Energy Focus Inc (EFOI) 2022 Q4 法說會逐字稿

Greetings, and welcome to the Energy Focus, Inc. Fourth Quarter and Fiscal Year-End 2022 Conference Call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Jim Warren, Senior Vice President and General Counsel. You may begin.

您好，歡迎來到 Energy Focus, Inc. 第四季度和 2022 財年末電話會議。 （操作員說明）請注意，正在錄製此會議。我現在將會議轉交給你的東道主，高級副總裁兼總法律顧問吉姆沃倫。你可以開始了。

Thank you, operator, and good morning, everyone. Joining me on the call today is Lesley Matt, Chief Executive Officer. Before we begin today's call, I'd like to remind everyone that we will make certain forward-looking statements. These statements are based upon information that represents the company's current expectations or beliefs. The results realized may differ materially from those stated. For a discussion of these risks that could affect our results, please refer to the section of the headings risk factors as well as forward-looking statements in our most recent 10-K filed with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Also, please note that during this call and in the accompanying press releases, certain financial metrics are presented on both GAAP and non-GAAP adjusted basis. Reconciliations of adjusted results to the GAAP results are available in the tables attached to the earnings release, which is posted on our corporate website at energyfocus.com in the Investor Relations section of the site.

謝謝接線員，大家早上好。今天和我一起參加電話會議的是首席執行官萊斯利·馬特 (Lesley Matt)。在我們開始今天的電話會議之前，我想提醒大家，我們將做出某些前瞻性陳述。這些陳述基於代表公司當前期望或信念的信息。實現的結果可能與陳述的結果存在重大差異。有關可能影響我們結果的這些風險的討論，請參閱我們最近向美國證券交易委員會提交的 10-K 中的標題風險因素部分以及前瞻性陳述。公司不承擔公開更新或修改任何前瞻性陳述的義務，無論是由於新信息、未來事件或其他原因，除非法律要求。此外，請注意，在本次電話會議和隨附的新聞稿中，某些財務指標是根據 GAAP 和非 GAAP 調整後的基礎提出的。調整後結果與 GAAP 結果的對賬可在收益發布所附的表格中找到，收益發布發佈在我們公司網站 energyfocus.com 的投資者關係部分。

I will now turn the call over to Lesley.

我現在將把電話轉給萊斯利。

Thank you, Jim. Good morning, everyone. Q4 was my first full quarter as CEO of Energy Focus after joining the company in mid-September, following almost 9 months of interim leadership by our Lead Independent Director, Steve Socolof. We are grateful for his hard work and dedication towards improving energy focus during his time at the helm. Steve continues to serve as a member of our Board and has been a guiding light for me on the company's path. My main focus since joining has been helping the company return to its core, work through significant supply chain constraints in legacy inventory positions and significant cost-cutting and rightsizing to the point the company to move past its troubled operating history.

謝謝你，吉姆。大家，早安。在我們的首席獨立董事史蒂夫索科洛夫 (Steve Socolof) 擔任近 9 個月的臨時領導後，第四季度是我在 9 月中旬加入公司後擔任 Energy Focus 首席執行官的第一個完整季度。我們感謝他在掌舵期間為提高能源集中度所做的辛勤工作和奉獻精神。史蒂夫繼續擔任我們的董事會成員，並一直是我在公司道路上的指路明燈。自加入以來，我的主要工作重點是幫助公司回歸核心，解決遺留庫存狀況中供應鏈的重大限制，並大幅削減成本和調整規模，使公司擺脫困境。

While it's early days for me here at the company, I will be frank that our results for the past year, I will review on this call are dismal and is essentially a story of survival from which it's my job to lead us to rebuild. I believe and our strategic investors voted with their dollars and a sign of confidence that there are calmer seas and redemption ahead.

雖然現在對我來說在公司還處於早期階段，但坦率地說，我們過去一年的業績令人沮喪，我將在這次電話會議上進行回顧，這基本上是一個生存的故事，我的工作是帶領我們重建。我相信，我們的戰略投資者用他們的美元投票，這是一種信心的跡象，表明未來會有更平靜的海面和救贖。

Energy Focus entered 2022 with brilliant hopes that our previous ultraviolet-C light disinfection or UVCD products will transform us into a direct-to-consumer product company and provide us with great opportunities for expansion. We have built an organization in anticipation that growth and expansion from these new products. After evaluating market demand and supply chain challenges, from our UVCD products, we revised our business strategy in 2022 to focus back on LED lighting and control products for our military, maritime and commercial and industrial lighting market with highly concentrated efforts starting in the second half of 2022.

Energy Focus 滿懷希望進入 2022 年，希望我們之前的紫外線 C 光消毒或 UVCD 產品能夠將我們轉變為一家直接面向消費者的產品公司，並為我們提供巨大的擴張機會。我們已經建立了一個組織，以期從這些新產品中獲得增長和擴張。在評估市場需求和供應鏈挑戰後，從我們的 UVCD 產品開始，我們修訂了 2022 年的業務戰略，從下半年開始高度集中精力為我們的軍事、海事和商業和工業照明市場重新專注於 LED 照明和控制產品2022 年。

As a result of our pivot back to military, maritime and commercial and industrial lighting and controls products, the company has taken great strides in 2022 to streamline expenses and reduce our cash burn, taking an even more aggressive approach in Q4, and we anticipate seeing full results of our efforts throughout 2023. Additionally, we have overhauled our existing inventory, reduced our operating space and restructured our workforce, which included eliminating almost 2/3 of positions. All of this had primed the team to effectively execute and focus on short-term opportunities aligned with our core channels, military maritime, commercial and industrial markets. Unfortunately, we are -- we continue to face supply chain challenges in Q4 on our best-selling products, combined with market price pressures on current inventory, which has impacted the financial results I'm sharing with you today.

由於我們將重心轉向軍事、海事、商業和工業照明和控制產品，公司在 2022 年取得了長足的進步，以精簡開支和減少現金消耗，並在第四季度採取了更加積極的方法，我們預計會看到我們在整個 2023 年所做努力的全部成果。此外，我們還徹底檢查了現有庫存，減少了我們的運營空間並重組了我們的員工隊伍，其中包括裁減了近 2/3 的職位。所有這些都讓團隊能夠有效地執行並專注於與我們的核心渠道、軍事海事、商業和工業市場相一致的短期機會。不幸的是，我們 - 我們在第四季度繼續面臨我們最暢銷產品的供應鏈挑戰，加上當前庫存的市場價格壓力，這影響了我今天與您分享的財務結果。

Despite the challenges that 2022 presented energy focus through our rigorous cost-cutting efforts, we were able to position ourselves for strategic investment by Sander Electronics in January of 2023. At the time of the investment, Jay Huang, President of Sander Electronics joined the Energy Focus Board of Directors as Chairman bringing a wealth of industry knowledge, factory sources and manufacturing experience to a well-positioned board.

儘管 2022 年通過我們嚴格的成本削減努力提出了能源重點的挑戰，但我們能夠在 2023 年 1 月為 Sander Electronics 的戰略投資做好準備。在投資時，Sander Electronics 總裁 Jay Huang 加入了 Energy Focus Board of Directors 擔任主席，將豐富的行業知識、工廠資源和製造經驗帶到一個定位良好的董事會。

The funding provided by the Sander investment has contributed to approximately $4.2 million in balance sheet improvements since the start of 2023. We utilized the funding to restructure many of our debt so that we can focus our cash flow back on day-to-day operations and not previous obligations. Some of these activities include a paydown of $1 million in conjunction with a restructuring of our secured inventory line through Crossroads Financial that will reduce our overall cost of this facility in 2023. A paydown of $500,000 in restructuring of a payment schedule with our outstanding bridge note held by Streeterville Financial that will better align the timing of the cash burn with what we anticipate to be increased cash flows from sales later in 2023, an agreed termination on our accounts receivables lending facility, conversion of promissory notes totaling $1.5 million to common stock reducing future cash burn.

自 2023 年初以來，Sander 投資提供的資金已為改善資產負債表做出了約 420 萬美元的貢獻。我們利用這筆資金重組了我們的許多債務，以便我們可以將現金流重新集中在日常運營和不是以前的義務。其中一些活動包括支付 100 萬美元，並通過 Crossroads Financial 重組我們的安全庫存線，這將降低我們在 2023 年該設施的總體成本。支付 500,000 美元用於重組付款計劃和我們未完成的過橋票據由 Streeterville Financial 持有，這將更好地將現金消耗的時間與我們預計在 2023 年晚些時候增加的銷售現金流量、同意終止我們的應收賬款貸款機制、將總計 150 萬美元的本票轉換為普通股減少未來燒錢。

In addition to the financial improvement, Jay and the Sander Electronic team has been instrumental in addressing the supply chain problems that hobbled Energy Focus in 2022. I am beyond excited to report that we have sourced new vendors, placed orders with tentative ship dates and inventory is anticipated for second quarter of this year. Finally, orders for our popular RedCap emergency lighting products continues to build a healthy backlog that was not realized in 2022 because of sourcing challenges. However, we anticipate resuming shipping RedCap to help fill this backlog even before the close of Q2. Our in-focused power line control products continue to gain interest as more customers are educated around this innovative power line control technology as we round out the product offering. We look to improve and expand our in-focus power line control product portfolio so that customers can realize all of the wellness benefits of human-centric lighting while being cost conscious in their retrofit efforts.

除了財務改善外，Jay 和 Sander Electronic 團隊在解決 2022 年阻礙 Energy Focus 的供應鏈問題方面發揮了重要作用。我非常高興地報告說，我們已經找到了新的供應商，下了帶有暫定發貨日期和庫存的訂單預計今年第二季度。最後，我們廣受歡迎的 RedCap 應急照明產品的訂單繼續積壓，但由於採購挑戰，該訂單在 2022 年未能實現。但是，我們預計甚至會在第二季度結束前恢復運送 RedCap 以幫助填補積壓。隨著我們完善產品系列，越來越多的客戶接受了有關這種創新電力線控制技術的教育，我們的重點電力線控制產品繼續受到關注。我們希望改進和擴展我們的聚焦電力線控制產品組合，以便客戶能夠實現以人為本的照明的所有健康益處，同時在改造工作中保持成本意識。

In my time at Energy Focus, in focus has received positive feedback from current customer installations, and I'm looking forward to expanding sales in this category in 2023. Staying on the theme of a steady and increased demand, I'm pleased to report that the strategic hire that we made in May of 2022 to service our government sales channel continues to build a strong backlog of orders for the military maritime market.

在我任職 Energy Focus 期間，in focus 收到了當前客戶安裝的積極反饋，我期待在 2023 年擴大該類別的銷售額。堅持需求穩定和增長的主題，我很高興地報告我們在 2022 年 5 月為服務政府銷售渠道而進行的戰略招聘繼續為軍用海事市場積壓大量訂單。

Prior to this hire, our military sales pipeline as we entered 2022 was swindling and keep in mind that these are long lead time made-to-order sales. Our new government sales lead immediately went to work shoring up the sales pipeline and continue to drive booked orders. Although supply chain constraints in Q4 of 2022 prevented the company from fully realizing his efforts in the year-end results with some of the orders slipping into the first quarter of 2023, we have resolved these log jams and look forward to sharing what we anticipate being strong sales numbers in this channel in 2023.

在此聘用之前，我們進入 2022 年時的軍品銷售渠道很混亂，請記住，這些都是交貨期很長的定制銷售。我們新的政府銷售主管立即著手加強銷售渠道，並繼續推動預訂訂單。儘管 2022 年第四季度的供應鏈限制使公司無法在年終業績中充分實現其努力，部分訂單滑入 2023 年第一季度，但我們已經解決了這些日誌堵塞問題，並期待分享我們預期的結果2023 年該渠道的強勁銷售數字。

As a company, we are also looking at other products that we can offer this channel to increase our percentage of winning bids. The Sander investment has also allowed for Energy Focus to think beyond the constraints of lighting products and carefully expand into other energy solution products categories that appropriately align with our current markets and sales channels. In early 2023, we announced our expansion into gallium nitride or more commonly referred to as GaN power supplies. These are power supplies for LED lamps, luminaires and displays that well align with our core business and Sanders' expertise. We believe that working together, we will be able to expand our offering to include components and end products in energy-related fields. Our joint technical cooperation and development will allow us to pursue expected opportunities in the fields of energy conservation, energy storage and energy management systems.

作為一家公司，我們也在尋找可以提供給該渠道的其他產品，以提高我們的中標率。對 Sander 的投資還讓 Energy Focus 能夠超越照明產品的限制，謹慎地擴展到與我們當前的市場和銷售渠道相適應的其他能源解決方案產品類別。 2023 年初，我們宣布擴展到氮化鎵或更常見的 GaN 電源。這些是用於 LED 燈、燈具和顯示器的電源，非常符合我們的核心業務和 Sanders 的專業知識。我們相信，通過共同努力，我們將能夠擴大我們的產品範圍，將能源相關領域的組件和最終產品包括在內。我們的聯合技術合作與開發將使我們能夠在節能、儲能和能源管理系統領域尋求預期的機會。

Initially, we plan to offer these items to the lighting industry and tap into our combined team's experience in LED lighting design, manufacturing and sales. Compared to legacy silicon-based power electronics, our GaN power supply products are expected to be more compact in size with higher efficiency and produce less heat from operations. We are also looking at many other what we refer to as energy solution products to expand our portfolio and sales potential. Although it is premature to release all of the details today, I am personally excited as I look the prospective expansion plans for Energy Focus. With a promise towards the future, let me now review our financial performance for the quarter and the year.

最初，我們計劃向照明行業提供這些產品，並利用我們聯合團隊在 LED 照明設計、製造和銷售方面的經驗。與傳統的矽基電力電子產品相比，我們的 GaN 電源產品預計尺寸更緊湊、效率更高，運行時產生的熱量更少。我們還在研究許多其他我們稱之為能源解決方案的產品，以擴大我們的產品組合和銷售潛力。雖然今天發布所有細節還為時過早，但當我看到 Energy Focus 的預期擴張計劃時，我個人感到很興奮。帶著對未來的承諾，讓我現在回顧一下我們本季度和本年度的財務業績。

Net sales of $663,000 for the fourth quarter of 2022 decreased 72.4% compared to sales of $2.4 million in the fourth quarter of 2021, driven mainly by a decrease in military sales. Both commercial and military sales were heavily impacted by supply chain constraints, and the military channel also suffered from a weak sales pipeline early in the year prior to our strategic hire. When compared to $1.8 million in the third quarter of 2022, sequential net sales were primarily down due to a decrease in commercial product sales. Net sales of our commercial products were $349,000 or 52.7% of total net sales for the fourth quarter of 2022, a decrease as compared to net sales of $1.2 million or 48.6% of total net sales for the fourth quarter of 2021, reflecting our supply chain constraints and the continued long-term impacts of the COVID-19 pandemic due to fluctuations in the timing, pace and size of commercial projects.

與 2021 年第四季度 240 萬美元的銷售額相比，2022 年第四季度的淨銷售額為 663,000 美元，下降 72.4%，主要原因是軍品銷售額下降。商業和軍事銷售都受到供應鏈限制的嚴重影響，而軍事渠道在我們戰略聘用之前的年初也遭受了銷售渠道疲軟的困擾。與 2022 年第三季度的 180 萬美元相比，環比淨銷售額下降的主要原因是商業產品銷售額下降。我們商業產品的淨銷售額為 349,000 美元，佔 2022 年第四季度淨銷售額的 52.7%，低於 120 萬美元的淨銷售額，佔 2021 年第四季度淨銷售額的 48.6%，反映了我們的供應鏈由於商業項目的時間、速度和規模的波動，COVID-19 大流行的限制和持續的長期影響。

Sales of our military products decreased in fourth quarter, mainly due to the supply chain impacts as well as continued delays of government funding available for certain projects and the continued delay timing of orders. Gross loss for the fourth quarter of 2022 was $0.2 million compared with gross profit of $0.2 million in the fourth quarter of 2021, a decrease of 200% year-over-year. Recall that in 2021, we recorded a $0.9 million for the employee retention tax credits as well, though we continue to wait to receive half of those funds. As a percentage of revenue, gross profit margin was a negative 35.9% in the fourth quarter of 2022 compared to 7.9% in the fourth quarter of 2021. The year-over-year decline in gross margin was primarily driven by higher variable costs as we sold down inventory on hand. Variable costs increased 57% as compared to the fourth quarter of 2021 to 123%. Adjusting gross profit margins for excess and obsolete in-transit net realizable value inventory reserve resulted in the non-GAAP adjusted gross margins of negative 55.8% for the fourth quarter of 2022 compared to 14.7% in the fourth quarter of 2021 and 3.2% in the third quarter of 2022. Gross margin was heavily depressed by the impact of fixed costs on low sales levels as well as our inventory reduction program, including sell-through pricing, scrap and liquidation activity and excess and obsolete reserve activity.

我們的軍品銷售額在第四季度有所下降，這主要是由於供應鏈的影響以及政府對某些項目可用資金的持續延遲以及訂單時間的持續延遲。 2022 年第四季度的毛虧損為 20 萬美元，而 2021 年第四季度的毛利潤為 20 萬美元，同比下降 200%。回想一下，在 2021 年，我們還記錄了 90 萬美元的員工保留稅收抵免，儘管我們仍在等待收到其中一半的資金。毛利率佔收入的百分比在 2022 年第四季度為負 35.9%，而 2021 年第四季度為 7.9%。毛利率同比下降的主要原因是可變成本增加，因為我們賣掉手頭的存貨。與 2021 年第四季度相比，可變成本增加了 57%，達到 123%。調整過剩和過時的在途可變現淨值存貨儲備的毛利率導致 2022 年第四季度的非公認會計原則調整後毛利率為負 55.8%，而 2021 年第四季度為 14.7%，2021 年第四季度為 3.2% 2022 年第三季度。固定成本對低銷售水平的影響以及我們的庫存減少計劃（包括直銷定價、報廢和清算活動以及過剩和過時的儲備活動）的影響嚴重壓低了毛利率。

Based on our levels of fixed costs, if we can again obtain quarterly sales levels greater than $3.5 million, we continue to expect our overall gross margins to be in the mid-20s. As we move forward on these run rates, we anticipate we will begin to approach the high 20s percentage range as we introduce new products and implement more aggressive value-added and value engineering initiatives to accompany our increased sales volume as well as depending on our sales mix and inventory valuations. However, we will continue to see some fluctuations quarter-to-quarter.

根據我們的固定成本水平，如果我們能夠再次獲得超過 350 萬美元的季度銷售額水平，我們繼續預計我們的整體毛利率將在 20 多歲左右。隨著我們在這些運行率上向前邁進，我們預計隨著我們推出新產品並實施更積極的增值和價值工程計劃以伴隨我們增加的銷量以及取決於我們的銷售額，我們將開始接近 20s 的高百分比範圍組合和存貨估值。但是，我們將繼續看到季度間的一些波動。

Operating expenses in the fourth quarter of 2022 were $1.8 million or 269.4% of sales compared to $2.5 million or 105.8% of sales in the fourth quarter of 2021. The decrease is attributable to reduction in payroll and payroll-related expenses due to our realignment initiatives over the past year as well as decreased advertising and promotion costs. Sequentially, operating expenses decreased approximately $458,000 from the $2.2 million in the third quarter of 2022, reflecting lower product development and SG&A expense as the company entered its current strategic initiatives. Loss from operations for the fourth quarter of 2022 was $2 million compared to an operating loss of $2.4 million in the fourth quarter of 2021. Sequentially, this compares to a loss from operations of $2.4 million in the third quarter of 2022, an improvement of $383,000.

2022 年第四季度的運營費用為 180 萬美元，佔銷售額的 269.4%，而 2021 年第四季度為 250 萬美元，佔銷售額的 105.8%。減少的原因是我們的調整舉措導致工資單和工資單相關費用減少在過去的一年中，廣告和促銷成本也有所下降。隨後，營業費用從 2022 年第三季度的 220 萬美元減少了約 458,000 美元，反映出隨著公司進入當前戰略計劃，產品開發和 SG&A 費用減少。 2022 年第四季度的運營虧損為 200 萬美元，而 2021 年第四季度的運營虧損為 240 萬美元。因此，與 2022 年第三季度的運營虧損 240 萬美元相比，改善了 383,000 美元.

Net loss was $2.3 million or $0.24 per basic and diluted share of common stock for the fourth quarter of 2022 compared with net loss of $2.6 million or $0.50 per basic and diluted share of common stock in the fourth quarter of 2021. Sequentially, this compares with a net loss of $2.7 million or $0.29 per basic and diluted share of common stock in the third quarter of 2022. Adjusted EBITDA, a non-GAAP measure, which excludes depreciation and amortization, interest expense, stock-based and other nonrecurring charges and/or sources of income such as incentive compensation and impairment charges taken against fixed assets was a loss of $1.8 million for the fourth quarter of 2022 compared with a loss of $2.2 million in the fourth quarter of 2021 and a loss of $2.3 million in the third quarter of 2022. Adjusted EBITDA improved from the prior year despite lower sales due to significant cost-cutting initiatives in SG&A.

2022 年第四季度淨虧損為 230 萬美元或每股基本和稀釋普通股 0.24 美元，而 2021 年第四季度淨虧損為 260 萬美元或每股基本和稀釋普通股 0.50 美元。按順序，這與2022 年第三季度淨虧損 270 萬美元或每股基本和稀釋普通股 0.29 美元。調整後的 EBITDA 是一種非 GAAP 衡量標準，不包括折舊和攤銷、利息費用、基於股票的費用和其他非經常性費用和/或固定資產的激勵補償和減值費用等收入來源在 2022 年第四季度虧損 180 萬美元，而 2021 年第四季度虧損 220 萬美元，第三季度虧損 230 萬美元2022 年。調整後的 EBITDA 比上一年有所改善，儘管由於 SG&A 的重大成本削減舉措導致銷售額下降。

For the full year, net sales were $6 million for 2022 compared with $9.9 million for 2021. Net sales from commercial products were $3.7 million or 62.8% of total sales for 2022 compared with $4.6 million or 47.5% of total net sales for 2021. Net sales from military and maritime market products were $2.2 million or 37.2% of total net sales for 2022 compared with $5.2 million or 52.5% of total net sales for 2021.

全年來看，2022 年的淨銷售額為 600 萬美元，而 2021 年為 990 萬美元。商業產品的淨銷售額為 370 萬美元，佔 2022 年總銷售額的 62.8%，而 2021 年為 460 萬美元，佔總淨銷售額的 47.5%。淨軍事和海事市場產品的銷售額為 220 萬美元，佔 2022 年淨銷售額的 37.2%，而 2021 年為 520 萬美元，占淨銷售額的 52.5%。

Gross loss was $0.3 million or negative 5.3% of net sales for 2022 compared with gross profit of $1.7 million or 17.2% of net sales for 2021. Gross margin for 2022 included unfavorable price and usage variances for materials and labor of $0.7 million or 29% of net sales and unfavorable inventory and want to reserve adjustments of $0.5 million or 8.7% of net sales. Adjusted gross margin was negative 4.8% for full year 2022 compared to 18.8% in the prior year due to higher variable costs from selling higher priced inventory on hand. We reviewed all fixed assets and identified any that were disposed or carried a reduced fair value, the recognized loss better position the company to reflect current value and focus on future growth.

2022 年毛虧損為 30 萬美元，占淨銷售額的負 5.3%，而 2021 年毛利潤為 170 萬美元，占淨銷售額的 17.2%。2022 年毛利率包括材料和人工的不利價格和使用差異 70 萬美元，佔 29%淨銷售額和不利庫存，並希望保留 50 萬美元或淨銷售額 8.7% 的調整。 2022 年全年調整後的毛利率為負 4.8%，而上一年為 18.8%，原因是出售手頭價格較高的庫存導致可變成本增加。我們審查了所有固定資產並確定了任何被處置或公允價值降低的資產，確認的損失使公司能夠更好地反映當前價值並專注於未來增長。

Operating loss was $9.3 million for 2022 compared with an operating loss of $8.7 million for 2021. And net loss was $10.3 million or $1.27 per basic and diluted share of common stock for 2022. This compares with net loss of $7.9 million or $1.73 per basic and diluted share of common stock for 2022, inclusive of noncash pretax gains of $1.7 million from the forgiveness of our Paycheck Protection Program loan and other income recorded relating to the employee retention tax credit.

2022 年營業虧損為 930 萬美元，而 2021 年營業虧損為 870 萬美元。2022 年淨虧損為 1030 萬美元或每股基本和稀釋普通股 1.27 美元。相比之下淨虧損為 790 萬美元或每股基本和稀釋普通股 1.73 美元2022 年普通股稀釋後的份額，包括因我們的“薪資保護計劃”貸款免除而產生的 170 萬美元非現金稅前收益以及與員工保留稅收抵免相關的其他收入。

Adjusted EBITDA with a loss of $8.7 million for 2022 compared with a loss of $7.9 million for 2021. The increased adjusted EBITDA loss in 2022 as compared to 2021 was primarily due to gross margin reductions from lower sales and higher cost of goods sold. Now I'd like to turn to the balance sheet. Cash was $52,000 as of December 31, 2022, as compared to $2.7 million as of December 31, 2021. As of December 31, 2022, the company had total availability of $107,000, which consisted of $52,000 of cash and $55,000 of additional borrowing availability under its credit facilities. This compares to total availability of $4.4 million as of December 31, 2021. Recall, we had just completed an equity raise at the end of December of 2021 as reflected in our cash and availability balances. As a reminder, total availability is a non-GAAP measurement of our access to cash at any given point in time, and we believe is a much more relevant metric than simply looking at the cash balance or even the net debt on the balance sheet. Excess borrowing availability on our credit facilities represents the difference between the maximum borrowing capacity of the credit facilities and our actual borrowings under these credit facilities.

2022 年調整後 EBITDA 虧損 870 萬美元，而 2021 年虧損 790 萬美元。與 2021 年相比，2022 年調整後 EBITDA 虧損增加的主要原因是銷售額下降和銷售成本上升導致毛利率下降。現在我想談談資產負債表。截至 2022 年 12 月 31 日，現金為 52,000 美元，而截至 2021 年 12 月 31 日為 270 萬美元。截至 2022 年 12 月 31 日，公司總可用資金為 107,000 美元，其中包括 52,000 美元的現金和 55,000 美元的額外借款。其信貸設施。相比之下，截至 2021 年 12 月 31 日，總可用資金為 440 萬美元。回想一下，我們剛剛在 2021 年 12 月底完成了股權融資，這反映在我們的現金和可用性餘額中。提醒一下，總可用性是我們在任何給定時間點獲得現金的非 GAAP 衡量標準，我們認為這是一個比簡單地查看現金餘額甚至資產負債表上的淨債務更相關的指標。我們信貸額度的超額可用借款是指信貸額度的最大借貸能力與我們在這些信貸額度下的實際借款之間的差額。

The excess availability under our credit facilities was $55,000 at the end of the fourth quarter 2022 and $169,000 at the end of the third quarter 2022 and $1.7 million at the end of the fourth quarter 2021. During the fourth quarter of 2022, cash used in operations was $472,000, of which a net loss from operations used $2.3 million of cash but that was offset by a source of cash attributable to working capital of $1.6 million, while cash used in investing activities was $16,000 and the company generated $4.1 million in cash from financing activities.

2022 年第四季度末，我們信貸額度下的超額可用性為 55,000 美元，2022 年第三季度末為 169,000 美元，2021 年第四季度末為 170 萬美元。2022 年第四季度，運營中使用的現金為 472,000 美元，其中運營淨虧損使用了 230 萬美元的現金，但被 160 萬美元的營運資本現金來源所抵消，而用於投資活動的現金為 16,000 美元，公司從融資中產生了 410 萬美元的現金活動。

Our net inventory balance of $5.5 million as of December 31, 2022, decreased $2.4 million over December 31, 2021. With that, we would like to open the call to questions.

截至 2022 年 12 月 31 日，我們的淨庫存餘額為 550 萬美元，比 2021 年 12 月 31 日減少了 240 萬美元。因此，我們想開始提問。

(Operator Instructions) Our first question comes from the line of Sameer Joshi with H.C. Wainwright.

（操作員說明）我們的第一個問題來自 Sameer Joshi 和 H.C.溫賴特。

In terms of the recovery of top line returning to previous levels, should we expect 2023 to revert to, say, 2021 levels? Or could you reach the 2020 level reached in excess of $15 million?

就收入恢復到以前的水平而言，我們是否應該期望 2023 年恢復到 2021 年的水平？或者你能達到 2020 年超過 1500 萬美元的水平嗎？

Thank you for your question, Sameer. My expectation is to at least reach the 2021 models, if not exceed.

謝謝你的問題，Sameer。我的期望是至少達到 2021 年的型號，如果不超過的話。

Okay. Okay. Okay. And then in terms of the distribution between commercial versus military. I know you've commentary on military backlog or at least pipeline expanding. How should we look at the mix going forward during the rest of the year from -- and contribution from military over the year?

好的。好的。好的。然後是商業與軍事之間的分配。我知道你對軍事積壓或至少管道擴張有評論。我們應該如何看待今年餘下時間的組合——以及今年軍方的貢獻？

Thank you. Yes, we have attributed a large backlog as we headed into 2023. And I anticipate our mix to be around 50-50 as we continue throughout the year with a larger amount in Q1 because of that slippage that we reported in Q4 of '22.

謝謝。是的，在我們進入 2023 年時，我們已經將大量積壓歸因於大量積壓。而且我預計我們的組合將在 50-50 左右，因為我們在 22 年第四季度報告的下滑導致我們全年繼續在第一季度有更多的積壓。

Yes, yes. And are the margins -- how is the margin profile? And will you just give us a high level on the type of products that are going to commercial versus military and the margin differences there?

是的是的。利潤率 - 利潤率如何？您能否簡單介紹一下將用於商業和軍事的產品類型以及兩者之間的利潤差異？

Yes. So there are large margin differences between our commercial and our military products. Through our cost reduction efforts, we are hopeful to improve our margin levels on both commercial and military lines as we move forward throughout 2023. And our partners, Sander Electronics are helping us improve those margin levels, which we hope to report in future quarters.

是的。因此，我們的商業產品和軍用產品之間存在很大的利潤差異。通過我們降低成本的努力，我們希望在整個 2023 年前進時提高我們在商業和軍用產品線的利潤率水平。我們的合作夥伴 Sander Electronics 正在幫助我們提高這些利潤率水平，我們希望在未來幾個季度報告這些利潤率水平。

Got it. And just on the EnFocus module, I think it was being rollout in the last quarter -- in 4Q, I mean, and product launch was expected around the end of last year. Is that rollout to -- is that rollout underway for the EnFocus module?

知道了。就 EnFocus 模塊而言，我認為它是在上個季度推出的——我的意思是在第四季度，產品預計在去年年底左右推出。是否推出 - EnFocus 模塊的推出正在進行中？

Yes. Unfortunately, our EnFocus rollouts were delayed due to some supply chain challenges in 2022 and beginning -- at the start of this year as well. We are hopeful to resume those activities and launch those products in 2023.

是的。不幸的是，由於 2022 年和年初的一些供應鏈挑戰，我們的 EnFocus 推出被推遲了——也是在今年年初。我們希望在 2023 年恢復這些活動並推出這些產品。

Okay. Okay. And on the -- just going back to the military, how should we -- like what is the visibility, meaning these are long lead time revenues. But how much visibilitiy do you have like 1 year out, 2 year out, how should we think about it?

好的。好的。關於——回到軍隊，我們應該如何——比如能見度，這意味著這些是長期的交付時間收入。但是你有多少知名度，比如 1 年、2 年後，我們應該如何考慮？

Great question. As we look at military sales, we -- historically, we start to build our pipeline and backlog on military 2 to 3 quarters out before those sales are due to the military. So we have been rebuilding throughout the end of '22 into the beginning of '23, a significant portion of military pipeline that we will realize here in 2023.

很好的問題。當我們查看軍事銷售時，我們 - 從歷史上看，我們開始建立我們的管道並在軍事銷售到期之前的 2 到 3 個季度積壓軍事。因此，從 22 年底到 23 年初，我們一直在重建，這是我們將在 2023 年在這裡實現的軍事管道的重要部分。

Understood. And just a couple of questions on operating expenses and inventory levels actually. Is the inventory that you have mostly mark-to-market in terms of what you expect from sales? Or should we expect negative gross margins from this going forward at least in the next few quarters.

明白了。實際上只有幾個關於運營費用和庫存水平的問題。就您對銷售的期望而言，您擁有的大部分庫存是否按市值計價？或者我們是否應該至少在接下來的幾個季度中預期毛利率為負。

So we anticipate Q1 to have similar -- let me pause for a moment. My apologies. Yes, it is mark-to-market. That is why we took the large E&O reserves at the end of 2022. So that way, we started with a clean slate for 2023 and could have better margins moving forward.

所以我們預計第一季度會有類似的——讓我暫停一下。我很抱歉。是的，它是按市值計價的。這就是我們在 2022 年底獲得大量 E&O 儲備的原因。這樣一來，我們就可以從 2023 年的白紙開始，並且可以有更好的利潤率向前發展。

Understood. Got it. Good to hear that. On the operating expense front, 2/3 of the headcount reduced, but in terms of dollars, how should we look at it? I think your OpEx was around $1.8 million, total GAAP OpEx this quarter. Is that the run rate? Or should we expect further reductions?

明白了。知道了。很高興聽到。在運營費用方面，減少了 2/3 的員工人數，但在美元方面，我們應該如何看待呢？我認為您的運營支出約為 180 萬美元，本季度的 GAAP 運營支出總額。那是運行率嗎？還是我們應該期待進一步減少？

There are further reductions that have been happening. And we expect to realize some, our Q4 number is pretty close, but we have reduced our payroll expense significantly over the prior year.

已經發生了進一步的減少。我們希望實現一些，我們的第四季度數字非常接近，但我們比上一年大幅減少了工資支出。

Right, right. Does the 4Q number have any severance costs that may not recur in 1Q and moving forward?

是的是的。 4Q 數字是否有任何可能不會在 1Q 和未來發生的遣散費？

No. There were no severance costs.

沒有。沒有遣散費。

Okay. In terms of cash availability, I know you spoke at length about the 4Q. I mean, December 31 balance sheet, $107,000 in available cash, including $52,000 cash on hand. What is the level currently and throughout the year, how do you plan to like fund the operations and any rollouts of new products?

好的。就現金可用性而言，我知道您詳細談到了第四季度。我的意思是，12 月 31 日的資產負債表，可用現金為 107,000 美元，包括手頭現金 52,000 美元。當前和全年的水平是多少，您打算如何為新產品的運營和推出提供資金？

Sameer, this is Jim Warren. We likely spoke to kind of restructuring our secured lending facilities following that strategic investment. Looking ahead to 2023, I think we'll be rebuilding our working capital and financing structures. We're working off of cash collections largely at this point. But we've significantly reduced our borrowing costs as we do that. And working with our supply chain partners to kind of restart the engine there.

薩米爾，這是吉姆沃倫。在該戰略投資之後，我們可能會談到重組我們的擔保貸款設施。展望 2023 年，我認為我們將重建營運資金和融資結構。在這一點上，我們主要是在處理現金收款。但在這樣做的過程中，我們已經大大降低了借貸成本。並與我們的供應鏈合作夥伴合作，重新啟動那裡的引擎。

Got it. And last question, supply chain issues have been lingering. Is there any particular item or items that are a cause of the issues? And how do you expect them to be -- these issues to be resolved over the next few quarters?

知道了。最後一個問題，供應鏈問題一直揮之不去。是否有任何特定項目或項目導致問題？您如何看待它們 - 這些問題將在接下來的幾個季度內得到解決？

Sure. So our ICs are still a large component issue that we have been impacted by, and our industry has been impacted by as a whole as the -- as that continues to right itself, that will also free up our ability to bring those products in. Additionally, our RedCap product is a very unique product in its design and structure. So we have had some challenges in ensuring that we can source the right componentry specific to that patented product. That we believe our sources have been able to restart their pipelines which will allow us to restart our pipeline.

當然。因此，我們的 IC 仍然是我們受到影響的一個大組件問題，我們的行業也受到了整個行業的影響——隨著它繼續自我修復，這也將釋放我們將這些產品帶入的能力。此外，我們的 RedCap 產品在設計和結構上都是非常獨特的產品。因此，我們在確保我們能夠採購特定於該專利產品的正確組件方面遇到了一些挑戰。我們相信我們的消息來源已經能夠重新啟動他們的管道，這將使我們能夠重新啟動我們的管道。

Got it. Yes. No, I think the GaN power supply and other power products looks promising, looking forward to updates on that. The turnaround on military looks promising as well. Good luck, Jim. Good luck, Lesley.

知道了。是的。不，我認為 GaN 電源和其他電源產品看起來很有前途，期待這方面的更新。軍事上的轉變看起來也很有希望。吉姆，祝你好運。祝你好運，萊斯利。

Thank you so much.

太感謝了。

And our next question comes from the line of David , a private investor.

我們的下一個問題來自私人投資者大衛。

David First question. I love to comment about -- and we just heard it just briefly on looking into product development using gallium nitride power supplies. And I guess what I'm asking is, is there any sort of insight that you can give us into the specific application of those? And potentially, what type of turnaround if those things are going into commercial products. Are these things that are going to be able to be introduced in the coming year? Or is it more longer term?

戴維 第一個問題。我喜歡評論——我們只是簡單地聽到了關於使用氮化鎵電源研究產品開發的內容。我想我要問的是，您是否可以為我們提供有關這些具體應用的任何見解？如果這些東西進入商業產品，可能會有什麼樣的轉變。這些東西會不會在來年推出？還是更長期？

Sure. Thank you, David, for your question. In regards to the GaN products, we're looking at working within the lighting industry first because that is where our expertise lie. Some of the opportunities that we are looking to go after may or may not be realized in 2023 and are more of a long-term strategic play just because it will involve additional development processes with potential partners. However, we are looking to be able to also supply within the lighting display market in module here hopefully before the end of the year. So some products will be a little bit easier than others, and we are hopeful that we will be able to start launching those here before the year is out.

當然。大衛，謝謝你的問題。關於 GaN 產品，我們首先考慮在照明行業開展工作，因為這是我們的專長所在。我們正在尋找的一些機會可能會在 2023 年實現，也可能不會實現，並且更像是一項長期戰略行動，因為它將涉及與潛在合作夥伴的額外開發過程。然而，我們希望能夠在今年年底之前在這里以模塊形式供應照明顯示市場。所以有些產品會比其他產品更容易一些，我們希望我們能夠在今年年底之前在這裡開始推出這些產品。

And one other question, given my background, can you provide any comment on the -- I know that Energy Focus has a reasonably large patent portfolio. Can you provide any comment on whether or not the company is looking into ways to monetize or to potentially squeeze some value out of its portfolio, which goes back a number of years. And given that you're turning back to your roots, at least from what I hear based on the UVC comments, has there been any thought into trying to exploit the patent position?

還有一個問題，鑑於我的背景，你能否就——我知道 Energy Focus 擁有相當大的專利組合提供任何評論。您能否就該公司是否正在研究貨幣化方法或可能從其投資組合中榨取一些價值發表任何評論，這可以追溯到幾年前。考慮到您要回歸本源，至少從我根據 UVC 評論聽到的情況來看，有沒有考慮過嘗試利用專利地位？

Great question. We currently look at all of our assets and continue to look at different ways to move our best foot forward as we continue to grow. Right now, my focus is on generating sales. But that's something that we could put for the future.

很好的問題。我們目前正在審視我們所有的資產，並繼續尋找不同的方式來在我們繼續發展的過程中向前邁出最好的一步。現在，我的重點是產生銷售。但這是我們可以為未來提出的。

And we have reached the end of the question and answer session, and I'll turn it back over to Lesley Matt for closing marks.

我們已經結束了問答環節，我將把它轉回給 Lesley Matt 以獲得結束分數。

Thank you, operator. Again, thank you, everyone, for joining us today, and we look forward to providing you with more information as we turn the corner in 2023. Thank you again.

謝謝你，運營商。再次感謝大家今天加入我們，我們期待在 2023 年即將到來之際為您提供更多信息。再次感謝您。

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時你們可以掛斷電話。感謝您的參與。