Nature's Sunshine Products Inc (NATR) 2022 Q4 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine financial results for the fourth quarter and full year ended December 31, 2022. Joining us today are Nature's Sunshine's CEO, Terrence Moorehead; CFO, Shane Jones; and General Counsel, Nate Brower. Following their remarks, we'll open the call for your questions.

大家下午好，感謝您參加今天的電話會議，討論 Nature's Sunshine 截至 2022 年 12 月 31 日的第四季度和全年財務業績。今天加入我們的是 Nature's Sunshine 的首席執行官 Terrence Moorehead；首席財務官肖恩·瓊斯；和總法律顧問 Nate Brower。在他們發言之後，我們將開始徵集您的問題。

Before we go further, I would like to turn the call over to Mr. Brower as you read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

在我們進一步討論之前，我想把電話轉給 Brower 先生，因為您正在閱讀公司的安全港聲明，該聲明符合 1995 年《私人證券訴訟改革法案》的含義，該聲明提供了有關前瞻性聲明的重要警告。內特，請繼續。

Thank you. Good afternoon, and thanks for joining our conference call to discuss our fourth quarter and full year 2022 financial results. I'd like to remind everyone that this call is available for replay by telephonic dial-in through March 29th. And by way of live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com.

謝謝。下午好，感謝您參加我們的電話會議，討論我們第四季度和 2022 年全年的財務業績。我想提醒大家，在 3 月 29 日之前，可以通過電話撥入重播此電話會議。並通過網絡直播的方式發佈在我們網站 ir.naturesunshine.com 的投資者關係部分。

The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance and the actual results may be materially different from the results implied by forward-looking statements.

本次電話會議的信息包含前瞻性陳述。這些陳述通常以相信、希望、可能、預期、期望、意願和其他類似表達等術語為特徵。前瞻性陳述並非對未來業績的保證，實際結果可能與前瞻性陳述所暗示的結果存在重大差異。

Factors that could cause results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein.

可能導致結果與此處暗示的結果存在重大差異的因素包括但不限於公司在 10-K 表格年度報告中風險因素標題下披露的那些因素以及向美國證券交易委員會提交的其他報告。本次電話會議的信息僅截至今天，公司不承擔更新此處提供的信息的任何義務。

Now I would like to turn the call over to the CEO of Nature's Sunshine, Terrence Moorehead. Terrence?

現在我想把電話轉給 Nature's Sunshine 的首席執行官 Terrence Moorehead。泰倫斯？

Thank you, Nate, and good afternoon, everyone. I want to thank you for joining today's call to discuss our fourth quarter and full year results. On the call with me is our new Chief Financial Officer, Shane Jones, and I'd like to take a moment to officially welcome Shane to Nature's Sunshine and say what a pleasure it is to have him as part of our management team.

謝謝你，內特，大家下午好。感謝您參加今天的電話會議，討論我們的第四季度和全年業績。與我通話的是我們的新任首席財務官 Shane Jones，我想花點時間正式歡迎 Shane 加入 Nature's Sunshine，並說很高興讓他成為我們管理團隊的一員。

Shane joined the company in December and brings over 25 years of experience, having previously served as the Chief Financial Officer at well-known companies such as West Marine, 1-800 Contacts and Backcountry.com. In his role as CFO, Shane will be working closely with our management team to improve performance and drive sustainable profitable growth across the business. He's already added significant value as we continue to take steps to mitigate external cost pressures, drive efficiency and build financial resilience into the business.

Shane 於 12 月加入公司，擁有超過 25 年的經驗，此前曾在 West Marine、1-800 Contacts 和 Backcountry.com 等知名公司擔任首席財務官。作為首席財務官，Shane 將與我們的管理團隊密切合作，以提高績效並推動整個業務的可持續盈利增長。隨著我們繼續採取措施減輕外部成本壓力、提高效率並為企業建立財務彈性，他已經增加了重要價值。

Today, I'll provide some context to our fourth quarter and full year 2022 results and give some details on how we believe the business continues to develop. Shane will then take you through the specifics of our financials in more detail.

今天，我將提供一些有關我們第四季度和 2022 年全年業績的背景信息，並詳細說明我們認為該業務將如何繼續發展。然後，Shane 將帶您更詳細地了解我們的財務細節。

Turning to the fourth quarter. We continue to recalibrate and adjust to the changing macroeconomic environment and shifts in consumer behavior, but saw several encouraging signs in the quarter. First, Asia Pacific continued to deliver strong results as we've done a good job diversifying our portfolio in the region. We've contemporized the business and built strong field fundamentals that continue to create new opportunities for incremental growth.

轉到第四季度。我們繼續重新調整和調整以適應不斷變化的宏觀經濟環境和消費者行為的轉變，但在本季度看到了一些令人鼓舞的跡象。首先，亞太地區繼續取得強勁業績，因為我們在該地區的投資組合多元化方面做得很好。我們對業務進行了現代化改造，並建立了強大的領域基礎，繼續為增量增長創造新的機會。

Second, our business in Central and Eastern Europe continued to show signs of stabilizing as we rewired operating practices to address the new reality on the ground and expanded our footprint to include a few new markets that helped partially offset the unique risks of doing business in that part of the world.

其次，我們在中歐和東歐的業務繼續顯示出穩定跡象，因為我們重新調整了運營實踐以應對當地的新現實，並擴大了我們的足跡以包括一些新市場，這有助於部分抵消在該地區開展業務的獨特風險世界的一部分。

Third, our digital initiatives continued to demonstrate strong potential to drive new customer acquisition and the integration of our Amazon business into our internal processes is expected to enhance our focus and improve performance moving forward. And finally, the product stockout issues that slowed our business in the first half of 2022 appear to be returning to pre-COVID levels as we saw product availability improved across the board.

第三，我們的數字計劃繼續顯示出推動新客戶獲取的強大潛力，將我們的亞馬遜業務整合到我們的內部流程中有望加強我們的關注並提高未來的績效。最後，在 2022 年上半年減緩我們業務發展的產品缺貨問題似乎正在恢復到 COVID 之前的水平，因為我們看到產品可用性全面提高。

At the same time, macroeconomic and geopolitical headwinds continued to negatively impact both our top and bottom line business dynamic in the fourth quarter. Despite the external headwinds, we were still able to move our key initiatives forward and deliver resilient results. Consolidated fourth quarter net sales on a reported basis came in at $103 million or $110 million when removing the impact of foreign exchange, which is a 6% decrease versus prior year.

與此同時，宏觀經濟和地緣政治逆風繼續對我們第四季度的收入和利潤業務動態產生負面影響。儘管存在外部逆風，我們仍然能夠推進我們的關鍵舉措並取得有彈性的結果。第四季度綜合淨銷售額為 1.03 億美元，扣除外匯影響後為 1.1 億美元，較上年同期下降 6%。

You'll remember, last year's fourth quarter, was the largest quarter in the company's history with each of our operating business units delivering strong growth. Clearly, we're operating in an extremely challenging external environment, but we believe the underlying fundamentals and strength of our brand remain firmly intact, and the steps we've taken to create a more diverse consumer-focused portfolio will build momentum as the external headwinds subside.

您會記得，去年第四季度是公司歷史上業績最強勁的一個季度，我們的每個運營業務部門都實現了強勁增長。顯然，我們在一個極具挑戰性的外部環境中運營，但我們相信我們品牌的基本面和實力仍然完好無損，我們為創建更多樣化的以消費者為中心的產品組合而採取的措施將隨著外部環境的發展而增強勢頭逆風消退。

Looking at the full year, we reported net sales of $422 million, making 2022 our second-best year in the company's history. When you adjust for the impact of foreign exchange, our 2022 sales were $445 million, which is up slightly versus prior year, again, a tremendous accomplishment given the unprecedented headwinds we faced. To be specific, foreign exchange wiped away about $23 million in sales for the year.

縱觀全年，我們報告的淨銷售額為 4.22 億美元，使 2022 年成為公司歷史上第二好的一年。當您根據外彙的影響進行調整時，我們 2022 年的銷售額為 4.45 億美元，與上一年相比略有增長，鑑於我們面臨前所未有的逆風，這也是一項巨大的成就。具體而言，外匯損失了當年約 2300 萬美元的銷售額。

A closer look shows that Asia Pacific drove our performance in the fourth quarter as well as the full year, led by Japan and Taiwan. On a constant currency basis, Asia was up 5% in the fourth quarter and 16% for the full year. The growth was fueled by our investment in field activation that helped drive order growth and counteract the residual effects of China's 0 COVID policy. It's worth noting that while China was a drag on the quarter, sales momentum increased each month as the country started to reopen. We're hopeful this trend continues, but the situation is fluid.

仔細觀察就會發現，在日本和台灣的帶動下，亞太地區在第四季度和全年推動了我們的業績。按固定匯率計算，亞洲第四季度增長 5%，全年增長 16%。我們對現場激活的投資推動了增長，這有助於推動訂單增長並抵消中國 0 COVID 政策的殘餘影響。值得注意的是，雖然中國拖累了本季度，但隨著中國開始重新開放，銷售勢頭每個月都在增長。我們希望這種趨勢繼續下去，但情況是不穩定的。

Looking forward to 2023, we believe a continued focus on targeted new product introductions, next-generation branding and sustained investment in field activation will allow us to continue to drive profitable growth in Asia in 2023. Our business in Europe continued to be resilient with sales for the quarter and full year performing better than expected due to the incredible resolve of our team in Central and Eastern Europe.

展望 2023 年，我們相信繼續專注於有針對性的新產品推出、下一代品牌推廣和對現場激活的持續投資將使我們能夠在 2023 年繼續推動亞洲的盈利增長。我們在歐洲的業務繼續保持彈性，銷售由於我們在中歐和東歐的團隊令人難以置信的決心，本季度和全年的表現都好於預期。

For the fourth quarter, sales were down 17% and were down 10% for the full year in constant currency versus last year's historic results. Macroeconomic and geopolitical challenges saw consumer spending declined sharply, negatively impacting orders and average order. Fortunately, our investment in customer growth helps support geographic penetration in new markets like Turkey and the Baltic states, partially filling the gap from lost sales in Ukraine. As we move into 2023, we believe continued stability in Central and Eastern Europe, combined with strong execution of our field fundamentals will create opportunities for us to deliver modest growth in the region.

與去年的歷史業績相比，第四季度銷售額下降了 17%，按固定匯率計算，全年銷售額下降了 10%。宏觀經濟和地緣政治挑戰導致消費者支出急劇下降，對訂單和平均訂單產生負面影響。幸運的是，我們對客戶增長的投資有助於支持在土耳其和波羅的海國家等新市場的地理滲透，部分填補了烏克蘭銷售損失的缺口。隨著我們進入 2023 年，我們相信中歐和東歐的持續穩定，加上我們領域基本面的有力執行，將為我們在該地區實現適度增長創造機會。

In North America, orders remained relatively flat versus prior year, but the business continued to be challenged by average order declines from customers who bought about 1 less unit on average per order. This is consistent with the broader market where we saw consumers offsetting inflationary pressures by purchasing smaller quantities, delaying purchases or trading down to cheaper brands. As a result, fourth quarter sales were down 14%, while full year sales were down 11%.

在北美，訂單量與上一年相比持平，但業務繼續受到平均訂單量下降的挑戰，客戶平均每筆訂單購買量減少約 1 件。這與更廣泛的市場一致，我們看到消費者通過購買較小數量、延遲購買或降價購買更便宜的品牌來抵消通脹壓力。結果，第四季度銷售額下降了 14%，而全年銷售額下降了 11%。

Our investment in digital activation continued to gain traction, driving new customer acquisition and adding new members to our Subscribe and Thrive Autoship program, which now represents about 26% of sales and continued to increase versus prior year. We continue to see encouraging signs from our digital business.

我們在數字激活方面的投資繼續獲得牽引力，推動了新客戶的獲取，並為我們的 Subscribe and Thrive Autoship 計劃增加了新成員，該計劃目前約佔銷售額的 26%，並且與上一年相比繼續增長。我們繼續從我們的數字業務中看到令人鼓舞的跡象。

As we move forward, we believe there's an opportunity to stabilize the North American business in the latter half of 2023 by continuing to expand our digital footprint, bringing our Amazon business in-house and by increasing the number of nutrition health practitioners recommending our products, thus extending our leadership position as the #1 nutrition health practitioner brand.

隨著我們的前進，我們相信有機會在 2023 年下半年通過繼續擴大我們的數字足跡、將我們的亞馬遜業務引入內部以及增加推薦我們產品的營養健康從業者的數量來穩定北美業務，從而擴大我們作為#1 營養健康從業者品牌的領導地位。

The fourth quarter also saw continued pressure on gross margins with 180 basis points of loss, gross of loss margin from inflation and foreign exchange that negatively impacted cost of goods. Last quarter, I invited our new supply chain leader, Martin Gonzalez, to walk you through our plans to improve gross margin with a series of initiatives designed to streamline our operations and drive out costs. Since then, we've made significant progress on our $10 million to $12 million gross savings target. We've identified the specific savings initiative and have moved into the execution phase of the plan.

第四季度毛利率也持續受壓，虧損 180 個基點，通貨膨脹和外彙的毛利率損失對商品成本產生負面影響。上個季度，我邀請了我們新的供應鏈負責人 Martin Gonzalez，向您介紹了我們通過一系列旨在簡化運營和降低成本的舉措來提高毛利率的計劃。從那時起，我們在 1000 萬至 1200 萬美元的總儲蓄目標上取得了重大進展。我們已經確定了具體的節約計劃，並已進入計劃的執行階段。

It's important to note, however, that the benefit of these actions won't start being reflected in our results until the end of 2023, with the material impact coming in 2024. The structural changes we're making to our product line and supply chain operations will provide significant improvements to gross margin. But many of the initiatives involve redesigning processes and revamping sourcing relationships. Doing this requires time and resources to redesign workflows, reformulate products, test them, cycle through old inventory by selling off legacy products and then selling the reformulated products into the market. Again, this is an end-to-end restructuring of our supply chain so it requires time and resources to do it right. In the end, the results will be significant and meaningful.

但是，請務必注意，這些行動的好處要到 2023 年底才會開始體現在我們的結果中，而實質性影響將在 2024 年到來。我們正在對產品線和供應鏈進行結構性調整運營將顯著提高毛利率。但許多舉措涉及重新設計流程和改造採購關係。這樣做需要時間和資源來重新設計工作流程、重新配製產品、測試它們、通過出售舊產品循環利用舊庫存，然後將重新配製的產品銷售到市場上。同樣，這是我們供應鏈的端到端重組，因此需要時間和資源才能正確完成。最終，結果將是重大而有意義的。

In the meantime, we're planning strategic price increases in Asia Pacific, Europe, LatAm and North America to help offset the impact of inflationary headwinds and improve profitability. In challenging times like these, we believe it's more important than ever to stay focused, keep moving forward and lean into our strategies, and that's exactly what we're going to do.

與此同時，我們計劃在亞太地區、歐洲、拉美和北美戰略性提價，以幫助抵消通脹逆風的影響並提高盈利能力。在這樣充滿挑戰的時代，我們相信保持專注、繼續前進並專注於我們的戰略比以往任何時候都更加重要，而這正是我們要做的。

As we move into 2023, we're focused on restoring growth and building positive momentum, delivering low to mid-single-digit revenue growth for the year. To achieve this, we've streamlined our global strategy to focus on 3 key priorities: Brand Power strategies will focus on creating more powerful new products to fuel customer growth. Field Energy will focus on attracting a new generation of digitally enabled distributors, retailers and nutrition health practitioners. And digital-first, we'll focus on building customer acquisition and retention capabilities around the globe.

隨著我們進入 2023 年，我們將專注於恢復增長和建立積極勢頭，實現今年中低個位數的收入增長。為實現這一目標，我們簡化了全球戰略，將重點放在 3 個關鍵優先事項上： 品牌力戰略將專注於創造更強大的新產品，以推動客戶增長。 Field Energy 將專注於吸引新一代數字化分銷商、零售商和營養健康從業者。數字優先，我們將專注於在全球範圍內建立客戶獲取和保留能力。

In closing, I want to reiterate our steadfast commitment to successfully navigating this unique period of the market uncertainty, and I want to leave you with a few takeaways. First, the underlying fundamentals of our business are solid, and our ability to drive customer activation remains well intact. Second, we have a strong balance sheet with the appropriate level of cash and liquidity to fund our strategies and key initiatives. And third, we're fighting back against the external macroeconomic environment, with a roadmap that improves gross margins and overall profitability to make us more valuable and more competitive in the future.

最後，我想重申我們對成功度過這個獨特的市場不確定時期的堅定承諾，我想給您一些要點。首先，我們業務的基本面是堅實的，我們推動客戶激活的能力仍然完好無損。其次，我們擁有強大的資產負債表，擁有適當水平的現金和流動性來為我們的戰略和關鍵舉措提供資金。第三，我們正在反擊外部宏觀經濟環境，制定了提高毛利率和整體盈利能力的路線圖，使我們在未來更具價值和競爭力。

With that, I'd like to turn the call over to Shane.

有了這個，我想把電話轉給 Shane。

Thank you, Terrence. It's great to be here today. Jumping right into our results. Net sales in the fourth quarter were $102.7 million compared to $117.9 million in the year ago quarter. This 13% decline was largely driven by reduced sales in China, Europe and North America. As Terrence mentioned, excluding the impact from foreign exchange rates, consolidated net sales decreased 6% in the fourth quarter versus last year. Gross margin in the fourth quarter was 72.2% compared to 74.0% a year ago. The decline was primarily driven by foreign exchange headwinds, increases in material production, transportation and distribution costs as well as changes in market mix. These headwinds were partially offset by a onetime $0.7 million add-back related to the partial reversal of the reserves taken earlier in 2022 for the Russia and Ukraine conflict.

謝謝你，泰倫斯。今天很高興來到這裡。直接進入我們的結果。第四季度的淨銷售額為 1.027 億美元，而去年同期為 1.179 億美元。這 13% 的下降主要是由於中國、歐洲和北美的銷售額下降。正如 Terrence 提到的，排除匯率的影響，第四季度的綜合淨銷售額比去年下降了 6%。第四季度的毛利率為 72.2%，而一年前為 74.0%。下降的主要原因是外匯逆風、材料生產、運輸和分銷成本的增加以及市場結構的變化。這些逆風部分被 2022 年初為俄羅斯和烏克蘭衝突提取的儲備金部分衝回而一次性增加 70 萬美元所抵消。

Volume incentives in the fourth quarter declined 9% to $31.1 million compared to $34.4 million in the year ago quarter. As a percentage of net sales, volume incentives were 30.3% compared to 29.1% in the year-ago quarter. The increase in volume incentives as a percentage of net sales is primarily due to changes in market mix. Selling, general and administrative expenses during the fourth quarter declined 15% to $38.8 million compared to $45.4 million in the year ago quarter. This reduction was driven by lower service fees in China, variable costs related to lower sales and lower compensation costs. These reductions were slightly offset by a onetime impairment of fixed assets of $1.1 million.

與去年同期的 3440 萬美元相比，第四季度的數量激勵下降 9% 至 3110 萬美元。銷量激勵占淨銷售額的百分比為 30.3%，而去年同期為 29.1%。數量激勵占淨銷售額百分比的增加主要是由於市場組合的變化。與去年同期的 4540 萬美元相比，第四季度的銷售、一般和管理費用下降 15% 至 3880 萬美元。這一減少是由於中國服務費下降、與銷售額下降相關的可變成本和薪酬成本下降所致。這些減少被 110 萬美元的固定資產一次性減值略微抵消。

As a percentage of net sales, SG&A expenses were 37.8% for the fourth quarter of 2022 compared to 38.5% in the year ago quarter. Reflective of the gross margin pressures, operating income was $4.2 million or 4.1% of net sales compared to $7.5 million or 6.4% of net sales in prior year. GAAP net income attributable to common shareholders for the fourth quarter was $2.0 million or $0.10 per diluted share as compared to $13.4 million or $0.67 per diluted share in the year ago quarter.

作為淨銷售額的百分比，SG&A 費用在 2022 年第四季度為 37.8%，而去年同期為 38.5%。反映毛利率壓力，營業收入為 420 萬美元或淨銷售額的 4.1%，而去年為 750 萬美元或淨銷售額的 6.4%。第四季度歸屬於普通股股東的 GAAP 淨收入為 200 萬美元或稀釋後每股收益 0.10 美元，而去年同期為 1340 萬美元或稀釋後每股收益 0.67 美元。

The change in GAAP net income reflects reduced operating income as well as an unfavorable change in our income tax provision related to a valuation allowance for foreign tax credits and our expected utilization of NOLs in some markets. Adjusted EBITDA, as defined in our earnings release, was $8.0 million compared to $11.6 million in the fourth quarter of 2021.

GAAP 淨收入的變化反映了營業收入的減少以及與外國稅收抵免的估值津貼相關的所得稅準備金的不利變化以及我們在某些市場對 NOLs 的預期利用。根據我們的收益發布中的定義，調整後的 EBITDA 為 800 萬美元，而 2021 年第四季度為 1160 萬美元。

Moving on to our liquidity and our capital allocation plan. Our balance sheet remains clean with cash and cash equivalents of $60 million and only $1.2 million of debt. Inventory was flat in Q4 compared to where we ended Q3. In 2023, we expect to rightsize the amount of inventory within our supply chain as we continue to meet strong demand in Asia and as China continues its reopening curve.

繼續我們的流動性和資本配置計劃。我們的資產負債表保持乾淨，現金和現金等價物為 6000 萬美元，只有 120 萬美元的債務。與第三季度結束時相比，第四季度的庫存持平。到 2023 年，隨著我們繼續滿足亞洲的強勁需求以及中國繼續其重新開放曲線，我們預計將調整供應鏈中的庫存量。

As a part of our capital allocation plan, we continue to utilize our share repurchase authorization, buying 909,000 shares in the full year for $13.6 million or an average of $14.93 per share. As of December 31, 2022, $24.0 million remains of our share repurchase program.

作為我們資本配置計劃的一部分，我們繼續利用我們的股票回購授權，全年以 1360 萬美元或平均每股 14.93 美元的價格購買 909,000 股股票。截至 2022 年 12 月 31 日，我們的股票回購計劃剩餘 2400 萬美元。

Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and strategic investments. Before moving to our outlook for 2023, I would like to address the situation we made public on February 24th. Our company was a victim of a sophisticated phishing attack that targeted Synergy Japan, which our team self-discovered on February 17. The incident involved employee impersonation and fraudulent financial requests, which resulted in fraudulently induced wire transfers during the month of February. As a result of this event, we expect to record a onetime pretax charge of up to $4.8 million in the first quarter of 2023.

除了股票回購之外，我們健康的資本配置結構使我們能夠繼續進行數字化轉型和戰略投資。在談到我們對 2023 年的展望之前，我想談談我們在 2 月 24 日公佈的情況。我們公司是針對 Synergy Japan 的複雜網絡釣魚攻擊的受害者，我們的團隊於 2 月 17 日自行發現了這一事件。該事件涉及員工冒充和欺詐性財務請求，導致 2 月份發生了欺詐性電匯。由於這一事件，我們預計將在 2023 年第一季度記錄高達 480 萬美元的一次性稅前費用。

To date, we have found no evidence of additional fraudulent activity and are working with our banking partners as well as federal and local authorities to investigate this matter and recover as much of the funds as possible.

迄今為止，我們沒有發現其他欺詐活動的證據，並且正在與我們的銀行合作夥伴以及聯邦和地方當局合作調查此事並儘可能多地追回資金。

Now turning to our 2023 outlook. So far during Q1, we have experienced a sequential improvement across most of our markets, and we expect to report sales growth for the full year in the low to mid-single-digit range. Keep in mind that Q1 of 2023 will be compared to a relatively strong period last year when many of the headwinds we are facing weren't so pronounced. However, the comparisons ease as we move through the year. We do expect inflation and foreign exchange headwinds to continue to have a negative impact to our cost of sales in the first half of the year, but we would expect modest improvement in the second half. And as Terrence mentioned, the benefit of our gross margin improvement plan won't literally hit our P&L until 2024.

現在轉向我們的 2023 年展望。到目前為止，在第一季度，我們的大部分市場都經歷了連續改善，我們預計全年的銷售增長將保持在中低個位數範圍內。請記住，將 2023 年第一季度與去年相對強勁的時期進行比較，當時我們面臨的許多逆風並不那麼明顯。然而，隨著時間的推移，比較變得容易了。我們確實預計通脹和外匯逆風將在今年上半年繼續對我們的銷售成本產生負面影響，但我們預計下半年會適度改善。正如 Terrence 所提到的，我們的毛利率提高計劃的好處要到 2024 年才會真正影響我們的損益。

In the meantime, we are taking price in certain products and geographies to combat inflation and improve gross margin. Despite market headwinds, most of which remain out of our control, we're very excited about and remain committed to the long-term growth opportunities for the business, and we are committed to pursuing opportunities to maximize value for our shareholders.

與此同時，我們正在對某些產品和地區定價，以對抗通貨膨脹並提高毛利率。儘管市場逆風，其中大部分仍然是我們無法控制的，但我們對業務的長期增長機會感到非常興奮，並將繼續致力於該業務的長期增長機會，我們致力於為股東尋求最大化價值的機會。

Now I will turn it back to the operator.

現在我會把它轉回給接線員。

(Operator Instructions)

（操作員說明）

Our first question will come from Linda Bolton-Weiser with D.A. Davidson.

我們的第一個問題將來自 D.A. 的 Linda Bolton-Weiser。戴維森。

So I guess I'll just start with it's good to hear your outlook for sales being up a little bit, modestly in 2023. Was that low to mid-single-digit growth in local currency or on a reported basis for the year?

因此，我想我首先要說的是，很高興聽到您對 2023 年銷售額的展望略有上升。以當地貨幣計算，這種增長率是低到中個位數，還是在今年的報告基礎上？

Do you want to comment on that, Shane?

你想對此發表評論嗎，Shane？

That will be in local currency.

那將以當地貨幣計算。

Okay. Got you. So as I think you said, the FX impact is kind of still there pretty negatively in the first quarter. And then it sort of would get less negative or better as the year progressed. Is that the way to think about that?

好的。明白了所以正如我想你所說的那樣，外匯影響在第一季度仍然存在相當負面的影響。然後隨著時間的推移，它會變得不那麼消極或更好。是這樣想的嗎？

That's correct.

這是正確的。

Okay. And then again, I don't want to get you into making detailed projections, but when you get past the hard comparison and the less negative FX, I mean do you think second quarter revenue can actually be up on a reported basis or is that a little unclear at this point?

好的。再一次，我不想讓你做出詳細的預測，但是當你通過艱難的比較和不太負面的 FX 時，我的意思是你認為第二季度的收入實際上可以在報告的基礎上增加嗎？在這一點上有點不清楚？

I would expect that it would be up if you recall, most of the big hits that we took last year began in Q2. So we'll have -- the comp will get easier in Q2, and which will allow us to have a positive comp in Q2.

如果你還記得的話，我預計它會上升，我們去年取得的大部分成功都是在第二季度開始的。所以我們會有——第二季度的比賽會變得更容易，這將使我們在第二季度有一個積極的比賽。

Yes. I think we've built some of the strategies, too, to build momentum throughout the year in general.

是的。我認為我們也制定了一些戰略，以在全年建立勢頭。

Okay. Well, that's good to hear. So again, I'm just wondering -- so for your outlook, I guess you really didn't give profit or EBITDA or anything. Is there something that holds you back on that, giving guidance for there on that front, given that you will have sales growth for the year?

好的。嗯，很高興聽到這個消息。再一次，我只是想知道——所以對於你的前景，我猜你真的沒有給出利潤或 EBITDA 或任何東西。考慮到您今年的銷售增長，是否有什麼阻礙您在這方面提供指導？

No, I think we're just -- again, at this point, it's still early in the year. I think we feel good about the momentum that we have in the business. I think we have our expense base under control. We've got costs under control, but we got to want to get the top line moving and kind of see where the business is going from there, and we'll take it from there.

不，我認為我們只是 - 再一次，在這一點上，它還處於今年年初。我認為我們對我們在業務中的發展勢頭感到滿意。我認為我們的費用基礎得到了控制。我們已經控制了成本，但我們必須要讓頂線動起來，看看業務從那裡走向何方，我們將從那裡開始。

Okay. Sounds good. And then on inventory, I didn't glance at your balance sheet yet, but what was the inventory at the end of the year? Was it actually down sequentially?

好的。聽起來不錯。再就是存貨，我還沒看你的資產負債表，年底的存貨是多少？它實際上是按順序下降的嗎？

No, it was flat sequentially to Q3.

不，它與第三季度持平。

So do you expect to have like kind of more reduction in inventory in 2023?

那麼，您是否預計 2023 年會有更多的庫存減少？

Absolutely. Absolutely. We will be working that down. Obviously, we'll have some growth that we'll add to some of that, but we will more than offset that growth. we're just rightsizing our -- the amount of inventory that we have because we have more than we likely should have had at the end of the year.

絕對地。絕對地。我們將努力解決這個問題。顯然，我們會有一些增長，我們會增加其中的一些，但我們會抵消這種增長。我們只是在合理調整我們的庫存量，因為我們擁有的庫存比我們在年底時可能擁有的要多。

Okay. And then just in terms of your businesses, good to hear that China is maybe showing some glimmers there, that's good. Can you just talk about -- can you talk about -- I mean, is there any more color you can give us about China and just in terms of the pace of recovery or what you're actually seeing there?

好的。然後就您的業務而言，很高興聽到中國可能在那裡顯示出一些微光，這很好。你能不能談談——你能談談——我的意思是，你能給我們更多關於中國的顏色嗎？就復甦的速度或你在那裡實際看到的情況而言？

Yes. As I mentioned, we're starting to see some momentum come back into the business. There's still a fair amount of uncertainty on the ground there. Consumer behavior has not simply returned to kind of where it was prior to the Zero COVID policy. So as I mentioned, we're hopeful that the trend line continues. But I'm going to say it's still a bit early to tell. But again, I think we feel good that we're getting positive momentum there.

是的。正如我所提到的，我們開始看到一些勢頭重新回到業務中。那裡仍然存在相當多的不確定性。消費者行為並沒有簡單地恢復到零 COVID 政策之前的狀態。因此，正如我所提到的，我們希望趨勢線能夠繼續下去。但我要說現在下結論還為時過早。但同樣，我認為我們在那裡獲得積極勢頭感覺很好。

Okay. And then can you talk a little bit more about Eastern Europe just what's going on there in terms of -- like is the sales being booked from Russia and Ukraine actually 0 at this point or is there still a little bit? And then what are those new markets you referred to sort of?

好的。然後你能不能多談談東歐的情況——比如此時從俄羅斯和烏克蘭預訂的銷售額實際上是 0，還是還有一點？那麼你提到的那些新市場是什麼？

Yes. So what we're seeing is we're able to get inventory reliably into the markets. We're able to get into the hands of the people that kind of where we wanted to go. And then we're able to kind of repatriate the dollars kind of once the inventory is on the ground there and it's sold in. So when I talk about us getting some stability, we really are seeing that kind of type of stability where the business is moving forward, people are selling. And that would include both in Russia and in Ukraine, albeit, obviously, Ukraine is at a depressed level.

是的。所以我們看到的是我們能夠可靠地將庫存投放市場。我們能夠將我們想去的地方交到人們手中。然後，一旦存貨到位並售出，我們就可以將美元匯回國內。所以當我談到我們獲得一些穩定性時，我們確實看到了業務中的那種穩定性正在前進，人們在銷售。這將包括俄羅斯和烏克蘭，儘管很明顯，烏克蘭處於低迷狀態。

The performance that we're seeing in Turkey and the Baltic states at this point in time, is providing in some partial -- it's partially filling the gap that we would have seen from Ukraine. So I think we feel really good about that. I think the team on the ground has done an outstanding job, rewiring everything from kind of how we get the product on the ground to how we deliver it to people to how we get payments. So it's been a lot of work. So I think we've -- again, we've reached this stability -- this level of stability all things kind of staying equal and all things holding steady. We feel pretty good about that.

我們目前在土耳其和波羅的海國家看到的表現在某種程度上提供了——它部分填補了我們從烏克蘭看到的差距。所以我認為我們對此感覺非常好。我認為實地團隊做得非常出色，重新設計了一切，從我們如何在實地獲得產品，到我們如何將產品交付給人們，再到我們如何獲得付款。所以這是很多工作。所以我認為我們已經——再一次，我們已經達到了這種穩定——這種穩定水平，所有事情都保持平等，所有事情都保持穩定。我們對此感覺很好。

And then we've got the dollars coming in from Turkey and the Baltic states. Still new markets for us, but it's enough that it's actually, I'd say, meaningful to -- relative to what we were losing in the Ukraine. I hope that's helpful.

然後我們得到了來自土耳其和波羅的海國家的美元。對我們來說仍然是新市場，但實際上，我想說，相對於我們在烏克蘭失去的東西來說，這就足夠了。我希望這會有所幫助。

Yes. Yes. And then I guess, just finally, I'd like to ask about North America because I guess you're still having some declines there. And I just kind of wonder about maybe the consumer pressure still facing some inflationary pressures and things like that, and yet you're kind of talking about taking price. Maybe if you could just give us a little more color about how you're managing that business there in North America?

是的。是的。然後我想，最後，我想問一下北美，因為我猜你在那裡仍然有一些下降。我只是想知道，也許消費者壓力仍然面臨一些通貨膨脹壓力和類似的事情，但你有點在談論價格。也許你能給我們更多關於你如何管理北美業務的顏色嗎？

Yes, that's an important one, especially when it comes to taking some price there. And what we're doing -- what we're specifically looking at is on some of our specialty products, especially the botanicals where we really kind of own some of these therapeutic areas, there is an opportunity for us to take price on some of those products. So we're going to do that. We'll be kind of looking at all of our products and all of the pricing, again, just to sharpen our pencil and make certain that we're hitting relevant price points, kind of just some of the prices are they just -- we just landed on them. And I think there's a better price point that people would be willing to pay. They wouldn't even notice the change but it would make a difference to us.

是的，這是一個重要的問題，尤其是當涉及到在那裡付出一些代價時。我們正在做的——我們特別關注的是我們的一些特色產品，尤其是我們真正擁有其中一些治療領域的植物藥，我們有機會對其中一些進行定價那些產品。所以我們打算這樣做。我們將再次查看我們所有的產品和所有定價，只是為了削尖我們的鉛筆並確保我們達到了相關的價格點，其中一些價格只是 - 我們剛剛降落在他們身上。而且我認為人們願意支付更好的價格。他們甚至不會注意到變化，但這會對我們產生影響。

We are still experiencing and dealing with an inflationary market where consumers are making different choices than they were versus the marketplace in 2021. So that does have some implications in terms of what we can do, our marketing and promotion strategies. But we do believe there's opportunity for us to take price. We're still able to drive customer growth. We are seeing good customer growth there. Again, but what's happening is, as we're bringing in new customers, we're just seeing that the average orders are different than they were just 12 months ago.

我們仍在經歷和應對一個通貨膨脹的市場，在這個市場上，消費者做出的選擇與 2021 年的市場相比有所不同。因此，這確實對我們可以做什麼、我們的營銷和促銷策略產生了一些影響。但我們確實相信我們有機會接受價格。我們仍然能夠推動客戶增長。我們在那裡看到了良好的客戶增長。再一次，但發生的事情是，當我們引入新客戶時，我們只是看到平均訂單與 12 個月前不同。

So we're going to keep hammering away at this. We do have other initiatives kind of in the mix to, as I had mentioned, across our digital platform. And then as well, looking towards our nutritional health practitioners to try and expand the number of people that we're bringing in there. That's an important initiative for us in 2023 and going forward, there are several hundred thousand health practitioners out in the marketplace that we're not tapping into right now that would be ideal kind of distributors for our product. And so we're going to be much more aggressive at trying to capture them in 2023 and beyond.

因此，我們將繼續努力解決這個問題。正如我所提到的，我們確實在我們的數字平台上混合了其他舉措。然後，也期待我們的營養健康從業者嘗試擴大我們在那裡帶來的人數。這對我們來說是 2023 年和未來的一項重要舉措，市場上有數十萬名健康從業者，我們現在沒有利用，他們將是我們產品的理想分銷商。因此，我們將更加積極地嘗試在 2023 年及以後捕獲它們。

And if I could just add on a little bit there. On the price increases in North America, especially, we've been very thoughtful, very careful about the way we're doing that. And frankly, are really measuring our elasticity of demand when we're doing it, so we can learn from that as well. .

如果我可以在那裡添加一點。特別是在北美的價格上漲方面，我們一直非常周到，對我們這樣做的方式非常謹慎。坦率地說，我們在做這件事的時候真的在衡量我們的需求彈性，所以我們也可以從中學習。 .

All right. At this time, this conclude our question-and-answer session. I would now like to turn the call back over to Mr. Moorehead for closing remarks.

好的。至此，我們的問答環節到此結束。我現在想將電話轉回給 Moorehead 先生作結束語。

Okay. Thank you. Hey, I'd like to thank everybody for listening to today's call, and we look forward to speaking with you when we report our first quarter 2023 results in May of 2023. Thanks again for joining us, and take care.

好的。謝謝。嘿，我要感謝大家聽今天的電話會議，我們期待在 2023 年 5 月報告 2023 年第一季度業績時與您交談。再次感謝您加入我們，保重。

Ladies and gentlemen, this does concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

女士們，先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。