Karat Packaging Inc (KRT) 2025 Q3 法說會逐字稿

Good day and welcome to the carrot packaging 3rd quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press, then 1 on your touch tone phone. And to withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Mr. Roger Pondell. Please go ahead, sir.

大家好，歡迎參加胡蘿蔔包裝公司2025年第三季財報電話會議。所有參與者將處於唯讀模式。如果您需要協助，請按該鍵，然後按零，向會議專家發出信號。今天的報告結束後，將有機會提問。若要提問，您可以按按鍵式電話上的 1 鍵。如需撤回您的問題，請按星號，然後按 2。請注意，本次活動正在錄影。現在我將把會議交給羅傑龐德爾先生。請繼續，先生。

Thank you, operator. Good afternoon, everyone, and welcome to Carrott Packaging's 20,253 quarter conference call. I'm Roger Pondell with Pondell Wilkinson, Carrott Packaging's investor relations firm. It will be my pleasure momentarily to introduce the company's Chief Executive Officer, Alan Yu. And its Chief Financial Officer Jan Goh. Before I turn the call over to Alan, I want to remind our listeners that today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1,995. Such forward-looking statements are subject to numerous conditions, many of which are beyond the company's control, including those set forth in the risk factor section of the of the company's most recent Form 10-k as filed with the Securities and Exchange Commission, copies of which are available on the SEC's website at www.sec.gov, along with other company filings made with the SEC from time to time. Actual results could differ materially from these forward-looking statements, and carrot packaging undertakes no obligation to update any forward-looking statements except as required by law. Please also note that during this call we will. We'll be discussing adjusted EBITDA margin, adjusted diluting diluted earnings per share, and free cash flow, which are non-GAAP financial measures as defined by SEC regulation G. A reconciliation of the most directly comparable GAAP measures to the non-GAAP financial measures is included in today's press release, which is now posted on the company's website.

謝謝接線生。各位下午好，歡迎參加 Carrott Packaging 20253 季度電話會議。我是 Roger Pondell，來自 Pondell Wilkinson，Carrott Packaging 的投資者關係公司。接下來，我將榮幸地向大家介紹公司執行長餘先生。以及財務長 Jan Goh。在將電話交給艾倫之前，我想提醒各位聽眾，今天的電話會議可能包含 1995 年《私人證券訴訟改革法案》所界定的前瞻性陳述。此類前瞻性聲明受諸多條件限制，其中許多條件超出公司的控制範圍，包括公司最近向美國證券交易委員會提交的 10-k 表格風險因素部分中列出的條件，該表格的副本可在 SEC 網站 www.sec.gov 上查閱，以及公司不時向 SEC 提交的其他文件。實際結果可能與這些前瞻性聲明有重大差異，除法律要求外，胡蘿蔔包裝公司不承擔更新任何前瞻性聲明的義務。另請注意，在本次通話中，我們將…我們將討論調整後的 EBITDA 利潤率、調整後的稀釋每股盈餘和自由現金流，這些都是美國證券交易委員會 G 條例定義的非 GAAP 財務指標。今天的新聞稿中包含了與非GAAP財務指標最直接可比較的GAAP指標的調節表，該新聞稿現已發佈在公司網站上。

And with that, I will turn the call over to CEO Alan Yu. Alan.

接下來，我將把電話交給執行長餘先生。艾倫。

Thank you, Roger. Good afternoon, everyone. Despite ongoing trade volatility, Carra achieved another quarter of record net sales, up over 10% year over year, fueled by solid volume expansion, a favorable product mix, and effective pricing initiatives. We've experienced double-digit growth across all major markets, especially in Texas and California.

謝謝你，羅傑。大家下午好。儘管貿易波動持續，但卡拉公司憑藉穩健的銷售成長、有利的產品組合和有效的定價策略，實現了又一個季度創紀錄的淨銷售額，同比增長超過 10%。我們在所有主要市場都實現了兩位數的成長，尤其是在德克薩斯州和加利福尼亞州。

Even with significant higher import costs due to increased duties and tariffs, we successfully sustained a gross margin of 34.5% for the third quarter.

儘管由於關稅增加導致進口成本大幅上升，但我們第三季仍成功維持了 34.5% 的毛利率。

We remain committed to our sourcing diversification strategy and our nimble and flexible operating model continues to enable us to effectively manage ongoing supply chain challenges.

我們將繼續致力於採購多元化策略，我們靈活敏捷的營運模式將繼續使我們能夠有效地應對持續的供應鏈挑戰。

During the 3rd quarter, we increased domestic sourcing to approximately 20% from about 15% in the second quarter and we reduced imports from Taiwan to approximately 42% from 58%.

第三季度，我們將國內採購比例從第二季度的約 15% 提高到約 20%，並將從台灣的進口比例從 58% 降低到約 42%。

We continue to closely monitor tariff developments and are ready to quickly adjust our sourcing strategy accordingly, as we have done in the past to maintain carriage competitive advantage.

我們將繼續密切關注關稅動態，並隨時準備根據情況迅速調整採購策略，就像我們過去所做的那樣，以保持運輸領域的競爭優勢。

Additionally, foreign currency exchange rate between the US dollar and the new Taiwan dollar have shown increased stability since August, which is expected to help improve our operating performance for the current quarter.

此外，自 8 月以來，美元與新台幣之間的外匯匯率呈現更穩定的態勢，預計這將有助於改善我們本季的經營業績。

Earlier this year, we secured a major add on of business to supply paperback, a new product category for carrot to one of our largest national chain accounts. Initial shipments to select distribution centers started in the 3rd quarter, and we expect the volume to accelerate in the 4th quarter.

今年早些時候，我們獲得了一筆重要的新增業務，為我們最大的全國連鎖客戶之一供應胡蘿蔔平裝書，這是一個新的產品類別。首批貨物已於第三季開始向部分配送中心出貨，我們預計第四季出貨量將加速成長。

With fulfillment expected during Q1 of 2026, this new category of business with a chain account is for a two-year term and expected to contribute approximately $20 million in additional annual revenue.

預計將於 2026 年第一季完成，這項與連鎖帳戶相關的新業務類別為期兩年，預計每年將貢獻約 2,000 萬美元的額外收入。

Over the next 2 to 3 years, we aim to scale our paperback business to more than $100 million in additional annual revenue.

在接下來的 2 到 3 年裡，我們的目標是將平裝書業務的年收入增加 1 億美元以上。

The anticipated growth from this new category is being driven by national and regional restaurant chains that are transitioning to paper bags from plastic bags. This shift is influenced by evolving state and municipal regulations, as well as a growing emphasis on enhancing customer experience and brand images.

這個新類別的預期增長是由全國性和區域性連鎖餐廳從塑膠袋轉向紙袋所推動的。這一轉變受到不斷變化的州和市級法規以及日益重視提升客戶體驗和品牌形象的影響。

We expect continued market share growth in this segment, further solidifying our position as leader in providing sustainable, eco-friendly, disposable food service products.

我們預計該細分市場的份額將持續成長，進一步鞏固我們在提供永續、環保的一次性餐飲服務產品方面的領導地位。

In late May and June this year, we implemented broad pricing increases across most product lines to offset rising import costs. Heading into the fourth quarter and 2026. Business trends remain strong. We continue to make Discipline pricing approach and partner with our customers while focusing on operating efficiencies. We are actively integrating several meaningful new customer accounts and focusing on increasing online marketing, which will strengthen our 2026 pipeline, building a strong foundation for what we expect to be another record setting year in sales.

今年5月下旬和6月，我們對大多數產品線實施了大幅度漲價，以抵消不斷上漲的進口成本。進入第四季和2026年。商業趨勢依然強勁。我們持續推行穩健的定價策略，與客戶建立夥伴關係，同時專注於提高營運效率。我們正在積極整合幾個重要的新客戶帳戶，並專注於增加線上行銷，這將加強我們 2026 年的業務管道，為我們預期又一個創紀錄的銷售年份奠定堅實的基礎。

Carris announced the first ever stock repurchase program this week. In addition to the regular quarterly dividends, the announcement underscores our broad confidence in the company's future growth prospects and financial strength. And I will now turn the call over to Jian Guo, our Chief Financial Officer, to discuss the company financial results in greater detail. Jan.

卡里斯本周宣布了公司有史以來第一個股票回購計畫。除了常規的季度分紅外，該公告也凸顯了我們對公司未來成長前景和財務實力的充分信心。現在我將把電話交給我們的財務長郭健，讓他更詳細地討論公司財務表現。一月

Thank you, Alan. I'll begin with a summary of our Q3 performance followed by an update on our guidance.

謝謝你，艾倫。我將首先總結我們第三季的業績，然後更新我們的業績預期。

Net sales for the 2025 3rd quarter were $124.5 million up 10.4% from $112.8 million in the prior year quarter. The increase was primarily driven by an increase of $9.4 million in volume. And a $3.5 million favorable impact from product mix, partially offset by a $0.7 million unfavorable year over year pricing comparison.

2025 年第三季淨銷售額為 1.245 億美元，比去年同期的 1.128 億美元成長 10.4%。此次成長主要由交易額增加 940 萬美元推動。產品組合帶來的350萬美元有利影響，部分被年比價格不利影響70萬美元抵銷。

Sales to chain accounts and distributors were up by 13.7%. Online sales increased 3.1% over the prior year quarter and sales to the retail channel were down 12.5% over the prior year quarter, reflecting the softness of the overall retail sector.

面向連鎖店和分銷商的銷售額成長了 13.7%。線上銷售額比去年同期成長了 3.1%，而面向零售通路的銷售額比去年同期下降了 12.5%，反映出整體零售業的疲軟態勢。

Cost of goods sold for the 2025 3rd quarter increased 17.8% to $81.6 million from $69.3 million in the prior year quarter.

2025 年第三季銷售成本較上年同期成長 17.8%，達到 8,160 萬美元，而去年同期為 6,930 萬美元。

Product costs increased $5.0 million due to sales growth, partially offset by more favorable vendor pricing and product mix.

由於銷售成長，產品成本增加了 500 萬美元，但供應商定價和產品組合更有利，部分抵消了這一成本。

Additionally, import costs increased $8.2 million due to higher import duty and tariffs coupled with a 21.0% increase in import volume as we purchased more inventory ahead of expected business expansion, partially offset by a 13.4% decrease in average freight container rates.

此外，由於進口關稅和稅費上漲，加上進口量增加了 21.0%（因為我們在預期業務擴張之前購買了更多庫存），進口成本增加了 820 萬美元，但平均貨運集裝箱費率下降了 13.4%，部分抵消了進口成本。

Gross profit for the 2025 3rd quarter was $42.9 million compared with $43.5 million in the prior year quarter. Gross margin for the 2025 3rd quarter was 34.5% compared with 38.6%. In the prior year quarter, gross margin was negatively impacted by higher import costs which as a percentage of that sales increased to 14.4% compared with 8.6% in the prior year quarter.

2025 年第三季毛利為 4,290 萬美元，而去年同期為 4,350 萬美元。2025年第三季毛利率為34.5%，而上年同期為38.6%。上年同期，毛利率受到進口成本上升的負面影響，進口成本佔銷售額的比例從去年同期的8.6%上升至14.4%。

The decrease in margin was partially offset by a decrease in product costs as a percentage of net sales due to more favorable vendor pricing and product mix, as well as a reduction in inventory write-offs and adjustments as a percentage of net sales.

利潤率的下降部分被產品成本佔淨銷售百分比的下降所抵消，這得益於供應商定價和產品組合的改善，以及庫存減值和調整佔淨銷售額百分比的降低。

Operating expenses in the 2025 3rd quarter were $34.3 million compared with $32.2 million in the prior year quarter.

2025 年第三季的營運費用為 3,430 萬美元，而去年同期為 3,220 萬美元。

The increase was mainly driven by $2.1 million of higher shipping costs due to higher sales volume, $0.7 million of higher rent expense due to a higher rate on our Chino, California facility lease extension, plus the opening of a new Chino distribution center.

此次成長主要由以下因素導致：銷售量增加，運輸成本增加 210 萬美元；加州奇諾工廠租賃延期，租金上漲，租金支出增加 70 萬美元；以及奇諾新配送中心的開幕。

And $0.6 million of higher salaries and benefit expenses. These increases were partially offset by a $1.4 million reduction in online platform fees.

以及 60 萬美元的更高薪資和福利支出。這些增長被線上平台費用減少 140 萬美元部分抵消。

Operating income in the 2025 3rd quarter was $8.6 million versus $11.3 million in the prior year quarter.

2025 年第三季營業收入為 860 萬美元，而去年同期為 1,130 萬美元。

Total other income net was $1.3 million for the 2025 3rd quarter compared with $0.6 million in the prior year quarter.

2025 年第三季其他淨收入總額為 130 萬美元，而去年同期為 60 萬美元。

The increase was primarily from foreign currency transaction gain of $0.7 million driven by the strengthening of the United States dollar against the new Taiwan dollar during the 2025 3rd quarter compared with a loss of $0.3 million on foreign currency transactions during the 2024 3rd quarter.

2025 年第三季度，由於美元對新台幣走強，外匯交易收入增加 70 萬美元，而 2024 年第三季外匯交易虧損 30 萬美元。

Net income for the 2025 3rd quarter was $7.6 million compared with $9.3 million for the prime quarter.

2025 年第三季淨收入為 760 萬美元，而第一季淨收入為 930 萬美元。

Net income margin was 6.1% in the 2025 3rd quarter compared with 8.2% in the prior year quarter.

2025 年第三季淨利率為 6.1%，而去年同期為 8.2%。

Net income attributable to Cro for the 2025 3rd quarter was $7.3 million, $0.36 per diluted share compared with $9.1 million or $0.45 per diluted share in the prior year quarter.

2025 年第三季歸屬於 Cro 的淨利為 730 萬美元，每股攤薄收益 0.36 美元，而去年同期為 910 萬美元，每股攤薄收益 0.45 美元。

Adjusted EBITDA for the 2025 3rd quarter was $13.1 million compared with $14.7 million for the prior year quarter.

2025 年第三季調整後 EBITDA 為 1,310 萬美元，而去年同期為 1,470 萬美元。

Adjusted EBITDA margin was 10.5% of net sales for the 2025 3rd quarter compared with 13.0% for the prior year quarter.

2025 年第三季調整後 EBITDA 利潤率為淨銷售額的 10.5%，而去年同期為 13.0%。

Adjusted diluted earnings per common share was $0.37 for the 2025 3rd quarter compared with $0.47 for the prior year quarter.

2025 年第三季調整後稀釋每股普通股收益為 0.37 美元，而去年同期為 0.47 美元。

We generated operating cash flow of $1.0 million in the third quarter compared with $19.5 million in the prior year quarter.

第三季我們產生的營運現金流量為 100 萬美元，而去年同期為 1,950 萬美元。

Duty and tariff payments as well as the inventory purchase payments increased. However, such increases will offset by strong collections and as you'll see described in the Form 10-Q filed tomorrow.

關稅和進口稅款以及庫存採購款項均增加。然而，這些成長將被強勁的稅收收入所抵消，正如您將在明天提交的 10-Q 表格中看到的那樣。

Despite the significant cash outlays for operations and a $3.5 million early loan repayment on one of our consolidated variable interest entities term loans, we ended the quarter with $91.1 million in working capital.

儘管營運方面有大量現金支出，並且提前償還了我們合併的可變利率實體定期貸款中的一筆 350 萬美元，但我們本季末的營運資金仍為 9,110 萬美元。

As of September 30th, 2025, we maintained financial liquidity of $34.7 million with another $19.9 million in short-term investment.

截至 2025 年 9 月 30 日，我們維持了 3,470 萬美元的財務流動性，另有 1,990 萬美元的短期投資。

As of September 30th, 2025, we reclassified one of our consolidated variable interest entities term loans into current liabilities, as the maturity is within 12 months, totaling $20.4 million. We intend to pay down the loan upon maturity with our cash on hand.

截至 2025 年 9 月 30 日，我們將合併可變利息實體的定期貸款重新分類為流動負債，因為該貸款的到期日不到 12 個月，總額為 2,040 萬美元。我們打算在貸款到期時用手頭現金償還部分貸款。

On November 4, 2025, our board of directors approved the quarterly dividend of $0.45 per share payable November 28, 2025 to stockholders of record as of November 21, 2025. Additionally, our board of directors approved our first ever share repurchase program of up to $15.0 million under which Carri is authorized to repurchase shares of its outstanding common stock from time to time through open market purchases.

2025 年 11 月 4 日，我們的董事會批准了每股 0.45 美元的季度股息，將於 2025 年 11 月 28 日支付給截至 2025 年 11 月 21 日登記在冊的股東。此外，我們的董事會批准了我們有史以來第一個高達 1500 萬美元的股票回購計劃，根據該計劃，Carri 被授權不時透過公開市場購買回購其已發行普通股。

Looking ahead to the 2025 4th quarter, we expect net sales to increase by approximately 10% to 14% over the prior year quarter, with gross margin projected to be within 33% to 35% and adjusted EBITDA margin to be within 8% to 10%.

展望 2025 年第四季度，我們預期淨銷售額將比上年同期成長約 10% 至 14%，毛利率預計在 33% 至 35% 之間，調整後 EBITDA 利潤率預計在 8% 至 10% 之間。

As Alan mentioned earlier, our new business pipeline for 2026 is robust, supported by the new paperback category offering and the addition of several key customer accounts. We remain focused on accelerating top-line growth with disciplined pricing while continuing to enhance operational efficiency and cost management.

正如艾倫先前所提到的，我們 2026 年的新業務管道十分強勁，這得益於新的平裝書類別產品和新增的幾個重要客戶帳戶。我們將繼續專注於透過嚴格的定價來加速營收成長，同時不斷提高營運效率和成本控制。

Alan and I will now be happy to answer your questions, and I'll turn the call back to the operator.

現在我和艾倫很樂意回答您的問題，我將把電話轉回給接線生。

Thank you. We will now begin the question-and-answer session.

謝謝。現在開始問答環節。

To ask a question, you may press star one on your touch tone phone.

若要提問，您可以按按鍵式電話上的星號鍵 1。

If you're using a speakerphone, please pick up your handset before pressing the keys.

如果您正在使用免持通話，請在按鍵前拿起聽筒。

If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2, and at this time, we'll pause momentarily to assemble our roster.

如果您的問題已得到解答，並且您想撤回您的問題，請按星號，然後按 2，此時我們將暫停片刻以整理我們的名單。

And the first question will come from Michael Francis with William Blair. Please go ahead.

第一個問題將由邁克爾·弗朗西斯和威廉·布萊爾提出。請繼續。

Alan, Jen, Mike on for Ryan. Nice quarter. I wanted to start on paper bags.

艾倫、珍、麥克代替瑞恩上場。不錯的街區。我想先從紙袋著手。

Did I hear you right that you aim to scale that to $100 million over the next two years?

我沒聽錯吧，你的目標是在未來兩年內將規模擴大到 1 億美元？

Yes, that is correct.

是的，沒錯。

And what gives you confidence in that number?

你憑什麼對這個數字有信心？

It's because there's a lot of chains are moving away from plastic bag into paper bag. And this is a segment that we're seeing that it's, as one of the large chains in the US move towards this area, more and more chain similar chain will follow through that and there, basically that we feel that there is a, organic growth in that segment and also at the same time, it is not just the paperback was handled, there's different type of. Bag. There's SOS bag that which every fast food restaurant will need, and I mean with the growth of the, fast food chain that is growing, the number of stores that is growing, we feel that we're competitive.

這是因為很多連鎖店正在從塑膠袋轉向紙袋。我們看到，隨著美國一家大型連鎖店進軍這個領域，越來越多的類似連鎖店也會跟進。基本上，我們認為這一領域正在自然增長。同時，不只是平裝書，還有不同類型的書籍。包。每家快餐店都需要一個 SOS 應急包，我的意思是，隨著快餐連鎖店的不斷發展壯大，門市數量也在不斷增加，我們感覺自己很有競爭力。

We can be competitive enough to gain market share in that segment and as more and more people are looking toward that area. And also there's other bakery back as well. There's just too many items in that segment that makes us feel that we can grow immediately. I mean, as I said, we mentioned in our announcement that one chain, the annual sales of that number will be $20 million to $25 million per year just for one chain, and we do have, two or three other chains already working in testing our paperback and SOS back. That's why it's, we're, we feel confident that this will grow quickly into an annual sales of an additional $100 million a.

我們有能力在該細分市場中獲得市場份額，而且越來越多的人正在關注該領域。而且後面還有另一家麵包店。該領域有太多產品讓我們覺得可以立即成長。我的意思是，正如我所說，我們在公告中提到，僅一家連鎖店的年銷售額就將達到每年 2000 萬至 2500 萬美元，而且我們還有兩三家其他連鎖店已經在測試我們的平裝本和 SOS 書包。正因為如此，我們有信心，這將迅速成長，每年帶來額外 1 億美元的銷售額。

Year.

年。

Well, that's all good to hear. And then I wanted to ask on gross margins, went lower, I think as we were expecting, and 4Q is a little lower than we were expecting, but would like to know, long, longer.

聽到這些真是太好了。然後我想問毛利率，它下降了，我想正如我們預期的那樣，第四季度比我們預期的要低一些，但我想知道，更長的時間，更長的時間。

Term, do you think that there's an opportunity for you to get back into that high 30% range on the gross margin number, or is that going to be difficult while tariffs are in the market?

Term，您認為您有機會將毛利率重新提升到 30% 以上嗎？還是說在關稅政策的影響下，這很難實現？

Well.

出色地。

We're trying to be conservative right now at this point because there's still uncertainty, but the good thing is we feel there's a tailwind. One of the things that, one of the issues that reduces our dras, our gross margins drastically in the second quarter was the sudden drop. In the Taiwanese doll, a sudden increase in the Taiwanese dollar versus the US dollar that it was like a drop of 11% in just 3 days alone. And that 11% has come back to just about an an increase of 4.5%, 5%.

目前我們盡量保持保守，因為仍然存在不確定性，但好消息是我們感覺到一股順風。導致我們第二季毛利率大幅下降的原因之一是突然下降。台幣兌美元匯率突然上漲，短短3天內跌幅就達到了11%。而這11%已經回落到大約成長4.5%或5%。

So basically, It's more of a stabilization in the US dollars against Asian currencies, and this is actually enabling us to go back to our vendors to negotiate a better pricing, this past few months, basically. So we're seeing that there's a more tailwind in terms of the gross margin, but we do want to be conservative in terms of how we look at in terms of the numbers in September.

所以基本上，美元對亞洲貨幣的匯率趨於穩定，這實際上使我們能夠在過去的幾個月與供應商協商更好的價格。因此，我們看到毛利率方面出現了一些利好因素，但我們確實希望在看待 9 月的數據時保持保守態度。

And giving us the number that we've seen in October. We've already seen some improvement in October versus September. September was better than August. So, we want to see more of the positive trend before we can issue a higher, increase our gross margin, numbers, basically.

並為我們帶來了我們在十月看到的數字。我們已經看到10月份的情況比9月有所改善。九月比八月好。所以，我們希望看到更多正面的趨勢，才能發布更高的數據，提高我們的毛利率。

Okay.

好的。

And lastly for me, it's good to see.

最後，對我來說，看到這些真是太好了。

The share buybacks. Would love to get an update on your capital allocation priorities between debt pay down buybacks and the dividend and any potential M&A.

股票回購。很想了解貴公司在償還債務、股票回購、分紅以及任何潛在的併購等方面的資本配置優先事項。

Well, we, our strategy is that if we have more than $20 million in a short-term deposit that we can allocate it to, the dividend, special dividend, regular dividend, or, use it for other investments. At this point, even with the increase in tariff, increase in, inventory wise in the second quarters, we, our deposit. Amount is still the the same remained the same, so we, we're still strong in cash and lately we're seeing that, we're bringing, we have been bringing down our inventory, to reduce our liability reduce reduce our costs in terms of the tariff as well as importation costs, so we're seeing cash flowing back into our accounts and that's why we feel like it's good for us to, do some type of a shirt rese. Purchase while while our stock is kind of low right now, I think it's a value to repurchase here back at the same time we are still looking to merger and acquisition. We do have a few in the pipeline, investment, partnership, joint venture, and also acquisition. We don't feel that this will deter us, in terms of, deter us in terms of moving toward this direction.

我們的策略是，如果我們有超過 2000 萬美元的短期存款可以分配，那麼我們可以將其用於股息、特別股息、常規股息，或用於其他投資。目前，即使關稅上漲，第二季庫存增加，我們的存款也增加了。金額仍維持不變，所以我們的現金儲備依然充裕。最近我們看到，我們一直在減少庫存，以降低負債，減少關稅和進口成本，因此我們看到現金回流到我們的帳戶中。這就是為什麼我們覺得現在進行一些襯衫研究對我們來說是件好事。趁著我們股票價格目前偏低，我認為現在是回購的好時機，同時我們仍在尋求併購機會。我們目前有一些項目正在籌備中，包括投資、合作、合資以及收購。我們認為這不會阻止我們朝著這個方向前進。

Okay, well good to hear. I'll pass it on.

好的，那就太好了。我會轉達的。

Thank you, Michael. The next question will come from George Staffos with Bank of America. Please go ahead.

謝謝你，麥可。下一個問題將來自美國銀行的喬治·斯塔福斯。請繼續。

Hi everyone, good afternoon. Thanks for taking my question. Can you hear me okay, Alan?

大家好，下午好。謝謝您回答我的問題。艾倫，你能聽清楚我說話嗎？

Yes, I can, George.

是的，我可以，喬治。

Hey, how are you? So listen, maybe piggybacking on the question on capital allocation. I want to take it from a different approach. I mean, your dividend basically represents the majority of your earnings per share.

嘿，你怎麼樣？所以，聽著，也許可以藉用一下關於資本配置的問題。我想換個角度來看這個問題。我的意思是，你的股息基本上佔你每股收益的大部分。

Why would you consider or contemplate doing more buyback, in light of that? Would you consider borrowing to buy back more stock? It would seem like, deleveraging and taking care of your incoming, debt pay down needs would be probably more prudent, but, how do you think about that?

有鑑於此，為什麼還會考慮或考慮進行更多回購？你會考慮借錢回購更多股票嗎？看起來，降低槓桿率並滿足即將到來的債務償還需求可能更為謹慎，但是，您怎麼看？

Well, here's the thing. The debt, we don't have any debt on our books right now at this point. The debt that you're seeing is the IE. That's on the real estate part of.

事情是這樣的。目前，我們帳面上沒有任何債務。你看到的債務就是IE。那是房地產方面的事。

The interest.

利息。

That $20 million that current liability, you said you're going to pay that down in the upcoming year.

你說過，你會在來年償還那2000萬美元的現有負債。

We can pay it down, we can pay either, with our current CD that we have in our, short-term deposit to utilize some of the cash on that and at the same time, we can have third-party, we can also continue to borrow with different banks. It depends on how, what the cash flow situation is if there's a need to do that. Because right now, like I said, we don't have any debts in our, lollipop or care packaging, book right now. So we're, this is one of the things that we still have time to think what we want to do, allocate our capitals. If there's other things that we can do better, then we will do that. But at this currently, the rate of CD in income is dropping as the interest, Trade reduces so we have to figure out which is better. If we were to pay down the debt, we actually will be making generating additional income, it'll be an interdepartment intercom intercompany loan to the VIE company in paying down that debt. So it wouldn't be like really just paying, it'll be paying down the debt for the VIE company, but at the same time for lollipop it'll be income, additional income. Instead of treating it for deposits from, yeah, deposits from the bank, it will be actually more income from the BIE company.

我們可以償還這筆款項，我們可以用我們目前在短期存款中的定期存款來償還，利用其中的一些現金，同時，我們也可以向第三方，或者繼續向不同的銀行借款。這取決於具體情況，以及現金流狀況如何，是否有必要這樣做。因為就像我剛才說的，我們現在沒有任何債務，無論是棒棒糖還是護理包裝方面的債務。所以，這是我們還有時間思考我們想做什麼、如何分配資金的事情之一。如果還有其他方面我們可以做得更好，那我們就會去做。但目前，隨著利息和交易的減少，CD 的收益率正在下降，所以我們必須弄清楚哪個更好。如果我們償還債務，實際上會創造額外的收入，這將是向 VIE 公司提供的部門間內部公司間貸款，用於償還該債務。所以這不僅僅是償還債務，而是為 VIE 公司償還債務，但同時為 Lollipop 公司帶來收入，額外的收入。與其將其視為來自銀行的存款，不如將其視為來自 BIE 公司的更多收入。

And George, this is Jen.

喬治，這位是珍。

I just wanted to add on, hi George. I just wanted to add on to what Alan was talking about, to answer your question. The main purpose really is to have one additional tool in our toolbox to further enhance our shareholder return while we continue to focus on growing. The company either organically or inorganically as we previously announced as you probably saw yesterday in the in the announcement, the total amount of that that the board approved of the share repurchase program is $15 million, so it is a fairly small program at management's total discretionary. So this will be something. That management will continue to evaluate in terms of a lot of the different factors, right, the price, the pricing, the performance, the liquidity, the strength of the balance sheet, quite a few factors, just another tool in our toolbox to.

我只是想補充一句，嗨，喬治。我只是想補充艾倫剛才說的內容，來回答你的問題。主要目的是為了在我們的工具箱中增加一個工具，以便在繼續專注於成長的同時，進一步提高股東回報。公司將透過有機成長或無機成長的方式進行擴張，正如我們之前宣布的那樣（您可能昨天在公告中看到了），董事會批准的股票回購計劃總額為 1500 萬美元，因此這是一個規模相當小的計劃，完全由管理層酌情決定。所以這將會是一件大事。管理階層將繼續從許多不同的因素進行評估，對吧？價格、定價、績效、流動性、資產負債表的穩健性等等，這只是我們工具箱裡的另一個工具。

Further enhance our shareholder return. You're right. I mean, obviously our dividend yield is already pretty rich, so that definitely is something that we consider, as we, move forward with the potential execution under this program as well.

進一步提升股東回報。你說得對。我的意思是，很顯然，我們的股息殖利率已經相當高了，所以這肯定也是我們在推進該計劃的潛在執行時會考慮的因素。

Okay, I appreciate the thoughts on that and thanks for the reminder on the VIE. One question back to the question I think Mike teed up on the bag there. So, let's assume you have perfect accuracy on the revenue side on bags, and that's $100 million in whatever time period you'd said.

好的，感謝您的想法，也謝謝您提醒我有關 VIE 的事情。回到剛才的問題，我認為麥克在那裡擺好了球座。假設你對行李收入的估算完全準確，並且在你所說的時間段內，收入為 1 億美元。

What kind of margin do you think you're going to get on that business? And you're already starting to see some of that show up in the 4th quarter, you said, correct? So two questions there.

你覺得這筆生意能賺多少錢？你說過，在第四季已經開始看到一些這樣的跡象了，對嗎？所以這裡有兩個問題。

It'll be, it will be a mixed, more of a mixed margin. The higher volume will be, in the, could be in the high 10s, margin size, and the SOS bag could be in the, high 30s. So it's, it depends on the product line. There's also a bakery bag that could be in the high 50s. So, and also at the same time, We are selling online on these, a new bag that we're bringing in, the online will be in even the, higher, margin range, so it will be more of a balancing mixing mixture of each just like we're as we are doing right now. So, and also we are actually working, heavily toward in terms of, getting our backs to, manufacture more efficiently. To increase margin from there, better sourcing of raw materials from our vendors, and also moving, shifting the, manufacturing site, locations, possibly, potentially moving some into domestic US production that might save some costs, even enhancing more margin. So, this is, these are the things that we can do, one, as a volume increase in the next, 12 months.

將會是，將會是一個喜憂參半的結果，更確切地說，是一個喜憂參半的結果。較高的銷量可能在 10 多件，利潤空間較大，而 SOS 袋的利潤空間可能在 30 多件。所以，這取決於產品線。還有一個烘焙食品袋，價格可能在 50 多美元。所以，同時，我們也在網路上銷售這些產品，我們即將推出一款新包，網路上銷售的利潤率會更高，所以這將更像是一種平衡的混合銷售模式，就像我們現在所做的那樣。所以，我們也在努力，大力推進，使我們的生產效率更高。為了提高利潤率，我們需要從供應商那裡更好地採購原材料，並且可能需要轉移生產基地，甚至有可能將部分生產轉移到美國國內，這或許可以節省一些成本，甚至提高利潤率。所以，我們可以做這些事情，第一，在接下來的 12 個月增加銷售量。

All right, so two quickies for me and I'll turn it over, Alan. So you know with that being the case and we're already in November, so almost.

好了，我先快速完成兩個回合，然後就把回合交給艾倫。所以你知道，既然情況就是這樣，現在已經是十一月了，差不多就到十一月了。

Halfway through the quarter, yet, the range on on revenue growth, the range on margin is is fairly wide. Now I realize you're trying to be prudent. I realize there are a lot of Bigger reason to mark, especially with tariffs and sourcing, but I find the range, it's maybe a little bit wider than I would expect at this juncture in the year. What, what's giving you pause in terms of maybe perhaps having a little bit narrower both growth rate range and margin range for the quarter, and then did I hear you say, and my last question I'll turn it over, did you say there was an inventory write-off? I apologize, I'm on the road right now, so I don't have your materials in front of me.

雖然季度已過半，但營收成長和利潤率的預期範圍都相當廣泛。現在我明白了，你是想謹慎行事。我知道有很多更重要的原因需要標記，尤其是在關稅和採購方面，但我發現，在這個時間點，標記的範圍可能比我預期的要寬一些。是什麼讓您猶豫是否要稍微縮小本季的成長率範圍和利潤率範圍？我剛剛是不是​​聽到您說，最後一個問題，我把問題轉給別人問，您是說有庫存減損嗎？抱歉，我現在在路上，所以您的資料不在我手邊。

I wasn't, I don't, I'm not sure what the inventory write-off was, but I know that we're reducing inventory at this currently, toward the year end, our actually our sales have been very robust. I should've said that we do, we are in the middle of. 4th quarter already, so we're seeing our sales, almost in the mid-teen range, but we just want to be conservative, and basically, at the mid-teen range, this is a sales increase organically that we haven't seen for actually for the past 3 years.

我不太清楚庫存減記的具體金額，但我知道目前臨近年底，我們正在減少庫存，實際上我們的銷售額一直非常強勁。我應該說，我們確實在進行中。已經是第四季了，所以我們的銷售額幾乎達到了十幾個百分點，但我們還是想保守一點，基本上，十幾個百分點的銷售額增長是過去三年裡我們從未見過的自然增長。

Okay, so that's we're saying that 12 to 14, but we are seeing numbers very close to the mid-teens, but we just want to be prudent in terms of 12 to 14. That's what we're trying to, this is where we, we're being conservative, but we're seeing in the mid-teens right now in the growth of numbers, the curate sales numbers. And, basically, in our industry, this is kind of the, a very good numbers, in terms of of well above our industry right now.

好的，所以我們說的是 12 到 14 歲，但我們看到的數字非常接近十幾歲，但我們還是想謹慎一些，把範圍定在 12 到 14 歲。這就是我們正在努力的方向，我們目前採取的是保守的做法，但我們看到，精選商品的銷售額目前增加了十幾個百分點。基本上，就我們這個行業而言，這算是一個非常好的數字，遠高於我們行業目前的水平。

Understood. Thanks, I'll turn it over.

明白了。謝謝，我這就翻過來。

Thank you, Jen. Thank.

謝謝你，珍。感謝。

You.

你。

And this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Alan Yu, CEO, for any closing remarks. Please go ahead.

我們的問答環節到此結束。我想把會議交還給先生。請執行長 Alan Yu 致閉幕詞。請繼續。

Thank you.

謝謝。

Thank you everyone for joining our 3rd quarter care packaging earning conference call. I'd like to say, thank you again and have a nice day. Goodbye.

感謝各位參加我們第三季護理包裝業務收益電話會議。我想再次表示感謝，祝您今天愉快。再見。

The conference is now concluded.

會議到此結束。

Thank you for attending today's presentation. You may now disconnect.

感謝各位參加今天的報告會。您現在可以斷開連線了。