KORU Medical Systems Inc (KRMD) 2022 Q4 法說會逐字稿

Greetings, and welcome to KORU Medical Systems Fourth Quarter and Full Year 2022 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 KORU Medical Systems 第四季度和 2022 年全年收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。

It is now my pleasure to introduce your host, Hannah Jeffrey of The Gilmartin Group. Thank you. You may begin.

現在我很高興向您介紹主持人，吉爾馬丁集團的漢娜杰弗裡。謝謝。你可以開始了。

Thank you, Doug, and good afternoon, everyone. Earlier today, KORU Medical Systems released financial results for the fourth quarter and full year ended December 31, 2022. A copy of the press release is available on the company's website. During this call, we will make certain forward-looking statements regarding our business plans, financial guidance and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to many risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements.

謝謝你，道格，大家下午好。今天早些時候， KORU Medical Systems 發布了截至2022年12月31日的第四季度和全年的財務業績。新聞稿的副本可在公司網站上獲取。在此次電話會議中，我們將就我們的業務計劃、財務指導和其他事項做出某些前瞻性陳述。這些評論基於我們截至今天的預測和期望。由於許多風險和不確定性，包括相關新聞稿和我們最近向美國證券交易委員會提交的文件中提到的風險和不確定性，實際事件或結果可能存在重大差異。我們不承擔更新任何前瞻性陳述的義務。

I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter and year and financial guidance for 2023. During the call, management will discuss certain non-GAAP financial measures in our press release and accompanying investor presentation and our filings with the SEC, each of which are posted on our website. You will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures with comparable GAAP measures in our press release and accompanying investor presentation and those filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, March 8, 2023, at approximately 4:30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed. And please reference the company's most recent press release and filings with the SEC.

我鼓勵聽眾將我們的新聞稿放在你們面前，其中包括我們的財務業績以及對季度和年度的評論以及 2023 年的財務指導。在電話會議期間，管理層將在我們的新聞稿中討論某些非 GAAP 財務指標以及隨附的投資者介紹和我們向美國證券交易委員會提交的文件，每一項都發佈在我們的網站上。您將在我們的新聞稿和隨附的投資者介紹以及這些文件中找到有關非 GAAP 措施的額外披露，包括這些措施與可比的 GAAP 措施的調節。為了收聽重播的人的利益，本次電話會議於 2023 年 3 月 8 日星期三下午 4:30 左右舉行並進行了錄音。東部時間。從那時起，該公司可能就所討論的主題發表了更多評論。請參考公司最近的新聞稿和提交給美國證券交易委員會的文件。

Joining us on today's call is Linda Tharby, President and CEO of KORU Medical Systems; and Tom Adams, KORU Medical's Interim Chief Financial Officer. Linda, please go ahead.

KORU Medical Systems 總裁兼首席執行官 Linda Tharby 與我們一起參加今天的電話會議； KORU Medical 的臨時首席財務官 Tom Adams。琳達，請繼續。

Thank you, Hannah. Good afternoon, everyone, and thank you for joining us today. During today's call, we will use slides to support our commentary. I will begin with the business update of the fourth quarter and full year '22, focusing on the company's progress towards our Vision '26 business strategy. I will then turn the call over to Tom to discuss the quarterly financials before ending with our '23 guidance. After concluding our prepared remarks, Tom and I will then be happy to open the call up for Q&A.

謝謝你，漢娜。大家下午好，感謝您今天加入我們。在今天的電話會議中，我們將使用幻燈片來支持我們的評論。我將從第四季度和全年 '22 的業務更新開始，重點介紹公司在實現我們的 Vision '26 業務戰略方面的進展。然後我會把電話轉給湯姆討論季度財務，然後以我們的 23 年指導結束。在結束我們準備好的發言後，湯姆和我將很樂意打開問答環節。

In December of '21, we communicated a 5-year strategy that we called Vision '26. This vision, which we have made significant progress on in '22, is driven by a 3-pillar growth strategy that will remain our focus in 2023. The first pillar is increasing our leadership position in a growing subcutaneous immunoglobulin or SCIg market through a focus on expanding our label indications, new patient starts and driving prefill adoption. Second is expanding our current leadership position in large-volume drug delivery in the home to new drugs, the business we call Novel Therapies. Finally, expanding both of these businesses into international markets.

在 21 年 12 月，我們傳達了我們稱為 Vision 26 的 5 年戰略。我們在 22 年取得了重大進展的這一願景是由三支柱增長戰略推動的，該戰略仍將是我們在 2023 年的重點。第一個支柱是通過專注於提高我們在不斷增長的皮下免疫球蛋白或 SCIg 市場中的領導地位在擴大我們的標籤適應症、新患者開始和推動預填充採用方面。其次是將我們目前在家庭大量給藥方面的領導地位擴大到新藥，我們稱之為新療法的業務。最後，將這兩項業務擴展到國際市場。

Supporting our 3 growth pillars is a foundation rooted in innovation, quality and regulatory expertise, and operational excellence. 2022 has been a tremendous year as we advanced several key milestones in our Vision '26 strategy and strengthen our position as a leader in drug delivery solutions in the home. Vision '26 focuses on growth and TAM expansion with specific commitments to accelerate revenues to a 20% revenue CAGR, reaching approximately $60 million by '26. This will be accomplished through a strategy to grow our core business revenue by double digits and through transforming the business from an Ig player to a broad drug delivery partner, with an investment in our Novel Therapies business.

支持我們三大增長支柱的是植根於創新、質量和監管專業知識以及卓越運營的基礎。 2022 年是意義非凡的一年，因為我們在 Vision '26 戰略中推進了幾個關鍵里程碑，並鞏固了我們作為家庭藥物輸送解決方案領導者的地位。 Vision '26 側重於增長和 TAM 擴張，並具體承諾將收入加速到 20% 的複合年增長率，到 '26 年達到約 6000 萬美元。這將通過將我們的核心業務收入增長兩位數的戰略以及通過將業務從 Ig 播放器轉變為廣泛的藥物輸送合作夥伴以及對我們的新療法業務的投資來實現。

Within this Novel Therapies business, we committed to signing multiple new drug delivery collaborations that would lead to 5 Phase III trials and 1 commercialized new drug indication. In addition, we committed to 8 new 510(k) products and/or indications and a $1.3 billion TAM. Lastly, we committed to doing this with a disciplined investment strategy aimed at innovation, commercial investments and strengthening our foundation. I am very proud of our progress in 2022, our first year against these key milestones. We posted year-over-year revenue growth of 19%, marking our fifth consecutive quarter of double-digit growth. We saw strength across the portfolio, including double-digit growth in our U.S. core outperforming the market, and our international core business, we saw double-digit growth in the back half as we increased our focus there.

在這個新療法業務中，我們承諾簽署多項新藥遞送合作，這將導致 5 項 III 期試驗和 1 項商業化新藥適應症。此外，我們承諾開發 8 種新的 510(k) 產品和/或適應症以及 13 億美元的 TAM。最後，我們承諾通過旨在創新、商業投資和鞏固我們基礎的紀律嚴明的投資戰略來做到這一點。我為我們在 2022 年取得的進展感到非常自豪，這是我們實現這些關鍵里程碑的第一年。我們的收入同比增長 19%，標誌著我們連續第五個季度實現兩位數增長。我們看到了整個投資組合的實力，包括我們的美國核心業務表現優於市場的兩位數增長，以及我們的國際核心業務，我們在後半部分看到了兩位數的增長，因為我們增加了對那裡的關注。

The more transformational part of our growth has been the increase in our novel therapies pipeline and associated total addressable market. Novel Therapies was a key driver of our year-over-year revenues. We ended '22 with 14 total collaborations across 7 drug categories, supporting a broader movement to subcu drug delivery in the home. This included one collaboration that progressed through the pipeline to a commercial launch, Apellis' Empaveli or Aspaveli outside the U.S.

我們增長中更具變革性的部分是我們新療法管道和相關總潛在市場的增加。新療法是我們同比收入的主要推動力。我們在 22 年結束時在 7 個藥物類別中進行了 14 次合作，支持更廣泛的家庭 subcu 藥物輸送運動。這包括一項通過管道進展到商業發布的合作，即 Apellis 的 Empaveli 或 Aspaveli 在美國以外的地區。

Most importantly, these 14 total collaborations give us confidence in our target of 5 Phase III trials by '26 and in exceeding our target of one new commercial drug indication. The total of our collaborations to date has doubled the potential of our total addressable market to $2.5 billion, well in excess of the $1.3 billion target. We also committed to doing this with a disciplined investment strategy. This year, we focused the majority of our investments in 3 areas: expanding our innovation capabilities, increasing our business development and commercialization efforts, and building a stronger foundation with the move to new facilities.

最重要的是，這 14 項總合作讓我們對我們在 26 年前完成 5 項 III 期試驗的目標充滿信心，並超越了我們的一種新商業藥物適應症的目標。迄今為止，我們的合作總額已使我們潛在市場的潛力翻了一番，達到 25 億美元，遠超 13 億美元的目標。我們還致力於通過嚴格的投資策略來做到這一點。今年，我們將大部分投資集中在 3 個領域：擴大我們的創新能力，加大我們的業務開發和商業化力度，以及通過遷移新設施來建立更堅實的基礎。

We did all of this while keeping an eye on cash and ending the year with $17.4 million, an increase from the third quarter and ahead of our guidance of $16 million. We executed with diligent cash management, while investing where needed to support growth. We have made significant strides towards Vision '26, over performing in the first year of our plan with clear progress towards our '26 milestones.

我們在做所有這些的同時密切關注現金，並在年底以 1740 萬美元結束了這一年，比第三季度有所增加，超過了我們 1600 萬美元的指導。我們執行勤奮的現金管理，同時在需要支持增長的地方進行投資。我們在實現 Vision '26 方面取得了重大進展，超過了我們計劃第一年的表現，在實現我們的 '26 里程碑方面取得了明顯進展。

In our U.S. business, we focused on growing our leadership position in the SCIg drug market. We outperformed the underlying market growth, growing 11% despite a supply interruption in the second and third quarters. We have used the underlying drug market growth as a marker of our success and a target for which we strive to outperform. For the full year '22, the SCIg drug market grew 8%, up from 2% growth in '21. We are excited by the positive momentum in the overall market to end the year, including fourth quarter reported script growth of 17% and SCIg drug market growth of roughly 12%.

在我們的美國業務中，我們專注於提升我們在 SCIg 藥物市場的領導地位。儘管第二和第三季度供應中斷，但我們的表現優於基礎市場增長，增長了 11%。我們將潛在的藥物市場增長作為我們成功的標誌和我們努力超越的目標。在 22 年全年， SCIg 藥物市場增長了 8%，高於 21 年的 2%。我們對年底整體市場的積極勢頭感到興奮，包括第四季度報告的劇本增長 17% 和 SCIg 藥物市場增長約 12%。

As we have communicated, we generally see a one-quarter lag from the script timing to our revenues, accounting for the timing it takes to get the patient operational with the KORU FREEDOM System in the home. We are excited by the fourth quarter drug and script market growth, and we anticipate a strong start to '23. At the end of '22, 16% of total patients are now on subcu drug therapy in the home, representing growing trend as SCIg therapy is outpacing IVIg therapy.

正如我們所傳達的那樣，我們通常會看到從腳本時間到我們的收入有四分之一的滯後，這說明了讓患者在家中使用 KORU FREEDOM 系統所需的時間。我們對第四季度藥品和腳本市場的增長感到興奮，我們預計 23 年會有一個強勁的開端。 22 年底，總患者中有 16% 現在在家中接受亞微藥物治療，這代表了隨著 SCIg 治療超過 IVIg 治療的增長趨勢。

New patients continue to be a primary focus for the company, and we remain uniquely positioned to capitalize on new patient starts with the broadest on-label indications in the market. To date, KORU Medical has 9 on-label indications with 5 different partners. In the past 18 months, we have added 4 new labels, 2 with Octapharma and Grifols for Ig, 1 for prefilled syringes with CSL and 1 for a non-Ig label this year, Apellis' Empaveli. Increasing our on-label indications and new patient starts, we'll remain a core part of our strategy.

新患者仍然是公司的主要關注點，我們仍然處於獨特的地位，可以利用市場上最廣泛的標籤上適應症的新患者開始。迄今為止，KORU Medical 與 5 個不同的合作夥伴有 9 個標籤適應症。在過去的 18 個月裡，我們添加了 4 個新標籤，2 個帶有 Ig 的 Octapharma 和 Grifols，1 個用於帶有 CSL 的預裝注射器，1 個用於今年的非 Ig 標籤，Apellis 的 Empaveli。增加我們的標籤適應症和新患者開始，我們將仍然是我們戰略的核心部分。

And finally, since receiving our FDA clearance of our FreedomEdge system for use with prefilled syringes in November of '21, we have seen the prefill market grow from approximately 3% penetration to 10% of the total market in '22, ending the fourth quarter with roughly 12% penetration. We also tracked this growth with doubling of our FreedomEdge pumps. Although still in its early stages and with current prefilled syringe sizes, supporting about 1/3 of the market, we continue to see an opportunity to grow our share and drive increased conversion to subcu therapy through ease of use and patient preference for prefilled syringes. We anticipate additional PFS indications to come to the market in the near future, and we remain well positioned to capitalize on this growth.

最後，自從 21 年 11 月我們的 FreedomEdge 系統獲得 FDA 批准用於預裝注射器以來，我們已經看到預裝市場在 22 年的滲透率從大約 3% 增長到整個市場的 10%，截至第四季度滲透率約為 12%。我們還通過將 FreedomEdge 泵增加一倍來跟踪這種增長。儘管仍處於早期階段並且目前的預裝注射器尺寸支持大約 1/3 的市場，但我們繼續看到增加份額的機會，並通過易於使用和患者對預裝注射器的偏好來推動更多的皮下治療轉化。我們預計在不久的將來會有更多的 PFS 適應症進入市場，並且我們仍然有能力利用這一增長。

In our geographic expansion efforts, we have seen positive momentum with 8% year-over-year growth in our international core business, driven by an impressive second half growth of 15% as we accelerated and focused our efforts internationally. We currently have distribution in over 25 countries, providing immediate leverage as our pharma partners expand their ex-U.S. indication. As plasma shortages alleviate in '22, we also see a growing Ig drug supply ex-U.S. in '23. New patient starts is an essential driver of both our core and international business, we continue to increase efforts to deepen relationships with our global pharma partners and to work together to capture the various opportunities across countries. Notably, in '22, we saw one new drug launch, Aspaveli in multiple international markets, and we anticipate further geographic launches in '23.

在我們的地域擴張努力中，我們看到了積極的勢頭，我們的國際核心業務同比增長 8%，這得益於我們在國際上加速和集中努力的下半年令人印象深刻的 15% 的增長。我們目前在超過 25 個國家/地區設有分銷點，在我們的製藥合作夥伴擴大其美國以外的業務時提供即時影響力。適應症。隨著 22 年血漿短缺的緩解，我們還看到美國以外的 Ig 藥物供應不斷增長。在 23 年。新患者的開始是我們核心業務和國際業務的重要驅動力，我們將繼續加大力度加深與全球製藥合作夥伴的關係，並共同努力抓住各國的各種機會。值得注意的是，在 22 年，我們看到了一種新藥 Aspaveli 在多個國際市場的上市，我們預計 23 年將有更多的地理上市。

Our second focus area is to strengthen our distribution partnerships. We have identified several key markets representing meaningful growth opportunities. Our initial efforts have seen our EU pump sales double year-over-year, indicating growth in new patient capture. We also see an additional opportunity to penetrate the existing base of electronic pumps and are in the process of building new clinical evidence for the benefits of the FREEDOM system, including patient comfort, device reliability and economic advantages.

我們的第二個重點領域是加強我們的分銷合作夥伴關係。我們已經確定了幾個代表重要增長機會的關鍵市場。我們最初的努力使我們的歐盟泵銷量同比翻了一番，這表明新患者數量有所增長。我們還看到了一個額外的機會來滲透現有的電子泵基礎，並且正在為 FREEDOM 系統的好處建立新的臨床證據，包括患者舒適度、設備可靠性和經濟優勢。

Moving to our Novel Therapies business, 2022 has marked a year of exciting progress. We've created a solid pipeline that has significantly contributed to accompanying growth in the short-term. Most importantly, it creates the opportunity for future drug indications that when commercialized, we will grow our business substantially. Our NT business consists of revenues generated in non-recurring engineering revenues and products and services in support of clinical trials prior to a drug's commercial launch. When the drug launches, this revenue becomes part of our core business revenues.

轉到我們的新療法業務，2022 年標誌著令人振奮的一年。我們已經創建了一個穩固的渠道，為短期內的伴隨增長做出了重大貢獻。最重要的是，它為未來的藥物適應症創造了機會，一旦商業化，我們的業務將大幅增長。我們的 NT 業務包括非經常性工程收入以及產品和服務產生的收入，以支持藥物商業上市前的臨床試驗。當藥物上市時，這筆收入成為我們核心業務收入的一部分。

Over the past few quarters, we have shared our pipeline and provided a more detailed view of this opportunity, including this quarter, providing more transparency on projected launch dates. In total, we now have 14 collaborations, which include over 2.8 million potential patients and a TAM of roughly $2.5 billion, roughly 2x our original aspirations. The new collaboration we established in '22 created the majority of this new market opportunity, including in our core immunology business and across multiple new drug therapy areas. We are pleased with the execution on our collaborations and increased engagement from the biopharma companies that have trusted us to help deliver their drugs.

在過去的幾個季度中，我們分享了我們的管道並提供了這個機會的更詳細視圖，包括本季度，從而提高了預計發布日期的透明度。總的來說，我們現在有 14 項合作，其中包括超過 280 萬潛在患者和大約 25 億美元的 TAM，大約是我們最初期望的兩倍。我們在 22 年建立的新合作創造了這個新市場機會的大部分，包括我們的核心免疫學業務和多個新藥治療領域。我們對合作的執行以及信任我們幫助交付藥物的生物製藥公司的參與度增加感到滿意。

Our Novel Therapies team is increasing at our event revenues as they execute on innovation milestones in our agreements and increasing clinical product sales for feasibility and trials for Phase II and III research. We look forward to continuing to build our momentum in '23. Based upon the company's capabilities, we have become a clear leader for consideration in every large volume opportunity. Due to the nature of Novel Therapies, drug opportunities may be canceled, the drugs may fail and timelines will shift.

我們的新療法團隊正在增加我們的活動收入，因為他們執行我們協議中的創新里程碑，並增加臨床產品銷售以實現 II 期和 III 期研究的可行性和試驗。我們期待在 23 年繼續增強我們的勢頭。基於公司的能力，我們已成為每個大批量機會中考慮的明確領導者。由於新型療法的性質，藥物機會可能會被取消，藥物可能會失敗，並且時間表會發生變化。

However, we believe our pace of new deals will remain relatively stable, and we anticipate ending the year with an additional 6 collaborations, bringing our total number of collaborations to approximately $20 million. This pipeline, along with multiple new opportunities we are working on includes multiple candidates in Phase III and a clear line of sight to our '26 commercialization goals. We have a strong start to '23 with another prefilled syringe deal announcement in quarter 1, a successful first year of execution on our Vision '26 growth strategy.

然而，我們相信我們的新交易步伐將保持相對穩定，我們預計今年年底還會有 6 項合作，使我們的合作總數達到約 2000 萬美元。這條管道，連同我們正在努力的多個新機會，包括第三階段的多個候選藥物和我們 26 年商業化目標的清晰視線。我們在第一季度宣布了另一筆預填充注射器交易，這是我們成功執行 Vision '26 增長戰略的第一年，我們在 23 年有了一個良好的開端。

I will now turn the call over to Tom to review our financial results.

我現在將電話轉給湯姆審查我們的財務業績。

Thank you, Linda, and good afternoon, everyone. I'm excited to report a strong year of approximately 19% double-digit growth with total net revenues of $27.9 million, an increase of $4.4 million. We achieved double-digit revenue growth in our domestic core and Novel Therapies businesses. Domestic core growth was 11.3%, driven by increased volume attributed to SCIg market growth and new label indications, including prefilled syringes.

謝謝你，琳達，大家下午好。我很高興地報告強勁的一年，實現了約 19% 的兩位數增長，總淨收入為 2790 萬美元，增加了 440 萬美元。我們的國內核心業務和新療法業務實現了兩位數的收入增長。國內核心增長為 11.3%，這是由於 SCIg 市場增長和新標籤適應症（包括預充式註射器）帶來的銷量增長推動的。

Novel Therapies revenue grew 330% related to services performed on an NRE innovation services agreement as well as increases in clinical trial product sales for several pharmaceutical customers. International core revenue grew by 8%, driven by volume growth. The international business showed strong second half results of 15% growth, led by new distributor revenue growth in Germany and a new label indication launched in several EU markets.

新療法收入增長了 330%，這與根據 NRE 創新服務協議執行的服務以及為幾家製藥客戶的臨床試驗產品銷售增加有關。在銷量增長的推動下，國際核心收入增長了 8%。國際業務下半年表現強勁，增長 15%，這主要得益於德國新分銷商收入的增長以及在多個歐盟市場推出的新標籤適應症。

Looking at the full year by quarter, we delivered strong double-digit growth every quarter. Our growth between Q3 and Q4 was impacted by the Q3 backorder clearance. Taking this into account, as we compare first half to back half, we grew our back half revenues by 21% higher than the first half of 17%. Our Q4 net revenues were $7.3 million and represented a growth of 13.2%, Novel Therapy sales grew by 260% or $584,000 and was primarily driven by significant milestone progress related to an NRE innovation service agreement.

按季度來看全年，我們每個季度都實現了強勁的兩位數增長。我們在第三季度和第四季度之間的增長受到第三季度延期清關的影響。考慮到這一點，當我們比較上半年和下半年時，我們的後半年收入增長了 21%，比上半年的 17% 高。我們第四季度的淨收入為 730 萬美元，增長了 13.2%，新療法銷售額增長了 260% 或 584,000 美元，這主要是由與 NRE 創新服務協議相關的重大里程碑進展推動的。

We also booked revenues in support of ongoing clinical trials. Domestic core growth of 6.2% was driven by growth in FreedomEdge system revenues for prefilled syringe payments, offset by store consolidations and a large specialty pharmacy account and the impact of lower SCIg script volumes from Q3. We generally see a 1 quarter lag in revenues from script volumes, accounting for the time it takes the patient to be operational with the Freedom system in the home.

我們還記錄了收入以支持正在進行的臨床試驗。 6.2% 的國內核心增長是由預裝注射器支付的 FreedomEdge 系統收入增長推動的，被商店整合和大型專業藥房賬戶以及第三季度 SCIg 腳本數量減少的影響所抵消。我們通常會看到腳本量的收入滯後 1 個季度，這說明患者在家中使用 Freedom 系統所需的時間。

International core revenue was lower by 3.2%, driven by prior year timing of orders from 2 distributors, partially offset by new distributor growth in Germany and growth in other markets related to new label indications.

國際核心收入下降了 3.2%，受去年 2 家分銷商訂單時間的推動，部分被德國新分銷商的增長和與新標籤適應症相關的其他市場的增長所抵消。

Reported gross margin for the full year was 55.1% and was lower than prior year by 350 basis points. We had a 400 basis point increase in COGS, 210 basis points was due to labor rate and material increases, primarily driven by the inflationary impacts. The remaining 210 basis points was due to onetime additional labor incurred for clearing the Q2 to Q3 backorders and subsequent Q4 inventory recovery leveling. We also incurred 50 basis points in one-time costs for our manufacturing transition and Chester facility ramp down to continue progress toward our outsourcing margin improvement initiatives.

全年報告的毛利率為 55.1%，比上年下降 350 個基點。我們的 COGS 增加了 400 個基點，其中 210 個基點是由於人工費率和材料增加，這主要是受通貨膨脹的影響。剩餘的 210 個基點是由於清理第二季度至第三季度的延期交貨以及隨後的第四季度庫存恢復平衡而產生的一次性額外勞動力。我們還為我們的製造轉型和切斯特工廠斜坡減少了 50 個基點的一次性成本，以繼續朝著我們的外包利潤率改善計劃取得進展。

Our NRE service revenue had a 50 basis point impact -- negative 50 basis point impact, partially offsetting these declines was an increase in core average selling price and product mix. Our growth -- our Q4 gross margin was 55.5% and remained flat with Q3 at 55.7%. As compared against last year, gross margin declined 350 basis points.

我們的 NRE 服務收入產生了 50 個基點的影響——負面的 50 個基點影響，部分抵消了這些下降的是核心平均售價和產品組合的增加。我們的增長——我們第四季度的毛利率為 55.5%，與第三季度持平，為 55.7%。與去年相比，毛利率下降了350個基點。

Walking this down, we experienced 223 basis point decrease, due to higher labor wages and material driven by a challenging inflationary environment. In addition, we had 257 basis point decline, due to maintaining one-time labor and increased overtime to replenish a 190 basis point decline in one-time costs as we initiate the ramp down of the Chester site that will close at the end of Q1. Offsetting these manufacturing increases was a higher margin for Novel Therapies and NRE mix and an increase in core average selling price and product mix.

往下看，我們經歷了 223 個基點的下降，這是由於充滿挑戰的通脹環境推動了更高的勞動力工資和材料。此外，我們有 257 個基點的下降，這是由於維持一次性勞動力並增加加班以補充一次性成本下降 190 個基點，因為我們啟動了將於第一季度末關閉的切斯特工廠的減速.抵消了這些製造增長的是新療法和 NRE 組合的更高利潤以及核心平均售價和產品組合的增加。

Moving forward, with the Chester site closure on track for Q1 and the passing the final validations for outsourced manufacturing, we are on track to generate significant margin improvement in the second half of 2023. Our cash balance at the end of 2022 was $17.4 million, representing a $7.9 million decrease from the beginning of the year. Cash during the year was used for strategic investments as previously communicated in our Vision 2026 plan related to innovation in support of Novel Therapies business, also in increasing our commercial and business development capabilities across our U.S. and Novel Therapies businesses.

展望未來，隨著第一季度切斯特工廠的關閉以及外包製造的最終驗證的通過，我們有望在 2023 年下半年實現利潤率的顯著改善。我們在 2022 年底的現金餘額為 1740 萬美元，比年初減少 790 萬美元。正如我們之前在 2026 年願景計劃中所傳達的那樣，本年度的現金用於戰略投資，該計劃與支持新療法業務的創新有關，也用於提高我們在美國和新療法業務中的商業和業務發展能力。

In addition, we invested in our Mahwah, New Jersey facilities and quality and regulatory investments to support our Novel Therapies and geographic expansion initiatives. We incurred a heavier cash burden in the first half of the year, driven by the facility investments in our new Mahwah facilities, including R&D labs and manufacturing clean room build-outs. We also had cash outlays for the annual bonus and year-end accrual payments in the early part of the year. During the second half, our use of cash was lower as we increased revenues, had lower expenses and implemented improvements in working capital.

此外，我們投資於新澤西州 Mahwah 的設施以及質量和監管投資，以支持我們的新療法和地域擴張計劃。由於我們新的 Mahwah 設施的設施投資，包括研發實驗室和製造潔淨室擴建，我們在今年上半年承擔了更重的現金負擔。我們在年初還為年度獎金和年終應計款項支付了現金。下半年，隨著收入的增加、支出的減少以及營運資金的改善，我們的現金使用量有所減少。

I will now turn the call back to Linda for guidance and closing comments.

我現在將把電話轉回琳達尋求指導和結束評論。

Thank you, Tom. Turning to expectations for fiscal '23, KORU Medical's guidance for full year '23 reflects many assumptions, including those set forth in our accompanying press release. We are pleased to report the following guidance and key milestones.

謝謝你，湯姆。談到對 23 財年的預期，KORU Medical 對 23 財年全年的指導反映了許多假設，包括我們隨附的新聞稿中提出的假設。我們很高興地報告以下指導和關鍵里程碑。

We expect full year '23 revenues of between USD32.5 million and USD33.5 million, representing growth in the range of 17% to 20%. We have identified several key milestones we will update throughout the year to support this revenue growth. These include core SCIg drug market growth of approximately 10%, prefilled string penetration of 15% to 20%, expanding our Novel Therapies pipeline with 6 new collaborations, bringing our total number of collaborations to approximately 20 and 2 new 510(k) filings in the back half of the year.

我們預計 23 年全年的收入將在 3250 萬美元至 3350 萬美元之間，增幅在 17% 至 20% 之間。我們已經確定了我們將在全年更新的幾個關鍵里程碑，以支持這一收入增長。其中包括核心 SCIg 藥物市場增長約 10%，預填充線滲透率 15% 至 20%，通過 6 項新合作擴展我們的新療法管道，使我們的合作總數達到約 20 項，以及 2 項新的 510(k) 申請下半年。

We are guiding to a 58% to 60% gross margin on the full year and to exit the year between 60% and 62% gross margin. Key drivers behind our '23 gross margins include our Chester site closure and headcount ramp down in Q1 and completion of outsourced manufacturing transition in the first half of the year. We are guiding to a 55% to 57% gross margin for the first half and 60% plus margins in the second half of '23. We also expect cash balance at year end '23 to be greater than $10 million. In order to support our strategic initiatives and continue to drive top line growth, we expect to increase operating expenses to roughly $30 million, inclusive of stock-based compensation.

我們指導全年毛利率為 58% 至 60%，並以 60% 至 62% 的毛利率結束這一年。我們 23 年毛利率背後的主要驅動因素包括我們在第一季度關閉切斯特工廠和裁員，以及在今年上半年完成外包製造轉型。我們指導 23 年上半年的毛利率為 55% 至 57%，下半年的毛利率為 60% 以上。我們還預計 23 年底的現金餘額將超過 1000 萬美元。為了支持我們的戰略舉措並繼續推動營收增長，我們預計將運營費用增加至約 3000 萬美元，其中包括基於股票的薪酬。

Our operating expense includes continued investment in our strategic initiatives with near-term goals of continued TAM expansion through securing additional new non-IG novel therapies deals, building our innovation and pipeline, including advancements in our Freedom system and development of our next-generation pump. We forecast improvements in working capital, specifically a $2 million inventory reduction as we outsource manufacturing. We expect to see higher cash burn in first half, driven by annual year end accrual payments and innovation investment timing.

我們的運營費用包括對我們的戰略計劃的持續投資，近期目標是通過獲得更多新的非 IG 新療法交易、建立我們的創新和管道（包括我們的 Freedom 系統的進步和我們的下一代泵的開發）繼續擴大 TAM .我們預測營運資本會有所改善，特別是由於我們將製造外包，庫存將減少 200 萬美元。在年終應計付款和創新投資時機的推動下，我們預計上半年的現金消耗將增加。

As in '22, we expect to see lower cash outlay in subsequent quarters due to increasing revenues, gross margins and working capital improvements. We're ahead of our operating plan, and we have visibility to breakeven in the second half of '24 based on our current strategic outlook. While we may choose to increase our cash on the balance sheet to take advantage of additional growth opportunities through debt or non-dilutive financing, we are not anticipating any equity raises at this time.

與 22 年一樣，由於收入增加、毛利率和營運資本改善，我們預計隨後幾個季度的現金支出將減少。我們領先於我們的運營計劃，並且根據我們目前的戰略展望，我們有能力在 24 年下半年實現收支平衡。雖然我們可能會選擇增加資產負債表上的現金以通過債務或非稀釋性融資來利用額外的增長機會，但我們目前預計不會進行任何股權融資。

In closing, we ended the year a stronger organization with a team that has delivered on several key milestones and is making significant progress towards Vision '26. We have delivered multiple quarters of double-digit growth and full year revenue growth of 19%, ahead of our initial expectations. We are executing a business strategy in our core business that outperforms the underlying market growth.

最後，我們以一個更強大的組織結束了這一年，其團隊已經實現了幾個關鍵里程碑，並在實現 Vision '26 方面取得了重大進展。我們已經實現了多個季度的兩位數增長和 19% 的全年收入增長，超出了我們最初的預期。我們正在核心業務中執行一項業務戰略，該戰略的表現優於潛在的市場增長。

In our Novel Therapies business, we are delivering impactful short-term revenues and as we continue to progress our collaborations, we have increased our overall commercialization outlook to $2.5 billion TAM. Our innovations and innovation and building a new Novel Therapies team are beginning to pay off with the commitment to new 510(k) filings and multiple new novel therapy collaborations in '23. This gives us confidence to provide revenue guidance in the range of 17% to 20% and a gross margin profile of greater than 60% by the end of the year.

在我們的新療法業務中，我們正在提供有影響力的短期收入，並且隨著我們繼續推進合作，我們已將整體商業化前景提高到 25 億美元 TAM。我們的創新和創新以及建立一個新的新療法團隊開始獲得回報，承諾在 23 年提交新的 510(k) 申請和多項新的新療法合作。這使我們有信心在年底前提供 17% 至 20% 的收入指導和超過 60% 的毛利率。

We are on track to deliver over $60 million in revenues by '26 and multiple new novel therapy drug indications. We are well positioned with a solid year of execution behind us to continue growing our leadership position and subcu drug delivery systems, providing increasing value to patients, customers and shareholders. And finally, a big thank you to our KORU employees and to our customers and patients.

我們有望在 26 年之前實現超過 6000 萬美元的收入和多種新的治療藥物適應症。我們已經做好了充分的準備，在過去的一年裡我們的執行力很強，可以繼續提高我們的領導地位和子藥物輸送系統，為患者、客戶和股東提供越來越多的價值。最後，非常感謝我們的 KORU 員工以及我們的客戶和患者。

I will now turn the call over for Q&A.

我現在將把電話轉過來進行問答。

Thank you. (Operator Instructions) Our first question comes from the line of Alex Nowak with Craig-Hallum.

謝謝。 （操作員說明）我們的第一個問題來自 Alex Nowak 與 Craig-Hallum 的對話。

Okay. I was hoping you could first start off on the business outside the U.S. It sounds like you're seeing some early gains there, but I'm just curious how to think about the expansion outside the U.S. this year? What are you assuming in the guidance for it? And then also, other than just engaging with distributors over there, what can you do to really accelerate that business this year?

好的。我希望您能首先開始在美國以外的業務。聽起來您在那裡看到了一些早期的收益，但我很好奇如何考慮今年在美國以外的擴張？您在指南中假設了什麼？然後，除了與那裡的分銷商接觸之外，今年你還能做些什麼來真正加速這項業務？

Yes. Thanks, Alex. Great question. So first of all, last year, we saw an overall plasma shortage in the market, and most of the key pharma partners, if they were short, gave the product to the U.S. So that's the first thing. We see by and large pharma companies having no plasma shortages and therefore, a lot of Ig drug supply. So we see that being the first boost to our international business. Second is, we hired a new leader with clear capabilities in distributor management. So we're focused our efforts with our current distributors, and we're starting to see the payoff. Third is, the Aspaveli launch. They are utilizing the KORU Freedom system as their preferred partner of choice outside the U.S. So we've seen a tremendous boost in the initial launch countries there.

是的。謝謝，亞歷克斯。很好的問題。所以首先，去年，我們看到市場上整體血漿短缺，大多數主要的製藥合作夥伴，如果短缺的話，都會把產品送到美國。所以這是第一件事。我們看到大型製藥公司沒有血漿短缺，因此有大量 Ig 藥物供應。因此，我們認為這是對我們國際業務的第一個推動。其次，我們聘請了一位在經銷商管理方面具有明確能力的新領導。因此，我們將精力集中在我們現有的分銷商身上，我們開始看到回報。第三是 Aspaveli 發布。他們正在利用 KORU Freedom 系統作為他們在美國以外的首選合作夥伴。因此，我們在最初的發射國家/地區看到了巨大的增長。

And then finally, and I would put this one out as -- it will take us a little bit more time, but conversion of electronic pumps, we think both from a patient preference, from a cost position, we have a great value proposition versus electronic pumps, we're generating now the clinical evidence to prove that out. So overall, we feel confident in international business and outlook to a double-digit growth in '23.

最後，我會把這個說出來——這會花費我們更多的時間，但是電子泵的轉換，我們認為無論是從患者的偏好還是從成本的角度來看，我們都有一個很好的價值主張電子泵，我們現在正在生成臨床證據來證明這一點。因此，總體而言，我們對國際業務充滿信心，並展望 23 年實現兩位數增長。

Okay. Understood. Makes sense. And then going back to the plasma shortage that we had in the market throughout COVID, the guidance has Ig drug market growth of about 10% built-in. Pre-COVID that market maybe was in the 15% to 20% range. A couple of weeks ago, CSL was out there saying that plasma collection supply is now above 2019 levels. So maybe just speak to what you're seeing in the Ig market? What are you seeing around plasma supply share gains? And how do you settle in on that 10% number versus maybe being more like 15% or 5%?

好的。明白了。說得通。然後回到我們在整個 COVID 期間市場上的血漿短缺問題，該指南內置了 Ig 藥物市場增長約 10%。在 COVID 之前，該市場可能在 15% 到 20% 的範圍內。幾週前，CSL 表示血漿收集供應現在高於 2019 年的水平。那麼也許只是談談你在 Ig 市場上看到的東西？您對等離子供應份額的增長有何看法？你如何確定 10% 的數字而不是 15% 或 5%？

Yes. Great question. So first, let me just talk about plasma supply. We saw growth Grifols and CSL come out and say that they see high double-digit collections, which is great. That's going to lead to the Ig product supply. And so as we look and remember the numbers that we're quoting, we're looking at full year guidances here. We saw, as you noted, pre-COVID growth in the area of 15% to 20% on a much smaller base. Last year, we saw 2% growth and obviously a big uptick to 8% this year. We're guiding to 10%. We saw the first month of the year come in around 8%. So this could be an area where we see it come out a little bit more. But as we know, this market can bounce around quarter-to-quarter. So at this point, we feel pretty confident at 10%, knowing that last year, we called an 8% and the market grew 7.8%. So we feel pretty good about our capabilities, but if there's one area that I'm super excited about like you is, seeing the fourth quarter script growth levels. We're seeing for the first time, a really clear break between subcu market growth versus IV market growth. So we think we have this in the right place. We'll continue to track it. And when we see an update to that, you'll all be the person to know.

是的。很好的問題。所以首先，讓我談談血漿供應。我們看到了 Grifols 和 CSL 的增長，並表示他們看到了高兩位數的收藏，這很棒。這將導致 Ig 產品供應。因此，當我們查看並記住我們引用的數字時，我們在這裡查看全年指導。正如您所指出的，我們看到 COVID 之前的增長在 15% 到 20% 的範圍內，但基數要小得多。去年，我們看到了 2% 的增長，今年顯然大幅上升至 8%。我們正在指導 10%。我們看到今年第一個月的增長率約為 8%。所以這可能是一個我們看到它出現更多的領域。但正如我們所知，這個市場可能會按季度反彈。所以在這一點上，我們對 10% 感到非常有信心，因為我們知道去年我們稱之為 8%，市場增長了 7.8%。所以我們對我們的能力感覺很好，但如果有一個領域讓我像你一樣感到非常興奮，那就是看到第四季度的腳本增長水平。我們第一次看到 subcu 市場增長與 IV 市場增長之間真正明顯的區別。所以我們認為我們在正確的地方擁有它。我們會繼續追踪。當我們看到更新時，你們都會知道。

And you've certainly done a great job at growing above that rate as well. Maybe just one last question around the prefilled syringe side, can you just remind us which sizes of prefilled vials are currently approved in the U.S.? And then how to think about new approvals of different vial sizes coming this year and incorporating that into your pump that you have right now?

你當然也做得很好，超過了這個速度。也許只是關於預裝注射器方面的最後一個問題，您能否提醒我們目前在美國批准了哪些尺寸的預裝藥瓶？然後如何考慮今年將獲得不同尺寸的藥瓶的新批准，並將其整合到您現在擁有的泵中？

Sure. So what we see approved in the market is a 5, 10 and 20 ml prefilled syringe. And patients use these in a variety of ways. The way that works the best is that they simply take the prefill and pop it into our FreedomEdge pump. But a variety of patients take much larger doses. So clearly, the big opportunity will be when we see a 50 ml approval come into the market. We see 2 things occurring. First of all, we see current pharma partners in the market, expanding their overall ranges of sizes. And second, we see new entrants, our new pharma partners coming out with pharma with prefilled indications. So I think that's fantastic. What's been very nice for us to see is that the overall growth in prefills is essentially the single biggest driver. We actually see the biomarker beginning to flatten out and slightly decline.

當然。所以我們在市場上看到批准的是 5、10 和 20 毫升的預裝注射器。患者以各種方式使用這些。最有效的方法是他們只需將預填充物放入我們的 FreedomEdge 泵中即可。但許多患者服用的劑量要大得多。很明顯，當我們看到 50 毫升的批准進入市場時，將是一個巨大的機會。我們看到發生了兩件事。首先，我們看到市場上現有的製藥合作夥伴正在擴大其整體規模範圍。其次，我們看到新進入者，我們的新製藥合作夥伴推出了具有預填充適應症的藥物。所以我認為這太棒了。我們很高興看到預填充的整體增長基本上是最大的單一驅動因素。我們實際上看到生物標誌物開始趨於平緩並略有下降。

Our next question comes from the line of Caitlin Cronin with Canaccord Genuity.

我們的下一個問題來自 Caitlin Cronin 與 Canaccord Genuity 的合作。

This is Caitlin on for Kyle. Congrats on a great quarter. And just a quick question, if you could maybe provide some more color on the cadence of margins this year. So NRE service revenues seem to be a driver of margins the past few quarters. And what's kind of the expectation for that to continue to affect margins in 2023? And then also could the timing of the manufacturing transitions caused different margin expectations, cadence start year than you've guided to?

這是凱爾的凱特琳。祝賀一個偉大的季度。只是一個簡單的問題，你是否可以在今年的利潤率節奏上提供更多顏色。因此，NRE 服務收入似乎是過去幾個季度利潤率的推動因素。對它在 2023 年繼續影響利潤率的預期是什麼？然後製造轉型的時間是否會導致不同的利潤率預期，節奏開始年比你指導的？

Go ahead, Tom.

來吧，湯姆。

Yes. Thanks, Caitlin, for the question. So when you look at our margin in 2022, it was really 3 factors that impacted it. One was labor and materials that we saw driven by inflationary increases. Second was, we added incremental costs for the back order that we had that we mentioned in Q2 and Q3. And then finally, we spend money on the transition of our manufacturing footprint by reducing our Chester footprint and moving to our third-party outsourced organization. So when you think about 2023 going forward, 2 of those things will not repeat themselves. We will not spend additional money on labor for shifts, referring to the backorder situation we had earlier in the year. And secondly, the one-time costs for all of the transitional work as we ramp down the Chester facility we'll also not repeat itself next year. So we see in the second half of next year, significant margin improvement, and that will be driven by those factors not repeating themselves as well as a lower cost of goods from our low-cost outsourced provider that begins in the second half of 2023.

是的。謝謝凱特琳提出這個問題。因此，當您查看我們 2022 年的利潤率時，確實有 3 個因素影響了它。一個是我們看到受通貨膨脹推動的勞動力和材料。其次，我們為第二季度和第三季度提到的延期交貨增加了增量成本。最後，我們通過減少我們的 Chester 足跡並轉移到我們的第三方外包組織，在製造足蹟的轉變上投入資金。因此，當您考慮 2023 年的未來時，其中兩件事不會重演。參考今年早些時候的延期交貨情況，我們不會在輪班人工上額外花錢。其次，隨著我們減少切斯特設施的所有過渡工作的一次性成本，我們明年也不會重蹈覆轍。因此，我們將在明年下半年看到利潤率顯著提高，這將受到那些不會重複出現的因素以及從 2023 年下半年開始的低成本外包供應商的較低商品成本的推動。

And maybe the only other thing that I would say, in addition to what Tom had to say is we're confident now in our Q1 Chester site closure. So we'll release all the expenses and headcount related to that. So you'll see the margin as we've guided to ramp up from that 55% level in the first quarter, we'll see it ramp up steadily throughout the year. And we've passed all our final validations to our outsourced manufacturing. And so we're confident that will wrap up in the back half as well. As for our margins on our NRE and core, our NRE margins, we are continuing to forecast that to have no meaningful impact on our gross margin at this point.

也許我唯一要說的是，除了湯姆不得不說的，我們現在對第一季度切斯特網站的關閉充滿信心。因此，我們將發布與此相關的所有費用和員工人數。所以你會看到我們指導的利潤率從第一季度的 55% 水平上升，我們會看到它在全年穩步上升。我們已經將所有最終驗證都通過了外包製造。因此，我們有信心也將在後半部分結束。至於我們的 NRE 和核心利潤率，我們的 NRE 利潤率，我們繼續預測這對我們的毛利率沒有有意義的影響。

Our next question comes from the line of Jason Bednar with Piper Sandler.

我們的下一個問題來自 Jason Bednar 和 Piper Sandler 的台詞。

This is Joe Downing on for Jason today. So one from us on the revenue guide, so we're curious on what will drive revenue to finish at the low end versus the high end of the guidance today? And can you talk about the assumptions around U.S. market growth versus international market growth? I know, you mentioned 6 new novel therapy partnerships in the 2023 guide. How much growth should we be thinking comes from the Novel Therapies pipeline this year?

這是今天傑森的喬·唐寧。所以我們在收入指南中有一個，所以我們很好奇什麼會推動收入在今天的指導的低端與高端完成？你能談談美國市場增長與國際市場增長的假設嗎？我知道，您在 2023 年指南中提到了 6 種新的新型療法合作夥伴關係。我們應該考慮今年的新療法管道有多少增長？

Yes. So you asked what could impact the range of our guidance up or down. And I would point to a couple of things. The first was the first question we got from Alex, which is at the U.S. market, we see that underlying Ig market grow faster, that could bump us up nicely. I think we have international probably in the right place. And then the biggest thing is, our Novel Therapies pipeline. And we start the year, obviously, with a number of collaborations and a number of commitments to revenues. And if we get -- if their trials progress well and they do well, they'll order more of the trials don't do well, they'll order less. Sometimes those trials are canceled, et cetera. So that's the biggest variable in our overall pipeline. However, at this point, obviously, with those broad guidance ranges for U.S. and international, we're expecting significant growth again in our Novel Therapies overall revenues.

是的。所以你問什麼會影響我們的指導範圍向上或向下。我要指出幾件事。第一個是我們從亞歷克斯那裡得到的第一個問題，在美國市場，我們看到潛在的 Ig 市場增長更快，這可以很好地提升我們。我認為我們可能在正確的地方擁有國際。然後最重要的是，我們的新療法管道。顯然，我們在今年開始時進行了一些合作，並做出了一些收入承諾。如果我們得到 - 如果他們的試驗進展順利並且他們做得很好，他們會訂購更多試驗效果不佳，他們會訂購更少。有時這些試驗會被取消，等等。所以這是我們整個管道中最大的變量。然而，在這一點上，顯然，根據美國和國際的廣泛指導範圍，我們預計我們的新療法總收入將再次顯著增長。

And then just then coming back to our U.S. and international, we don't provide specific guidance. What I would say is that we expect, as we have in the past year to outperform that underlying 10% that we issue for the U.S. market by a couple of points, and we would expect our international business to be on track and maybe a little bit better than our second half performance.

然後回到我們的美國和國際，我們不提供具體指導。我要說的是，我們預計，正如我們在過去一年中所做的那樣，我們為美國市場發行的基礎 10% 的表現將好幾個點，我們預計我們的國際業務將走上正軌，也許會有一點比我們下半場的表現好一點。

Great. And then one for Tom, just looking at the 2023 margin guidance, what are you looking at in the guidance as it relates to the -- like further material labor or other OpEx costs? How are you contemplating that in the 2023 margin guidance?

偉大的。然後是湯姆的一個，只要看看 2023 年的利潤率指導，你在指導中看到了什麼，因為它與——比如進一步的材料勞動力或其他運營支出成本有關？您如何在 2023 年利潤率指南中考慮這一點？

Yes. So in terms of labor in the '23 guidance. So as I mentioned, we are going to be ramping down our Chester location. So labor will significantly drop as we reduce that footprint and remove that labor. The second part is, as mentioned earlier, our NRE will be slightly improved from last year in terms of overall margin and footprint. And then thirdly, with the outsourcing, that's the big one. So the outsourcing will allow us to purchase products at a much lower cost than how we were making them and manufacturing them today. So I'd say with those components, those are the main assumptions that are going to drive a lower margin for us this year.

是的。因此，就 23 年指南中的勞動而言。所以正如我提到的，我們將減少我們在切斯特的位置。因此，隨著我們減少足跡並消除勞動力，勞動力將大大減少。第二部分是，如前所述，我們的 NRE 在整體利潤率和足跡方面將比去年略有改善。第三，外包是最重要的。因此，外包將使我們能夠以比我們今天製造和製造它們的方式低得多的成本購買產品。所以我想說的是，對於這些組件，這些是今年將降低我們利潤率的主要假設。

And we have built in as well. I mean, what Tom is alluding to is, obviously, now we have a purchase price that comes from a much lower labor cost environment because our outsources is in Latin America. But on top of that, our costs here, we have built in those inflationary impacts that we saw this year into a much lower base here.

我們也內置了。我的意思是，湯姆的意思是，很明顯，現在我們的採購價格來自勞動力成本低得多的環境，因為我們的外包是在拉丁美洲。但最重要的是，我們在這裡的成本，我們已經將今年看到的那些通脹影響納入了一個低得多的基數。

Yes. That is all the questions we have for today. I'd like to turn the call back to Linda Tharby for closing remarks.

是的。這就是我們今天的所有問題。我想把電話轉回給琳達·薩比 (Linda Tharby) 以作結束語。

I'm very proud of our progress in '22 against our '26 vision. We look forward to continuing to update you in '23 and just again, a big thank you to all of our KORU employees.

我為我們在 22 年實現我們 26 年願景的進展感到非常自豪。我們期待在 23 年繼續為您更新，再次非常感謝我們所有的 KORU 員工。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。