FGI Industries Ltd (FGI) 2023 Q4 法說會逐字稿

Good day and welcome to the FGI. Industries Fourth Quarter 2023 conference call.(Operator Instructions)

美好的一天，歡迎來到 FGI。產業 2023 年第四季電話會議。（操作員說明）

Please note this event is being recorded I would now like to turn the conference over to Paul Bartolai, Managing Director, Balan at Vallum Advisors. Please go ahead.

請注意，該活動正在錄製中，我現在想將會議轉交給 Vallum Advisors 的 Balan 董事總經理 Paul Bartolai。請繼續。

Thank you. Welcome to FGI Industries fourth quarter and full year 2023 results conference call. Leading the call today are President and CEO, David Bruce; and Chief Financial Officer, Perry Lin.

謝謝。歡迎參加 FGI Industries 2023 年第四季和全年業績電話會議。今天主持會議的是總裁兼執行長 David Bruce；和財務長 Perry Lin。

We issued a press release after the market closed yesterday, detailing our recent operational and financial results. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature are uncertain and outside of the company's control.

我們在昨天收盤後發布了一份新聞稿，詳細介紹了我們最近的營運和財務表現。我想提醒您，管理層在今天的電話會議上的評論和對問題的回答可能包括前瞻性陳述，這些陳述本質上是不確定的，超出了公司的控制範圍。

Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially for a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest filings with the SEC.

儘管這些前瞻性陳述是基於管理層目前的預期和信念，但由於對可能導致實際結果不同的一些因素的討論，實際結果可能會存在重大差異，請參閱我們向 SEC 提交的最新文件中的風險因素部分。

Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the press release issued yesterday and the appendix of this presentation, which is available on the company's website.

此外，請注意，您可以在昨天發布的新聞稿和本簡報的附錄中找到歷史非公認會計準則財務指標的調節表，這些附錄可在公司網站上找到。

Today's call will begin with a performance review and strategic update from David Bruce, followed by a financial review from Perry Lin. At the conclusion of these prepared remarks, we'll open the line for your questions.

今天的電話會議將首先由 David Bruce 進行績效評估和策略更新，然後由 Perry Lin 進行財務評估。在準備好的發言結束後，我們將開通您的提問專線。

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

這樣，我會將電話轉給戴夫。

Thanks, Paul. Good morning, everyone, and thank you for joining our call today. I am extremely pleased with our solid fourth quarter results and improved momentum as we enter 2024, we have seen inventory levels normalize, and we experienced improved order trends across our key businesses during the fourth quarter, due in large part to the investments we made in our organic growth initiatives throughout the year under our brands, products and channels or PPC strategy.

謝謝，保羅。大家早安，感謝您今天加入我們的電話會議。我對我們第四季度的穩健業績和進入2024 年時的成長勢頭感到非常滿意，我們看到庫存水準正常化，第四季度我們關鍵業務的訂單趨勢有所改善，這在很大程度上要歸功於我們在我們全年根據我們的品牌、產品和通路或 PPC 策略開展有機成長計劃。

The improved order momentum has carried into the early months of 2024, further bolstered by the resoundingly positive reception from customers to our groundbreaking products and engaging presentation at the recent Kitchen and Bath Show in Las Vegas, the largest event of its kind in North America.

訂單勢頭的改善一直持續到 2024 年初，客戶對我們的突破性產品的強烈反響以及最近在北美最大的同類活動拉斯維加斯廚房和浴室展上的精彩演示進一步推動了訂單勢頭的改善。

This recent success has not only reaffirmed our standing as a leader in the industry, but has also propelled us to new heights. Our participation in the kitchen and bath show was marked by the unveiling of our latest designs and technological breakthroughs, including our flash card anti overflow toilet designs, which garnered accolades by winning two prestigious awards.

最近的成功不僅重申了我們作為行業領導者的地位，而且還推動我們達到了新的高度。我們參加廚衛展的標誌是推出了我們的最新設計和技術突破，其中包括我們的閃卡防溢馬桶設計，贏得了兩個享有盛譽的獎項。

The enthusiastic response from attendees at Ciba's has sparked considerable interest and anticipation further cementing our reputation for innovation and excellence. These recent events give me continued confidence we are on track for significantly improved results in 2024. We experienced solid growth trends across most of our business portfolio during the fourth quarter, driven by improved order momentum, generally stable end market demand and normalization of inventory levels.

汽巴與會者的熱烈反響引發了極大的興趣和期待，進一步鞏固了我們創新和卓越的聲譽。最近發生的這些事件讓我繼續充滿信心，我們預計在 2024 年取得顯著改善的業績。在訂單勢頭改善、終端市場需求整體穩定和庫存水準正常化的推動下，我們的大部分業務組合在第四季度都經歷了穩健的成長趨勢。

Each of our business segments showed year-over-year growth during the fourth quarter, other than our best furniture segment, which continues to be impacted by demand weakness and a trade down to lower priced offerings. Total revenue ended down 2.6% in the fourth quarter.

我們的每個業務部門在第四季度都呈現同比增長，但我們最好的家具部門除外，該部門繼續受到需求疲軟和低價產品交易的影響。第四季總營收下降 2.6%。

Our ongoing focus on higher-margin products drove another quarter of strong gross margin improvement with fourth quarter gross margin increasing roughly 550-basis points to 29.2%, our highest quarterly gross margin result as a public company.

我們對高利潤產品的持續關注推動了毛利率又一個季度的強勁增長，第四季度毛利率增加了約 550 個基點，達到 29.2%，這是我們作為上市公司的最高季度毛利率結果。

This drove a 20.1% increase in gross profit during the fourth quarter. While the inventory destocking headwinds had been obscuring much of the progress during 2023, we continue to make progress on our growth initiatives. It is very exciting to see these efforts begin to show through in our results during the fourth quarter, and we expect to see more of this in the coming quarters.

這帶動第四季毛利成長20.1%。儘管去庫存的逆風掩蓋了 2023 年的大部分進展，但我們的成長計畫仍繼續取得進展。看到這些努力開始在第四季的業績中得到體現，我們感到非常興奮，我們預計在未來幾季會看到更多這樣的成果。

On our first call as a public company, two years ago, I introduced our long-term strategic plan to drive shareholder value that was based on driving organic growth through our BPC. strategy, enhanced margin performance and efficient capital deployment.

兩年前，在我們作為上市公司的第一次電話會議上，我介紹了我們旨在透過 BPC 推動有機成長的基礎上推動股東價值的長期策略計畫。策略、提高利潤率和高效率的資本配置。

While we faced many headwinds during 2023, I am very proud of our continued focus and execution against our strategic goals during the year. I would like to take this opportunity to walk through some of our key accomplishments during the fourth quarter and highlight some of our key strategic priorities for 2024.

儘管我們在 2023 年面臨許多阻力，但我對我們在這一年中持續關注和執行我們的策略目標感到非常自豪。我想藉此機會回顧我們在第四季度取得的一些主要成就，並重點介紹我們 2024 年的一些關鍵策略重點。

As it relates to our BPC program and our organic growth initiatives, we continued to make solid progress on our recently launched programs and new product offerings during the quarter. First, as we have discussed on recent calls, we entered into a licensing agreement that provides us access to an industry-leading overflow toilet technology, which we recently announced will be marketed as FlashCORE to overflow technology.

由於它與我們的 BPC 計劃和有機成長計劃相關，因此本季我們在最近推出的計劃和新產品方面繼續取得紮實進展。首先，正如我們在最近的電話會議中討論的那樣，我們簽訂了一項授權協議，為我們提供了業界領先的溢流馬桶技術，我們最近宣布該技術將作為 FlashCORE 溢流技術進行行銷。

During the fourth quarter, we were awarded product placements at several large customers, including two of the largest commercial distributors in North America. We exhibited a new line of retail and commercial sanitaryware products featuring flash guard at the 2024 kitchen and bath show. Additionally, FGI won first place a highly coveted design bites competition at KB is 2024 as the industry innovation with the biggest bite for its flash guard technology.

在第四季度，我們獲得了幾個大客戶的產品置入機會，其中包括北美兩家最大的商業經銷商。我們在 2024 年廚衛展上展示了一系列具有防閃功能的新零售和商業衛浴產品。此外，FGI 在 2024 年 KB 舉辦的一場備受矚目的設計競賽中獲得第一名，成為以其快閃記憶體保護技術最具影響力的產業創新。

Second, we continue to focus on initiatives to expand geographically with agreements providing entry into India, Eastern Europe, Australia and the UK. In the UK, we landed our first new customer partners in 2023, and we continue to build on these relationships with several major customer awards on the horizon in the UK, Germany and India across both our retail and wholesale channels. In the last month, we have entered into agreements with three new distributor partners in India.

其次，我們繼續關注透過提供進入印度、東歐、澳洲和英國的協議來擴大地域的舉措。在英國，我們在 2023 年找到了第一批新客戶合作夥伴，我們將繼續透過我們的零售和批發管道與英國、德國和印度即將獲得的幾個主要客戶獎項建立這些關係。上個月，我們與印度的三個新經銷商合作夥伴簽訂了協議。

And we have so we are excited by the opportunity to grow our product penetration with these partners and take advantage of the vast growth potential of the Indian market, and we look forward to continuing to grow our presence in these markets in the coming quarters and years.

因此，我們很高興有機會與這些合作夥伴一起提高我們的產品滲透率，並利用印度市場的巨大成長潛力，我們期待在未來幾個季度和幾年內繼續擴大我們在這些市場的影響力。

Third, we continue to execute on our recently announced program awards, including the online shower door program for an existing large Canadian retail partner that commenced in June 2023, and the rollout of our industry-leading shower oral program into as many as 300 locations of a large US retailer, our new jackpot shareable products where it hit among the cable show attendees. We expect these programs to continue to ramp up in 2024 driving further momentum into the new year.

第三，我們繼續執行最近宣布的計劃獎項，包括於2023 年6 月開始為加拿大現有大型零售合作夥伴推出的線上淋浴門計劃，以及在加拿大多達300 個地點推出我們行業領先的淋浴口腔計劃。一家美國大型零售商，我們的新大獎可共享產品在有線電視節目參與者中引起了轟動。我們預計這些計劃將在 2024 年繼續增加，為新的一年帶來更多動力。

Fourth, during the third quarter, we announced an in-store promotion with a large US retailer that did not previously carry any of our sanitaryware products to lay the groundwork for future growth. I'm excited to report that following a successful promotion, we placed several new sanitaryware SKUs with this retailer, which featured the new flash guard overflow technology. We look forward to continued growth with this new partner in the coming years.

第四，第三季度，我們宣布與美國大型零售商進行店內促銷，該零售商以前沒有銷售我們的任何衛浴產品，為未來的成長奠定基礎。我很高興地向大家報告，在成功促銷之後，我們向這家零售商投放了幾個新的衛浴潔具 SKU，其中採用了新的防溢流技術。我們期待在未來幾年與這個新合作夥伴繼續發展。

Finally, our custom Cabinetry business continues to grow rapidly. Our premium covered bridge brand added 203 new dealers during 2023, bringing our total active dealer count to 302. At the end of the year, we had a large display at the 2024 kitchen and bath show that showcased our covered bridge custom kitchen cabinetry line and the enormously positive feedback we received at the show gives us confidence that covered Bridge has increasingly strong growth momentum, all while contributing to the highest average gross margins across any of our product segments.

最後，我們的訂製櫥櫃業務持續快速成長。我們的優質廊橋品牌在 2023 年新增了 203 家經銷商，使我們的活躍經銷商總數達到 302 家。年底，我們在 2024 年廚衛展上進行了大型展示，展示了我們的廊橋定制廚房櫥櫃系列，我們在展會上收到的巨大積極反饋讓我們相信廊橋擁有越來越強勁的增長勢頭，同時為我們所有產品領域的最高平均毛利率做出貢獻。

We are also pleased to announce that I reported that our new digital custom kitchen cabinetry business has recently announced its soft launch with an official launch anticipated in the spring of 2024 by leveraging industry-leading AI software with our existing customer kitchen operations infrastructure and an unmatched commitment to premium on-trend products.

我們也很高興地宣布，據我報道，我們新的數位客製化廚房櫥櫃業務最近宣布軟啟動，預計將於2024 年春季正式啟動，利用業界領先的人工智慧軟體與我們現有的客戶廚房運營基礎設施和無與倫比的致力於優質流行產品。

We believe either quarter will reach new heights in terms of cabinetry, personalization, convenience and design. We are very excited by our progress on our strategic growth initiatives, which we expect to be a key driver of our improved results in 2024 and should help us drive above market organic growth in the coming years.

我們相信這兩個季度都將在櫥櫃、個人化、便利性和設計方面達到新的高度。我們對策略成長計畫的進展感到非常興奮，我們預計這將成為我們 2024 年業績改善的關鍵驅動力，並應幫助我們在未來幾年推動高於市場的有機成長。

Second, focus of our value creation strategy is on operating efficiency and driving margin expansion. We reported another quarter of strong year-over-year gross margin improvement, driven by our strategic decision to focus on higher-margin categories.

其次，我們價值創造策略的重點是營運效率和推動利潤率擴張。在我們專注於高利潤類別的策略決策的推動下，我們的毛利率又實現了同比強勁增長。

For the full year 2023, we reported gross margin of 27.4%, up nearly 800-basis points from 2022 despite the revenue headwinds.

儘管收入不利，但 2023 年全年毛利率仍為 27.4%，較 2022 年增長近 800 個基點。

Finally, our third focus is on efficient capital deployment. We made meaningful progress during 2023 in reducing our working capital usage, which resulted in improved free cash flow conversion and lower net debt levels. While debt repayment and investment in organic initiatives has been our main priority, we continue to evaluate opportunities for strategic bolt-on acquisition opportunities. As we survey 2024, we are excited by the growing momentum in our growth initiatives. The demand environment for the home improvement market remains uneven with several industry forecasters predicting modest declines in repair and remodel spending in 2024.

最後，我們的第三個重點是高效率的資本配置。2023 年，我們在減少營運資金使用方面取得了有意義的進展，從而改善了自由現金流轉換並降低了淨債務水準。雖然債務償還和有機計劃投資一直是我們的首要任務，但我們仍在繼續評估策略性補充收購機會。在展望 2024 年時，我們對成長計畫的不斷增長勢頭感到興奮。家居裝修市場的需求環境仍然不平衡，一些行業預測人士預測 2024 年維修和改造支出將小幅下降。

However, as Perry will discuss when he covers our 2024 outlook in more detail. Based on the progress of our recent product launches and new programs under our OBPPC strategy, we are confident we can generate above market growth in 2024, while we faced many market headwinds during 2023. I'm extremely proud of our team and our continued focus on our long term strategic objectives. This has positioned the company for a solid year in 2024 and continued success in the coming years.

然而，正如佩里在更詳細地介紹我們的 2024 年展望時將討論的那樣。根據我們最近在 OBPPC 策略下推出的產品和新計劃的進展，我們有信心在 2024 年實現高於市場的成長，儘管我們在 2023 年面臨許多市場阻力。我為我們的團隊以及我們對長期策略目標的持續關注感到非常自豪。這為公司在 2024 年奠定了堅實的基礎，並在未來幾年繼續取得成功。

With that, I will turn it over to Perry for a more detailed review of our financials.

這樣，我會將其轉交給佩里，以便對我們的財務狀況進行更詳細的審查。

Thank you, Dave, and good morning, everyone. I will provide some additional details on the quarter given an update on our liquidity and balance sheet and wrap it up with our full year 2024 guidance. Revenue totaled $31 million during the fourth quarter of 2023, a decrease of 2.6% compared to the prior year, driven by continued end market demand weakness in the best furniture market, partially offset by growth in sanitaryware shower system and kitchen cabinetry.

謝謝戴夫，大家早安。我將根據我們的流動性和資產負債表的最新情況提供有關本季度的一些其他詳細信息，並以我們的 2024 年全年指導來總結。2023 年第四季的收入總額為 3,100 萬美元，比前一年下降 2.6%，這是由於最佳家具市場的終端市場需求持續疲軟，但部分被衛生潔具淋浴系統和廚房櫥櫃的成長所抵消。

Looking at our business line, sanitary ware revenue was $20.6 million during the fourth quarter, up 1.8% from last year due to improved order pattern as our new programs are beginning to benefit results. US furniture revenue was $2.5 million during the fourth quarter, down from $6.1 million in the prior year period.

看看我們的業務線，第四季衛浴收入為 2,060 萬美元，比去年增長 1.8%，這是由於我們的新計劃開始受益，訂單模式有所改善。第四季美國家具收入為 250 萬美元，低於去年同期的 610 萬美元。

The bath furniture market continue to be impacted by macro headwinds and a down to lower ticket products. As we have discussed previously, we are launching product offering in the mid-tier category to better address current demand and hope to see improved trend in incoming quarters. Shower system revenue was $5.7 million during the first quarter, up 55% from revenue of $3.7 million last year.

浴室家具市場持續受到宏觀不利因素和低價產品的影響。正如我們之前所討論的，我們正在推出中端類別的產品，以更好地滿足當前需求，並希望在未來幾季看到趨勢的改善。第一季淋浴系統營收為 570 萬美元，比去年的 370 萬美元成長 55%。

The main change in the shower category remained steady and our recently launched programs are building momentum. We continue to expect this new program to drive improved trends into 2024 on a revenue, which consists primarily of the custom kitchen cabinetry business was $2.1 million during the first quarter, up from $1.7 million last year due to continued dealer growth and new product launches.

淋浴類別的主要變化保持穩定，我們最近推出的計劃正在形成勢頭。我們仍然預計，這項新計畫將推動2024 年的趨勢改善，第一季的營收（主要包括客製化廚房櫥櫃業務）為210 萬美元，高於去年的170 萬美元，原因是經銷商的持續成長和新產品的推出。

Gross profit was $9 million during the first quarter, an increase of 20.1% compared to last year, driven by strong growth in our higher margin product. As a result, gross profit margin improved to 29.2% of a roughly 550-basis point from the prior year. We expect our full year 2024 gross margin to be consistent with our strong gross margin performance generated during the full year 2023.

第一季毛利為 900 萬美元，比去年增長 20.1%，這得益於我們高利潤產品的強勁增長。結果，毛利率較上年提高約 550 個基點，提高至 29.2%。我們預計 2024 年全年毛利率將與 2023 年全年強勁的毛利率表現一致。

Our operating expenses increased to $7.8 million during the first quarter, up from $6.5 million last year due to ongoing investment in our growth initiatives, including marketing spending for the recently launched for Oshkosh, our Pro totally product line and expenses tied to new personal kitchen cabinetry business development opportunity.

第一季我們的營運費用從去年的650 萬美元增至780 萬美元，這是由於我們對成長計畫的持續投資，包括最近為Oshkosh 推出的行銷支出、我們的Pro 整體產品線以及與新個人廚房櫥櫃相關的費用業務發展機會。

GAAP operating income was $1.2 million during the fourth quarter, up 20% from income of $1 million last year. Excluding certain nonrecurring expenses adjusted operating income was $1.4 million during the fourth quarter. The increase in operating income was a result of our gross profit dollars, partially offset by higher operating expense tied to growth initiatives.

第四季 GAAP 營業收入為 120 萬美元，比去年的 100 萬美元成長 20%。排除某些非經常性費用，第四季調整後營業收入為 140 萬美元。營業收入的增加是我們毛利的結果，部分被與成長計畫相關的較高營業費用所抵銷。

Adjusted operating margin was 4.4% during the fourth quarter, flat to the same period last year. GAAP net income was $0.5 million or $0.05 per diluted share during the fourth quarter of 2023, down modestly from the same period last year.

第四季調整後營業利益率為 4.4%，與去年同期持平。2023 年第四季 GAAP 淨利為 50 萬美元，即稀釋後每股收益 0.05 美元，較去年同期小幅下降。

Now turning to balance sheet and our liquidity. As of December 31, 2023, the company had $7.8 million of cash and cash equivalents and total debt of $7 million. At the end of the quarter, we had $16.6 million of availability under our credit facilities. Net of letters of credit, combined with cash, total liquidity was $24.4 million at quarter end. We believe we are in a solid liquidity position that is more than sufficient to fund our growth initiatives.

現在轉向資產負債表和我們的流動性。截至2023年12月31日，該公司擁有780萬美元的現金和現金等價物，總債務為700萬美元。截至本季末，我們的信貸額度下有 1,660 萬美元的可用資金。扣除信用狀和現金後，截至季末的流動資金總額為 2,440 萬美元。我們相信，我們的流動性狀況良好，足以為我們的成長計畫提供資金。

Finally, turning to guidance. As our growth investment continued to gain momentum and inventory levels has normalized, we expect to return to organic growth in 2024 despite our expectation that a market are flat to down modestly.

最後，轉向指導。隨著我們的成長投資繼續獲得動力並且庫存水準已經正常化，儘管我們預計市場將持平或小幅下滑，但我們預計將在 2024 年恢復有機成長。

In addition, we expect to continue to increase our growth in investment to take advantage of attractive opportunity under our PPC. strategy. Based on these factors, we are providing initial 2024 guidance for revenue in the range of $115 million to 1$28 million, adjusted operating income in the range of $2.8 million to $3.8 million and adjusted net income of between $1.2 million to $2 million.

此外，我們預計將繼續增加投資成長，以利用 PPC 下有吸引力的機會。戰略。基於這些因素，我們提供的 2024 年初步指引收入為 1.15 億美元至 1.28 億美元，調整後營業收入為 280 萬美元至 380 萬美元，調整後淨利為 120 萬美元至 200 萬美元。

Please note that the guidance for the net income and adjusted operating income is provided on an adjusted basis and excludes certain nonrecurring items.

請注意，淨利潤和調整後營業收入的指導是在調整後的基礎上提供的，不包括某些非經常性項目。

That accompanies our prepared remarks. Operator, we are now ready for the question and answer portion of our call.

這是我們準備好的評論。接線員，我們現在已準備好進行通話的問答部分。

We will now begin the question and answer session. (Operator Instructions)

我們現在開始問答環節。（操作員說明）

Reuben Garner, The Benchmark Company.

魯本·加納，基準公司。

Good morning, guys. So a pretty strong outlook from a top line perspective that come here despite what seems to continue to be kind of a sluggish environment, at least on the retail front. Can you talk about what your end market assumptions are within this outlook?

早上好傢伙。因此，從營收角度來看，儘管環境似乎仍然低迷，至少在零售方面，但前景相當強勁。您能否談談您對這一前景的最終市場假設是什麼？

And then you've got a lot of moving pieces with new business and new geographies and new customers. Like is there any way to quantify just how much you have kind of within your control over the next 12 months?

然後你就會得到很多新業務、新地區和新客戶的動態。有沒有什麼方法可以量化您在未來 12 個月內可以控制的程度？

Yes, it's a good question. Thanks. And yes, I mean, we've been talking for some time about our ability or at least our intent to grow organically initially, especially with a lot of newer businesses from executing the BPC. strategy with newer products, which we highlighted today. As an example, our recent technological advances in the toilet for N. is in addition to that, our channel expansions, which we've talked about with Europe and India.

是的，這是一個好問題。謝謝。是的，我的意思是，我們已經討論了一段時間我們的能力，或者至少是我們最初有機成長的意圖，特別是透過執行 BPC 來發展許多新業務。我們今天強調的新產品策略。舉個例子，除了我們最近與歐洲和印度討論過的渠道擴張之外，我們最近在 N. 廁所方面取得了技術進步。

And you know, as far as how does that relate to what we see in the market as we mentioned the market. There's a lot of market forecasting right now that is looking at the particularly the R&R market as being flat or down low to mid-single digits. But our expectation is based on the new programs that we're starting to execute, what you saw some of the results of that in Q4 that we should be able to outpace that down or estimated moderating market with by taking some share and instituting new programs, which will give us incremental new business opportunities.

你知道，這與我們在市場上看到的情況有什麼關係，就像我們提到的市場一樣。目前有許多市場預測認為，特別是 R&R 市場將持平或下降至中個位數。但我們的期望是基於我們開始執行的新計劃，您在第四季度看到的一些結果，我們應該能夠通過佔據一些份額並製定新計劃來超越下降或估計放緩的市場，這將為我們帶來增量新的商機。

And that's, again, some of that what sort of impact that as we if we go back to the end of the prior 2022 into 2023 with destocking, right. And we talked about that and we don't see that having any material impact on our business in 2024. So again, it's a matter of timing and execution on these new programs, which have started to impact our business positively and that's how we sort of see the balance between our organic growth with those new programs and also in the face of a flat to slightly down market overall.

再說一次，如果我們回到 2022 年底到 2023 年去庫存，會產生什麼樣的影響，對吧。我們討論過這個問題，但我們認為這不會對我們 2024 年的業務產生任何實質影響。因此，這又是這些新計劃的時機和執行問題，它們已經開始對我們的業務產生積極影響，這就是我們如何看待我們的有機增長與這些新計劃之間的平衡，以及面對持平或略有下降的情況。市場整體下跌。

Okay, great. And then, Tom, can you talk about how pricing has, I guess trended or what the full impact of pricing was in 2023 and sort of what expectation is embedded in your outlook for 2024?

好的，太好了。然後，Tom，您能談談定價的趨勢嗎？我猜是定價趨勢，或者定價對 2023 年的全面影響是什麼，以及您對 2024 年的展望有何期望？

Yes, we don't we don't anticipate that pricing is going to be a material impact either way. In 2024, no adjustments were weighed and were made in 2023, as we know, a large proportion of pricing and 2023 emanated from freight costs.

是的，我們不認為定價會產生實質影響。2024年沒有權衡調整，2023年也沒有進行調整，據我們所知，定價和2023年的很大一部分來自運費成本。

That being said, our freight has ramped up a bit so far this year, and we're going to keep an eye on that. And our belief and our estimates are that things should even out as we go through the middle part of the year. And as you know, there is no way to guarantee that price won't come into play, you know, should cost Elevate. But as of as of our, you know, our look into 2024.

話雖這麼說，今年到目前為止我們的貨運量有所增加，我們將密切關注這一情況。我們的信念和估計是，隨著年中的到來，情況應該會趨於平穩。如您所知，沒有辦法保證價格不會發揮作用，您知道，應該花費 Elevate。但截至我們對 2024 年的展望。

At this point, we don't anticipate price playing a major factor either.

目前，我們預期價格也不會成為主要因素。

And then a two-part question here on your operating expenses last year, I think was kind of viewed as a year of investment in spite of plus on end market. And looks like you're if I'm doing the math correctly, kind of sustaining that level of spending on this year. Am I thinking about that the right way? Was there any one-time expenditures last year that are maybe a little bit more permanent or are there just new one-time expenditures.

然後是關於去年的營運費用的兩部分問題，我認為儘管終端市場有所增加，但去年仍被視為投資的一年。如果我計算正確的話，看起來你今年的支出水準可以維持下去。我的思考方式正確嗎？去年是否有任何一次性支出可能是永久性的，或者只是有新的一次性支出。

And the second part of the question is how do we think about that, that long term in terms of your percentage of revenue, I mean, when you first came public, it was in the kind of mid keen now it's been kind of consistently in the mid-20s the last couple of years or last year. And sounds like going into this year. Is that something that will trend back lower at some point? Are you more focused on kind of investments to grow and to drive that higher gross margin than fast.

問題的第二部分是我們如何看待這個問題，從長遠來看，就你的收入百分比而言，我的意思是，當你第一次上市時，它處於一種中期熱衷，現在它一直在持續增長。過去幾年或去年 20 年代中期。聽起來像是要進入今年。是否會在某個時候回落？您是否更專注於成長和提高毛利率的投資而不是快速投資。

Yes, yes. You just finish on what I was going to sort of lead into. So you're 100%, correct. And we've cited the fact that our gross margin expansion is sort of muted when you look at the OpEx impact to our to our gross. But that's exactly what we're trying to do. We're not necessarily on I'm not necessarily targeting a percentage per se. Right now, the key is that we're trying to prepare ourselves for the growth that we're investing in.

是的是的。你只需完成我要引導的內容。所以你是100%正確的。我們已經提到了這樣一個事實，當你看看營運支出對我們毛利率的影響時，我們的毛利率擴張有點緩慢。但這正是我們正在努力做的事情。我們不一定要以百分比為目標。目前，關鍵是我們正在努力為我們投資的成長做好準備。

And we know that I can't give you a particular number, but we know we can scale this business well beyond where we're at today with the majority of the infrastructure we have in place now, right? So we're sort of we're sort of prepping ourselves for that in some sense if you want to call that some of those investments are obviously tied directly to and new business opportunities expanding in Europe, expanding in India, the new digital kitchen venture, for example, marketing for our new toilet innovation.

我們知道，我無法給你一個具體的數字，但我們知道，利用我們現在擁有的大部分基礎設施，我們可以將這項業務擴展到遠遠超出我們今天的水平，對嗎？因此，如果你想稱其中一些投資顯然與在歐洲擴張、在印度擴張、新的數位廚房企業直接相關的新商機有關，那麼從某種意義上說，我們正在為此做好準備。例如，我們的新型廁所創新的營銷。

So those are things that we're going to that we're investing in that a lot of those you won't see when it comes to expansion and geographical markets as we've already pretty much dove into that. You know, there will be marketing expenses related to that, but that will all be a commensurate with new business, right? So to answer the overall answer to that question is, as we scale the business with the infrastructure we have in place, the percentage of the OpEx will slowly drop because we believe we have a lot of elasticity between the investment right now, the operator of a lot of operating leverage between what we have in place versus where we can go with that.

因此，這些都是我們將要投資的事情，其中​​許多在擴張和地理市場方面是你看不到的，因為我們已經投入了大量精力。你知道，會有與此相關的行銷費用，但這都與新業務相稱，對吧？因此，要回答這個問題的總體答案是，隨著我們利用現有基礎設施擴展業務，營運支出的百分比將慢慢下降，因為我們相信現在的投資、運營商之間有很大的彈性。我們現有的與我們可以採取的措施之間存在著很大的營運槓桿。

Yes, I think Reuben, I mean, you know where, you know, we are looking at all banks. I think the overall goal our goal is to drive the gross margin dollar also, you know, maintain that reasonable. I'll back to spending on, you know, the end game is kind of, you know, increase our operating income percentage. That's what we are doing and currently in future.

是的，我認為魯本，我的意思是，你知道我們在哪裡尋找所有銀行。我認為我們的總體目標是提高毛利率，並保持合理水準。我會回到支出上，你知道，最終的遊戲是增加我們的營業收入百分比。這就是我們現在和未來正在做的事情。

Congrats on the close of the year and good luck in 2024.

恭喜今年結束，祝 2024 年好運。

Greg Gibas, Northland Securities.

吉巴斯 (Greg Gibas)，北國證券。

Hey, good morning, Dave and Perrin. Thanks for taking the questions. Wondering and if I could follow up on the gross margin side really nice. I mean, I think you said highest gross margin in the company's public history of 550-basis points year over year. What were the primary drivers of that improvement? And do you view those improved margins are sustainable or do you kind of see upside from here on it? Just kind of wondering how you expect those to trend and where you're seeing maybe opportunity for improved margin?

嘿，早上好，戴夫和佩蘭。感謝您提出問題。想知道我是否可以跟進毛利率方面的情況，真的很好。我的意思是，我認為您所說的毛利率是該公司公開歷史上最高的，年增 550 個基點。這種改進的主要驅動因素是什麼？您是否認為利潤率的提高是可持續的，或者您認為這有什麼好處嗎？只是想知道您期望這些趨勢如何以及您在哪裡看到可能提高利潤的機會？

Yes. That's a good question. So yes, in the short term, I think I mentioned in the release that we definitely anticipate that we'll be able to maintain our gross margin posture like as far as what we averaged in 2023. We did have a great Q4. I'm not sure that the Q4 number is a realistic sustainable gross margin for 2024.

是的。這是個好問題。所以，是的，從短期來看，我想我在新聞稿中提到，我們肯定預計我們將能夠維持我們 2023 年平均毛利率的狀況。我們確實有一個很棒的第四季。我不確定第四季的數字是否是 2024 年現實的可持續毛利率。

However, that being said, we do expect to continue to grow our margins because a lot of our growth is coming from higher-margin categories, which we've emphasized a lot of kitchens is probably the best example. That's our highest margin business that we have. We continue to expand. I mean the reaction to our kitchen exhibition cables was phenomenal.

然而，話雖這麼說，我們確實希望繼續增加利潤，因為我們的大部分成長來自利潤率較高的類別，我們強調的許多廚房可能就是最好的例子。這是我們利潤率最高的業務。我們繼續擴張。我的意思是，人們對我們廚房展覽電纜的反應是驚人的。

Our Shaver business continues to grow. We keep adding new product, growing the margin there than as we've talked about over the last couple of years. Some dollars of gross margin dollars are a key focus for us as well. And as a lot of the sanitaryware shakeout in the industry moderates as far as inventory levels and on ordering cadence, you know, as we see that come back to life, that's going to contribute to the dollar side as well. So as we scale the business, we really do feel we'll be able to improve gross margin going forward in the short and the long term.

我們的剃須刀業務持續成長。我們不斷增加新產品，增加利潤，比我們過去幾年談論的要高。毛利率中的一些美元也是我們關注的重點。隨著該行業許多衛生潔具的庫存水準和訂購節奏的調整有所緩和，正如我們所看到的那樣，這也將有助於美元的上漲。因此，隨著我們擴大業務規模，我們確實認為我們將能夠在短期和長期內提高毛利率。

Makes sense on core. And then I wanted to follow up. I know we've talked about this for several quarters now, but where categories are I guess exactly what categories are you seeing destocking maybe persist longer than you anticipated or even worsen, but then maybe where are you seeing some improvements? I'm just wondering if you could address those.

核心上有道理。然後我想跟進。我知道我們已經討論了這個問題好幾個季度了，但我猜你到底看到哪些品類去庫存的時間可能比你預期的持續時間更長，甚至更糟，但也許你在哪裡看到了一些改進？我只是想知道你能否解決這些問題。

Yes. I mean, I think I just briefly mentioned we don't really see any material impact to our results this year from destocking, the destocking has pretty much normalized across the industry. That being said, it doesn't mean there's local little small pockets of certain customers with certain categories. But from a material aspect to our business, it's going to be minimal.

是的。我的意思是，我想我只是簡單地提到，我們並沒有真正看到去庫存對我們今年的業績產生任何實質性影響，去庫存在整個行業已經基本正常化。話雖這麼說，但這並不意味著某些特定類別的本地客戶有一小部分。但從我們業務的物質方面來看，這將是最小的。

I think I think the difference this year, and I think I touched upon this on last quarter, you know, retail and wholesale, while their inventory levels have normalized, they're also looking at a more conservative base level inventory. So that's just cautionary based on what I mentioned earlier, as they know that the market, their forecasts are flat to slightly down. So their inventory levels are going to be looked at with a little more scrutiny.

我想我認為今年的差異，我想我在上個季度談到了這一點，你知道，零售和批發，雖然他們的庫存水平已經正常化，但他們也在考慮更保守的基本庫存水平。因此，根據我之前提到的內容，這只是一個警告，因為他們知道市場，他們的預測持平或略有下降。因此，他們的庫存水準將受到更嚴格的審查。

So I don't think you're going to see the big spikes, obviously, that we saw in 2020, 2021 and 2022 and everybody's fret over that when they when they go through something like that. So but that being said, there's no abnormality to what I believe we're going to see from an ordering perspective. It's just going to be a little bit more conservative with a little bit lower inventory levels. But for the most part, everybody is sort of there.

因此，我認為你顯然不會看到我們在 2020 年、2021 年和 2022 年看到的大幅增長，每個人在經歷類似的事情時都會對此感到擔憂。話雖這麼說，我相信從訂購的角度來看我們將看到的情況並沒有什麼異常。只是會更保守一點，庫存水準稍微低一點。但在大多數情況下，每個人都在那裡。

So I think that was the key in the middle of last year people weren't there yet, and the destocking was impacting order cadence. But I think as we head into the beginning at Abbott, as we've headed into this year and as we go into the middle part of the year. I think that where you're not going to hear us talk about destocking has an impact of business.

所以我認為這是去年年中的關鍵，人們還沒有到那裡，去庫存正在影響訂單節奏。但我認為，當我們進入雅培的年初時，當我們進入今年時，當我們進入今年中期時。我認為，如果你不會聽到我們談論去庫存，就會對業務產生影響。

Okay, sounds good. And you know, I guess lastly, just to follow up on your commentary on your strategic bolt-on opportunities, one, what types of opportunities are you thinking about or evaluating on and do valuation multiples make sense in a way are reasonably attractive?

好的聽起來不錯。我想最後，為了跟進您對策略附加機會的評論，第一，您正在考慮或評估哪些類型的機會，估值倍數是否在某種程度上具有合理吸引力？

Yes, I think it's a good question because I know we had a year and a half ago, there was there was a little bit more what I would call a flurry of activity with opportunities that came across our desk. We came close on one or two. They didn't pan out and didn't meet some of the requirements that we had set for ourselves and then it got quiet.

是的，我認為這是一個很好的問題，因為我知道一年半前，我們的辦公桌上出現了更多我所說的一系列活動和機會。我們已經接近一兩個了。他們沒有成功，也沒有達到我們為自己設定的一些要求，然後就安靜了。

And then I think obviously it got quiet because, you know, 2023 was sort of a rough year for people again with inventory destocking and just a very uneven market. But we are engaging in some more conversations today. And I think when you look at the multiples, yes, because you have to look at some historical, it's been a rough couple of years to sort of and gauge what the value of the company is.

然後我認為顯然它變得安靜了，因為，你知道，2023 年對人們來說又是艱難的一年，庫存去化和市場非常不平衡。但我們今天正在進行更多對話。我認為，當你查看市盈率時，是的，因為你必須查看一些歷史數據，這幾年是艱難的時期，需要對公司的價值進行排序和衡量。

So I think part of our strength here is that we are not looking to add bolt-on opportunities for companies that are outside of our what I would call our categorical dominance, which is bath and kitchen right. So we many of the companies that we might look at are related to our industry quite tight. And if it's not the same product, it's a related product category, maybe in a different channel.

因此，我認為我們的優勢之一是，我們不希望為那些不在我們的絕對主導地位（即浴室和廚房領域）之外的公司增加補充機會。因此，我們可能關注的許多公司與我們的行業關係非常密切。如果不是同一產品，則可能是相關的產品類別，可能在不同的管道中。

So I think we have enough information based on our industry experience. And then, of course, with Perry reviewing the financials and looking at how we're going to judge those multiples, I think we'll be able to make wise decisions as we move forward. And hopefully, like I said, we've been a little bit more involved in the last several months. So hopefully, Bill, something will come to fruition.

所以我認為根據我們的行業經驗，我們有足夠的資訊。當然，隨著佩里審查財務狀況並考慮我們將如何判斷這些倍數，我認為我們將能夠在前進的過程中做出明智的決定。希望，就像我說的，我們在過去幾個月有更多的參與。所以，比爾，希望事情能夠有成果。

Thanks for the color.

謝謝你的顏色。

This concludes our question and answer session. I would like to turn the conference back over to Dave Bruce, for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給戴夫·布魯斯，讓他發表閉幕詞。

Thank you for the time and interest today. We appreciate your continued support of FGI. Stay well, and if we don't connect during the quarter. We look forward to speaking with you on our next quarterly call. Thank you.

感謝您今天的時間和興趣。我們感謝您對 FGI 的持續支持。保持健康，如果我們在本季沒有聯繫的話。我們期待在下一次季度電話會議上與您交談。謝謝。

Thank you.

謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。