Digital Brands Group Inc (DBGI) 2022 Q3 法說會逐字稿

Greetings and welcome to the Digital Brands Group third-quarter 2022 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Hil Davis, CEO. Thank you, Hil. You may begin.

歡迎來到 Digital Brands Group 2022 年第三季度財報電話會議。 （操作員說明）提醒一下，正在錄製此會議。現在我很高興向您介紹東道主 Hil Davis，首席執行官。謝謝你，希爾。你可以開始了。

Yes. Good afternoon, and welcome to the Digital Brands third-quarter 2022 earnings conference call. This earnings calls 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.

是的。下午好，歡迎來到 Digital Brands 2022 年第三季度收益電話會議。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，其中包括有關公司業務戰略和增長戰略等的陳述。

Expressions which identified 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.

確定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。

Future developments and actual results could differ materially from those set forth and contemplated by or underlying the forward-looking statements. In light of these risks and uncertainties, there can be no assurances that the forward-looking information will prove to be accurate.

未來的發展和實際結果可能與前瞻性陳述所闡述和考慮的或潛在的存在重大差異。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。

The company will be hosting a Q&A session at the conclusion of the prepared remarks. Please note this event is being recorded.

公司將在準備好的評論結束時舉辦問答環節。請注意正在記錄此事件。

But let me start by saying we delivered strong revenue growth and continued operating leverage on our fixed costs in the third partner. In addition, we have several positive updates to the business which I will discuss in detail.

但我首先要說的是，我們在第三方合作夥伴的固定成本上實現了強勁的收入增長和持續的經營槓桿。此外，我們對業務有幾個積極的更新，我將詳細討論。

First, we reduced our debt significantly, which allows us to factor our wholesale purchase orders. This creates a significant change in our working capital cycle. In the past, we had to fund all our production costs upfront. Up until recently, this resulted in a four to five-month negative working capital cycle, which is why we had to borrow money at times to pay for the upcoming product fabric and production.

首先，我們大幅減少了債務，這使我們能夠考慮批發採購訂單。這使我們的營運資金周期發生了重大變化。過去，我們必須預先支付所有生產成本。直到最近，這導致了四到五個月的負營運資金周期，這就是為什麼我們不得不不時藉錢來支付即將推出的產品面料和生產的原因。

Since October 1, we had been able to factor our purchase orders, which allows us to use to use that capital to purchase fabric and pay for production. This is a huge change in our cash needs and working cash flow. This is even more critical to our business given our second point, which is the significant increase in our Q1 2023 wholesale bookings versus Q1 2022.

自 10 月 1 日以來，我們已經能夠分解我們的採購訂單，這使我們能夠使用該資金購買麵料並支付生產費用。這是我們現金需求和工作現金流的巨大變化。鑑於我們的第二點，這對我們的業務更為重要，即與 2022 年第一季度相比，我們 2023 年第一季度的批發預訂量顯著增加。

Our Q1 wholesale orders for Stateside alone are up over 50% from Q1 of last year. Additionally, this still is a success in wholesale bookings for Q1 2023 versus no wholesale bookings last year as it was a direct-to-consumer only at that point in time.

我們僅在美國的第一季度批發訂單就比去年第一季度增長了 50% 以上。此外，這在 2023 年第一季度的批發預訂方面仍然是成功的，而去年沒有批發預訂，因為它只是在那個時間點直接面向消費者。

These increases in wholesale bookings continue to show the strength of our brand and the demand from both the wholesale channel and the -- which is also carried over into the direct to consumer channel. In fact, this strength has led to several groups approaching us about licensing our brand.

這些批發預訂量的增加繼續顯示我們品牌的實力以及批發渠道和 - 這也被轉移到直接面向消費者的渠道。事實上，這種優勢已導致多個團體與我們接洽，希望獲得我們品牌的許可。

Licensing revenue could add meaningful revenue streams that is extremely high flow-through as there is limited costs associated with this revenue. We are currently reviewing this opportunities, and they are significant in nature, and we are excited about potential opportunities.

許可收入可以增加有意義的收入流，這種收入流的流量非常高，因為與此收入相關的成本有限。我們目前正在審查這個機會，它們在本質上意義重大，我們對潛在的機會感到興奮。

The third point is that we launched the Bailey shop in the October, which is a single e-commerce destination that features all are our brands. We have experienced strong results and consumer trends since we launched this multi-brand site. We believe this shows the power of our initial vision and business model and sets a strong foundation to which we can add additional brands like Sundry as we bring them into our portfolio.

第三點是我們在十月份推出了百利店，這是一個單一的電子商務目的地，所有的都是我們的品牌。自推出這個多品牌網站以來，我們取得了不錯的成績和消費趨勢。我們相信這顯示了我們最初願景和商業模式的力量，並為我們可以在將 Sundry 等其他品牌納入我們的產品組合時奠定了堅實的基礎。

We believe our business gets exponentially stronger every time we add a brand, and we provide the customer with more options and styles across more brands. And the deal flow we are seeing is higher than we've ever seen, given this current market. So we believe that we'll continue to grow our portfolio at significant scale over the next 12 to 18 months.

我們相信，每增加一個品牌，我們的業務就會成倍增長，並且我們會為客戶提供更多品牌的更多選擇和款式。鑑於目前的市場，我們看到的交易流量比以往任何時候都高。因此，我們相信在未來 12 至 18 個月內，我們將繼續大規模擴大我們的投資組合。

We continue to achieve operating leverage on our fixed costs of business. As our results show, our fixed expenses declined slightly year over year in absolute dollars while we increased our revenue. Let me repeat that. Our fixed costs expenses declined slightly year over year in absolute dollars, while we increased our revenue.

我們繼續在我們的固定業務成本上實現經營槓桿。正如我們的結果所示，我們的固定支出按絕對美元計算同比略有下降，同時我們增加了收入。讓我重複一遍。我們的固定成本支出按絕對美元計算同比略有下降，而我們的收入有所增加。

Our net operating loss declined meaningfully year over year. And as we continue to grow our wholesale and our e-commerce revenue as noted earlier, we expect to continue to get leverage on these expenses and cash flow positive in the first quarter. This leverage will increase as we add more brands to the portfolio.

我們的淨營業虧損同比大幅下降。如前所述，隨著我們繼續增加批發和電子商務收入，我們預計第一季度將繼續利用這些費用和現金流為正。隨著我們在產品組合中添加更多品牌，這種影響力將會增加。

Further detailed results for the third quarter 2023 compared to 2022: net sales were $3.4 million versus $2.2 million in the year-ago quarter, an increase of 58.3% year over year. Net sales excluded $0.4 million in deferred revenue, which is associated with the timing of when customers' orders were placed versus when they were shipped in our men's custom business. There is a four to six-week lag time between customers' orders and when they actually get shipped even overseas to Harper & Jones and then shipped to the customer.

與 2022 年相比，2023 年第三季度的進一步詳細結果：淨銷售額為 340 萬美元，而去年同期為 220 萬美元，同比增長 58.3%。淨銷售額不包括 40 萬美元的遞延收入，這與我們男裝定制業務中客戶下訂單的時間與發貨時間有關。從客戶下訂單到產品實際從海外運送到 Harper & Jones 再運送給客戶之間有四到六週的滯後時間。

So again, we have to bear the cost of those fabrics to make the suiting or the shirting or the sport coat or the pant, and then we are not able to recognize the revenue. But what happens is when we do ship that, in the fourth quarter, we are going to be able to recognize that revenue without the associated costs to that product. And that's just a GAAP accounting piece. So we will benefit -- gross margin will benefit in Q4 with this -- due to this lag in timing.

因此，我們必須再次承擔製作西裝、襯衫、運動外套或褲子的這些面料的成本，然後我們無法確認收入。但是，當我們確實在第四季度發貨時，我們將能夠在沒有該產品相關成本的情況下確認該收入。這只是一個 GAAP 會計部分。因此，由於時間滯後，我們將受益——毛利率將在第四季度受益。

Net sales were also negatively impacted due to Stateside wholesale order shipping after September 30. A lot of times, we will ship October 1, 2, or 3. And again, due to GAAP accounting you only can recognize the shipping on the ship date. So the revenue associated with these Stateside wholesale orders were shift to our fourth-quarter revenue as well.

由於美國批發訂單在 9 月 30 日之後發貨，淨銷售額也受到了負面影響。很多時候，我們將在 10 月 1 日、2 日或 3 日發貨。同樣，由於 GAAP 會計，您只能在發貨日期確認發貨。因此，與這些美國本土批發訂單相關的收入也轉移到了我們第四季度的收入中。

So as you can see, our third-quarter revenue would have been significantly higher just due to certain timing around actually recognizing that revenue. And all that revenue will flow through into the fourth-quarter results.

因此，正如您所看到的，我們第三季度的收入本來會高得多，只是因為實際確認該收入的特定時間。所有這些收入都將流入第四季度的業績中。

Gross margin was 48.3% versus 55.9% a year ago, a decrease of 7.6% in gross profit margin. Gross profit margin was negatively impacted by 5.1% due to the accounting treatment of deferred revenue as we discussed and the timing of the fabric costs in our men's custom business. This benefit will shift into the fourth quarter as a benefit to gross profit. So in fourth quarter, from Harper & Jones, we will benefit from both a revenue as well as a gross profit adjustment that just has to do with the timing.

毛利率為 48.3%，而一年前為 55.9%，毛利率下降 7.6%。由於我們討論的遞延收入的會計處理以及男裝定制業務中面料成本的時間安排，毛利率受到了 5.1% 的負面影響。這一收益將轉移到第四季度，作為對毛利潤的收益。因此，在第四季度，我們將從 Harper & Jones 的收入和毛利調整中受益，這與時間安排有關。

Additionally, our gross profit margin was negatively impacted by price increases in our production expenses during the third quarter especially at Stateside. Please remember that we set the retail price points for these products four to six months ahead of production as we are offering these products at wholesale shows. Therefore, when there is a price increase in our production, we cannot change our pricing right away or during that period to reflect that price increase. However, we can increase our retail price points for the next period, which we have done.

此外，我們的毛利率受到第三季度生產費用價格上漲的負面影響，尤其是在美國。請記住，我們在生產前四到六個月設定這些產品的零售價點，因為我們在批發展會上提供這些產品。因此，當我們的產品價格上漲時，我們無法立即或在此期間更改定價以反映價格上漲。但是，我們可以提高下一期的零售價，我們已經做到了。

We will experience the benefit of these price increases starting in the first quarter of 2023. This was a one-time event that will flow through into Q3 and some into Q4 but will not flow through in the first quarter and going forward. And again, there is just a lag from -- as an example, Q1 shows -- or for the Q1 shipment, we were showing those in August, September, and October.

從 2023 年第一季度開始，我們將體驗到這些價格上漲的好處。這是一次性事件，將持續到第三季度，部分事件將持續到第四季度，但不會在第一季度和未來持續。再一次，只是有一個滯後——例如，第一季度顯示——或者對於第一季度的出貨量，我們在 8 月、9 月和 10 月展示了這些。

So we set the retail price then for the Q1 shipment. So we already knew that cost was there, and we have since adjusted our retail pricing to reflect that cost. And we'll get that margin back at Stateside. I think that's really important, because we are able to catch that up.

所以我們為第一季度的發貨設定了零售價。所以我們已經知道成本是存在的，並且我們已經調整了我們的零售價格以反映該成本。我們將在美國收回利潤。我認為這非常重要，因為我們能夠趕上它。

General administrative expenses as a percentage of revenue decreased 38.5% to 105.8% of revenues versus 172% a year ago. General and administrative expenses were $3.6 million versus $3.7 million, a $100,000 lower in the year-ago quarter. We continue to get leverage on our fixed costs, and we do not expect any additional increases in general and administrative expenses or in our production expenses for cost of goods sold either.

一般管理費用佔收入的百分比從一年前的 172% 下降 38.5% 至收入的 105.8%。一般和行政費用為 360 萬美元，而去年同期為 370 萬美元，減少了 100,000 美元。我們繼續利用我們的固定成本，我們預計一般和管理費用或我們的銷售商品成本的生產費用不會有任何額外增加。

Sales and marketing expenses were 35.8% of revenue versus 60.4% a year ago, a decrease of 40.8%. Sales and marketing expenses were $1.2 million versus $1.3 million a year ago, which is $100,000 less. We slowed our digital advertising spend in the third quarter in advance of our Bailey shop rollout in October.

銷售和營銷費用佔收入的 35.8%，而一年前為 60.4%，下降了 40.8%。銷售和營銷費用為 120 萬美元，而一年前為 130 萬美元，減少了 100,000 美元。在 10 月份推出 Bailey 商店之前，我們在第三季度放慢了數字廣告支出。

In October, we redirected our advertising spend from each of our brand sites to our Bailey shop site, which features all our brands in a single site. This shift in our advertising strategy resulted in sales and marketing efficiencies going forward, and we'll continue to do so. And I think that's really important, because we are not advertising against three or four sites now. We are predominantly advertising against one site putting that dollars there, so we could drive more traffic.

10 月，我們將廣告支出從每個品牌網站重定向到我們的 Bailey 商店網站，該網站將我們所有的品牌都集中在一個網站上。我們廣告策略的這種轉變導致了銷售和營銷效率的提高，我們將繼續這樣做。我認為這非常重要，因為我們現在不再針對三四個網站做廣告。我們主要是在一個網站上做廣告，把錢放在那裡，這樣我們就可以吸引更多的流量。

And as we stated, we are seeing, at the Bailey shop, customers buying multiple brands in the single cart, which shows the power of what we are doing. Because then, our customer acquisition to acquire a customer is less than $15. Whereas right now, most digital customer acquisition costs is running $75 to $125.

正如我們所說，我們看到，在 Bailey 商店，顧客在一個購物車中購買多個品牌，這顯示了我們正在做的事情的力量。因為那時，我們的客戶獲取不到 15 美元。而現在，大多數數字客戶獲取成本在 75 到 125 美元之間。

I cannot express how important this is. If you take a brand like Sundry that has several hundred thousand, if not million, email customer people in their list and to be able to drive them to their site and acquire a customer for $15 when on average, they are spending $280, both the CAC and the LTV for our business is incredibly high.

我無法表達這是多麼重要。如果你拿一個像 Sundry 這樣的品牌，如果他們的列表中有數十萬甚至數百萬的電子郵件客戶，並且能夠將他們帶到他們的網站並以 15 美元的價格獲得客戶，那麼他們平均花費 280 美元，無論是我們業務的 CAC 和 LTV 非常高。

And this is the power of our model right here is that we can drive down CAC; we can drive up LTV; we can cross merchandise across the brands as customers at multiple brands to a card. And the more data we have, the more personalized we are able to get in what we're able to show the customer in terms of their looks. So as we look at the data if a customer is more athleisure, or they're more prep, or they're more tailored, we're then able to create looks and styles and email those customers based on those looks and styles.

這就是我們模型的力量，我們可以降低 CAC；我們可以提高 LTV；我們可以將跨品牌的商品作為多個品牌的客戶交叉到一張卡上。我們擁有的數據越多，我們就能夠根據客戶的外觀向他們展示的內容就越個性化。因此，當我們查看數據時，如果客戶更喜歡運動休閒，或者他們更準備，或者他們更合身，那麼我們就能夠創建外觀和样式，並根據這些外觀和样式向這些客戶發送電子郵件。

And being able to acquire customers for $15 or less is even better than the go-go days of social media when Facebook and Insta and even TikTok just launched. And I cannot stress enough how this also changes our cash both near-term but also the profitability going forward as our LTV goes way up as well.

能夠以 15 美元或更低的價格獲得客戶甚至比 Facebook 和 Insta 甚至 TikTok 剛剛推出時社交媒體的蓬勃發展還要好。我怎麼強調都不為過，因為我們的 LTV 也在上升，這也會改變我們的短期現金和未來的盈利能力。

Distribution expenses were 2.9% of revenue versus 4.9% a year ago, a deadline of 41.4%. Distribution expenses were $98,000 versus $105,000 a year ago. We expect to continue to benefit from reduction and our distribution expenses associated with operating one distribution center versus two distribution centers as we collapse Stateside's DC into our single DC that we have now.

分銷費用佔收入的 2.9%，而一年前為 4.9%，最後期限為 41.4%。分銷費用為 98,000 美元，而一年前為 105,000 美元。隨著我們將美國本土的 DC 合併為我們現在擁有的單一 DC，我們預計將繼續受益於與運營一個配送中心而不是兩個配送中心相關的減少和我們的配送費用。

Loss from operations was $2.6 million versus $7.9 million a year ago, which is a decline of $5.3 million from a year ago, which again shows the leverage we are getting on our business and that we expect to continue to get especially with our Q1 wholesale bookings coming in.

運營虧損為 260 萬美元，而一年前為 790 萬美元，比一年前減少了 530 萬美元，這再次表明我們在業務上獲得的影響力，我們希望繼續獲得影響力，尤其是在第一季度的批發預訂方面進來。

Interest expense was $2.3 million versus $0.5 million a year ago. I think the most important thing here is going forward, interest expense should be less than $150,000 a quarter due to the elimination of the debt that we discussed.

利息支出為 230 萬美元，而一年前為 50 萬美元。我認為這裡最重要的事情是向前發展，由於消除了我們討論的債務，每季度的利息支出應該少於 150,000 美元。

Net loss attributable to common stockholders was $4.9 million, of which $2.3 million of that was interest expense. This is $9.26 per diluted share, which includes the interest expense compared to net loss attributable to common stockholders a year ago of $8.9 million or $75.83 per diluted share a year ago.

歸屬於普通股股東的淨虧損為 490 萬美元，其中 230 萬美元為利息支出。這是攤薄後每股 9.26 美元，其中包括與一年前普通股股東應占淨虧損 890 萬美元或一年前攤薄後每股 75.83 美元相比的利息支出。

So in closing, we believe this quarter is the strongest reflection yet that we are on a clear and sure path to profitability with our current brand. We have incredibly strong Q1 wholesale orders. We believe the Sundry acquisition should create even more positive EBITDA upon acquisition. And then as you can see, the Bailey shop is driving unbelievable success both in traction across brands but in lowering our customer acquisition cost customer online and driving our AOV, which is also driving our LTV.

因此，最後，我們認為本季度是迄今為止最強烈的反映，表明我們正走在一條清晰而確定的道路上，以我們當前的品牌實現盈利。我們的第一季度批發訂單非常強勁。我們認為，收購 Sundry 後應該會創造更積極的 EBITDA。然後正如您所看到的，Bailey 商店在跨品牌的吸引力和降低在線客戶獲取成本以及推動我們的 AOV 和推動我們的 LTV 方面都取得了令人難以置信的成功。

So our e-commerce continues to get leverage, and our wholesale continues to accelerate. So with that, I will open it up to Q&A, please.

所以我們的電子商務繼續發揮作用，我們的批發繼續加速。因此，我將打開它進行問答。

(Operator Instructions) [Maya L], Private Investor.

（操作員說明）[Maya L]，私人投資者。

Hello. First, I want to congratulate you on an awesome quarter. Really impressive growth. And then I wanted to ask you, at what point would you guys consider going private since there is such a deep disconnect from shared prices and the numbers you guys are bringing?

你好。首先，我要祝賀您度過了一個很棒的季度。真正令人印象深刻的增長。然後我想問你們，你們什麼時候會考慮私有化，因為共享價格和你們帶來的數字之間存在如此嚴重的脫節？

Yeah. Thank you for your question. It's a really interesting question. It's something that we are discussing internally. I think at some point, you got to look at this meaningfully deep, deep disconnect, and we know what we would get on the private markets. We do have very high interest in this.

是的。謝謝你的問題。這是一個非常有趣的問題。這是我們正在內部討論的事情。我認為在某些時候，你必須看看這種有意義的深度、深度脫節，我們知道我們會在私人市場上得到什麼。我們對此非常感興趣。

As you can imagine, one of the big things that's happening in this world is especially with the Apple iOS privacy and also with the department stores shrinking in the wholesale channel, which we don't have a lot of exposure to, as you're seeing that these brands are needing to what they call platform or come together to actually really drive growth or survive.

你可以想像，這個世界上正在發生的一件大事尤其是 Apple iOS 隱私以及百貨商店在批發渠道中的萎縮，我們沒有太多接觸，因為你看到這些品牌需要他們所謂的平台或聚集在一起才能真正推動增長或生存。

And I think what we are hearing from the conversations we are having is that we have proved that this works and that we know how to do it and that if we can come into a portfolio of PE or VC brands and bring this expertise and wrap all their brands up in there and then go public nine months later or a year later at $500 million in revenue, then there is some massive [arb] for them.

而且我認為我們從我們正在進行的對話中聽到的是，我們已經證明這是可行的，並且我們知道如何去做，如果我們能夠進入 PE 或 VC 品牌的投資組合併帶來這種專業知識並包裝所有他們的品牌在那裡，然後在九個月或一年後以 5 億美元的收入上市，然後他們就有了一些巨大的 [arb]。

So these are obviously conversations that have been had and having. And it's something we honestly have to look at, because at some point, if there is this much of a disconnect, it doesn't make sense to stay in the private market -- I mean the public markets, unfortunately.

所以這些顯然是已經進行過的對話。老實說，這是我們必須考慮的事情，因為在某些時候，如果存在如此大的脫節，那麼留在私人市場就沒有意義了——不幸的是，我指的是公共市場。

And to be honest, I mean I did equity research for a decade, I don't quite understand the dislocation either. I guess it's just a nano-capital, but we do know that there is a lot of interest there. And given what even broken companies are going for in the private markets, there is incredible interest in what we've done and doing and the massive dislocation and the reality of our market cap versus our results.

老實說，我的意思是我做了十年的股票研究，我也不太了解錯位。我想這只是一個納米資本，但我們確實知道那裡有很多興趣。考慮到甚至破產的公司在私人市場上的追求，人們對我們所做的和正在做的事情以及我們市值與我們的結果之間的巨大錯位和現實產生了難以置信的興趣。

Awesome. Thank you. Yeah. Just I wanted to reiterate, I find such value here in the disconnect. And I fully believe what your guys' position and low debt that the sky is the limit from here if you guys keep putting up these growth numbers. But thank you. Congrats again.

驚人的。謝謝。是的。我只是想重申一下，我在斷開連接中找到了這樣的價值。而且我完全相信你們的立場和低債務，如果你們繼續提供這些增長數字，那麼天空就是這裡的極限。但是謝謝你。再次恭喜。

Yeah, Maya, definitely. And thank you. And by the way, for what it's worth, I do think that was a big piece of it was one of the things that had helped back a lot of these discussions was our debt load. And now that that's cleared and the equity hasn't reflected that, at least the equity price, it's now very interesting because it's just that equity purchase versus having to add all those debt do the transaction and buy it out, which is creating even more of an arbitrage.

是的，瑪雅，絕對是。謝謝你。順便說一句，就其價值而言，我確實認為其中很大一部分是幫助支持許多此類討論的因素之一是我們的債務負擔。現在已經清算了，股票還沒有反映出這一點，至少是股票價格，現在非常有趣，因為只是股票購買而不是必須添加所有這些債務來進行交易並買斷，這創造了更多的套利。

And I think that's what's been holding those discussions back, which are now no longer holding those discussions back. And I think we have to think what's best for the shareholders. And if we are getting significantly larger interest and offers at the private level, we have to consider that. And we will consider that. And it's definitely a deep, deep discount to reality in our opinion.

我認為這就是阻礙這些討論的原因，現在這些討論不再阻礙這些討論。而且我認為我們必須考慮什麼對股東最好。如果我們在私人層面獲得更大的興趣和報價，我們必須考慮這一點。我們會考慮這一點。在我們看來，這絕對是對現實的極大折扣。

Absolutely. Actually, I have one more question that that brings up. Are you guys actively looking for more acquisitions? I know once Sundry officially closes up, this is going to be a big one for you guys. What are you guys actively talking to other companies? Given the rate environment, I would assume a lot of smaller companies are looking to get bought out, and I would think that this is a strong position for you guys to capitalize on.

絕對地。實際上，我還提出了一個問題。你們在積極尋找更多的收購嗎？我知道一旦 Sundry 正式關閉，這對你們來說將是一件大事。你們積極與其他公司交談的內容是什麼？鑑於利率環境，我認為很多小公司都希望被收購，我認為這是你們可以利用的有利地位。

Yes. And in fact, we have seen a lot of that inflow as well. I would say that we think that there is a big opportunity here, and we do think it's accretive. I know sometimes people look at it as one that's dilutive, but you've got to look at the overall accretion especially at these levels even if you were to issue shares.

是的。事實上，我們也看到了很多這種流入。我會說我們認為這裡有很大的機會，我們確實認為它是增值的。我知道有時人們會認為它具有稀釋性，但即使你要發行股票，你也必須考慮整體增長，尤其是在這些水平上。

With Sundry, you're doing -- as we've stated, I think they're doing north of 20, and we are north of 30, so you can start to do that math. And it's just there's even more of the dislocation there. And there is -- we are seeing more inbound requests than we ever have from really good companies that are trying to figure out what to do here and raising capital.

對於 Sundry，你正在做——正如我們所說的，我認為他們在 20 以北，而我們在 30 以北，所以你可以開始計算了。只是那裡有更多的錯位。而且有 - 我們看到來自真正優秀的公司的入境請求比以往任何時候都多，這些公司正試圖弄清楚在這裡做什麼並籌集資金。

Just so you know, in the private market a lot of times might come with a preferred, which means they are getting multiple amounts of their money back, which is less interesting to a lot of these founders. And additionally, what's happening too is a lot of these companies have been in business for 10, 12, 15 years, and the founders want an exit. And they don't want to continue to stay private.

就像你知道的那樣，在私人市場上，很多時候可能會出現優先選擇，這意味著他們會收回多筆資金，這對這些創始人中的許多人來說並不那麼有趣。此外，正在發生的事情還有很多這些公司已經經營了 10 年、12 年、15 年，而創始人想要退出。他們不想繼續保密。

So we are seeing a lot of deal flow. And we do expect if we do stay in the public markets, we will continue to be acquisitive. But if we're not also going to get credit for building a $50 million, $90 million, $125 million revenue business over the next nine months, there is not really a reason to be in the public markets especially if we are going to trade at $2.5 million to $3.5 million of market cap. I mean, our market cap is literally probably roughly a little less than half of what our Q1 revenues would be, which is pretty interesting and obviously pretty compelling for a lot of outside people.

所以我們看到很多交易流。我們確實希望，如果我們確實留在公開市場，我們將繼續收購。但是，如果我們在接下來的九個月內不能因為建立 5000 萬美元、9000 萬美元、1.25 億美元的收入業務而獲得信貸，那麼就沒有理由進入公開市場，特別是如果我們要在250 萬至 350 萬美元的市值。我的意思是，我們的市值實際上可能略低於我們第一季度收入的一半，這對很多外部人士來說非常有趣，而且顯然非常有吸引力。

Absolutely. Thank you, and congrats again.

絕對地。謝謝，再次恭喜。

Thanks.

謝謝。

Charles (inaudible), Private Investor.

查爾斯（聽不清），私人投資者。

Yes. Hi, Hil. Congratulations on these numbers. I haven't seen anything on the Amazon exposure. Can you talk to us about that?

是的。嗨，希爾。祝賀這些數字。我還沒有看到亞馬遜曝光的任何內容。你能和我們談談嗎？

Yeah. We've been happy with it. It's been slow and steady. It took a while, warmed up, and it's just been a nice, slow, and steady piece. We are learning a lot. We use a third-party agency.

是的。我們對此很滿意。它一直緩慢而穩定。花了一段時間，熱身，這是一個很好的、緩慢的、穩定的作品。我們正在學習很多。我們使用第三方代理。

There are some things we are looking at from an acquisition candidate that actually specialize in this and have a direct relationship with them. So we believe in it enough that we're actually looking and seeking or even getting inbound requests from Amazon-driven companies that have those relationships.

我們正在從一個真正專注於此並與他們有直接關係的收購候選人那裡尋找一些東西。因此，我們對此深信不疑，以至於我們實際上正在尋找和尋求甚至收到來自具有這些關係的亞馬遜驅動公司的入站請求。

The question is for us is do you put a Stateside on there? Do you put a Sundry on there? Does it or does not hurt the brand? But we do think the other opportunity is to create some of our own private label businesses using our current brand under a different brand name and making may be more overseas and using that to drive there as well, which we think is a really interesting growth opportunity as well.

我們的問題是你在那裡放了美國本土嗎？你在那裡放雜物嗎？它是否會損害品牌？但我們確實認為另一個機會是使用我們現有的品牌以不同的品牌名稱創建一些我們自己的自有品牌業務，並且可能更多地在海外製造並利用它來推動那裡，我們認為這是一個非常有趣的增長機會以及。

So take the DSTLD, like, there is no reason we couldn't make the denim in Pakistan and make a lot of the same products, be it obviously a lower-quality product but it also -- the price point would be significantly less as well. So we are just kind of scraping that data and looking and seeing what's working, what's not working, where we could lean in more and realizing that having potentially an Amazon-based company in our portfolio would really be an interesting play here as we look at the strategies based on the success we've had.

因此，以 DSTLD 為例，我們沒有理由不能在巴基斯坦生產牛仔布並生產很多相同的產品，儘管它顯然是一種質量較低的產品，但它也——價格點會大大降低出色地。所以我們只是在抓取這些數據，看看什麼有效，什麼無效，我們可以在哪些方面投入更多，並意識到在我們的投資組合中擁有一家潛在的亞馬遜公司真的會很有趣，因為我們正在看基於我們已經取得的成功的策略。

All right. Thank you so much.

好的。太感謝了。

Yeah. Thanks for the question.

是的。謝謝你的問題。

[Reed Heinrich], ROTH Capital Fund.

[Reed Heinrich]，羅斯資本基金。

Hello. First, congrats on a solid quarter. Very excited about 2023 for you, guys, most definitely. I would like to piggyback a little bit off of some of the debt conversations here and focus on your agreement with Black Oak Capital. Could you touch on your securities purchase agreement with Black Oak Capital, and what that means to your company with some of that debt restructuring?

你好。首先，祝賀一個穩定的季度。伙計們，絕對是你們對 2023 年感到非常興奮。我想藉用這裡的一些債務對話，並專注於你與 Black Oak Capital 的協議。您能否談談您與 Black Oak Capital 的證券購買協議，這對貴公司的某些債務重組意味著什麼？

Yes. So Black Oak had the first lien position on our debt, which is -- in the beginning of the call, I was talking about how we can start to factor now. That's the reason we can factor, because they've converted their debt into preferred equity.

是的。所以 Black Oak 對我們的債務有第一留置權，這是——在電話會議開始時，我在談論我們現在如何開始考慮因素。這就是我們可以考慮的原因，因為他們已經將債務轉換為優先股。

And then that preferred equity can get converted in the common at up to $500,000 a month. And they are maxed out at that. So that will take about 14 months from when they start selling.

然後優先股可以每月高達 500,000 美元的價格轉換為普通股。他們在這方面已經用盡了。因此，從他們開始銷售起，大約需要 14 個月的時間。

I believe their average price per share is roughly $9.31 if I am not mistaken. So if they were to sell at this level, they would actually be returning less money to their debtholders, and which they obviously do not want to do. So I don't think they would sell. And based on conversations, they want to return par or above par level, which would be above $9.31 based on the conversations that I have had with their managing director.

如果我沒記錯的話，我相信他們的平均每股價格約為 9.31 美元。因此，如果他們要在這個價位出售，他們實際上會向債權人返還更少的錢，而他們顯然不想這樣做。所以我認為他們不會出售。根據談話，他們希望返回標準桿或高於標準桿的水平，根據我與他們的董事總經理的談話，這將高於 9.31 美元。

And they are definitely in no hurry. They think this is an incredibly undervalued asset is well. They do -- their job is they're fund investing companies. So they also set valuations, so they're very clear on -- that's the big reason they converted is they -- one of the reasons is they saw that there's a massive disconnect, and they could actually return significantly more in equity than debt given the dislocation of the valuation.

他們絕對不著急。他們認為這是一種被低估得難以置信的資產。他們這樣做 - 他們的工作是他們是基金投資公司。所以他們也設定了估值，所以他們非常清楚——這就是他們轉換的主要原因是——原因之一是他們看到存在巨大的脫節，而且他們實際上可以通過股票獲得比債務回報更多的回報估值錯位。

So that's the opportunity there, and that's -- so again, they are limited, which is nice. And they were very open to that. They had no problem with it. They don't want to put pressure, and they do think it's undervalued, which is why they converted it into the equity.

所以這就是那裡的機會，那就是 - 再一次，他們是有限的，這很好。他們對此非常開放。他們對此沒有問題。他們不想施加壓力，他們確實認為它被低估了，這就是他們將其轉換為股權的原因。

And they'll just be very smart about it. But also, they're in no hurry, and they think it's incredibly undervalued that they could make multiples of their debt and return back to their debtholders.

他們會對此非常聰明。而且，他們並不著急，他們認為他們可以將債務翻倍並返還給債權人，這被低估了。

Thank you. That's very important to touch on. I appreciate the clarification there. That was one of the potential flags a while ago that I was seeing. But the more that I've read the filings and then hearing this on the call, it sounds like it would really make no sense for them to dilute at the current moment. So thank you very much. I appreciate it.

謝謝。觸及這一點非常重要。我很欣賞那裡的澄清。這是我剛才看到的潛在標誌之一。但我越是閱讀這些文件，然後在電話中聽到這個，聽起來他們在目前稀釋真的沒有意義。非常感謝。我很感激。

Yeah, definitely. And again, like I talk to them probably weekly. And they definitely feel like there is a much bigger opportunity for their holders. And they have some, as all portfolios do, some brands that are under water. And so this would help offset those as well if they returned more than their principal amount that they converted into equity, which is not lost on them.

是的，絕對是。再一次，就像我可能每週與他們交談一樣。他們肯定覺得他們的持有人有更大的機會。和所有投資組合一樣，他們有一些品牌處於水下。因此，如果他們的回報超過他們轉換為股權的本金金額，這也有助於抵消這些損失，而這並沒有損失。

Exactly. And when they converted it into equity, they were making their decisions and right at that point, which I think shows the true colors of what their intentions are anyway. So all right. Well, thank you.

確切地。當他們將其轉換為股權時，他們當時正在做出正確的決定，我認為這無論如何都顯示了他們意圖的真實面目。所以好吧。嗯，謝謝。

Yeah. And by the way, I cannot stress enough the ability to factor now, which we have not had. I just can't tell you. We are moving from a negative five-month working capital cycle to a positive three-month working capital cycle. I mean that is significant especially as our wholesale continues to grow especially brands like Stateside over 50%. I mean that's being able to use cash from the factor as opposed to having to go to our balance sheet to buy the product and make the product, buy the fabric, is a massive delta in our cash needs.

是的。順便說一句，我怎麼強調現在的因數分解能力都不為過，我們還沒有這種能力。我只是不能告訴你。我們正在從負的五個月營運資金周期轉變為正的三個月營運資金周期。我的意思是，這非常重要，尤其是因為我們的批發量繼續增長，尤其是像 Stateside 這樣的品牌超過 50%。我的意思是，與必須去我們的資產負債表購買產品和製造產品、購買麵料相比，能夠從這個因素中使用現金是我們現金需求的巨大增量。

Definitely. That makes perfect sense. Yeah. I will just add as an institutional investor here, I'm looking for undervalued opportunities especially with how the markets have been.

確實。這是完全有道理的。是的。作為一名機構投資者，我只想補充一點，我正在尋找被低估的機會，尤其是在市場一直如此的情況下。

DBGI has been one of my top watches and then I was waiting for Q3 earnings to come out here especially going into the end of the year, end of the season. And the most important thing was listening a little bit into your Q1 projected wholesales and orders. That's very important to me as well.

DBGI 一直是我最喜歡的手錶之一，然後我在這裡等待第三季度的收益，尤其是在年底、賽季末。最重要的是稍微聽聽您第一季度預計的批發和訂單。這對我也很重要。

So honestly just congratulations on some good work of recent. And I'll definitely continue being a shareholder. So thank you.

老實說，祝賀最近的一些好工作。我肯定會繼續成為股東。所以謝謝。

Yeah. Thank you.

是的。謝謝。

Thank you. There are no further questions in the queue at this time. I'd like to have the floor back to Hil Davis for any closing comments.

謝謝。目前隊列中沒有其他問題。我想請 Hil Davis 發表任何結束評論。

Yeah. Thanks, everyone, for joining us. As you can see, our momentum continues. We're getting leverage on the fixed costs. I'd also see us you think about different things, you should probably look at the comps.

是的。謝謝大家加入我們。如您所見，我們的勢頭仍在繼續。我們正在利用固定成本。我也看到我們你考慮不同的事情，你可能應該看看 comps。

We're also often ask what the comps are. You get AKA Brands out there; you've got Solo Brands out there. You've got Warby Parker which is the DTC only. You've got Allbirds, and then you've got ourselves. And I think going back to what was asked before, there are some dislocations out there.

我們也經常詢問補償是什麼。你在那裡得到了 AKA 品牌；你有 Solo Brands。您有 Warby Parker，它只是 DTC。你有 Allbirds，然後你有我們自己。我認為回到之前的問題，那裡存在一些錯位。

And all we can do is execute and then make the right decision for shareholders, but the business is in a really strong state. We're excited. We're excited about the Sundry acquisition and continuing to scale.

我們所能做的就是執行，然後為股東做出正確的決定，但業務處於非常強勁的狀態。我們很興奮。我們對收購 Sundry 並繼續擴大規模感到興奮。

Whether it's in the private or public world, I think we've figured it out. I think that's why we've got a lot of interest in how platform of these companies, strip out costs, not just from an OpEx perspective, but also from a marketing, DTC, lowering the CAC significantly, driving LTV, which is really critical in the world we're in today.

無論是在私人領域還是公共領域，我想我們都已經解決了。我認為這就是為什麼我們對這些公司的平台如何剝離成本非常感興趣，不僅從運營支出的角度，而且從營銷、DTC 的角度來看，顯著降低 CAC，推動 LTV，這非常關鍵在我們今天所處的世界中。

So we are excited about what we see both in terms of potential pipelines of acquisitions, in terms of the different options that we have at the table, and our continued growth and our brands both across DTC as well as wholesale. So with that, thanks, everyone, and have a good night.

因此，我們對潛在的收購渠道、我們在談判桌上的不同選擇以及我們在 DTC 和批發領域的持續增長以及我們的品牌方面所看到的情況感到興奮。那麼，謝謝大家，祝大家有個美好的夜晚。