Charles & Colvard Ltd (CTHR) 2024 Q2 法說會逐字稿

Good day, and welcome to the Charles & Colvard Second Quarter Fiscal Year 2024 Earnings Conference Call and Webcast.

美好的一天，歡迎來到 Charles & Colvard 2024 財年第二季財報電話會議和網路廣播。

And all participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

所有參與者將處於僅聽模式。如果您需要協助，請按星號鍵和零向會議專家發出訊號。今天的演講結束後，將有機會提問。

To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. This earnings call may contain forward-looking statements as defined in Section 27 A. of the Securities Act of 1933 as amended, including statements regarding, among other things, the Company's business strategy and growth expressions that and identify 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 further assurance that these forward-looking this forward-looking information will prove to be accurate.

要提問，您可以按按鍵式電話上的星號，然後按一個。若要撤回您的問題，請按星號然後按兩顆星。本次財報電話會議可能包含經修訂的 1933 年《證券法》第 27 A 條所定義的前瞻性陳述，其中包括有關公司業務戰略和增長表達等的陳述，並確定前瞻性陳述主要基於取決於我們公司的預期，並受到許多風險和不確定因素的影響，其中一些風險和不確定因素無法預測或量化，並且超出了我們的控制範圍。未來的發展和實際結果可能與前瞻性陳述所設想或所依據的結果存在重大差異。鑑於這些風險和不確定性，無法進一步保證這些前瞻性資訊將被證明是準確的。

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 dot charlesandcolvard.com. French slash events Company will be hosting a Q&A question and answer session. At the conclusion of the prepared remarks, should you have any questions if you'd like to submit, please e-mail ir at Charles & Colvard.com. Please note this event is being recorded.

今天的電話會議附帶了一個支持性的 PowerPoint 幻燈片，可在公司網站 ir dot charlesandcolvard.com 的投資者關係部分取得。法國斜線活動公司將舉辦問答環節。在準備好的評論結束時，如果您有任何問題想要提交，請發送電子郵件至 Charles & Colvard.com。請注意此事件正在被記錄。

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

我現在將會議交給總裁兼執行長唐·奧康奈爾先生、丹·奧康奈爾先生。

Please go ahead, sir.

請繼續，先生。

Good afternoon, everyone, and welcome to our Second Quarter Fiscal 2024 financial results conference call. During our second quarter, we continued to experience the effects of a challenging year for the jewelry industry, but we were not alone reports by Tenaris indicate that the US jewelry market sank 5.8% in 2023, despite the impacts on our business and margins from challenging economic conditions, rising commodity prices and downward pricing pressure on lab-grown diamonds, we remain resilient in the face of adversity. We ended the quarter debt-free with $11.1 million in total cash delivered $7.9 million in revenue and decreased inventory to $25.8 million as lab-grown diamond pricing pressure impacts the value proposition of Lloyd's tonight and retailers seek competitive prices and alternative sources. It is imperative that we forge direct relationships with independent jewelers to protect our brand equity and the value of Charles & Colvard moist snuff. As a result, we anticipated the decline in our traditional segment, specifically loose gemstone sales as we continue to transition away from our distributor model and prepare to engage directly with thousands of independent jewelers through our new owned web property, Charles & Colvard direct.com, allowing independent doors to purchase directly from the source will enable them to be more agile and responsive to market conditions to help maximize their profits. We feel this ongoing transition will be critical to the business, reaffirming our position in the lab-grown market as the original creator and source of the world's finest voice and IGM, we believe we will begin to see the positive impact of this strategic shift in the coming quarters. While we experienced softness in loose gemstone sales during the quarter, we were encouraged by our finished jewelry holiday performance with our brick and mortar partners. We continue to modify and optimize our Forever One moissanite in-store assortment with new designs and increased carat weights, highlighting moist Knight's value proposition and further differentiating ourselves against competitive diamond alternatives. Additionally, we are pleased to have introduced Arcadia lab-grown diamonds finished jewelry in key Elsburg diamond stores ahead of the holiday season. We believe this addition to our in-store assortment highlights the importance of our strategic merchandising to offer design supporting both moist nine and lab-grown diamonds, reinforcing the market opportunity for both our GEM categories as more retailers adopt lab-grown diamond assortments to meet the growing consumer demand. We believe this important expansion will allow us to gain a greater share of the overall fine jewelry market in our online channels. Segment, which now represents 84% of total net sales. We experienced sequential growth in lab-grown diamond sales up 15% year over year on Charles & Colvard.com. for the quarter. Lab-grown diamonds continue to climb as a percentage of our total revenue, increasing our total achievable market opportunity. We continue to make strategic capital investments to optimize our web property Charles & Colvard.com as we prepare to launch Phase one of our next-gen e-commerce platform in Q4, we believe next gen will transform our Charles & Colvard direct to consumer e-commerce experience in myriad ways designed to create a better user experience and increase sales conversion. We believe our new headless front-end e-commerce platform powered by custom proprietary code contained within industry leading open source applications will dramatically increase our site speed, gather critical consumer data and shopping behavior, split, test shopping journeys, bolster SEO rankings and add a variety of new shopping experiences these advanced product configuration capabilities and new two-step custom engaging builder will allow consumers to browse the catalog more efficiently. We believe these significant changes to the shopping journey will greatly increase the overall customer experience while driving additional revenue. Our web property more site outlet.com, up 21% year to date in revenue compared to last year remains an important revenue driver and disposition outlet for obsolete and legacy inventory as we refine our merchandising strategy to support our other channels, more site, outlet.com continues to serve consumers seeking clearance and low cost merchandise outlet.com enables us to capture the lower end of the market without diminishing the Charles & Colvard brand.

大家下午好，歡迎參加我們的 2024 財年第二季財務業績電話會議。在第二季度，我們繼續經歷了珠寶業充滿挑戰的一年的影響，但泰納瑞斯(Tenaris) 的報告表明，美國珠寶市場2023 年下跌了5.8%，儘管挑戰對我們的業務和利潤造成了影響，但我們並不是唯一的公司。儘管經濟狀況、大宗商品價格上漲以及實驗室生產鑽石的價格下行壓力，我們在逆境中仍能保持韌性。本季結束時，我們沒有負債，總現金為1,110 萬美元，收入為790 萬美元，庫存減少至2,580 萬美元，因為實驗室培育的鑽石定價壓力影響了勞合社今晚的價值主張，零售商尋求有競爭力的價格和替代來源。我們必須與獨立珠寶商建立直接關係，以保護我們的品牌資產和 Charles & Colvard 濕鼻煙的價值。因此，我們預計傳統細分市場會出現下滑，特別是鬆散的寶石銷售，因為我們將繼續從分銷商模式轉型，並準備透過我們新擁有的網路資產Charles & Colvard direct.com 與數千家獨立珠寶商直接接觸。允許獨立門直接從源頭採購將使他們能夠更靈活地響應市場狀況，從而幫助實現利潤最大化。我們認為這種持續的轉變對業務至關重要，並重申了我們在實驗室培育市場中作為世界上最好的聲音和IGM 的原創者和來源的地位，我們相信我們將開始看到這一戰略轉變的正面影響未來幾季。雖然本季裸石銷售疲軟，但我們與實體合作夥伴的成品珠寶假日表現令我們感到鼓舞。我們不斷修改和優化我們的 Forever One 莫桑鑽店內品種，採用新設計和增加克拉重量，突出了 Moist Knight 的價值主張，並進一步使我們在競爭性鑽石替代品中脫穎而出。此外，我們很高興在假期季節之前在埃爾斯堡的主要鑽石商店推出 Arcadia 實驗室培養鑽石成品珠寶。我們相信，店內品種的增加凸顯了我們戰略銷售的重要性，即提供支持濕九和實驗室培育鑽石的設計，隨著越來越多的零售商採用實驗室培育的鑽石品種來滿足我們的需求，增強了我們的GEM 類別的市場機會。不斷增長的消費需求。我們相信，這一重要的擴張將使我們能夠透過線上管道在整個高級珠寶市場中獲得更大的份額。該細分市場目前佔總淨銷售額的 84%。Charles & Colvard.com 上的實驗室製造鑽石銷量較去年同期成長 15%。對於本季。實驗室培育鑽石占我們總收入的百分比持續攀升，增加了我們可實現的總市場機會。我們繼續進行策略資本投資，以優化我們的網路資產Charles & Colvard.com，因為我們準備在第四季度推出下一代電子商務平台的第一階段，我們相信下一代將把我們的Charles & Colvard 直接轉變為消費者電子商務平台-以多種方式提供商務體驗，旨在創造更好的用戶體驗並提高銷售轉換率。我們相信，我們新的無頭前端電子商務平台由業界領先的開源應用程式中包含的自訂專有程式碼提供支持，將極大地提高我們的網站速度，收集關鍵的消費者數據和購物行為，拆分、測試購物旅程，增強SEO 排名並添加各種新的購物體驗這些先進的產品配置功能和新的兩步驟自訂參與建立器將允許消費者更有效地瀏覽目錄。我們相信購物旅程的這些重大變化將大大提高整體客戶體驗，同時帶來額外收入。我們的網站財產更多網站outlet.com，今年迄今為止的收入比去年增長了21％，仍然是重要的收入驅動因素和過時和遺留庫存的處置渠道，因為我們完善了銷售策略以支持我們的其他管道，更多網站，奧特萊斯.com 繼續為尋求清倉和低成本商品的消費者提供服務。outlet.com 使我們能夠在不削弱 Charles & Colvard 品牌的情況下佔領低端市場。

During Q2, we also successfully launched a new transactional web property made Shopping.com to support our streaming and broadcast initiatives made shopping. In October, we launched our pilot programming on made shopping featuring Charles & Colvard products across satellite linear broadcasting and live streams on social media platforms such as Facebook, YouTube and X and other mediums, our Phase one current and follow the traditional home shopping model featuring nationally recognized host. We are pleased to note an overall lift in direct consumer traffic on Bay Shopping.com, as well as Charles & Colvard.com, which we believe is due to our main shopping presence, reaching a broader audience since the launch of our new initiative made. For those who want to understand the why behind their purchase for those who prioritize trust in their purchasing decisions. And for those who appreciate products that are thoughtfully created with a better world in mind and made shopping, we're on a mission to redefine our customer shop, starting with a curated collection of exquisite fine jewelry by Charles & Colvard as the flagship brand. But that's just the beginning. We're working behind the scenes to explore potential partners who share our commitment to quality craftsmanship and to meet eat those with plans to eventually expand our made shopping offerings to other product verticals. Phase two of May, Charlie will evolve into a mix of traditional and modern content, a unique blend of education, entertainment and interactive live shopping and storytelling, creating a personal and purposeful destination for today's consumer. We believe this initiative will be our solution for consumers seeking hyper curated shopping experiences, further solidifying our brand's presence in a growing market and thereby helping to increase shareholder value. Although we experienced softness in the beginning of the quarter. We witnessed an increase in demand in December year-over-year for Charles & Colvard.com, which we attributed to top of funnel awareness driven by our direct to consumer shopping initiatives. Our concerted efforts across multiple properties collectively fueled top line revenue growth during the quarter's final months. Furthermore, we are thrilled to have launched two strategic online partnerships within the quarter with Fred Meyer jewelers and the Army and Air Force Exchange Service for the exchange. These partnerships performed well out of the gate and will we believe become important revenue drivers for us in future quarters. As we look ahead, we remain focused on preserving cash while strategically scaling resources to support current and future state revenue drivers. I will now turn the presentation over to Clint Pete, our CFO, to provide detailed insight into Q2's financial performance claim. Please proceed.

在第二季度，我們也成功推出了新的交易網路資產 Shopping.com，以支援我們的串流媒體和廣播計劃（購物）。10 月，我們透過衛星線性廣播和Facebook、YouTube 和X 等社交媒體平台和其他媒體的直播，推出了以Charles & Colvard 產品為特色的客製化購物試點節目，我們的第一階段遵循傳統的家庭購物模式，國家認可的主持人。我們很高興地註意到 Bay Shopping.com 以及 Charles & Colvard.com 上的直接消費者流量總體有所提升，我們認為這是由於我們的主要購物業務自推出新舉措以來吸引了更廣泛的受眾。對於那些想要了解購買背後原因的人，對於那些在購買決策中優先考慮信任的人。對於那些欣賞以美好世界為理念而精心打造的產品並進行購物的人來說，我們的使命是重新定義我們的顧客商店，首先以 Charles & Colvard 精選的精美高級珠寶系列作為旗艦品牌。但這只是開始。我們正在幕後努力尋找與我們一樣致力於優質工藝的潛在合作夥伴，並與那些計劃最終將我們的購物產品擴展到其他產品垂直領域的人會面。在五月的第二階段，查理將發展成為傳統和現代內容的結合，教育、娛樂、互動現場購物和講故事的獨特融合，為當今的消費者創造一個個性化和有目的的目的地。我們相信，這項舉措將成為我們為尋求精心策劃的購物體驗的消費者提供的解決方案，進一步鞏固我們的品牌在不斷增長的市場中的地位，從而有助於提高股東價值。儘管我們在本季初經歷了疲軟。我們見證了 12 月 Charles & Colvard.com 的需求同比增長，我們將其歸因於我們直接面向消費者的購物計劃所推動的漏斗頂部意識。我們在多個資產方面的共同努力共同推動了本季最後幾個月的營收成長。此外，我們很高興在本季度與 Fred Meyer 珠寶商以及陸軍和空軍交換服務機構建立了兩項戰略線上合作夥伴關係。這些合作關係一開始表現良好，我們相信將成為我們未來幾季的重要收入驅動力。展望未來，我們仍然專注於保留現金，同時策略性地擴展資源以支持當前和未來的國家收入驅動因素。我現在將把簡報交給我們的財務長克林特‧皮特 (Clint Pete)，他將詳細介紹第二季的財務表現主張。請繼續。

Thanks, Don. Today I'll provide a summary of key financials for the second quarter ended December 31st, 2023. Additional details can be found in our earnings press release that we issued this afternoon, our Form 10-Q, which we expect to file tomorrow. Please note that all percentage comparisons are to the second quarter ended December 31st, 2022, unless specified otherwise.

謝謝，唐。今天，我將提供截至 2023 年 12 月 31 日的第二季主要財務資料摘要。更多詳細信息，請參閱我們今天下午發布的收益新聞稿以及我們預計明天提交的 10-Q 表格。請注意，除非另有說明，所有百分比比較均以截至 2022 年 12 月 31 日的第二季為基準。

First, we will start on Slide 9 with the comparative analysis of the second quarter of fiscal 2024 compared to the same period one year ago. And total net sales for Q2 2024 totaled $7.9 million versus $10.4 million, a decrease of 24% due primarily to the continued general economic uncertainties and the expected decline in the company's wholesale revenue as we shift to a more direct-to-consumer business model and as our independent dealer initiatives matures, net sales for our online channel segment, which is primarily direct to consumer and includes charlesandcolvard.com most at outlet.com Charles & Colvard direct.com made Shopping.com marketplaces drop, ship retail and other pure play outlets totaled $6.7 million for the quarter now representing 84% of total net sales, up from 76% one year ago. Net sales for our traditional segment, which consists of wholesale and brick-and-mortar customers, totaled $1.3 million for the quarter, representing now 16% of total net sales compared to 24% of sales in the year-ago quarter. Finished jewelry net sales represented 93% of total sales for the quarter, up from 81% of sales in the second quarter one year ago as we continued to position ourselves in the fine jewelry market and moved more to the direct consumer model as we expected due to the previously mentioned strategies, loose jewel net sales decreased 73% for the quarter. Domestic sales represent 98% of all sales in the second quarter within international net sales totaling 2%.

首先，我們將從投影片 9 開始對 2024 財年第二季與一年前同期進行比較分析。2024 年第二季的淨銷售額總額為790 萬美元，較1,040 萬美元下降了24%，這主要是由於總體經濟的持續不確定性以及隨著我們轉向更直接面向消費者的業務模式和公司的批發收入的預期下降。隨著我們的獨立經銷商計劃的成熟，我們在線通路細分市場的淨銷售額（主要直接面向消費者，包括charlesandcolvard.com、outlet.com、Charles & Colvard direct.com ）使Shopping.com 市場下降，船舶零售和其他純業務該季度專賣店銷售額總計 670 萬美元，佔總淨銷售額的 84%，高於一年前的 76%。我們的傳統部門（包括批發和實體客戶）本季的淨銷售額總計 130 萬美元，目前佔總淨銷售額的 16%，而去年同期為 24%。成品珠寶淨銷售額佔本季總銷售額的93%，高於一年前第二季銷售額的81%，因為我們繼續定位高級珠寶市場，並如我們預期的那樣更多地轉向直接消費模式。與前面提到的策略相比，Loss Jewel 本季的淨銷售額下降了 73%。國內銷售額佔第二季總銷售額的 98%，國際淨銷售額佔 2%。

Moving on to Slide 10 to discuss gross margin reported gross margin of 36% versus 41% gross margin in the year-ago quarter, or gross profit at $2.9 million versus $4.3 million in growth profit in the year-ago quarter. For Q2 2020 for operating expenses increased 5% from the year ago quarter. Sales and marketing expenses decreased 1% to $4.3 million. General and administrative expenses were $1.5 million for the quarter compared to $1.2 million in the year-ago quarter or 26% increase. The increase in G&A for Q2 was due in large part, the increase in legal fees related to various corporate matters compared to the prior year quarter. We reported a net loss for Q2 2020 for a $2.9 million or $0.09 loss per diluted share compared with a net loss of $1 million or $0.03 loss per diluted share in the year-ago period. The main drivers for our increased net loss were again, as noted last quarter, the decline in revenues and additional expenses due to various ongoing corporate matters. Within the quarter, our weighted average shares outstanding on a diluted basis used in the calculation of loss per share for the quarter were approximately 30.3 million shares for the period ended December 31st, 2023, same as in the year-ago quarter.

接下來討論投影片 10，討論毛利率，報告毛利率為 36%，而去年同期毛利率為 41%，毛利為 290 萬美元，而去年同期成長利潤為 430 萬美元。2020 年第二季的營運費用較去年同期成長 5%。銷售和行銷費用下降 1% 至 430 萬美元。本季一般及管理費用為 150 萬美元，去年同期為 120 萬美元，成長 26%。第二季度一般管理費用的增加很大程度上是由於與去年同期相比，與各種公司事務相關的法律費用增加。我們報告 2020 年第二季的淨虧損為 290 萬美元，即稀釋後每股虧損 0.09 美元，而去年同期淨虧損為 100 萬美元，即稀釋後每股虧損 0.03 美元。正如上季所指出的，我們淨虧損增加的主要驅動因素再次是由於各種正在進行的公司事務而導致的收入下降和額外費用。在本季內，截至 2023 年 12 月 31 日止期間，用於計算本季每股虧損的稀釋後已發行加權平均股數約為 3,030 萬股，與去年同期相同。

Now let's move on to a snapshot of our balance sheet. Our liquidity and capital position remains strong as we ended the quarter with $11.1 million of total cash compared to $15.6 million at the end of the fourth quarter ended June 30th, 2023. Working capital remained strong at $15.3 million in addition, the Company was debt-free as of December 31st, 2023. Our cash flow used in operations was $1.3 million during the quarter compared to $600,000 of cash flow generated from operations during the same quarter a year ago and a reduction from our cash burn in Q1 2024, which was $2.7 million in terms of other sources of liquidity, we have access to a $5 million cash secured credit facility with JPMorgan Chase Bank. As of December 31st, 2023, there were no outstanding amounts due on the credit facility. Inventory as of December 31st, 2023, totaled $25.8 million compared to June 30th, 2023, when it totaled $26.8 million compared to $35 million at December 31st, 2022 year over year decrease of more than $8 million due to the inventory write-down in Q4 FY 2023. Loose jewels inventory was $8.5 million at December 31st, 2023, compared to $9.1 million as of June 30th, 2023 and compared to $15.9 million as of December 31st, 2022, a year over year decrease, again due to the inventory write-down referenced above finished jewelry inventory was $17 million as of December 31st, 2023, compared to $17.3 million as of June 30th, 2023 and compared to $18.8 million as of December 31st, 2022 Company remains focused on prudent inventory management strategies. Book value per share at the end of second quarter was $1.13 per share trading well below market.

現在讓我們來看看資產負債表的快照。我們的流動性和資本狀況依然強勁，本季結束時我們的現金總額為 1,110 萬美元，而截至 2023 年 6 月 30 日的第四季末為 1,560 萬美元。營運資金依然強勁，達到 1,530 萬美元，此外，截至 2023 年 12 月 31 日，公司沒有債務。本季度我們營運中使用的現金流為130 萬美元，而去年同期營運產生的現金流為60 萬美元，並且比2024 年第一季的現金消耗有所減少，就其他流動性來源而言，現金消耗為270 萬美元，我們可以從摩根大通銀行獲得 500 萬美元的現金擔保信貸額度。截至 2023 年 12 月 31 日，該授信額度不存在任何到期未償還金額。截至2023 年12 月31 日的庫存總額為2580 萬美元，而2023 年6 月30 日的庫存總額為2680 萬美元，而2022 年12 月31 日的庫存總額為3500 萬美元，由於第四季度的庫存減記，年減了超過800 萬美元2023 財年。截至2023 年12 月31 日，散裝珠寶庫存為850 萬美元，而截至2023 年6 月30 日為910 萬美元，截至2022 年12 月31 日為1,590 萬美元，同比下降，同樣是由於上述庫存減記所致截至2023 年12 月31 日，成品珠寶庫存為1,700 萬美元，而截至2023 年6 月30 日，成品珠寶庫存為1,730 萬美元；截至2022 年12 月31 日，成品珠寶庫存為1,880 萬美元。公司仍專注於審慎的庫存管理策略。第二季末每股帳面價值為 1.13 美元，遠低於市場水準。

In summary, we remain steadfast in our cash management while diligently deploying capital in support of our ongoing strategic initiatives, but that I'll turn it back over to Dan.

總之，我們在現金管理方面保持堅定，同時努力部署資本以支持我們正在進行的戰略舉措，但我會將其轉回丹。

Thank you, Kurt. In conclusion, we acknowledge the recent industry shift has presented us with numerous challenges and has significantly impacted our earnings. However, we do not believe this setback will deter our progress or hinder our long-term growth and strategic initiatives. We remain committed to delivering long-term shareholder value and look forward to the opportunities that lie ahead.

謝謝你，庫爾特。總之，我們承認最近的產業轉變給我們帶來了許多挑戰，並對我們的收益產生了重大影響。然而，我們認為這項挫折不會阻礙我們的進步或阻礙我們的長期成長和策略舉措。我們仍然致力於提供長期股東價值，並期待未來的機會。

Thank you for your continued support and confidence in our company.

感謝您一直以來對我們公司的支持與信任。

At this time, I'll turn it back over to the operator, we'll open the lines for any questions.

此時，我會將其轉回給接線員，我們將開通線路以解答任何問題。

Thank you. We will now begin the question and answer session to ask a question. You may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw your question, please press star then two. We ask that you please limit yourself to one question and one follow-up. And if you have further questions, you may reenter the question queue. And at this time, we'll pause momentarily to assemble our roster. Again, if you have a question, please press star then one and the first question will come from Paul Johnson with Johnson Investments.

謝謝。我們現在開始問答環節來提問。您可以按按鍵式電話上的星號，然後按一個。如果您使用免持電話，請在按鍵前拿起聽筒。如果您的問題已解決，但您想撤回問題，請按星號然後按兩顆星。我們要求您只提出一個問題和一項後續行動。如果您還有其他問題，可以重新進入問題佇列。此時，我們將暫停一下以集合我們的名單。再次強調，如果您有疑問，請按星號，然後按一個，第一個問題將來自約翰遜投資公司的保羅·約翰遜。

Please go ahead.

請繼續。

Yes, good afternoon. I have a question on the operating expenses, which are roughly flat with a year ago from some changes, but roughly flat. In the meantime, we lost $3 million and I know got $11 million in cash and I know it's not a straight line on cash burn, but if we have one more year of learning revenues and $3 million in the quarter on, that's going to destroy all the all the cash on the balance sheet. So I'm not hearing anything in the call that makes us think that leaving aside the plans and the marketing plans, what how are we going to preserve this cash based on the cash burn now?

是的，下午好。我有一個關於營運費用的問題，由於一些變化，營運費用與一年前大致持平，但大致持平。同時，我們損失了300 萬美元，我知道我們得到了1100 萬美元現金，而且我知道這不是一條直線的現金消耗，但如果我們再有一年的學習收入和本季度的300 萬美元，這將摧毀資產負債表上的所有現金。因此，我在電話中沒有聽到任何讓我們認為拋開計劃和行銷計劃，我們將如何根據現在的現金消耗來保存這筆現金？

Yes.

是的。

Hey, Paul, thanks for the question. So certainly our cash burn, I mean, we did reduce our cash burn from last year, which was I believe, was $2.7 million versus $1.3 million this quarter. So we're pretty good at, you know, kind of understanding that we are burning cash and it's costing us money to operate the business. I will tell you that what people don't look at is they don't look at the concentration of inventory. The concentration of the finished jewelry, which is a $17 million-plus at this time Inc.

嘿，保羅，謝謝你的提問。所以，我的意思是，我們的現金消耗確實比去年減少了 270 萬美元，而本季為 130 萬美元。所以我們非常擅長，你知道，我們正在燒錢，這讓我們需要花錢來經營業務。我告訴你，人們不看的是庫存的集中度。成品珠寶的集中度，目前 Inc. 的價值超過 1700 萬美元。

And that finished jewelry is the commodity, which is gold itself.

成品珠寶就是商品，也就是黃金本身。

So we're constantly making additional investments in the material and into merchandise that we bring to market.

因此，我們不斷對推向市場的材料和商品進行額外投資。

So that gold within that product is highly liquid of all and we're able to raise cash on that.

因此，該產品中的黃金具有很高的流動性，我們能夠藉此籌集現金。

So with that being said, we have $11 million plus in cash.

話雖如此，我們還有超過 1100 萬美元的現金。

And then we have the cash equivalence between the inventory side, which is a much different dynamic in business than it was in the years past. So optically, it may seem a little bit different, but we're actually in a better place and we're spending the necessary dollars to make the investments where they need to be able to drive the business for the future. I'm pretty confident and kind of where we're going and what we're building is certainly a cash and preservation of cash is really, really critical. So look to us to be prudent and then look to us to make strategic investments where it makes sense and look to us to cut back in reserve when possible in the coming months.

然後我們有庫存方面的現金等值，這與過去幾年的業務動態有很大不同。因此，從表面上看，它可能看起來有點不同，但我們實際上處於一個更好的位置，我們正在花費必要的資金在他們需要能夠推動未來業務的地方進行投資。我非常有信心，我們要去的地方和我們正在建造的東西肯定是現金，而保存現金真的非常重要。因此，期待我們保持謹慎，然後期待我們在有意義的情況下進行策略性投資，並期待我們在未來幾個月內盡可能削減儲備。

But right now, we're launching a new web property that takes capital.

但現在，我們正在推出一個需要資金的新網路資產。

We're deploying capital to be able to kind of be bring forward the best in class of our web experience. We're making initiatives where we believe that's going to be driving growth for the future. We're making investments in resources. So we're bringing on staff that are specific to different areas of the business that we believe that's going to bring growth and drive growth from certainly, you know, your question is very valid, but moving forward, we're pretty confident in where we'll be in the future. So we had to shift and kind of moissanite versus lab-grown diamonds. We had some downward pressure on the moist snuff market, you had the economy, some other things, but I believe that kind of the quarters ahead will start to turn this a little bit will start to be more. You know, cognizant on the profitability of the business as the shift starts to happen once we start to get some of these things and these new initiatives online and focus more on the revenue side of it and streamlining the business and get the more profitable considerations to come.

我們正在部署資金，以便能夠提供一流的網路體驗。我們正在採取舉措，相信這將推動未來的成長。我們正在對資源進行投資。因此，我們正在聘請針對不同業務領域的員工，我們相信這將帶來成長並推動成長，當然，你知道，你的問題是非常有效的，但展望未來，我們非常有信心我們會在未來。因此，我們必須改變莫桑石與實驗室製造鑽石的關係。我們在潮濕的鼻煙市場上面臨一些下行壓力，你有經濟，還有其他一些事情，但我相信未來幾季將開始扭轉這一點，並將開始變得更大。你知道，認識到業務的盈利能力，因為一旦我們開始將這些東西和這些新舉措放在網上，並更多地關注其收入方面並簡化業務並獲得更有利可圖的考慮因素，這種轉變就開始發生來。

So I don't know if I answered that, but --

所以我不知道我是否回答了這個問題，但是--

I appreciate that. So if there's roughly $10 million in inventory. Going back to your point about a lot of it being gold or very liquid, just ballpark, how much of the $10 million could be liquidated if we need the cash, was it a quickly? I'm talking about not finished products.

我很感激。因此，如果庫存約為 1000 萬美元。回到你的觀點，其中很多是黃金或流動性很強，只是大概，如果我們需要現金，這 1000 萬美元中的多少可以被清算，是不是很快？我說的是未完成的產品。

But.

但。

Yes, so again, when I was with Berkshire Hathaway's Ridgeline group, and we certainly looked at everything. And it we tried to drive the business if a catastrophic event were to occur, what is liquid?

是的，當我在伯克希爾哈撒韋公司的 Ridgeline 團隊工作時，我們確實考慮了一切。如果發生災難性事件，我們試圖推動業務發展，那麼什麼是流動性？

The beauty of our business is the gold is commodities.

我們業務的美妙之處在於黃金就是商品。

So it is highly liquid. So would our inventory at $25 million if you look at the concentration that inventory specifically, that inventory is comprised of finished jewelry at $17 million if you took, you know, 60% of that inventory, you said its goal that gold is at 14 carat. It's very, very simple to come up with the economics on that five. So I mean that's basically where you're at with that. And then you have the $11.1 million in cash. You have no debt right now in the business. So we still feel that we're in a good place.

所以它的流動性很高。那麼，如果您具體查看庫存的集中度，該庫存由1700 萬美元的成品珠寶組成，如果您拿走了該庫存的60%，您說其目標是黃金為14 克拉，那麼我們的庫存將達到2500萬美元。 。要得出這五個面向的經濟學原理非常非常簡單。所以我的意思是，這基本上就是你的處境。然後你就擁有了 1110 萬美元的現金。您現在在企業中沒有債務。所以我們仍然覺得我們處於一個好的位置。

We also have a $5 million credit line that's available to us to kind of continue to grow and kind of ship and shape this business.

我們還有 500 萬美元的信貸額度，可供我們繼續發展、發展和塑造這項業務。

So a lot of other companies don't have the commodity in gold in their in their finished products, right?

所以很多其他公司的成品中都沒有黃金商品，對吧？

So that's one advantage we have.

這是我們的優勢之一。

Appreciate and thank you.

感謝並感謝您。

Welcome.

歡迎。

Again, if you have a question, please press star then one. This concludes our question and answer session. I would like to turn the conference back over to Mr. Dan O'Connell for any closing remarks.

再次強調，如果您有疑問，請先按星號，然後再按一個。我們的問答環節到此結束。我想將會議轉交丹·奧康奈爾先生發表閉幕詞。

Please go ahead, sir.

請繼續，先生。

So I want to thank everyone for their attention and continued belief in the Company, and we look forward to sharing our progress and achievements with you in the future.

因此，我要感謝大家對公司的關注和持續信任，我們期待在未來與您分享我們的進步和成就。

Thank you.

謝謝。

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。