Eastern Company (EML) 2025 Q1 法說會逐字稿

Good morning, everyone and welcome to the Eastern Company's first quarter fiscal year 2025 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following the presentation. If anyone should require operator assistance during this conference, please press 0 on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Maryanne Barr, investor relations. Maryanne, the floor is yours.

大家早安，歡迎參加東方公司 2025 財年第一季財報電話會議。目前，所有參與者都處於僅收聽模式，演講結束後將開放提問。若會議期間有人需要接線生協助，請按電話鍵盤上的 0。請注意，本次會議正在錄製。現在我將會議交給主持人、投資人關係部 Maryanne Barr。瑪麗安，請你發言。

Good morning and thank you everyone for joining us this morning for a review of the Eastern Company's results for the first quarter of 2025. With me on the call are Ryan Schroeder, Chief Executive Officer, and Nick Vlahos, Chief Financial Officer. The company issued an earnings press release yesterday after the market closed. If anyone has not yet seen the release, please visit the investor section of the company's website www.easterncompany.com, where you will find the release under financial news.

早安，感謝大家今天早上加入我們，共同回顧東方公司 2025 年第一季的業績。與我一起參加電話會議的還有執行長 Ryan Schroeder 和財務長 Nick Vlahos。該公司昨天在股市收盤後發布了一份獲利新聞稿。如果有人還沒有看到新聞稿，請造訪該公司網站 www.easterncompany.com 的投資者部分，您可以在該處的財經新聞專欄下找到該新聞稿。

Please note that some of the information you will hear during today's call will consist of forward-looking statements about the company's future financial performance and business prospects, including without limitation, statements regarding revenue, gross margin, operating expenses, other income and expenses, taxes, and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected in these forward-looking statements.

請注意，您在今天的電話會議中聽到的一些資訊將包括有關公司未來財務業績和業務前景的前瞻性陳述，包括但不限於有關收入、毛利率、營業費用、其他收入和支出、稅收和業務前景的陳述。這些前瞻性陳述受風險和不確定性的影響，可能導致實際結果或趨勢與這些前瞻性陳述中的預測有重大差異。

We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances that occur after the call. For more information regarding these risks and uncertainties, please refer to risk factors discussed in our SEC filings, including Form 10K filed with the SEC on March 11, 2025 for the fiscal year 2024. In addition, during today's call, we will discuss non-gap financial measures that we believe are useful as supplemental measures of Eastern's performance. These non-gap measures should be considered in addition to, and not as a substitute for or in isolation from GAAP results. A reconciliation of each of the non-gap measures discussed during today's call to the most directly comparable GAAP measure can be found in the earnings press release. With that, I'll turn the call over to Ryan.

我們不承擔審查或更新任何前瞻性陳述以反映通話後發生的事件或情況的義務。有關這些風險和不確定性的更多信息，請參閱我們向美國證券交易委員會 (SEC) 提交的文件中討論的風險因素，包括 2025 年 3 月 11 日向美國證券交易委員會提交的 2024 財年 10K 表格。此外，在今天的電話會議中，我們將討論我們認為可作為東方業績補充指標的非差距財務指標。這些非差距措施應作為 GAAP 結果的補充來考慮，而不應替代或孤立於 GAAP 結果。在今天的電話會議上討論的每個非差距指標與最直接可比較的 GAAP 指標的對帳可以在收益新聞稿中找到。說完這些，我會把電話轉給瑞安。

Thank you, Maryanne and thank you everyone for joining us today. At the highest level, I'll say this, the 1st quarter met our earnings expectations that still with plenty of challenges in the marketplace. Revenues came in at $63.3 million down slightly from Q1 of 2024. EBITDA came in at $4.8 million and earnings per share at $0.31 per share, very close to where we expected it to come in, for the year or for the quarter. A few high-level updates before I turn it over to Nick on more details from the quarter. These updates are from really the last time that we spoke.

謝謝你，瑪麗安，也謝謝大家今天的到來。從最高層面來說，我想說的是，第一季的獲利達到了我們的預期，但市場仍存在著許多挑戰。營收為 6,330 萬美元，較 2024 年第一季略有下降。EBITDA 為 480 萬美元，每股收益為 0.31 美元，非常接近我們對今年或本季的預期。在我將本季的更多細節轉交給尼克之前，我先介紹一些高層更新。這些更新實際上來自我們上次談話的內容。

We've made meaningful structural changes in Big 3 Precision. We've been able to sell the ISBM blow mold business, also known as Centralia mold. Furthermore, within Big Three, we've been able to close the Dearborn facility and improve our structural competitiveness within our racing business. Additionally, we've been able to complete a share buyback program of 200,000 shares. I'm also happy to report that the board approved an additional share buyback program of additional 400,000 shares.

我們對 Big 3 Precision 進行了有意義的結構性變革。我們已經能夠出售 ISBM 吹塑模具業務，也稱為 Centralia 模具。此外，在三巨頭中，我們已經能夠關閉迪爾伯恩工廠並提高我們賽車業務的結構競爭力。此外，我們也完成了 200,000 股的股票回購計畫。我還很高興地報告，董事會批准了額外的 400,000 股股票回購計劃。

Also throughout the quarter, and the first part of the year we've been able to complete our leadership team transition plans and I'm very happy about the leadership team. I'll touch on that within each of the portfolio businesses a bit more as we get further into things. And then lastly, I'd like to say I'm extremely pleased to have Chan Delvado join us on our board of directors. Previously, Chan was the CEO of Servers operations and advisory Company. There he was on a number of different boards, probably most notably as co-Chairman of Albertson's. Most recently, Chan was the Chairman of New Flyer Industries. I'm super excited to have Chairman join the board. 2025 will be a year of enhancing our strategic growth plans, eliminating bureaucracy, and optimizing our cash flow. So with that, I'd like to turn it over to Nick on additional details for the quarter.

在整個季度和今年上半年，我們已經完成了領導團隊的過渡計劃，我對領導團隊感到非常滿意。隨著我們進一步了解事情，我將在每個投資組合業務中更多地談論這一點。最後，我想說，我非常高興 Chan Delvado 加入我們的董事會。此前，陳先生曾擔任 Servers 營運和諮詢公司的執行長。他曾在多個不同的董事會任職，其中最著名的可能是擔任 Albertson 公司的聯合董事長。最近，陳先生擔任 New Flyer Industries 的董事長。我非常高興董事長加入董事會。 2025 年將是我們加強策略成長計畫、消除官僚主義和優化現金流的一年。因此，我想將本季的更多詳細資訊交給尼克。

Thanks, Ryan. I'll focus my review today on the company's financial results from continuing operations for the first quarter of 2025. Net sales in the first quarter of 2025 decreased 2% to 63.2 million from 64.6 million in last year's first quarter. The decline was primarily due to decreased sales of truck mirror assemblies and truck accessories offset by increased sales of returnable transport packaging products. Our backlog as of March 29, 2025, decreased 9% to 85.9 million compared to 94.0 million as of March 30, 2024. The decrease was primarily driven by decreased orders for returnable transport packaging products, truck mirror assemblies, and latch and handle assemblies.

謝謝，瑞安。今天我將重點回顧公司 2025 年第一季的持續經營財務表現。2025 年第一季淨銷售額從去年第一季的 6,460 萬下降 2% 至 6,320 萬。下降的主要原因是卡車後視鏡組件和卡車配件的銷售額下降，但可回收運輸包裝產品的銷售增加抵消了這種影響。截至 2025 年 3 月 29 日，我們的積壓訂單量為 8,590 萬份，而截至 2024 年 3 月 30 日為 9,400 萬份，下降了 9%。下降的主要原因是可回收運輸包裝產品、卡車後視鏡組件以及閂鎖和把手組件的訂單減少。

Gross margin as a percentage in that sales for the first quarter of 2025 was 22.4% compared to 23.9% for the prior year period. The decrease was due to higher raw material costs, partially offset by price increases. As a percentage in net sales, product development costs for 2% for both the first quarter of 2025 and 2024. Selling general and administrative expenses decreased $0.8 million or 8% in the first quarter of 2025 compared to last year's period. The decrease was primarily due to lower payroll related expenses of $0.5 million offset by higher sales commissions of $0.3 million.

2025 年第一季的毛利率為 22.4%，去年同期為 23.9%。下降的原因是原物料成本上升，但被價格上漲部分抵銷。淨銷售額的百分比，2025 年第一季和 2024 年第一季的產品開發成本均為 2%。2025 年第一季銷售一般及行政費用與去年同期相比減少了 80 萬美元，即 8%。下降的主要原因是工資相關費用減少 50 萬美元，但銷售佣金增加 30 萬美元。

Other income and expense increased $0.2 million in the first quarter of 2025 compared to the last year's period. The decrease was primarily due to favorable gains on security transactions in 2024 that did not occur in 2025 in current year restructuring expenses.

2025 年第一季其他收入和支出與去年同期相比增加了 20 萬美元。下降的主要原因是 2024 年證券交易的良好收益在 2025 年並未計入當年的重組費用。

Net income from continuing operations for the first quarter of 2025 was $1.9 million or $0.31 per diluted share compared to $2.1 million or $0.34 per diluted share for the 2024 period. Now turning to non-gap measure, adjusted net income from continuing operations for the first quarter of 2025 was $2.2 million or $0.32 per diluted share compared to adjust in net income of $2.1 million or $0.34 per diluted share for the prior year period.

2025 年第一季持續經營淨收入為 190 萬美元，即每股攤薄收益 0.31 美元，而 2024 年同期持續經營淨收入為 210 萬美元，即每股攤薄收益 0.34 美元。現在轉向非差距衡量標準，2025 年第一季調整後的持續經營淨收入為 220 萬美元或每股攤薄收益 0.32 美元，而去年同期調整後的淨收入為 210 萬美元或每股攤薄收益 0.34 美元。

At the end of the first quarter of 2025, our senior net leverage ratio was 1.45 compared to 1.23 at the end of 2024. In addition, we invested $0.8 million in capital expenditures and paid dividends. Of 0.7 million. In the first year's quarter, as of March 29, 2025, inventories totaled $56.1 million, up $0.2 million from the end of fiscal year 2024.

截至 2025 年第一季末，我們的高級淨槓桿率為 1.45，而 2024 年底為 1.23。此外，我們還投資了 80 萬美元的資本支出並支付了股息。70萬。第一季度，截至 2025 年 3 月 29 日，庫存總額為 5,610 萬美元，比 2024 財年末增加 20 萬美元。

During the first quarter of 2025, we repurchased 50,000 shares of common stock under the share repurchase program Eastern Boards authorized in August 2023. Bringing us to a total of 200,000 shares repurchased and completing the 2023 authorization. On April 30, 2025, the board of directors authorized a new share repurchase program authorizing the company to repurchase up to 400,000 shares of its common stock. The program extends until May 2030. That completes my financial review. I'll now turn the call back to Ryan.

2025 年第一季度，我們根據東部委員會於 2023 年 8 月批准的股票回購計畫回購了 50,000 股普通股。使我們總共回購了 200,000 股，並完成了 2023 年的授權。2025年4月30日，董事會批准了一項新的股票回購計劃，授權公司回購最多400,000股普通股。該計劃將延長至2030年5月。我的財務審查就此結束。我現在將電話轉回給瑞安。

Thanks Nick. Now I'll speak a bit more about each of the three portfolio companies. Let's start with Eberhard. Most of but I'll repeat for those that don't. Eberhard designs and engineers and manufactures and manufactures a wide range of security hardware such as latches, locks, hinges, handles, and related components for industrial work truck, military, and specialty applications.

謝謝尼克。現在我將更詳細地介紹這三家投資組合公司。讓我們從埃伯哈德開始。大部分都是，但對於那些不了解的人，我會重複一遍。Eberhard 設計、製造和生產各種安全硬件，如閂鎖、鎖、鉸鏈、把手和相關組件，用於工業工作卡車、軍事和特殊應用。

I'll start with Zach Gurney. So Zach joined at the very end of last year as the President of Eberhard. He's doing a fantastic job and has done, really nice work updating their strategy. Furthermore, in that work, they've reorganized the commercial team there and brought in a great leader named Scott Meldow who's leading the commercial team at Eberhard.

我首先從 Zach Gurney 開始。因此，扎克於去年年底加入 Eberhard，擔任其總裁。他做得非常出色，在更新他們的策略方面做得非常好。此外，在這項工作中，他們重組了那裡的商業團隊，並聘請了一位名叫 Scott Meldow 的偉大領導者來領導 Eberhard 的商業團隊。

Scott has worked with both Zach and I in the past, so we're very pleased with him joining. Thus far they've been able to minimize the impact of tariffs. In some cases that means passing some of those costs on and others it's about being nimble with our supply chain and brokers. Certainly, there's been some softness in those markets that I mentioned that they serve. That being said, Eberhard really benefits from being very well diversified and at this point it's still pointed towards growth for 2025.

斯科特過去曾與扎克和我合作過，所以我們非常高興他的加入。到目前為止，他們已經能夠將關稅的影響降至最低。在某些情況下，這意味著轉嫁部分成本，而在其他情況下，這意味著靈活運用我們的供應鏈和經紀人。當然，我提到的他們所服務的市場確實出現了一些疲軟現象。話雖如此，Eberhard 確實受益於良好的多元化，並且目前它仍然有望在 2025 年實現成長。

Some of the key initiatives for Eberhard, there's going to be continued focus and defined initiatives on the commercial front. We're also going to be doubling down on our efforts with new product development. Furthermore, we need to be very nimble with our supply chain, so I'm very pleased with the progress that's been made at Eberhard and extremely encouraged about the future of that business.

對 Eberhard 來說，一些關鍵措施是將繼續專注於商業方面並明確相關措施。我們也將加倍努力進行新產品開發。此外，我們需要非常靈活地管理我們的供應鏈，因此我對 Eberhard 的進展感到非常滿意，並且對該業務的未來充滿信心。

Next, let's turn to Velvac. Velvac designs, manufactures, and supplies vision systems, mirrors, and a broad range of components and accessories for the medium and heavy-duty truck markets. The medium and heavy-duty truck markets for those that don't know have been fairly significantly impacted over the last handful of months, and the ACT, which is most commonly used to track build rates, have shown an additional softness for the remainder of the year. We shall see in terms of how those build rates and, but as you may or may not know, Velvac from a mirror standpoint has a very significant market share, particularly on the Class A truck market.

接下來，我們來談談 Velvac。Velvac 為中型和重型卡車市場設計、製造和供應視覺系統、鏡子以及各種組件和配件。對於那些不知道的人來說，中型和重型卡車市場在過去幾個月中受到了相當大的影響，而最常用於追蹤建造率的 ACT 在今年剩餘時間內顯示出額外的疲軟。我們將看到這些建造率如何，但您可能知道也可能不知道，從鏡子的角度來看，Velvac 擁有非常大的市場份額，特別是在 A 級卡車市場。

So, we're having to be as flexible as we possibly can to being responsive to the changes in the volumes associated with our customers there. That being said, Dan McGrew and the team have been able to take market share and are extremely well positioned for growth in the future to those class A and markets. Furthermore, it's a bright spot within the business, but their efforts on their aftermarket business have continued to pay off.

因此，我們必須盡可能靈活地應對那裡的客戶數量變化。話雖如此，丹·麥格魯和他的團隊已經能夠佔領市場份額，並為未來在 A 級市場的成長做好了極其有利的準備。此外，這是業務中的一個亮點，但他們在售後市場業務上的努力仍在繼續獲得回報。

The team there has been able to grow that business even in the challenging environments associated with tariffs and everything else that organizations are going through. So key initiatives for Velvac in 2025 and beyond is centered around vertical integration. They've done a lot of work on that already, bringing in some plastic injection molding parts. They're going to continue to work on that. Furthermore, we have big plans for expanding our aftermarket business.

即使在與關稅以及組織正在經歷的其他一切挑戰性環境中，那裡的團隊仍然能夠發展業務。因此，Velvac 在 2025 年及以後的關鍵舉措將圍繞著垂直整合。他們已經在這方面做了很多工作，並引進了一些塑膠注塑零件。他們將繼續致力於此。此外，我們還有擴大售後市場業務的宏偉計劃。

They do a fantastic job serving their customers there, and I think have a strategic advantage going forward. And then like Eberhard, they need to continue to have a nimble supply chain, so. Like Eberhard, Velvac had a solid year last year, and like Eberhard, I think they are very well positioned for success going into the future. In the near term, they're obviously going to have to work through some of the challenges associated with market demand and supply chain uncertainty.

他們在那裡為客戶提供了出色的服務，我認為他們在未來具有戰略優勢。然後像埃伯哈德一樣，他們需要繼續擁有靈活的供應鏈，所以。和 Eberhard 一樣，Velvac 去年也表現穩健，而且和 Eberhard 一樣，我認為他們已經為未來的成功做好了充分的準備。在短期內，他們顯然必須解決與市場需求和供應鏈不確定性相關的一些挑戰。

Moving on to big 3. So Big 3 designs, manufactures, and delivers turnkey, innovative and sustainable packaging and material handling solutions as well as blow mold tooling. So, like I mentioned earlier, we've completed the sale of the ISBM business also known as Centralia Mold. We're happy to have completed that in very speedy order. And furthermore, we've been able to become very close. We're not quite done yet, but within the quarter we're going to be completing our strategic review of the mold business, and we have a go forward plan with that.

繼續前進到三巨頭。因此，Big 3 設計、製造並提供交鑰匙、創新和永續的包裝和材料處理解決方案以及吹塑工具。因此，正如我之前提到的，我們已經完成了 ISBM 業務（也稱為 Centralia Mold）的出售。我們很高興能夠如此快速地完成這項工作。而且，我們的關係也變得非常親密。我們還沒有完全完成，但在本季度內我們將完成對模具業務的策略審查，並且我們有一個前進的計劃。

On the racing side, which is a significant part from a revenue standpoint for Big 3 Precision, we've been able to improve significantly the cost input costs associated with that business. As I mentioned earlier, we've completed the closure of the Dearborn location. A portion of that business is rolled into the central rack business, and then the other portion is moved to a new small purpose focused facility in Sterling Heights, Michigan. For the design of racks and prototyping them.

賽車方面，從收入角度來看，這是 Big 3 Precision 的一個重要組成部分，我們已經能夠大幅改善與該業務相關的成本投入成本。正如我之前提到的，我們已經完成了迪爾伯恩工廠的關閉。該業務的一部分被納入中央機架業務，然後另一部分被轉移到密西根州斯特林海茨的一個新的小型專用設施。用於設計機架並製作原型。

With all this said and all the efforts that Emilio, our President there, has and his whole team have been doing, we've begun to see incremental significant improvements in the results of that business. We still have a way to go, but I'm really encouraged with what that business has been able to do thus far. So going forward, we're going to finish those rationalization efforts which are all but complete. We're going to shift gears to operational efficiency efforts within the companies that we're operating in, and we've already shifted to improving and bolstering our commercial growth plans.

綜上所述，透過我們總裁艾米利歐和他的整個團隊的努力，我們已經開始看到該業務的業績逐漸顯著改善。我們還有很長的路要走，但我對該業務迄今為止的成就感到非常鼓舞。因此，展望未來，我們將完成那些幾乎已經完成的合理化工作。我們將在營運公司內部大力提高營運效率，並且我們已經轉向改進和加強我們的商業成長計劃。

So, with all that said, I, I'm very encouraged with the work that the teams have done, at Big 3, at Velvac, and at Eberhard, and I'm encouraged about the future of this business. So, with that I would like to open it up for any questions anyone might have we'll pause for questions and then I'll move on to my final comments before closing the call.

所以，綜上所述，我對 Big 3、Velvac 和 Eberhard 團隊所做的工作感到非常鼓舞，我對這項業務的未來也充滿信心。因此，我想開始回答大家可能提出的任何問題，我們將暫停一下以回答問題，然後在結束通話之前我將發表我的最後評論。

Thank you very much. We are now opening the floor for questions. If you would like to ask a question, you can press 1 on your phone keypad now. A confirmation time will indicate that your line is in the queue. You may press 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. So that's 1, if you would like to ask a question. Please wait a moment while we poll for any questions. I'm not seeing any questions come into the queue at this moment. Just a reminder to anyone, it's one if you would like to ask a question. We do have a question in, and your question is coming from Ross Davison of Bannerton Capital. Ross, your line is live.

非常感謝。我們現在開始回答問題。如果您想提問，現在就可以按下手機鍵盤上的 1。確認時間將表示您的線路已在佇列中。如果您想從佇列中刪除您的問題，請按 2。對於使用揚聲器裝置的任何參與者，可能需要在按下按鍵之前拿起聽筒。如果你想提問的話，那就是 1。請稍等片刻，我們正在調查任何問題。目前我還沒有看到任何問題進入隊列。只是提醒大家，如果你想問一個問題，這就是一個。我們確實有一個問題，您的問題來自 Bannerton Capital 的 Ross Davison。羅斯，你的線路已通。

Hi Ryan. Hey Nick, thanks for taking the question. On returnable packaging, I was curious if you just give us kind of a way to think about the outlook for that business, specifically I'm wondering, obviously there's a lot of change in the supply chain and there's a lot of uncertainty. Is there a potential tailwind there if there's production moved around, what would your customers need more of your help in any of those scenarios?

你好，Ryan。嘿，尼克，謝謝你回答這個問題。關於可回收包裝，我很好奇您是否能為我們提供一種思考該業務前景的方法，具體來說，我想知道，顯然供應鏈中存在很多變化，並且存在許多不確定性。如果生產轉移，是否有潛在的順風？在任何一種情況下，您的客戶會更需要您的哪些協助？

Yeah, thank you very much for the question, Ross. I, I'd say this it's been a quiet market in the returnable packaging, particularly in the automotive segment. So, we, we've certainly seen that from a, from a volume standpoint. That being said, when you think about tariffs and you think about all the supply chain uncertainty, the big three precision business is almost completely insulated from that being that we're made in America, that our supply chain is for the vast majority of it un-American supply chain. So we are really uniquely positioned. We think there is some demand that's being pent up and if and when it does break loose, we are well positioned to jump on it.

是的，非常感謝你的提問，羅斯。我想說的是，可回收包裝市場一直很平靜，特別是在汽車領域。因此，從數量的角度來看，我們確實看到了這一點。話雖如此，當你考慮關稅並考慮所有供應鏈的不確定性時，三大精密業務幾乎完全不受此影響，因為我們是在美國製造的，我們的供應鏈絕大多數是非美國供應鏈。因此，我們確實具有獨特的優勢。我們認為，有些需求被壓抑了，一旦這些需求真正釋放出來，我們就能把握機會。

And that's why a lot of our heavy lifting, as we mentioned about with Dearborn and some other improvements we made within the business from a cost structure standpoint, it's going to allow us to be competitive but also very responsive that there is a significant breakthrough. Historically speaking, these markets do tend to be a bit lumpy, and we've certainly seen a softer pattern here recently with all the uncertainty in the marketplace. So, we're encouraged that in many cases we believe we're in the trough and we and we believe many of our customers are sort of all in a wait and see mode with regard to trade talks and terrify ramifications, but at some point in time, regardless of those deals get done or don't get done, they're going to have to break some programs loose and we'll be we are very well positioned regardless so yeah, I would, I that's how I frame it up. I don't know Nick if you have anything else to add.

這就是為什麼我們要付出很多艱辛的努力，就像我們在迪爾伯恩提到的那樣，以及從成本結構的角度在業務中做出的一些其他改進，這將使我們具有競爭力，同時也能迅速做出反應，取得重大突破。從歷史上看，這些市場確實往往有點不穩定，而且由於市場存在種種不確定性，我們最近確實看到了一種較為疲軟的模式。因此，令我們感到鼓舞的是，在很多情況下，我們相信我們正處於低谷，我們和我們相信我們的許多客戶都對貿易談判和可怕的後果持觀望態度，但在某個時間點，無論這些交易是否完成，他們都必須放鬆一些計劃，而我們無論如何都會處於非常有利的位置，所以，是的，我會的，這就是我的看法。我不知道尼克你還有什麼要補充的。

Yeah, I would say, as more production is brought back into the United States, Big 3 is in a good position to take advantage of that due to their focus of their locations in North America and already having the experience of producing the returnable packaging that a lot of companies will be able to utilize more because more of their supply chain is local compared to overseas which you do not get typically have returnable packaging.

是的，我想說，隨著越來越多的生產轉移回美國，三大巨頭將處於有利地位，可以利用這一點，因為它們的重點放在北美地區，並且已經擁有生產可回收包裝的經驗，許多公司將能夠更多地利用這種包裝，因為它們的供應鏈更多地是本地化的，而不是海外，而海外通常沒有可回收包裝。

That's great. That makes sense. Thanks for that. And then just on gross margin it's lower than it had been sort of the last year and a half he referenced higher raw material costs, some price increases. Is it? Should we expect sort of the levels you're at sort of where we're going to be for a while? Are there near term opportunities to sort of raise that gross margin? Any help there thinking about it would be appreciated, yeah.

那太棒了。這很有道理。謝謝。然後，就毛利率而言，它比過去一年半的水平要低，他提到原材料成本上升，價格上漲。是嗎？我們是否應該預期我們會在一段時間內保持你所處的水平？近期是否有機會提高毛利率？是的，任何幫助我思考此事的人都會很感激。

So, Ryan, I'll jump in on this question. So, part of this also was sales mix as well, and with that we do expect with some of our higher margin products to start getting a better velocity in the market, start selling more, and therefore that will also help to support the margin as well. But we are always focused on taking out as much cost as possible from our cost of goods sold as well.

那麼，瑞安，我想回答這個問題。因此，這其中的一部分也是銷售組合，我們確實希望我們的一些利潤率較高的產品能夠開始在市場上獲得更好的速度，開始銷售更多，因此這也將有助於支持利潤率。但我們也始終致力於從銷售成本中盡可能降低成本。

Okay, great, thank you.

好的，太好了，謝謝。

Thanks for the answers.

謝謝您的回答。

Thank you very much. Just a reminder if there are any further questions, you can join the queue by pressing one on your keypad. Okay, I'm not seeing any further questions, so I will now hand back over to Ryan for any closing comments.

非常感謝。提醒一下，如果還有其他問題，您可以按下鍵盤上的 1 鍵加入佇列。好的，我沒有其他問題了，所以現在我將把時間交還給 Ryan，請他做最後評論。

Thank you, Jenny. Yeah, so in closing here, you're going to see with the Eastern Company a relentless execution for top decile performance that's going to be really the central theme of everything that we're doing. We're going to be looking at strategic growth and operational focus going into the remainder of the year where we've been very active as we've been touching on here today in the call on the big 3 transformation. I don't believe it's completely finished yet, but we're we're approaching the end of that. We're going to have cost discipline. This is obviously very uncertain times. We're going to control the things that are within our control and we've done much of that in the first quarter that's going to be a continued focus going on through the 2nd quarter and the remainder of the year.

謝謝你，珍妮。是的，最後，你會看到東方公司對最高十分位表現的不懈追求，這才是我們所做一切的中心主題。我們將在今年剩餘時間內專注於策略性成長和營運重點，在這方面我們一直非常活躍，就像我們今天在關於三大轉型的電話會議上談到的那樣。我認為它還沒有完全完成，但我們已經接近尾聲了。我們將嚴格控製成本。這顯然是一個非常不確定的時期。我們將控制我們能控制的事情，並且我們在第一季已經做了很多工作，這將是我們在第二季和今年剩餘時間持續關注的重點。

And from a tariff standpoint, it's obviously front and center to virtually every company and business in in North America and maybe around the world. We have an organization that is very aggressive on tariff management. This is mainly within the Velvac and Eberhard business. But I've been very impressed with the team's ability to manage that on an hour by hour and day by day business. I'm happy that through the first quarter they've been able to more or less neutralize the tariffs that we have seen come through. I'm not suggesting that that's going to completely be the case going forward, but the plans thus far have supported doing exactly that. And then in a related sense we're going to continue to have nimble supply chains. The efforts I touched on with regard to Velvac insourcing and ever hard having a number of efforts in adjusting our supply chain for our best use of success in the long run.

從關稅的角度來看，這顯然是北美乃至全世界幾乎所有公司和企業關注的焦點。我們有一個在關稅管理方面非常積極的組織。這主要發生在 Velvac 和 Eberhard 業務範圍內。但我對團隊逐小時、逐日管理業務的能力印象深刻。我很高興，在第一季度，他們已經能夠或多或少地抵消我們所看到的關稅。我並不是說未來的情況會完全如此，但迄今為止的計劃確實支持這樣做。從相關意義上講，我們將繼續擁有靈活的供應鏈。我談到了與 Velvac 內部採購有關的努力，以及我們為調整供應鏈所做的努力，以便從長遠來看最大限度地取得成功。

And then you know I'd like to close out with our balance sheet is in quite good shape and with that MMA is now a priority again. We're going to be extremely disciplined, but we're excited to start looking at deals come through here the remainder of the year and even into 2026. So, with that said, we look forward to giving you an update in Q2. If you have any additional questions or need any additional information, please don't hesitate to reach out. And with that I'll close the call and hand it back to Jenny, our operator.

然後你知道我想以我們的資產負債表狀況良好來結束，並且 MMA 現在再次成為優先事項。我們將非常自律，但我們很高興開始關註今年剩餘時間甚至 2026 年達成的交易。因此，我們期待在第二季為您提供最新消息。如果您有任何其他問題或需要任何其他信息，請隨時與我們聯繫。說完我就結束通話，並將電話交還給我們的接線生珍妮 (Jenny)。

Thank you so much, Ryan. That does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.

非常感謝，瑞安。今天的會議到此結束。您現在可以斷開電話線並享受美好的一天。我們感謝您的參與。