Real Good Food Company Inc (RGF) 2023 Q3 法說會逐字稿

Greetings and welcome to the Real Good Food third quarter 2023 earnings call. (Operator instructions) As a reminder, this conference is being recorded.

歡迎參加 Real Good Food 2023 年第三季財報電話會議。 （操作員說明） 請注意，本次會議正在錄製中。

It is now my pleasure to introduce your host, Mr. Shamari Benton, Vice President of FP&A. Thank you, Mr. Benton, you may begin.

現在我很高興向您介紹主持人，FP&A 副總裁 Shamari Benton 先生。謝謝您，本頓先生，您可以開始了。

Good morning and welcome to the real good Food Company's third quarter 2023 earnings conference call. On the call today are Bryan Freeman, Executive Chairman; Gerry Law, Chief Executive Officer; and Akshay Jagdale, Chief Financial Officer.

早安，歡迎參加真正的好食品公司 2023 年第三季財報電話會議。今天參加電話會議的是執行主席 Bryan Freeman；羅嘉瑞，執行長；和財務長 Akshay Jagdale。

Our third quarter earnings release crossed the wire at approximately 8 AM Eastern time today. If you have not had a chance to review the release, it's available on the investor portion of our website at www.realgoodfoods.com.

我們的第三季財報於東部時間今天上午 8 點左右發布。如果您還沒有機會查看該新聞稿，可以在我們網站 www.realgoodfoods.com 的投資者部分查看。

Before we begin, I would like to remind everyone that certain statements made on this call are forward-looking statements within the meaning of Federal Security laws and are subject to considerable risks and uncertainties.

在開始之前，我想提醒大家，本次電話會議中所做的某些陳述是聯邦安全法含義內的前瞻性陳述，並面臨相當大的風險和不確定性。

These forward-looking statements are intended to qualify for Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call today, other than statements of historical fact are forward-looking statements and include statements regarding our projected financial results, including net sales, gross profit, gross margin, adjusted gross profit, adjusted gross margin and adjusted EBITDA, as well as our ability to increase our net sales from existing customers and acquire new customers, introduce new products compete successfully in our industry, implement our growth strategy and effectively expand our manufacturing and production capacity.

這些前瞻性陳述旨在使人們有資格免受1995 年《私人證券訴訟改革法案》規定的責任的保護。今天在本次電話會議上所做的所有陳述（除歷史事實陳述外）均為前瞻性陳述，包括有關我們預期的陳述財務業績，包括淨銷售額、毛利、毛利率、調整後毛利、調整後毛利率和調整後EBITDA，以及我們增加現有客戶淨銷售額、獲取新客戶、推出新產品在產業中成功競爭的能力，實施我們的成長策略，有效擴大我們的製造和生產能力。

Forward-looking statements made on this call represent management's current expectations and are based on information available at the time such statements are made. Such statements involve a number of known and unknown uncertainties, many of which are outside the company's control and could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements.

本次電話會議中所做的前瞻性陳述代表了管理階層目前的預期，並基於做出此類陳述時可獲得的資訊。此類陳述涉及許多已知和未知的不確定因素，其中許多因素超出了公司的控制範圍，並可能導致未來的結果、業績或成就與此類前瞻性陳述明示或暗示的結果、業績或成就存在顯著差異。

Important factors and risks that could cause or contribute to such differences are detailed in the company's filings with the Securities and Exchange Commission. Except as required by law, the company undertakes no obligation to update any forward-looking or other statements herein. Whether as a result of new information, future events or otherwise.

該公司向美國證券交易委員會提交的文件中詳細介紹了可能導致或促成此類差異的重要因素和風險。除法律要求外，本公司不承擔更新本文任何前瞻性或其他陳述的義務。無論是由於新資訊、未來事件或其他原因。

In addition, throughout this discussion, we refer to certain non-GAAP financial measures, which refer to results before taking into account certain one-time or non-reoccurring charges that are not core to our ongoing operating results and which we believe better reflect the performance of our business on an ongoing basis.

此外，在整個討論中，我們提到了某些非公認會計準則財務指標，這些指標是指在考慮某些一次性或非經常性費用之前的結果，這些費用不是我們持續經營績效的核心，我們認為這些指標更能反映了我們的業務持續表現。

Our non-GAAP financial measures, including adjusted gross margin and adjusted EBITDA, are reference. A reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure is included in our third quarter earnings release, which is available on our website under our Investor tab.

我們的非公認會計準則財務指標（包括調整後毛利率和調整後 EBITDA）僅供參考。我們的第三季財報中包含了每項非公認會計原則財務指標與其最直接可比較的公認會計原則財務指標的對賬，該報告可在我們網站的「投資者」標籤下找到。

With that, it is my pleasure to turn the call over to the Real Good Food Company's Executive Chairman, Bryan Freeman.

至此，我很高興將電話轉給 Real Good Food 公司的執行主席 Bryan Freeman。

Thanks. Thanks, Shamari, and good morning, everyone, and thank you for joining us today on our third quarter earnings call. I will briefly review our third quarter highlights and discuss the reasons we believe we're well positioned for long-term profitable growth. Gerry will cover operations and Akshay will then review our financial results and outlook in more detail. After that, we'll open the call for questions.

謝謝。謝謝沙馬裡，大家早安，感謝您今天參加我們的第三季財報電話會議。我將簡要回顧我們第三季的亮點，並討論我們相信我們為長期獲利成長做好準備的原因。 Gerry 將負責運營，Akshay 將更詳細地審查我們的財務表現和前景。之後，我們將開始提問。

Starting with our financial highlights for the third quarter net sales were $55.6 million, an increase of 48% year over year and an increase of 141% on a two year stack basis, both of which represent a significant acceleration sequentially. Growth would have been even higher if we had been able to fill orders on time as consumption was up 90%, far exceeding shipment growth.

從我們的財務摘要開始，第三季的淨銷售額為 5,560 萬美元，年增 48%，以兩年累計成長 141%，這兩項指標均顯著加速。如果我們能夠按時完成訂單，成長率會更高，因為消費成長了 90%，遠遠超過了出貨量成長。

For perspective, our consumption growth 90% in the third quarter accelerated 80 points sequentially, and this momentum has carried into the fourth quarter. Acceleration of sales growth this quarter was driven by the unmeasured channel. Branded sales in non-measured channel were up 90% on a year-over-year basis and up 200% on a two-year stack basis, both of which represent nice acceleration.

從長遠來看，我們第三季的消費成長90%，比上一季加快了80個百分點，而這種勢頭延續到了第四季。本季銷售成長的加速是由不可衡量的管道推動的。非衡量通路的品牌銷售額年增 90%，兩年累計成長 200%，這兩者都代表著良好的加速。

Growth was driven primarily by distribution growth, which doubled sequentially. We're particularly encouraged by the breadth of our offerings and the unmeasured channel, which stands seven categories, two temperature states and three eating occasions. As we exited the quarter and began the third quarter, we had approximately eight items in distribution, over 50% of the store base in this channel, which is more than double compared to a year ago.

成長主要由分銷成長推動，分銷成長連續翻倍。我們的產品範圍之廣且無法測量的管道尤其令我們感到鼓舞，其中包括七個類別、兩種溫度狀態和三種飲食場合。當我們結束本季並開始第三季時，我們有大約 8 種商品在分銷，超過 50% 的商店基數來自該管道，比一年前增加了一倍多。

As a result, we expect unmeasured channel sales growth momentum to continue into the fourth quarter of 2023 and beyond. This includes national distribution of branded poultry appetizers and on trays as well as further expansion of our handheld, which include our cloud house and burrito platforms in the refrigerated section.

因此，我們預計無法衡量的通路銷售成長動能將持續到 2023 年第四季及以後。這包括品牌家禽開胃菜和托盤的全國分銷，以及我們手持設備的進一步擴展，其中包括冷藏部分的雲屋和捲餅平台。

To summarize the unmeasured channel and provide additional perspective in 2021, we had two items that on a combined annualized basis achieved 65% ACV and 2022 figure to three items with a combined and annualized ACV of 68%. Currently have eight items in distribution and participate in seven categories in two temperature states. For perspective, we've never had more than four items operate simultaneously in our history. All of this is to say that our strategy to expand into new categories across two temperature state is working and creates a strong foundation for durable, predictable growth business going forward.

為了總結未衡量的管道並提供 2021 年的額外視角，我們有兩項合計年化 ACV 達到 65%，而 2022 年的數字為三項，合計年化 ACV 為 68%。目前有八個項目正在分發，並參加兩個溫度狀態的七個類別。從長遠來看，我們歷史上從未有過超過四個項目同時運作。所有這些都表明，我們在兩種溫度狀態下拓展新類別的策略正在發揮作用，並為未來持久、可預測的成長業務奠定了堅實的基礎。

Now turning to the retail channel performance. Sales growth was 56% on a two year stack basis and up 12% year over year. The year-over-year growth would have been even better if we were able to fill customer orders on time. Our perspective consumption grew 30% far outpacing double digit shipment.

現在轉向零售通路的表現。兩年銷售額成長 56%，年增 12%。如果我們能夠按時滿足客戶訂單，同比成長會更好。我們預計消費成長 30%，遠超過出貨量的兩位數成長。

Both shipment and consumption growth significantly accelerated sequentially, driven by distribution growth from the June shelf reset, combined with higher [volumes]. The new products that we introduced recently have significantly higher velocities than our base products, which we expect will continue to drive significant overall brand velocity growth for the remainder of 2023.

在 6 月貨架重置後的分銷增長以及[銷量]增加的推動下，出貨量和消費量增長均顯著加速。我們最近推出的新產品的速度明顯高於我們的基礎產品，我們預計這將在 2023 年剩餘時間內繼續推動整體品牌速度的顯著成長。

We expect strong double digit growth in the channel for the remainder of the year. As of the third quarter end, our total distribution points for 187,000, which is an increase of roughly 58,000 total distribution points from the beginning of this year. In addition, we have roughly another 17,000 new distribution points confirmed for the fourth quarter of 2023, which if achieved, would represent 58% growth from the beginning of this year.

我們預計今年剩餘時間該通路將出現兩位數的強勁成長。截至第三季末，我們的總分銷點為187,000個，比今年年初增加了約58,000個總分銷點。此外，我們也確認了 2023 年第四季新增約 17,000 個分銷點，如果實現的話，將比今年年初成長 58%。

The products gaining distribution include our global MultiServ on-trade and bread and poultry, which has significantly higher velocities than our base, which we expect will continue to drive significant overall brand velocity growth for the remainder of 2023. We continue to expect strong double digit growth in this channel for the remaining of the year.

獲得分銷的產品包括我們的全球MultiServ 貿易以及麵包和家禽，其速度明顯高於我們的基礎，我們預計這將在2023 年剩餘時間內繼續推動整體品牌速度的顯著增長。我們繼續預計強勁的兩位數成長今年剩餘時間內該通路的成長。

Aforementioned new distribution gains, combined with strong base business velocity gives us confidence that we will grow sales in 2024 to at least $245 million, representing growth of approximately 30%. Jagdale Akshay will speak to this in more detail, but I wanted to touch on our margins this quarter. Once again and provide a high-level view of how we see the remainder of the year shaping up.

上述新的分銷收益，加上強勁的基礎業務速度，讓我們有信心在 2024 年將銷售額增長至至少 2.45 億美元，增幅約為 30%。 Jagdale Akshay 將更詳細地討論這一點，但我想談談本季度我們的利潤率。再次提供我們對今年剩餘時間的展望。

Gross margins were 20.9% this quarter, which is a 1614 fifth improvement year over year and the second highest margin in our history. Year over year improvement in our margin being driven by our productivity initiatives and overall favorable commodity cost environment, as well as better plant utilization.

本季毛利率為 20.9%，年比 1614 第五次提高，也是我們史上第二高的毛利率。我們的生產力計劃和整體有利的商品成本環境以及更好的工廠利用率推動了我們的利潤率逐年提高。

On a sequential basis, our reported gross margins improved 725 bps, owing to the increase of sales and corresponding better fixed cost leverage in the plants, which we expect will continue into the fourth quarter of 2023 and 2024, given the strong momentum.

環比來看，我們報告的毛利率提高了725 個基點，這得益於銷量的增加以及工廠相應更好的固定成本槓桿，鑑於強勁的勢頭，我們預計這種情況將持續到2023 年第四季度和2024 年。

Adjusted EBITDA was $1.2 million, which was in the middle of the range we provided when we preannounced a few weeks ago, again, for the fourth quarter of 2023 and 2024, we see our plant utilization rates continuing to increase, which leverages our overhead and SG&A and is how we expect to see positive cash earnings in the fourth quarter of 2023 and 2024.

調整後的EBITDA 為120 萬美元，處於我們幾週前預先宣布的範圍的中間位置，同樣，對於2023 年第四季度和2024 年，我們看到我們的工廠利用率繼續增加，這充分利用了我們的管理費用和SG&A，我們預計 2023 年第四季和 2024 年將實現正現金收益。

Gerry will expand on this later, but I want to talk about how we plan on accelerating our production growth to meet surges in demand on a couple of fast-growing odds. The primary change we are making is to add incremental capacity that creates redundancy in areas where we are seeing the most demand. Capital required to do this is made possible in part from our recent equity raise, and we expect the improved uptime and incremental capacity for certain products to come online this month.

格里將在稍後詳細闡述這一點，但我想談談我們計劃如何加速產量增長，以滿足一些快速增長的賠率的需求激增。我們所做的主要改變是增加增量容量，從而在我們需求最大的區域創造冗餘。實現這一目標所需的資金部分來自我們最近的股權融資，我們預計某些產品的正常運作時間和增量產能將於本月上線。

Next let's take a look at the current state of the health and wellness market and how our brand positioning is resonating with a broad consumer base. According to [scan] for the 52 weeks ending September 10, 2023, for $206 billion, health and wellness industry grew 7% year over year, in line with the 7% three-year CAGR.

接下來讓我們來看看健康和保健市場的現狀，以及我們的品牌定位如何與廣大消費者群體產生共鳴。根據 [scan] 截至 2023 年 9 月 10 日的 52 週，健康和保健行業的銷售額為 2060 億美元，同比增長 7%，與 7% 的三年複合年增長率一致。

Over the same period, the $75 billion total frozen food category grew 5%. Several industry observers have called out the fact that category consumption trends have weakened in recent months as industry cycling for price increases during a relatively tough economic backdrop for consumers. We did not take significant pricing actions like our competitors and as such are not dealing with volume declines related to [velocity].

同期，冷凍食品類別總價值達 750 億美元，成長了 5%。一些產業觀察家指出，近幾個月來，在消費者相對困難的經濟背景下，產業不斷漲價，品類消費趨勢已減弱。我們沒有像競爭對手那樣採取重大定價行動，因此沒有處理與[速度]相關的銷售下降問題。

Another headwind, we believe frozen food brands are facing is their high glycaemic volume. According to NPD, the number one attribute consumers are looking for is to get away from sugar. In fact, according to spend, there was a $4 billion switch away from higher sugar food to low sugar Foods in the last 52 weeks as of June 18. This trend is durable and it is accelerating.

我們認為冷凍食品品牌面臨的另一個不利因素是其高血糖量。據 NPD 稱，消費者尋求的首要屬性是遠離糖。事實上，根據支出，截至 6 月 18 日的過去 52 週內，已有 40 億美元的消費從高糖食品轉向低糖食品。這種趨勢是持久的，而且還在加速。

A further catalyst this is the significant consumer interest in adoption of GLP-1 drugs. A recent Morgan Stanley alpha Y study showed that 45% of the US adult population has interest in these drugs. The study also showed that those are taking GLP-1 drugs shift away from sugary foods and begin eating more poultry and protein-based foods. Yet when you walk the frozen food aisle, it is difficult to find meal solutions that are not high in carbohydrates and sugar. We believe this is why our growth continues to accelerate while others are declining.

另一個催化劑是消費者對採用 GLP-1 藥物的巨大興趣。摩根士丹利最近的一項 alpha Y 研究表明，45% 的美國成年人對這些藥物感興趣。研究還表明，正在服用 GLP-1 藥物的人不再吃含糖食品，而是開始吃更多的家禽和蛋白質食品。然而，當你走在冷凍食品貨架上時，很難找到碳水化合物和糖含量不高的飲食解決方案。我們相信，這就是為什麼我們的成長持續加速，而其他國家卻在下滑。

For the latest 12 weeks ending October eighth, 2023, RGF measured channel grew by 31%. On a dollar per store per week basis, our branded poultry items are the highest velocity health and wellness item in the US. Our single-serve on-trade platform continues to post total points of distribution and velocity gains as we lap one and two year trends.

截至 2023 年 10 月 8 日的最近 12 週，RGF 測量的通道增加了 31%。以每家商店每週銷售一美元計算，我們的品牌家禽產品是美國銷售速度最快的健康和保健產品。隨著我們一年和兩年的趨勢，我們的單一服務貿易平台繼續發布總分銷點和速度增益。

At our multi-serve on trees continue to grow in both velocity and points of distribution. We have the right item at the right time, and we plan to lean in even further in 2024. For that, and I'd like to spend a few minutes on our near term innovation agenda. I'm pleased to report that our new bread, especially in fish sticks, have been accepted in approximately 1,700 stores with the first ship this December. It is our initial entrance into the 7 billion frozen fish category, and we are pleased with the relatively fast acceptance of this new item with our retailer partners.

在我們的多發樹上，速度和分佈點都在持續成長。我們在正確的時間擁有正確的項目，我們計劃在 2024 年進一步推進。為此，我想花幾分鐘時間討論我們的近期創新議程。我很高興地報告，我們的新麵包，尤其是魚條麵包，已在大約 1,700 家商店接受，並於今年 12 月推出了第一批貨。這是我們首次進入 70 億條冷凍魚類別，我們很高興我們的零售商合作夥伴相對快速地接受了這個新產品。

I believe this is further evidence of our brand position that is leading to low glycaemic consumer movement is resonating with retailers and consumers. Second, our low carbohydrates, high protein powders and burritos can now be found in the refrigerated section in mass retail. This is an example of taking success in the unmeasured channel and bring that to the measured flash retail channel. We believe this can be a significant growth accelerator in the coming quarters.

我相信這進一步證明了我們的品牌地位正在引發低血糖消費者運動，並與零售商和消費者產生共鳴。其次，我們的低碳水化合物、高蛋白粉和墨西哥捲餅現在可以在大眾零售的冷藏區找到。這是在未衡量的通路中取得成功並將其引入可衡量的快閃記憶體零售通路的範例。我們相信這可能會成為未來幾季的顯著成長加速器。

Third, we are launching our new low sugar, low carbohydrate barbecue, pulled pork and pulled chicken on trays and approximately 1900 stores in a national retailer in January with a first ship in December. As a reminder, conventional barbecue sauce proteins are loaded with sugar, while ours has only two grams of sugar per serving and it's delicious. Further, we recently gained a new large customer on the unmeasured channel that will be launching our frozen bacon wrapped stuffed chicken on trades in approximately 2000 stores in the first quarter.

第三，我們將於 1 月在全國零售商的約 1900 家商店推出新的低糖、低碳水化合物燒烤、手撕豬肉和手撕雞肉托盤，並於 12 月首次發貨。提醒一下，傳統的燒烤醬蛋白質富含糖，而我們的每份僅含兩克糖，而且味道鮮美。此外，我們最近在未測量的管道上獲得了一個新的大客戶，該客戶將在第一季度在大約 2000 家商店中推出我們的冷凍培根包裹雞肉。

In summary, we have a lot of momentum going into 2024, and we continue to believe we have permission to achieve our stated goal of achieving at least $500 million in sales over the long term.

總之，進入 2024 年我們有很大的動力，我們仍然相信我們有能力實現我們既定的目標，即長期實現至少 5 億美元的銷售額。

I'd like to now turn the call over to our CEO, Gerry Law, to provide an update on Bolingbrook and our operations more broadly.

我現在想將電話轉給我們的執行長 Gerry Law，以提供有關 Bolingbrook 和我們更廣泛運營的最新資訊。

Thank you, Bryan, and good morning, everyone, and thank you for joining us on today's call. Our Bolingbrook, Illinois facility is continuing to ramp up production, and we expect acceleration in the fourth quarter of 2023, driven by better attainment levels and a new fryer coming online.

謝謝布萊恩，大家早安，謝謝您參加今天的電話會議。我們位於伊利諾州博林布魯克的工廠正在繼續提高產量，我們預計在更好的達標水平和新油炸機上線的推動下，產量將在 2023 年第四季加速。

We under shipped demand in the third quarter, and this drove shortfall relative to our guidance. To expand on what Bryan said, we have taken measures to address this issue. First, I'm spending a considerable amount of my time in the facility to ensure the team has the support and resources it needs to execute the production plan.

我們第三季的出貨需求不足，這導致了相對於我們指引的缺口。為了擴展佈萊恩所說的內容，我們已採取措施來解決這個問題。首先，我在工廠花了大量時間，以確保團隊擁有執行生產計畫所需的支援和資源。

Our operational performance has improved and production growth has accelerated as a result. Additionally, we are installing additional capacity for certain products, so that we can handle surges in demand. Our 20.9% gross margin is particularly encouraging as we continued to be in the early stages of achieving our long-term efficiency targets.

我們的營運績效得到改善，產量成長也因此加速。此外，我們正在為某些產品安裝額外的產能，以便我們能夠應對需求的激增。我們 20.9% 的毛利率尤其令人鼓舞，因為我們仍處於實現長期效率目標的早期階段。

Our sales guidance calls for capacity utilization, rates to increase to 70% to 80% in the second half of 2023. Higher utilization rates should drive significant fixed cost leverage in the plants and enable our transition to positive cash earnings in the fourth quarter of 2023.

我們的銷售指導要求在2023 年下半年將產能利用率提高到70% 至80%。更高的利用率應會推動工廠的固定成本槓桿顯著增加，並使我們能夠在2023 年第四季實現正現金收益。

Adjusted gross margins, which assume full utilization were 27.8% and point to the underlying margin profile of the business, when the plants are fully utilized. We have been deliberate about building capacity ahead of demand, reflecting all the hard work and investments made to get to this capacity up and running over the past 18 months.

假設充分利用後的調整後毛利率為 27.8%，顯示工廠充分利用時業務的基本利潤狀況。我們一直在考慮在需求之前進行產能建設，這反映了過去 18 個月為實現這一產能並運作而付出的所有努力和投資。

Although we had some trouble filling orders in September, we are confident that the issues that led to the shortfall were transitory. The addition of new frac capacity combined with continuing improvements in attainment levels and uptime due to machinery redundancy on existing product lines should help us catch up on orders in the fourth quarter of 2023.

儘管我們在 9 月履行訂單時遇到了一些困難，但我們相信導致短缺的問題是暫時的。新壓裂產能的增加，加上現有產品線機械冗餘導致的達標水準和正常運作時間的持續改善，應有助於我們在 2023 年第四季趕上訂單。

Further formula optimization, in addition to raw material costs contributed to solid margin performance this quarter. I continue to be encouraged by the sequential improvement in efficiencies at Bolingbrook and City of Industry continues to perform well. Moreover, we expect our operating performance to continue improve in 4Q '23 and beyond, driven by better efficiencies resulting in lower labor costs, improved plant utilization and better overhead cost leverage.

除了原料成本之外，進一步的配方優化也為本季穩健的利潤表現做出了貢獻。我繼續對 Bolingbrook 效率的連續提高感到鼓舞，工業城繼續表現良好。此外，我們預計，在效率提高、勞動力成本降低、工廠利用率提高和管理成本槓桿改善的推動下，我們的營運表現將在 23 年第四季及以後繼續改善。

Before I turn it over to Akshay, I would like to discuss the biggest catalyst for 2024. We continue to expect our labor costs to come down sequentially is Bolingbrook, which has structurally lower costs as compared to our City of Industry facility, becomes a larger portion of our production mix and achieves our targeted efficiencies.

在我將其交給Akshay 之前，我想討論一下2024 年最大的催化劑。我們仍然預計我們的勞動力成本將依次下降，即Bolingbrook，與我們的工業城工廠相比，其結構成本較低，成為更大的工廠我們的生產組合的一部分，並實現我們的目標效率。

Every incremental pound coming out of Bolingbrook is accretive to our labor costs. In addition, overall labor costs are further aided by continued efficiency gains at our City of Industry facility. We are confident in our ability to bring labor cost in line with industry standards of about 5% to 10% of sales over time.

博林布魯克每增加一磅都會增加我們的勞動成本。此外，我們工業城工廠的持續效率提升進一步降低了整體勞動成本。我們相信，隨著時間的推移，我們有能力使勞動成本符合行業標準，佔銷售額的 5% 至 10% 左右。

Additionally, higher sales will drive a step change in plant utilization rates and allow us leverage lower overhead costs. We expect this overhead leverage to drive approximately five points and further improvement over margin profile in 2024 as compared to the first half.

此外，更高的銷售額將推動工廠利用率發生階躍變化，並使我們能夠利用更低的管理成本。我們預計，與上半年相比，這種間接費用槓桿將在 2024 年推動約 5 個百分點，並進一步改善利潤率狀況。

Lastly, our investments in Bolingbrook have enabled significant productivity savings. These include the shelf manufacturing of our chicken tortillas, cooked chicken that is used in our product fillings and our proprietary breading blends, which on a combined basis, are likely to drive approximately 200 to 400 basis points of margin improvement.

最後，我們在 Bolingbrook 的投資顯著降低了生產力。其中包括我們的雞肉玉米餅的貨架製造、產品餡料中使用的熟雞肉以及我們專有的麵包粉混合物，這些綜合起來可能會推動利潤率提高約 200 至 400 個基點。

As for direct materials inflation, the good news is that commodity costs are expected to remain favorable for the remainder of 2023. In summary, the sequentially higher sales levels that we are now guiding to in the fourth quarter, driven by distribution points already secured, mark an important inflection point for the business from a capacity utilization perspective and will enable us to meet our goal of transitioning to positive cash earnings in the fourth quarter of 2023.

至於直接材料通膨，好消息是，預計大宗商品成本在 2023 年剩餘時間內將保持有利。總之，在已確保分銷點的推動下，我們目前指導的第四季度銷售水平將持續走高，從產能利用率的角度來看，這標誌著該業務的一個重要轉折點，將使我們能夠實現2023 年第四季實現正現金收益過渡的目標。

We are pleased by our margin performance this quarter, which showed significant improvement sequentially and year over year. We expect 2024 adjusted EBITDA be in the positive mid-teens, billions of dollars range and expect to generate positive cash earnings.

我們對本季的利潤率表現感到滿意，與上一季相比，我們的利潤率表現顯著改善。我們預計 2024 年調整後 EBITDA 將達到 10 億美元左右，並有望產生正現金收益。

We have strong visibility into the drivers of our continued margin turnaround and feel confident in achieving our outlook. It's an exciting time at real good foods. We continue to provide focused support for the growing demand of our sales group has locked in by investing in talent, capabilities and supply chain. I feel confident in our ability to effectively navigate the environment we are in to deliver results and build sustainable long-term value for our shareholders.

我們對利潤率持續改善的驅動因素有很強的洞察力，並對實現我們的前景充滿信心。這是品嚐真正美食的激動人心的時刻。我們透過對人才、能力和供應鏈的投資，持續為銷售團隊不斷增長的需求提供有針對性的支援。我對我們有效應對所處環境、交付成果並為股東創造可持續長期價值的能力充滿信心。

Now I'd like to turn the call over to Akshay, our Chief Financial Officer, who will walk you through our third quarter financials.

現在我想將電話轉給我們的財務長 Akshay，他將向您介紹我們第三季的財務狀況。

Thank you, Gerry, and good morning, everyone. Turning to our financial results, net sales in the third quarter were $55.6 million, an increase of 48% as compared to the third quarter of last year. Branded sales in the unmeasured channel increased by approximately 90% year over year in the third quarter, primarily driven by distribution growth.

謝謝你，格里，大家早安。轉向我們的財務業績，第三季淨銷售額為 5,560 萬美元，比去年第三季成長 48%。第三季度，未衡量通路的品牌銷售額年增約 90%，這主要是由分銷成長所推動的。

Consumption in dollar terms or was at an all-time high, more than doubling both sequentially and year over year and far outpaced shipment growth. As a reminder, consumption data is scanned sales at the cash register as measured by IRI. It is worth noting again that our consumption growth is highly incremental to the category and the incrementality is higher than we had expected.

以美元計算的消費量或處於歷史最高水平，環比和同比增長一倍以上，遠遠超過出貨量增長。提醒一下，消費資料是透過 IRI 衡量的收銀機銷售額掃描資料。再次值得注意的是，我們的消費成長對於品類來說是高度增量的，增量高於我們的預期。

Expanding upon Bryan's remarks in the measured channel, our brand's overlap with the leading brand and breaded poultry was only 3.5%. The same is true in the unmeasured channel, where our growth has been almost 100% incremental to incumbent brands. Growth in the unmeasured channel is tracking ahead of our expectation, and we have strong momentum heading into 2024.

擴展 Bryan 在測量管道中的言論，我們的品牌與領先品牌和麵包屑家禽的重疊度僅為 3.5%。在未衡量的管道中也是如此，我們的成長幾乎是現有品牌 100% 的增量。未衡量通路的成長超出了我們的預期，進入 2024 年我們擁有強勁的勢頭。

In the retail channel, growth was 56% on a two-year stack basis and up 12% year over year. Year-over-year growth would have been even better if we were able to fill customer orders on time. Our perspective consumption grew 31%, far outpacing shipments. Both shipment and consumption growth saw a significant acceleration sequentially driven by distribution growth from the June shelf reset, combined with higher velocity.

在零售通路，兩年累計成長 56%，年增 12%。如果我們能夠按時滿足客戶訂單，同比成長會更好。我們預計消費成長 31%，遠超過出貨量。由於六月貨架重置後的分銷成長以及更高的速度，出貨量和消費量成長均顯著加速。

And new products that we introduced recently have significantly higher velocity than our base products, which we expect will continue to drive significant overall brand velocity growth for the remainder of 2023. We expect strong double-digit growth in this channel for the remainder of the year.

我們最近推出的新產品的速度明顯高於我們的基礎產品，我們預計這將在2023 年剩餘時間內繼續推動整體品牌速度的顯著增長。我們預計該管道在今年剩餘時間內將出現兩位數的強勁增長。

Although we have a strong innovation agenda for 2024 and are entering a few new adjacent categories like Breaded Fish, our focus is on growing distribution of existing products that are already performing well on show. At third quarter gross profit was $11.6 million, reflecting a gross margin of 20.9% of net sales. As compared to a gross profit of $1.8 million or a gross margin of 4.7% of net sales in the third quarter of last year.

儘管我們為 2024 年制定了強有力的創新議程，並且正在進入一些新的相鄰類別，例如麵包魚，但我們的重點是擴大已經在展會上表現良好的現有產品的分銷。第三季毛利為 1,160 萬美元，毛利率佔淨銷售額的 20.9%。相較之下，去年第三季的毛利為 180 萬美元，毛利率為淨銷售額的 4.7%。

The increase in gross margin was due to improved product contribution margins in part driven by lower commodity costs as well as productivity initiatives. Lower plant costs also contributed to margin expansion, driven by better utilization rates. Gross margin should continue to improve sequentially as the higher revenue leads to better fixed cost absorption in the plan.

毛利率的成長歸因於產品貢獻率的提高，部分原因是商品成本下降以及生產力措施。在利用率提高的推動下，工廠成本的降低也有助於利潤率的擴大。由於較高的收入導致計劃中固定成本的吸收較好，因此毛利率應繼續改善。

Adjusted gross profit during the quarter was $15.5 million, reflecting an adjusted gross margin of 27.8% of net sales as compared to $5.9 million or 15.8% of net sales in the third quarter of last year. Productivity initiatives and lower commodity prices contributed to the year-over-year increase in margin.

本季調整後毛利為 1,550 萬美元，調整後毛利率佔淨銷售額的 27.8%，而去年第三季調整後毛利率為 590 萬美元，佔淨銷售額的 15.8%。生產力措施和大宗商品價格下降推動了利潤率同比增長。

Total operating expenses were $20.5 million in the third quarter as compared to $12.4 million in the third quarter of last year. Adjusted operating expenses increased by approximately $5.2 million to $15.9 million in the third quarter. As compared to $10.7 million in the third quarter of last year.

第三季總營運費用為 2,050 萬美元，而去年第三季為 1,240 萬美元。第三季調整後營運費用增加約 520 萬美元，達到 1,590 萬美元。相比之下，去年第三季為 1,070 萬美元。

The increase in operating expenses was driven primarily by the increase in research and development costs and to a lesser extent, higher distribution costs. The increase in R&D expense is to support the strong new product pipeline and commercialization efforts. R&D costs tend to be lumpy on a quarterly basis depending on the level of new product activity as well as the timing and scale of commercialization.

營業費用的增加主要是由於研發成本的增加以及較小程度的經銷成本的增加所致。研發費用的增加是為了支持強大的新產品研發和商業化工作。研發成本往往按季度波動，具體取決於新產品活動的水平以及商業化的時間和規模。

As for the increase in distribution costs, we transitioned a few large customers to our new distribution relationship in the quarter, which proved to be inefficient. This trend should reverse in the fourth quarter as we transition these customers back to more efficient distribution arrangements.

至於分銷成本的增加，我們在本季將一些大客戶轉變為新的分銷關係，但事實證明效率低。隨著我們將這些客戶重新轉向更有效率的分銷安排，這種趨勢應該會在第四季扭轉。

Adjusted EBITDA totaled $1.2 million in the third quarter as compared to a loss of $3.8 million in the third quarter of last year. Cash burn pre debt service of $2.2 million was the lowest in the Company's history, improving $9 million sequentially in the third quarter. Several one-off factors negatively impacted our results and cash flow in the third quarter, including but not limited to the temporary spike of certain key commodities as well as our inability to fill orders on time.

第三季調整後 EBITDA 總計 120 萬美元，而去年第三季虧損 380 萬美元。償債前現金消耗為 220 萬美元，為公司歷史最低水平，第三季較上季增加 900 萬美元。一些一次性因素對我們第三季的業績和現金流產生了負面影響，包括但不限於某些關鍵商品的暫時飆升以及我們無法按時履行訂單。

Following the end of the third quarter we completed a public offering of Class-A stock, generating $15 million of net proceeds. We intend to use the proceeds for general corporate purposes, including but not limited to investing in working capital to support the significant acceleration and growth. Acceleration in our sales growth starting in the third quarter is driving significant fixed cost leverage across our plant network and G&A propelling us to positive cash earnings.

第三季末後，我們完成了 A 類股票的公開發行，產生了 1,500 萬美元的淨收益。我們打算將所得款項用於一般企業用途，包括但不限於投資營運資金以支持顯著加速和成長。從第三季開始，我們的銷售成長加速，推動我們工廠網路和一般管理費用的固定成本槓桿顯著增加，推動我們實現正現金收益。

Now turning to our outlook for the remainder of 2023 and 2024. For the three months ending December 31, 2023, we expect net sales to be $65 million to $72 million, approximately 83% to 102% growth as compared to the corresponding quarter in 2022.

現在轉向我們對2023 年剩餘時間和2024 年的展望。截至2023 年12 月31 日的三個月，我們預計淨銷售額將為6500 萬美元至7200 萬美元，與2022 年同期相比增長約83 % 至102% 。

Adjusted EBITDA is expected to be between $4 million and $6 million. For the full year ending December 31, 2023. We expect net sales to be in the $185 million to $92 million range, or approximately 31% to 36% growth as compared to 2022.

調整後的 EBITDA 預計在 400 萬至 600 萬美元之間。截至 2023 年 12 月 31 日的全年。我們預計淨銷售額將在 1.85 億美元至 9,200 萬美元之間，或與 2022 年相比成長約 31% 至 36%。

Adjusted gross margins are expected to be at least 24%, and adjusted EBITDA is expected to be in the low to mid-single digit million range. For the full year 2024, we expect net sales of at least $245 million, adjusted gross margin increasing one-percentage-point to two-percentage point as compared to 2023 and adjusted EBITDA of at least $15 million.

調整後的毛利率預計至少為 24%，調整後的 EBITDA 預計將在百萬美元的中低個位數範圍內。對於 2024 年全年，我們預計淨銷售額至少為 2.45 億美元，調整後毛利率比 2023 年增加 1 個百分點至 2 個百分點，調整後 EBITDA 至少為 1500 萬美元。

Long term, we continue to expect net sales of approximately $500 million, adjusted gross margin of 35% and adjusted EBITDA margin of 15%. In addition, we currently expect to reach positive cash earnings beginning in the fourth quarter of 2023 and to carry that trend forward into 2024.

長期來看，我們繼續預期淨銷售額約 5 億美元，調整後毛利率為 35%，調整後 EBITDA 利潤率為 15%。此外，我們目前預計從 2023 年第四季開始將實現正現金收益，並將這一趨勢延續到 2024 年。

This concludes our prepared remarks. I would now like to hand the call back over to the operator to begin the Q&A session. Operator?

我們準備好的演講到此結束。我現在想將電話轉交給接線員以開始問答環節。操作員？

Thank you. We will now be conducting a question-and-answer session. (Operator instructions) Thank you.

謝謝。我們現在將進行問答環節。 （操作員說明）謝謝。

Jeff Van Sinderen, B Riley Securities.

Jeff Van Sinderen，B Riley 證券公司。

Good morning, everyone. And congratulations on your progress in Q3 and into Q4. Realized you touched on some of this in your prepared comments, but maybe we can drill down a little bit more, if you can give us a little more detail about the ramp in production at Bolingbrook so far in Q4, I guess where you are with the new fryer and any other equipment that may be are needed. And then just sort of general efficiencies you're experiencing there so far in Q4 and where you are in terms of utilization and target run rate trend of Q4?

大家，早安。恭喜您在第三季和第四季的進展。意識到您在準備好的評論中談到了其中的一些內容，但如果您能給我們提供有關Bolingbrook 迄今為止第四季度產量增長的更多詳細信息，也許我們可以進一步深入了解，我猜您的情況如何新的油炸鍋和任何其他可能需要的設備。那麼，到目前為止，您在第四季度所經歷的整體效率以及第四季度的利用率和目標運行率趨勢如何？

Yeah. You bet. Hey, Jeff. You know what we saw late, very late in Q3 is pretty significant order flow and we have the capacity to fill those orders. However, when we really push the plant to get it done, we fell down and you know, so what the way to solve for that is to create redundancy and frankly, excess capacity. And we've gone about doing that. And I think that it doesn't happen in the future.

是的。你打賭。嘿，傑夫。你知道我們在第三季很晚看到的情況是相當重要的訂單流，我們有能力滿足這些訂單。然而，當我們真正推動工廠完成任務時，我們就倒下了，你知道，解決這個問題的方法是創造冗餘，坦白說，產能過剩。我們已經開始這麼做了。我認為未來不會發生這種情況。

And to that end, I'll flip it over to Gerry because each one has really been hands-on on that piece.

為此，我將把它交給格里，因為每個人都真正親自參與了這件事。

Yeah. Thanks, Bryan, and good morning. Yeah, I think the way to think about it in that, you know, I like car, so I'm going to associated with the with the race car. But you know, we had a race car, let's call it a Ferrari in the garage, capable of doing 200 plus miles, an hour. We've had it out in the track, we've been doing late lapse. We've been front and paste core, then we hit the accelerator so hard that we melted with the tires. The plants had to start one and two times.

是的。謝謝，布萊恩，早安。是的，我認為思考這個問題的方式是，你知道，我喜歡汽車，所以我會把它與賽車聯繫起來。但你知道，我們有一輛賽車，我們稱之為車庫裡的法拉利，每小時可行駛 200 多英里。我們已經在賽道上做到了，我們一直在做後延遲。我們一直在前面並粘貼核心，然後我們猛烈地踩油門以至於我們與輪胎融化了。工廠必須啟動一兩次。

So to that point, you know, we're hardening the core, race time ready. Not only have we really stopped melting tires, we put spares on the shelf as well. The last five, six weeks I've been there, we've seen a 35% increase in credit, credit poultry, September over October. And just remember my background and my history, I come from a hard-core ops and manufacturing background, and that's my specialty.

所以到那時，你知道，我們正在強化核心，為比賽做好準備。我們不僅真正停止了熔化輪胎，還把備件放在了貨架上。在我去過的過去五、六週裡，我們看到 9 月的信貸、家禽信貸比 10 月增加了 35%。請記住我的背景和歷史，我來自核心營運和製造背景，這是我的專長。

I can get teams to make those machines dance. As Bryan mentioned, we've added redundancies to improve the uptime and schedule attainment. Additionally, we have more fryers coming in. We have a fryer that'll arrive sometime next week and be online. You don't short order, and we have a second fryer coming in before the end of the year.

我可以讓團隊讓這些機器跳舞。正如布萊恩所提到的，我們增加了裁員以提高正常運行時間和進度。此外，我們還有更多的油炸鍋即將到來。我們的油炸鍋將於下週某個時候到達並上線。您無需短期訂購，我們將在今年年底前推出第二台油炸鍋。

And you know, I think I want to also remind everyone that the lines that we're adding are relatively low CapEx. We have the core of the plant built. I would think of it in terms that we've built the office out and we're adding a couple of more printers to the office in that sort of term or so, yes. So we're executing the plan. We're comfortable with our capacities, both before and after these changes and the future is in order for us. I hope that covers the question for you.

你知道，我想我還想提醒大家，我們增加的產品線的資本支出相對較低。我們已經建造了工廠的核心。我認為，我們已經建造了辦公室，我們將在大約這個期限內向辦公室添加更多印表機，是的。所以我們正在執行該計劃。無論是在這些變化之前或之後，我們都對自己的能力感到滿意，未來對我們來說是井然有序的。我希望這能解答你的問題。

That's really helpful and great to hear. And then maybe we can just shift a little bit to kind of what your existing larger retail customers are telling you they want most in terms of additional skews and then plan for door expansion in those and then maybe if you could just touch on ramping distribution into new retailers or new doors?

這確實很有幫助，而且很高興聽到。然後也許我們可以稍微改變一下您現有的大型零售客戶告訴您的他們最想要的額外傾斜，然後計劃在這些方面進行門擴張，然後也許您可以將分銷範圍擴大到新零售商還是新門？

Yeah, you know, it's kind of straightforward and simple when you have skews with very high velocities and are also bringing in new consumers to the category. So you're helping retailers grow their category, then usually they want to just lean in with you. And so specifically, Jeff, what I see expanded distribution in the categories you currently participate in, there's obviously an opportunity to add skew count in the breaded poultry door and the same is true in the single-serve on-trade door as well as the MultiServ on-trade door.

是的，你知道，當你以非常高的速度進行傾斜並且還為該類別引入新消費者時，這是一種簡單明了的方式。因此，如果您幫助零售商發展他們的品類，那麼他們通常會願意與您合作。因此，傑夫，具體來說，我看到您目前參與的類別中的分佈擴大了，顯然有機會在麵包屑家禽門中添加傾斜計數，在單份貿易門以及單份服務門中也是如此。 MultiServ 貿易門。

Though, I think that as you see increased points of distribution next year, you'll really see us kind of build out, the skew selection because, you know we're helping them grow the category. The other thing that I wanted to call attention to is, we see a pretty nice opportunity on the refrigerated section of the store as well. And that's going to be a focus of ours going into 2024 to expand our handheld business and our soft meats business in the refrigerated category on the upcoming quarters.

不過，我認為，當你看到明年分銷點增加時，你真的會看到我們進行了一些建設，傾斜選擇，因為，你知道我們正在幫助他們發展這個類別。我想提請注意的另一件事是，我們在商店的冷藏區也看到了一個很好的機會。這將是我們進入 2024 年的重點，以在接下來的幾個季度擴大我們的手持式業務和冷藏類別的軟肉業務。

Okay. And then you mentioned the fish launch, I think you said December or you're shipping, starting to ship in December and then that will start to actually hit shelves in January. Is that correct?

好的。然後你提到了魚的發布，我想你說的是 12 月，或者你正在發貨，12 月開始發貨，然後將在一月份開始實際上架。那是對的嗎？

Yes, that's correct. The same is true on our soft meat platform. So and I'll skip the store counts are significant. They're in the range of 1,700 to 1,900 stores nationally. And having a national footprint for that allows our social media folks to really lean in on the platforms as well, and we'll see how velocity shape up next year once drawn shelf.

對，那是正確的。我們軟肉平台也是如此。因此，我將跳過商店數量很重要的部分。他們在全國擁有 1,700 至 1,900 家商店。擁有全國性的足跡也讓我們的社群媒體人員也能夠真正依靠這些平台，我們將看到明年一旦上架後速度會如何形成。

And if the -- just to follow up on that, if the shelters are pretty good in the fish, for example, when would the next sort of reset date, would that be a June reset for that reset? Or how should we think about that?

如果 - 只是為了跟進這一點，例如，如果庇護所對魚類來說相當好，那麼下一次重置日期是什麼時候，會是六月重置嗎？或者說我們該如何思考這個問題？

You know, I would be thinking back half of next year. It's when those resets would occur.

你知道，我會回想起明年的一半。正是在這些重置發生的時候。

Okay. Fair enough. I'll take the rest offline. Thanks for taking my questions.

好的。很公平。我會把剩下的部分離線。感謝您回答我的問題。

Thank you, Jeff.

謝謝你，傑夫。

Thank you. We have reached the end of our question and answer session. And with that, thank you for participating. You may now disconnect.

謝謝。我們的問答環節已經結束。在此，感謝您的參與。您現在可以斷開連線。

Before we disconnect, I wanted to make a few comments on recent deal that we have put in place. I wanted to just call attention to it and make a few comments. First of all, our overall strategy over the last several months has been really to strengthen our balance sheet, and we've done that in a couple of ways.

在我們斷開連接之前，我想對我們最近達成的協議發表一些評論。我只是想引起人們的注意並發表一些評論。首先，過去幾個月我們的整體策略實際上是加強我們的資產負債表，我們透過多種方式做到了這一點。

One was the recent equity raise and two putting in some debt instruments that do two things. One, reduce our cash interest cost into increased liquidity and so we're pleased to announce is that our long-term partner, PMC financial services has really been with us since the beginning, has made the decision to move forward with a new $45 million debt piece that will has the potential.

一是最近的股權融資，二是發行一些債務工具，這有兩件事。第一，減少現金利息成本以增加流動性，因此我們很高興地宣布，我們的長期合作夥伴 PMC 金融服務公司從一開始就一直與我們在一起，並決定繼續推進新的 4500 萬美元融資債務部分將有潛力。

We see it as essentially reducing our cash interest cost of as much as $6 million annually, and it will also increase our liquidity by as much as $15 million. So we think that that's a really positive development. And we look forward to completing that deal in upcoming days, not weeks, and we'll get more into it when we pull that together.

我們認為這將從根本上減少我們每年高達 600 萬美元的現金利息成本，並且還將增加我們高達 1500 萬美元的流動性。所以我們認為這是一個非常積極的發展。我們期待在未來幾天而不是幾週內完成這筆交易，當我們把它放在一起時，我們會更深入地研究它。

I view that as very positive development for the business and look forward to supporting our fourth quarter results next year. And I hope everyone has a great Thanksgiving. So with that, have a great day and thanks for taking time today. Thanks.

我認為這對業務來說是非常積極的發展，並期待支持我們明年第四季的業績。我希望每個人都有一個愉快的感恩節。就這樣，祝您有美好的一天，感謝您今天抽出時間。謝謝。

Thank you. This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.

謝謝。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。