamonds is putting downward pressure to the wholesaler on our moissanite business too as well.

我們談到了直播。我們談到了購物直接反應，更多的是線性評論，隨著我們對批發部門的依賴程度降低，未來將實際貨幣化。目前，逐底競爭和實驗室培育鑽石之間的定價壓力也給我們莫桑石業務的批發商帶來了下行壓力。

So that's why the more we can do direct-to-consumer, we can still realize and capitalize on the higher margins and continue to do so moving forward. So we've been making it very clear, I understand that when we say this particular section or segment is down by 49% I don't want everyone to get hung up on that because ultimately, as that becomes a smaller and smaller piece of the business, certainly that percentage is going to climb and rise. But the thought is that the online business and our direct to consumer business will grow exponentially higher as these investments start to come in and take shape.

所以這就是為什麼我們越能直接面向消費者，我們仍然可以實現並利用更高的利潤率，並繼續向前發展。所以我們一直說得很清楚，我知道當我們說這個特定的部分或部分下降了 49% 時，我不希望每個人都掛斷這一點，因為最終，隨著它變得越來越小業務，當然這個百分比將會攀升和上升。但我們的想法是，隨著這些投資開始出現並初具規模，在線業務和我們直接面向消費者的業務將呈指數級增長。

Great. If I could sneak in 2 more -- just 1. Since you mentioned the signature showroom, just any, any metrics for success you can share on that front. I'm just really curious how that's going, and then what would be the sort of I guess the gating items for looking to open additional showrooms?

偉大的。如果我能再偷偷摸摸 2 個——就 1 個。既然你提到了標誌性的陳列室，那麼你可以在這方面分享任何成功的指標。我真的很好奇這是怎麼回事，然後我猜想開設更多陳列室的門控項目是什麼？

Yes, so right now we're still in for all I intents and purposes, the beta scenario related to the signature showroom, we're testing out a lot of different things specific to the store, to the consumer that's coming to the store. We're doing things that are non-traditional, like we're doing special events, we're doing corporate alliance programs, we're doing collaborative type engagements with local community.

是的，所以現在我們仍然出於我的所有意圖和目的，與簽名陳列室相關的測試場景，我們正在測試許多特定於商店的不同事物，以及來到商店的消費者。我們正在做一些非傳統的事情，比如我們正在做特別活動，我們正在做企業聯盟計劃，我們正在與當地社區進行協作式的接觸。

So it's -- there's just a lot of moving parts there and we can't -- we're not giving any, guidance or forward, numbers specific to that. But we can just tell you that it is performing better than anticipated and we believe that there's definitely a future there. We believe that in some shape or form we can take this model and we can position this model in key strategic areas and demographics that are performing quite well for us within different regions domestically at this point.

所以它 - 那裡只有很多活動部件，我們不能 - 我們沒有給出任何具體的指導或前瞻性數字。但我們可以告訴你，它的表現比預期的要好，我們相信那里肯定有未來。我們相信，以某種形式或形式，我們可以採用這種模式，我們可以將這種模式定位在目前在國內不同地區對我們表現良好的關鍵戰略領域和人口統計數據中。

So the timing for that still remains open for discussion. And we're still, basically we just launched in October on the signature showroom. So we've got a few months under our belt right now. We do have some holiday traffic. Valentine's Day has been pretty exciting. Matter of fact we have a, a big event scheduled for Saturday here too as well. And these events come between, 50 guests to 100 different guests come at a given moment.

因此，該時間點仍有待討論。而且我們仍然，基本上我們只是在 10 月份在簽名陳列室推出。所以我們現在有幾個月的時間。我們確實有一些假期交通。情人節一直很令人興奮。事實上，我們也計劃在周六在這裡舉辦一場大型活動。這些事件發生在 50 位客人到 100 位不同的客人之間。

So, it's been pretty exciting and we're pretty pleased with, with kind of the performance there. So I believe, in the coming quarters, we'll be able to make a, a more concrete statement as to what that looks like in the future.

所以，這非常令人興奮，我們對那裡的表現感到非常滿意。所以我相信，在接下來的幾個季度裡，我們將能夠就未來的情況做出更具體的聲明。

Okay, fair enough. And just one last one on the margin the gross margins, if, if I could Clint, you referenced that a big portion of the year over year headwind, I think it sounded like 700 basis points of it was a difference in how you're applying labor costs to capitalize inventory.

好吧，很公平。最後一個關於毛利率，如果，如果我可以的話，克林特，你提到了一年中的很大一部分逆風，我認為這聽起來像是 700 個基點，這與你的方式有所不同應用勞動力成本將存貨資本化。

Can you just explain that in a little bit more detail for us so we understand it and on a go forward basis is this, this, are you going to be applying the same methodology so that we should assume all things being equal? We should be assuming somewhere in that kind of by single digit a hundred basis point headwind on a year, year basis.

您能否為我們更詳細地解釋一下，以便我們理解它，並且在前進的基礎上，您是否要應用相同的方法，以便我們應該假設所有事情都是平等的？我們應該假設某個地方每年都有個位數的一百個基點逆風。

Yes, so Matt, sorry about that. Let me just address that and try to simplify that just a little bit. I don't mean to, take that from Clint, but as we start to transition our business into more of a direct to consumer as opposed to the wholesale distribution company that we were in the past or a loose gemstone, we're reducing the amount of what we call whip or work in progress related to the cutting and fasting of our gemstones.

是的，馬特，對此感到抱歉。讓我來解決這個問題，並嘗試稍微簡化一下。我不是故意的，從克林特那裡拿走，但是當我們開始將我們的業務轉變為更多地直接面向消費者而不是我們過去的批發分銷公司或鬆散的寶石時，我們正在減少我們稱之為鞭打或與我們的寶石切割和禁食相關的在製品的數量。

So in the past, we literally had, x number of gemstones that were cutting on a quarterly basis, on a monthly basis, and therefore that was spread out over the course of, month over month within the quarter. And it would be spread out across the board over the inventory.

因此，在過去，我們確實有 x 數量的寶石按季度、按月切割，因此在本季度內逐月分佈。它將全面分佈在庫存中。

Now that we're being mindful of that inventory and we're not actually producing as much raw material and we have finished goods and we have inventory in stock, we don't have the advantage of that applied labor as much. And Clint, you can elaborate a little more if you want to on that, but that, that's pretty much, where we're at.

現在我們正在關注庫存，我們實際上並沒有生產那麼多的原材料，我們有成品，我們有庫存，我們沒有那麼多的應用勞動力優勢。克林特，如果你願意的話，你可以詳細說明一下，但這就是我們所處的位置。

And I just wanted to clarify, Matt, it wasn't a change, I think it, it was just the, the, the amount of the jobs that the process as Don mentioned, related to the fabrication of the moissanite and the raw material.

我只是想澄清一下，馬特，這不是改變，我認為這只是 Don 提到的與莫桑石和原材料製造相關的工作量.

Okay, got it. So we should just assume that on a go for basis inventory may, you may be able to flush more inventory, just because you're not producing to demand not just to a certain set level every quarter.

好，知道了。因此，我們應該假設在基礎庫存的基礎上，您可能能夠衝出更多庫存，只是因為您不是按需求生產，而不僅僅是每個季度達到一定的設定水平。

You're absolutely correct. One other factor that Matt, we should consider is that as lab grown diamond pricing, becomes, it's trying to find a bottom, it's trying to stabilize. So, because there's a race to the bottom. When we first got in and we first introduced lab grown diamonds, inventory was at X price. So, and basically there was a cost associated with those particular goods that we had in stock at the time. Now the pricing is literally dropped and come down, but we still had the cost associated with those original goods, that original inventory.

你完全正確。 Matt，我們應該考慮的另一個因素是，隨著實驗室培育鑽石的定價，它正試圖找到一個底部，它正試圖穩定下來。所以，因為存在逐底競爭。當我們第一次進入並首次介紹實驗室培育的鑽石時，庫存價格為 X。因此，基本上我們當時有庫存的那些特定商品會產生成本。現在價格確實下降了，但我們仍然有與那些原始商品相關的成本，即原始庫存。

So we had some margin pressure specific to that. We believe we've rectified that and we remedied that and we're in a good place now as we continue to go more vertical. We basically are becoming more and more competitive and we're pricing our goods in line with the market.

所以我們有一些特定的保證金壓力。我們相信我們已經糾正了這一點並且我們已經補救了並且我們現在處於一個很好的位置，因為我們繼續更加垂直。我們基本上變得越來越有競爭力，我們的商品定價與市場一致。

If not, we're actually below most of the retailers and we're more competitive. But initially to get into the space, we made a capital investment and that inventory was valued at X. So we did feel some margin pressure there. We believe that we sold through almost all of those goods and now we're pretty much stabilized. So, we will be in a much better place moving forward.

如果不是，我們實際上低於大多數零售商，我們更具競爭力。但最初進入該領域時，我們進行了資本投資，庫存價值為 X。因此我們確實感受到了一些利潤壓力。我們相信我們幾乎賣掉了所有這些商品，現在我們已經基本穩定下來了。因此，我們將在一個更好的地方前進。

The next question is from Peter Jackson, a private investor.

下一個問題來自私人投資者彼得傑克遜。

Yes, so in the prepared comments, I think it might have been something that Clint said you said you guys were expecting sort of continued softness, especially in the second half. Can you elaborate on that? Are you making sort of a larger macro call here about the economy and interest rates, or are you saying specifically that you're seeing continued softness or as doesn't make sense to spend a lot of money on marketing, therefore the sales will be soft because it doesn't make sense to, to spend the dollars?

是的，所以在準備好的評論中，我認為這可能是克林特說的，你們說你們期待持續的軟弱，尤其是在下半場。你能詳細說明一下嗎？您是在這裡就經濟和利率做出更大的宏觀預測，還是您具體說您看到經濟持續疲軟，或者在營銷上花費大量資金沒有意義，因此銷售額將會軟是因為它沒有意義，花美元？

I believe there's a lot of truth in what you said and how you framed it across the board. I think it's a little bit of everything. I personally feel that the global economy, although I'm not an economist and I can't, predict what's happening, kind of, and we don't give, forward looking statements specific to that.

我相信你所說的以及你如何全面構建它的大部分內容都是真實的。我認為這是一切的一點點。我個人認為，儘管我不是經濟學家而且我不能預測全球經濟正在發生的事情，但我們不會給出具體的前瞻性陳述。

But, certainly we believe that, I mean, I guess, in today's indication, it's up today and things are up today and optimism is up and things are moving in a positive direction. But I still believe that the consumer has, an issue specific to higher interest rates, specific to financing terms related to jewelry whether they're going to purchase that particular item or they're going to pay their rent or mortgage or they're increased mortgage, whether they're on fluctuating rates.

但是，我們當然相信，我的意思是，我想，在今天的跡像中，它今天上漲了，今天的情況上漲了，樂觀情緒上升了，事情正朝著積極的方向發展。但我仍然相信，消費者有一個特定於更高利率的問題，特定於與珠寶相關的融資條款，無論他們是要購買該特定物品，還是要支付租金或抵押貸款，或者他們會增加抵押貸款，無論它們的利率是否波動。

We just don't know. So, I guess it's more of a macro scenario, but certainly I will tell you specifically, you're a hundred percent correct as it relates to, marketing dollars. If you look across the board, look at some of the other, technology companies. Look at the marketing spend and the dollars and the revenue associated with the spend, we're no different. we're looking at that. If we're not getting the ROAS or the return, we're basically going to dial back in those particular areas.

我們只是不知道。所以，我想這更像是一個宏觀場景，但我肯定會具體告訴你，你是百分百正確的，因為它涉及到營銷費用。如果你縱觀全局，看看其他一些科技公司。看看營銷支出以及與支出相關的美元和收入，我們也不例外。我們正在研究。如果我們沒有獲得 ROAS 或回報，我們基本上會在這些特定領域回撥。

So, we want to strive to be profitable and we want to do things right. We're just not out for, purely top line growth and numbers. We're trying to build a real solid company and we believe we've got some really great initiatives that we can deploy capital that'll bring value to the company. And also later on, we'll be able to monetize those channels in a much greater way than perhaps burning through cash in some of these paid in social campaigns that were run previously.

所以，我們想努力盈利，我們想把事情做對。我們只是不追求純粹的頂線增長和數字。我們正在努力建立一家真正穩固的公司，我們相信我們已經有了一些非常棒的舉措，我們可以利用這些舉措為公司帶來價值。而且稍後，我們將能夠以比以前運行的一些付費社交活動中的現金消耗更大的方式將這些渠道貨幣化。

Right. Well, that also connects to, what you do with that cash and if investing that cash isn't attractive on advertising because of the poor ROAS, are you better off buying shares? I think I saw on the release that you bought about 450,000 shares back, which seems like a lot, but at the dollar level that it's not a lot of money relative to the $17 million.

正確的。好吧，這也與你用這些現金做什麼有關，如果由於 ROAS 差而投資這些現金對廣告沒有吸引力，你買股票會更好嗎？我想我在新聞稿上看到你回購了大約 450,000 股，這看起來很多，但在美元層面上，相對於 1700 萬美元，這並不是很多錢。

At some point, and by the way, I know in the past, people like Alan Sykes and other, and others were really buying in a big way. It's a little discouraging just not to see really any meaningful buying lately. Is that between that and perhaps not buying the shares back at a higher level? Or can we infer that you guys think this is going to be softer for a longer period?

在某些時候，順便說一下，我知道過去像艾倫賽克斯和其他人這樣的人確實在大量購買。最近沒有看到真正有意義的購買，這有點令人沮喪。是在那之間，也許不回購更高水平的股票？或者我們可以推斷你們認為這會在更長的時間內變得更軟嗎？

So let me answer the first part of your question. Certainly, we made the case for why we believe that we're an incredible value and we believe that we're trading way below book. And the opportunity is there. We certainly believe in the long term outlook for Charles & Colvard and what we've kind of built in the initiatives we have in place.

所以讓我回答你問題的第一部分。當然，我們證明了為什麼我們相信我們具有令人難以置信的價值，並且我們相信我們的交易遠低於賬面價值。機會就在那裡。我們當然相信 Charles & Colvard 的長期前景，以及我們在現有舉措中所建立的東西。

Some, we've discussed, some we, are still to come to fruition in the coming quarters. So, there is this thing called quiet period. So, certainly insiders, myself or whatever can't purchase within these timeframes where we have material non-public information. Certainly we did lean in and buy, a half a million dollars' worth of stock because we believe that, that was really important and we believe that the value was there.

有些，我們已經討論過，有些我們，仍將在未來幾個季度取得成果。所以，有一個叫做安靜期的東西。因此，在我們擁有重大非公開信息的這些時間範圍內，當然內部人士、我自己或其他任何人都無法購買。當然，我們確實傾斜併購買了價值 50 萬美元的股票，因為我們相信，這真的很重要，我們相信價值就在那裡。

We absolutely will consider, given, the situation and downward pressure on the stock should it be something that, is meaningful to us, given what we know to come in the future and where our investments need to go and where we believe that we're going to monetize, exponentially is not at risk. We will certainly consider more buybacks.

我們絕對會考慮，考慮到股票的情況和下行壓力，如果它對我們有意義，考慮到我們知道未來會發生什麼，我們的投資需要去哪里以及我們認為我們在哪裡將貨幣化，成倍地沒有風險。我們當然會考慮更多的回購。

Just in December, Clint right here, he did, purchased some shares. So, we're constantly looking to see open windows when we can actually invest in ourselves and our people. So right now we're, we did come off 2 years' worth incredible growth and upward trajectory and profitability. We said that now we've built up a lot of cash, upwards of $20 million then.

就在 12 月，克林特就在這裡，他確實購買了一些股票。因此，當我們可以真正投資於我們自己和我們的員工時，我們一直在尋找打開的窗口。所以現在我們確實實現了 2 年令人難以置信的增長、上升軌跡和盈利能力。我們說現在我們已經積累了大量現金，當時超過 2000 萬美元。

And then we were going to deploy that cash, make investments in infrastructure, make investments in our distribution capabilities, make investments in our, our enterprise resource management system, make investments in our web properties. We did that moving forward. We want to continue to be the best of breed in the e-commerce space for all things made, not mined.

然後我們將部署這些現金，對基礎設施進行投資，對我們的分銷能力進行投資，對我們的企業資源管理系統進行投資，對我們的網絡資產進行投資。我們這樣做了。我們希望繼續成為電子商務領域的佼佼者，提供所有製造而非開采的產品。

So we'll want to have the best in place as far as our web properties and that cost money. So we'll continue to make those investments. We have some incredible things coming up that we believe that are really critical to this direct to consumer business model that we're creating rather than, as I said in my, opening comments, a single threaded moissanite and I distribution company.

因此，就我們的網絡資產而言，我們希望擁有最好的，這需要花錢。因此，我們將繼續進行這些投資。我們有一些令人難以置信的事情即將發生，我們認為這對我們正在創建的這種直接面向消費者的商業模式非常關鍵，而不是像我在開場評論中所說的那樣，是一個單線程的莫桑石和我的分銷公司。

So, we like to believe that, we made those announcements. We know the triggers that we need to, kind of press that are going to kind of exponentially move us to another level, but we did level set that we're going to make those investments.

所以，我們願意相信，我們發布了這些公告。我們知道我們需要的觸發因素，某種媒體會以指數方式將我們提升到另一個水平，但我們確實設定了我們將要進行這些投資的水平。

So again, times are changing, it's a different environment what I'm saying? So, we'll certainly look at every opportunity that comes to, increase the value of our shareholders' positions certainly I'm a stakeholder in this company too as well, and I have a significant portion of shares and investment in this company myself.

那麼，時代在變，我說的是不同的環境嗎？所以，我們當然會抓住每一個機會，增加我們股東職位的價值，當然我也是這家公司的利益相關者，我自己也持有這家公司的很大一部分股份和投資。

So, it's within my best interest to be able to drive growth and drive value within the stock, and that's what I do every day, and that's what we all do here. So, we'll, we'll do the, we'll do what we believe is the right thing for the company.

因此，能夠推動股票的增長和價值符合我的最大利益，這就是我每天所做的，也是我們所有人在這裡所做的。所以，我們會，我們會做，我們會做我們認為對公司正確的事情。

Okay, fair enough. And on the direct to consumer business what do you think that we can model in, in terms of gross margins going forward?

好吧，很公平。在直接面向消費者的業務方面，您認為我們可以在未來的毛利率方面建模什麼？

Again we've had some margin pressure given 2 things. So number one, pricing related specifically as I spoke before about the initial investment in the diamond goods or lab grown diamond goods, the original cost for those goods. And then now the, kind of the reduced cost and the pressure there to be competitive and sell off those goods.

鑑於兩件事，我們再次遇到了一些利潤壓力。所以第一，定價與我之前談到的關於鑽石商品或實驗室培育鑽石商品的初始投資特別相關，這些商品的原始成本。然後現在，降低成本和競爭壓力以及出售這些商品的壓力。

The other thing that will happen is as the race to the bottom goes on lab grown diamonds, we basically have to kind of see where that goes, and we want to still make sure that we're competitive. We still want to make sure that we're in the conversation and our goal is to be one of the top destinations.

另一件將會發生的事情是，隨著實驗室培育鑽石的逐底競爭，我們基本上必須看看它會走向何方，我們仍然希望確保我們具有競爭力。我們仍然希望確保我們在對話中，我們的目標是成為頂級目的地之一。

In order to do that, we need to be competitive. We need to build a story of why that consumer should buy from us a compelling story with the design and the aesthetic of what we're bringing to market.

為了做到這一點，我們需要有競爭力。我們需要建立一個故事，說明為什麼消費者應該從我們這裡購買一個引人入勝的故事，以及我們推向市場的產品的設計和美學。

But certainly there may be some pressure there. So the answer specifically, I've said this a million times, that 40% margins a very, very strong business in the jewelry space. That's just my personal opinion, and I believe that's strong. We always strive to be north of 50%. So I would say somewhere between the 40 to 50% would be a model that I could absolutely, get behind.

但肯定會有一些壓力。所以具體的答案，我已經說過一百萬次了，40% 的利潤率是珠寶領域非常非常強大的業務。這只是我的個人意見，我相信這是強有力的。我們始終努力做到 50% 以上。所以我會說 40% 到 50% 之間的某個地方是我絕對可以落後的模型。

So, again, it really depends on some key factors that may come. And those key factors are, do we want to spend money and deploy capital in additional marketing areas that we haven't done in the past? Whereas if the paid and social spend is not bearing the results that we want, then maybe we try some other type of avenues that may definitely increase the expense, but not get the return.

因此，再次強調，這實際上取決於可能出現的一些關鍵因素。這些關鍵因素是，我們是否想在我們過去沒有做過的其他營銷領域花錢和部署資本？然而，如果付費和社交支出沒有產生我們想要的結果，那麼也許我們會嘗試一些其他類型的途徑，這些途徑肯定會增加支出，但得不到回報。

So, we're in a complex scenario that if we lean in too much, it basically affects the bottom line and it affects the margin almost immediately. So we're trying to build a company and we're trying to grow at the same time, but it's kind of a catch '22.

因此，我們處於一個複雜的場景中，如果我們過度依賴，它基本上會影響底線，並且幾乎會立即影響利潤率。所以我們正在努力建立一家公司，同時我們也在努力成長，但這有點像'22'。

So, to answer your question, I believe somewhere around a 45% to 47% would be the ultimate area, but there is the possibility of some pricing pressure between the lab grown diamond, which is representing a larger portion of our online direct-to-consumer business in Charles & Colvard right now.

所以，為了回答你的問題，我相信 45% 到 47% 左右是最終區域，但實驗室培育鑽石之間可能存在一些定價壓力，這代表了我們在線直銷的較大部分-現在在 Charles & Colvard 的消費者業務。

Okay. And last question, just saying on the DTC, so if it doesn't make sense to spend money on the -- on advertising right now because of the incredibly tough ROAS. How are we going to keep the DTC from falling with all the investments and actually increased investments, it's hard to see it drop by 16% in the quarter and again, totally understand the macro issues.

好的。最後一個問題，只是在 DTC 上說，所以如果現在花錢在廣告上是沒有意義的，因為 ROAS 非常艱難。我們如何防止 DTC 隨著所有投資和實際增加的投資而下降，很難看到它在本季度再次下降 16%，完全理解宏觀問題。

But I just looked at Cygnet, which I know is not a great comparable, but it's the only one of the few that's public and their sales for the quarter and in December are based on their guidance, which you updated and increased is going to be down like 5%, and we dropped 25%.

但我剛剛查看了 Cygnet，我知道它不是一個很好的可比對象，但它是為數不多的公開的，他們本季度和 12 月的銷售額是基於他們的指導，你更新和增加的是下降了 5%，我們下降了 25%。

So obviously, again, not a perfect, comparable and much smaller company, but the bigger question is how do you -- how do you get those DTC sales back up, especially given the tough environment, especially given that it doesn't make sense to spend a lot of money on advertising right now.

很明顯，這不是一家完美的、可比的、規模小得多的公司，但更大的問題是你如何——你如何讓那些 DTC 銷售恢復，特別是考慮到艱難的環境，特別是考慮到它沒有意義現在花很多錢做廣告。

Yes. So all pointed great questions, right? So let's talk about the commentary on Cygnet, right? They're a conglomerate, they're a monopoly. They pretty much own all 4 corners of the earth as it relates to jewelry. So a lot of their growth has come through acquisition. So certainly, their latest acquisition of Blue Niles, that revenue is starting to trigger diamonds Direct they bought.

是的。所以所有都指出了很好的問題，對吧？那麼我們來談談Cygnet的評論吧？他們是一個聯合企業，他們是一個壟斷企業。他們幾乎擁有與珠寶相關的地球的所有 4 個角落。所以他們的很多增長都是通過收購來實現的。因此，可以肯定的是，他們最近收購了 Blue Niles，該收入開始觸發他們直接購買的鑽石。

So all of that's coming into play. Also over the years prior, they were literally just beaten down. So their growth trajectory and their success, in my view, has been a little bit skewed by that and skewed by kind of the acquisitions. They pretty much own the marketing universe as it relates to Google and Facebook and everything, because they can deploy pretty much unlimited capital to be in the top rankings and to be top of mind to most consumers.

所以所有這些都開始發揮作用。同樣在之前的幾年裡，他們實際上只是被打敗了。因此，在我看來，他們的增長軌跡和成功在某種程度上受到了影響，並受到了某種收購的影響。他們幾乎擁有與穀歌和 Facebook 以及一切相關的營銷領域，因為他們可以部署幾乎無限的資本以躋身頂級排名並成為大多數消費者的首選。

So the comparison, and I appreciate you saying that may not be a direct comparison, but what we need to do is we need to figure out where is that point of diminishing re returns. We're certainly going to continue to spend in paid advertising and, and still go there, but we need to find the really that threshold where we have to stop the spend, redeploy those dollars in other areas.

所以比較，我很感激你說這可能不是直接比較，但我們需要做的是我們需要弄清楚收益遞減點在哪裡。我們肯定會繼續在付費廣告上花錢，而且還會繼續花錢，但我們需要找到真正的門檻，我們必須停止花錢，將這些錢重新部署到其他領域。

We also spend money with our co-op partners in brick and mortar, and they're requesting more, brand assets and collateral and co-ops. So we need to support them because brick and mortar is still a strong piece of our business.

我們還與我們的實體合作夥伴一起花錢，他們要求更多，品牌資產和抵押品以及合作社。所以我們需要支持他們，因為實體店仍然是我們業務的重要組成部分。

So we're doing that. And then I guess to answer your question, we need more channels to be able to distribute our product. We need more drop ship partners that we believe can just broaden our footprint, we said footprint, maybe 5 times within the, the prepared remarks.

所以我們正在這樣做。然後我想回答你的問題，我們需要更多的渠道來分發我們的產品。我們需要更多我們認為可以擴大足蹟的直運合作夥伴，我們說足跡可能是準備好的言論的 5 倍。

And, we certainly believe that that's how we're going to do it, and that's a, a much more affordable way to kind of drive revenue into the online segment because basically it's a, a percentage of play and it's not a direct spend, if that makes sense.

而且，我們當然相信這就是我們要做的方式，這是一種更實惠的方式來推動收入進入在線領域，因為基本上它是一個，一定比例的遊戲，而不是直接支出，如果這是有道理的。

So we as a company are looking for more strategic partners that we have in the online business where we can represent a direct to consumer presence, control the message, control our designs in that category. Then lastly there are other channels out there besides online digitally that we can utilize a lot of these assets that we built up, a lot of the infrastructure that we put in place where we can reach that consumer streaming in more of a direct response or a linear approach where we control the, the medium, we control the messaging and we control for all I intents and purposes the airtime.

因此，作為一家公司，我們正在尋找我們在在線業務中擁有的更多戰略合作夥伴，在那裡我們可以代表直接面向消費者的存在，控制信息，控制我們在該類別中的設計。最後，除了在線數字之外，還有其他渠道，我們可以利用我們建立的大量這些資產，我們建立的大量基礎設施，我們可以通過直接響應或更直接的方式接觸消費者流媒體我們控制媒體的線性方法，我們控制消息傳遞，我們控制所有我的意圖和目的的通話時間。

So the goal would be there is to build that out stronger where we can control our destiny. There is a cost associated with that. We just need to manage through that and see where the returns are greater. So we believe we've got a plan moving forward. Certainly the complexity of the environment in the universe is there, so, we'll see what we can do in the next couple quarters. Do, do you work with influencers?

因此，我們的目標是在我們可以控制自己命運的地方建立更強大的力量。與此相關的成本。我們只需要解決這個問題，看看哪裡的回報更大。所以我們相信我們已經有了一個向前推進的計劃。當然，宇宙環境的複雜性就在那裡，所以，我們將看看在接下來的幾個季度裡我們能做些什麼。你和有影響力的人一起工作嗎？

Much so we do, right? So I mean, recently it was with JLO and not JLO, but one of the Jersey Shore folks JW, sorry about that. we work with a couple other influencers too as well, but the goal is to be able to really understand what the value is of those influencers.

我們做的很多，對吧？所以我的意思是，最近是與 JLO 而不是 JLO，而是澤西海岸的一位成員 JW，對此感到抱歉。我們也與其他幾個有影響力的人合作，但我們的目標是能夠真正了解這些有影響力的人的價值。

We believe right now the influencers that we've approached in kind of that direction is pretty much one and done. We did the Bachelorette, we've done a lot of campaigns there, so that was successful for us. We'll continue to do that. We're better off with those type of influencer paths, right? Certainly we have affiliate programs that have an influencer base too as well, those affiliates and we're actually growing the affiliate universe right now.

我們相信，現在我們已經朝著那個方向接近的有影響力的人幾乎已經完成了。我們做了單身女郎，我們在那裡做了很多活動，所以這對我們來說是成功的。我們將繼續這樣做。我們最好選擇那些類型的影響者路徑，對吧？當然，我們也有有影響力基礎的附屬計劃，這些附屬公司和我們現在實際上正在擴大附屬宇宙。

But we believe that kind of coordinating with designers and other types of in influential, type folks within our industry is, is more meaningful for the future. So we'll do a little bit of, a little bit of both, but if we lean in on 1 big influencer and that cost associated with engagement is, X number of dollars like a Super Bowl commercial, then where are we going to be with that? So we, that's the unknown, right?

但我們相信，與設計師和我們行業內其他有影響力的類型的人進行協調，對未來更有意義。所以我們會做一點，兩者都做一點，但是如果我們依靠一個有影響力的人，而與參與相關的成本是 X 美元，就像超級碗廣告一樣，那麼我們將何去何從接著就，隨即？所以我們，那是未知數，對吧？

We don't know if a single ad or a single influencer is going to give us, that catalyst to moves us to another level, or is it going to fizzle out? It's just going to be a one-time spend and therefore just destroy us financially. So we're trying to be prudent and responsible and fiscally responsible with our shareholder's money and with our initiatives moving forward.

我們不知道單個廣告或單個有影響力的人是否會給我們帶來將我們提升到另一個層次的催化劑，還是會逐漸消失？這只是一次性支出，因此只會在經濟上摧毀我們。因此，我們正努力對股東的資金和我們向前推進的舉措保持謹慎、負責和財政負責。

(Operator Instructions)

（操作員說明）

It's Adam Lowensteiner, Lytham Partners. I've got a couple questions here from investor who emailed us. As moissanite becomes a smaller portion of overall sales and perhaps declines in sales, is there a risk to the agreement with the supplier Cree regarding minimum orders over time? I mean, along those lines, what is being done to secure better pricing on supplies of lab-grown diamonds?

我是 Lytham Partners 的 Adam Lowensteiner。我收到了發郵件給我們的投資者的幾個問題。隨著莫桑石在整體銷售額中所佔的比例越來越小，而且銷售額可能會下降，隨著時間的推移，與供應商 Cree 就最低訂單達成的協議是否存在風險？我的意思是，按照這些思路，正在採取哪些措施來確保實驗室培育鑽石供應的更好定價？

Okay, great, thanks Adam for that. So also a great question. certainly, if you, if you kind of look at our filings, which will come out tomorrow you might take note of kind of the consumption of raw material, which is definitely present there. We're definitely being responsible and prudent with our inventory. Certainly you see the decline in the inventory quarter over quarter and sequential quarters.

好的，太好了，感謝 Adam。所以也是一個很好的問題。當然，如果你，如果你看一下我們明天會發布的文件，你可能會注意到原材料的消耗，這肯定存在於那裡。我們絕對對我們的庫存負責和謹慎。當然，您會看到庫存季度環比和連續季度下降。

We anticipate that one would assume that we're going to make responsible decisions related to wilt, which is wolf speed. Now certainly they're an incredible partner and a strategic partner, and they've been with us for over 27 years, or around 27 years. So we're all aware of the business climate, we're aware of, kind of the overall requirements and the demand.

我們預計人們會假設我們將做出與枯萎相關的負責任的決定，也就是狼的速度。現在他們肯定是一個了不起的合作夥伴和戰略合作夥伴，他們已經和我們在一起超過 27 年，或者大約 27 年。所以我們都知道商業環境，我們知道，總體要求和需求。

So, as we progress forward, we'll, we'll make executive decisions to manage through that. We believe that we have the type of relationship certainly we did that at the onset of COVID when it first started. Certainly, that'll be a continued conversation with our partners and we'll continue to be mindful and respectful, of that relationship.

因此，隨著我們的進步，我們將做出行政決策來管理它。我們相信，在 COVID 剛開始時，我們確實擁有那種類型的關係。當然，這將是與我們的合作夥伴的持續對話，我們將繼續關注和尊重這種關係。

But certainly take a look at the consumption and kind of, navigate through that. As it relates to, how do we secure better pricing and lab grown diamonds? I alluded to it a little bit within this conversation. Our goal is to become more vertical in this space and become an active player, whether we become the grower and then go from grown to market, that's a, a much bigger conversation.

但當然要看一下消費情況，然後瀏覽一下。就此而言，我們如何確保更好的定價和實驗室培育的鑽石？我在這次談話中提到了一點。我們的目標是在這個領域變得更加垂直，成為一個積極的參與者，無論我們是成為種植者，然後從種植到市場，這是一個更大的對話。

That may come in time, whether there's a partnership like a wolf speed scenario that could come to fruition where we could literally procure the rough. I can tell you that right now we're ongoing R&D and test, and we're cutting and fastening our own rough. So that is provided by a strategic growing partnership that we have. So that's going to get us more vertical. We believe that that's going to hedge against any pricing pressure.

這可能會及時到來，無論是否有像狼速場景這樣的合作夥伴關係可以實現，我們可以從字面上採購原石。我可以告訴你，現在我們正在進行研發和測試，我們正在切割和固定我們自己的原石。因此，這是由我們擁有的不斷發展的戰略夥伴關係提供的。所以這將使我們更加垂直。我們認為，這將對沖任何定價壓力。

We believe that that's going to get us more competitive and we believe we'll become a bigger player, much like we are in the moissanite world, where we basically facet and cut more moissanite gemstones than anywhere in the world. So, we anticipate one day that will be a factor in that space. So I hope that answers this. Questions on that.

我們相信這將使我們更具競爭力，我們相信我們將成為更大的參與者，就像我們在莫桑石世界一樣，我們基本上刻面和切割的莫桑石寶石比世界上任何地方都多。因此，我們預計有一天這將成為該領域的一個因素。所以我希望能回答這個問題。關於那個的問題。

Next question is on inventory. Is the percentage of inventory mix changing and he's talking about the increase in finished jewelry and the decrease in loose jewels?

下一個問題是庫存。庫存組合的百分比是否發生變化，他是在談論成品珠寶的增加和散裝珠寶的減少？

Yes, so certainly the goal is to provide more value to our shareholders, right? So, in the past, what I've learned is, it's a very simple exercise, right? You want to be able to maximize the value of your inventory. We're fortunate that we're dealing in commodities and that commodities, albeit somebody say the fiat money system, people say different things, but gold is gold. Platinum is platinum.

是的，當然目標是為我們的股東提供更多價值，對吧？所以，在過去，我學到的是，這是一個非常簡單的練習，對吧？您希望能夠最大化庫存的價值。我們很幸運，我們在交易商品和商品，儘管有人說法定貨幣體系，人們說不同的話，但黃金就是黃金。鉑金就是鉑金。

So the market dictates the value of that. So when you see our inventory and you look at finished jewelry and finished goods, the valuation of that inventory is exponentially higher because it has that high gold concentration or intrinsic value that's very easily calculated on a balance sheet.

所以市場決定了它的價值。因此，當您查看我們的庫存並查看成品珠寶和成品時，該庫存的估值呈指數級增長，因為它具有很高的黃金集中度或內在價值，這很容易在資產負債表上計算出來。

So look to us to continuously build out, finished, jewelry because that's where we're going more direct to consumer, and that's where we believe is the best path forward for us as a company.

因此，請期待我們不斷打造成品珠寶，因為這是我們更直接地面向消費者的地方，也是我們認為對我們公司來說最好的前進道路。

Also, keep in mind as we, build out our drop ship programs and our partnerships, there's certain SLAs that are in place, which are service level, agreements that are in place that we need to maintain inventory stock and everything. So we need to maintain those inventory thresholds to be able to support them.

此外，請記住，在我們建立我們的直運計劃和我們的合作夥伴關係時，有某些 SLA，即服務水平，我們需要維持庫存和一切的協議。因此，我們需要維持這些庫存閾值才能支持它們。

And also as we start to see the shrinking pie of wholesale distributors or the distribution of loose gemstones, because basically they're experiencing other pressures, we actually did a consolidation between our partners and our distribution partners.

而且當我們開始看到批發分銷商或散裝寶石的分銷規模縮小時，因為基本上他們正在承受其他壓力，我們實際上在我們的合作夥伴和我們的分銷合作夥伴之間進行了整合。

So there's less of them. We're actually pushing our goods into more individual pieces than selling 500, a 1,000 of a number. So look to us to decrease our loose jewels inventory too as well, and we believe that that's a good thing. Gary, I think we have one more caller.

所以他們比較少。實際上，我們將我們的商品分成更多的單件，而不是銷售 500 件，即 1,000 件。因此，希望我們也減少我們的散裝珠寶庫存，我們相信這是一件好事。加里，我想我們還有一位來電者。

And the next question is from [Jack Straub], a private investor.

下一個問題來自私人投資者 [Jack Straub]。

Don, just a quick question on potential acquisitions. Have you guys been approached by any larger company to be acquired just based on you guys trading about half book value? I didn't know if there was any conversations from many other company towards you guys.

唐，只是一個關於潛在收購的快速問題。你們有沒有被任何更大的公司接洽，僅僅因為你們交易了大約一半的賬面價值就被收購了？我不知道是否有許多其他公司對你們進行過任何對話。

Hey, Jack, great question. I mean, it's a loaded question and obviously I can't answer that question specifically. we don't discuss any matters specific to that, but I can tell you that we've got a tremendous opportunity ahead of us. We believe there's a roadmap ahead of us, whether we become the acquirer of others to be able to grow our footprint or to grow our brand, or to grow our strategy, that remains to be seen.

嘿，傑克，好問題。我的意思是，這是一個很複雜的問題，顯然我無法具體回答這個問題。我們不討論任何具體的問題，但我可以告訴你，我們面前有一個巨大的機會。我們相信我們面前有一個路線圖，我們是否成為其他人的收購者以擴大我們的足跡或發展我們的品牌，或者發展我們的戰略，還有待觀察。

We're looking at every, so, certainly, I have an obligation, in the chair that I sit in to be able to review and discuss and, and take into consideration any opportunity that would present itself. So we think we're a great company, we think we're, a great value. We have a good position in the market. So, we believe there's plenty of growth for us to grow our business standalone. So, I don't know if that, kind of answers your question.

我們正在研究每一個，所以，當然，我有義務在我所坐的椅子上進行審查和討論，並考慮可能出現的任何機會。所以我們認為我們是一家偉大的公司，我們認為我們是一個偉大的價值。我們在市場上有很好的地位。因此，我們相信我們有足夠的增長空間來獨立發展我們的業務。所以，我不知道這是否能回答您的問題。

Well, so you completely ruling that out. Then. If a company did approach you and you thought it, it brought superior value, then the current share price, you would consider that you're not completely shooting down that just based on where you think you can grow the company 3 years?

好吧，所以你完全排除了這一點。然後。如果一家公司確實與您接洽並且您認為它帶來了更高的價值，那麼當前的股價，您會認為您並沒有完全拒絕僅僅基於您認為公司 3 年可以發展的地方？

Absolutely not. So, we would take any consideration, anyone that comes forward with a, a legitimate bonafide offer, we take that to the board of directors. We talk about it all the time, should an opportunity present itself and it makes sense for the shareholders and myself included across the board. Absolutely. I mean, why wouldn't we? So, given, an opportunity that could or will present itself we'll, we'll kind of visit that at the time.

絕對不。因此，我們會考慮任何提出合法善意報價的人，我們會將其提交給董事會。我們一直在談論它，如果有機會出現，這對股東和我本人來說都是有意義的。絕對地。我的意思是，我們為什麼不呢？因此，鑑於可能或將會出現的機會，我們將在當時進行訪問。

This concludes our question and answer session. I would like to turn the conference back over to Don O'Connell for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給 Don O'Connell 作閉幕詞。

So first of all, I want to thank everybody for today and on behalf everybody at Charles & Colvard, we appreciate your time and I want to thank you all for your continued support, and we look forward to things that come in the future for Charles & Colvard.

所以首先，我要感謝今天的每一個人，並代表 Charles & Colvard 的每一個人，感謝你們抽出寶貴的時間，感謝你們一直以來的支持，我們期待著 Charles 未來的發展&科爾瓦德。

The conference call will be archived for review on the company's website at http://www.charlesandcolvard.com/investor-relations/events. To access the digital replay of this conference, you may dial 1-877-344-7529, or 1-412-317-0088 beginning approximately 1 hour from now. You will be prompted to enter a conference number, which will be 4241796. Please record your name and company when joining.

電話會議將在公司網站 http://www.charlesandcolvard.com/investor-relations/events 上存檔以供審查。要觀看本次會議的數字重播，您可以在大約 1 小時後撥打 1-877-344-7529 或 1-412-317-0088。系統將提示您輸入會議號，即 4241796。加入時請記錄您的姓名和公司。

The conference is 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。您現在可以斷開連接。