SPAR Group Inc (SGRP) 2023 Q3 法說會逐字稿

Good morning. And welcome to the SPAR Group third quarter 2023 financial results conference call.(Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Sandy Martin, Three Part Advisors. Please go ahead.

早安.歡迎參加 SPAR 集團 2023 年第三季財務業績電話會議。（操作員說明）請注意此活動正在錄製中。我現在想把會議交給三部分顧問桑迪馬丁。請繼續。

Thank you, operator. And good morning, everyone. We appreciate you joining us for SPAR Group, Inc.'s conference call to review 2023 third quarter results. Joining me on the call today are SPAR's Chief Executive Officer, Mike Matacunas, and the company's Chief Financial Officer, Antonio Calisto Pato.

謝謝你，接線生。大家早安。我們感謝您參加 SPAR Group, Inc. 的電話會議，回顧 2023 年第三季業績。今天參加電話會議的有 SPAR 執行長 Mike Matacunas 和公司財務長 Antonio Calisto Pato。

This call is also being webcast and can be accessed through the audio link on the Events and Presentations page of the Investor Relations section at investors.sparinc.com. The information recorded on this call speaks only as of today. So please be advised that any time-sensitive information may no longer be accurate as of the date of any replay or transcript reading.

此次電話會議也正在進行網路直播，可以透過 Investors.sparinc.com 投資者關係部分的活動和演示頁面上的音訊連結進行收聽。此次通話中記錄的資訊僅截至今天。因此，請注意，自任何重播或文字記錄閱讀之日起，任何時間敏感的資訊可能不再準確。

I would also like to remind you that the statements made today in today's discussion that are not historical facts, including statements, expectations, future events, or future financial performance are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements by their nature are uncertain and outside of the company's control. Actual results may differ materially from those expressed or implied.

我還想提醒您，今天的討論中所做的非歷史事實的陳述，包括陳述、預期、未來事件或未來財務業績，都是根據私人證券訴訟的安全港條款做出的前瞻性陳述1995 年改革法案。前瞻性陳述本質上是不確定的，並且不在公司的控制範圍內。實際結果可能與明示或暗示的結果有重大差異。

Please refer to today's earnings press release for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP financial measures and reconciliations to the nearest GAAP measures can be found at the end of our earnings release. SPAR Group assumes no obligation to update or revise any forward-looking statements publicly.

請參閱今天的收益新聞稿，以了解我們對前瞻性聲明的揭露。這些因素以及其他風險和不確定性在該公司向美國證券交易委員會提交的文件中進行了詳細描述。管理階層也可能參考非公認會計原則財務指標，並且可以在我們的收益發布結束時找到最接近的公認會計原則指標的調節表。 SPAR集團不承擔公開更新或修改任何前瞻性陳述的義務。

Finally, the earnings press release we issued earlier today is posted on the Investor Relations section of our website at sparinc.com. And now I would like to turn the call over to the company's CEO, Mike Matacunas. Mike.

最後，我們今天稍早發布的收益新聞稿發佈在我們網站 sparinc.com 的投資者關係部分。現在我想將電話轉給公司執行長 Mike Matacunas。麥克風。

Thank you, Sandy. And good morning, everyone. I am pleased to share our third quarter results. At the end of our prepared remarks today, we will open the line for questions from analysts and institutional investors.

謝謝你，桑迪。大家早安。我很高興分享我們第三季的業績。在我們今天準備好的發言結束時，我們將開放一個接受分析師和機構投資者提問的熱線。

On a consolidated basis, our third quarter revenue was down 3.6%. Our results reflect growth in our merchandising services. Strong progress in distribution services and the beginning of a recovery in our remodel services.

綜合來看，我們第三季的營收下降了 3.6%。我們的業績反映了我們的銷售服務的成長。分銷服務取得強勁進展，改造服務開始復甦。

For merchandising, our US merchandising business grew by 27%. Canada merchandising grew by 23%, Mexico by 28%, and Brazil by 10%. We believe there is material incremental opportunity and a growing addressable market as more brands and retailers turn to us for the last product touch and driving consumer experience. We bring both scale and speed.

在商品銷售方面，我們的美國商品銷售業務成長了 27%。加拿大商品成長 23%，墨西哥成長 28%，巴西成長 10%。我們相信，隨著越來越多的品牌和零售商向我們尋求最終的產品觸感和推動消費者體驗，將會出現實質的增量機會和不斷增長的潛在市場。我們帶來了規模和速度。

The great strength in our merchandising services business was offset on a consolidated basis by our Asia Pacific businesses. Our smaller joint ventures and the US remodel business is now beginning to recover in the current quarter after slowing earlier in the year.

我們的商品服務業務的巨大優勢在合併基礎上被我們的亞太業務所抵消。我們的小型合資企業和美國改裝業務在今年稍早放緩後，現在開始在本季復甦。

As a reminder, I shared on prior calls that some of our remodel clients had pushed out or delayed remodel work. We expect this to fully recover over the next 12 months. And we are positioned to take even more share as we look forward.

提醒一下，我在之前的電話中透露，我們的一些改造客戶已經推遲或推遲了改造工作。我們預計這一情況將在未來 12 個月內完全恢復。展望未來，我們將佔據更多份額。

Our distribution business had an exceptionally strong third quarter. We launched this business 24 months ago. And we are building momentum each quarter. While it is on a base of small numbers, it was up 10x in the third quarter over the prior period last year.

我們的分銷業務第三季表現異常強勁。我們 24 個月前推出了這項業務。我們每季都在積蓄動力。儘管數量較少，但第三季的數量比去年同期增加了 10 倍。

Our Asia Pacific business represents 8.4% of our revenue, but declined 21% in the third quarter. EMEA, which is comprised of South Africa, which now makes up 11.7% of our revenue, declined 12%, making our performance in the Americas, which is the United States, Canada, Mexico, and Brazil, the cornerstone of our results. Against the lower consolidated revenue, we delivered 4% more margin dollars and an incremental 150 basis points of gross margin percent in the quarter. This is our fourth successive quarter in a row of gross margin percent improvement.

我們的亞太業務占我們收入的 8.4%，但第三季下降了 21%。歐洲、中東和非洲地區（包括南非）目前占我們收入的 11.7%，下降了 12%，這使得我們在美洲（即美國、加拿大、墨西哥和巴西）的表現成為我們業績的基石。儘管綜合收入較低，但本季我們的利潤率增加了 4%，毛利率增加了 150 個基點。這是我們的毛利率連續第四季度提高。

For the third quarter, the US merchandising gross margin was up 290 basis points. South Africa, while challenged on revenue, increased gross margin percent by 90 basis points. And Brazil delivered a 230-basis point-improvement over the same period last year. I am pleased with our continued progress and profitability and our ability to successfully recruit, retain, and reward great talent to serve our clients.

第三季度，美國商品毛利率成長了 290 個基點。南非雖然在收入方面面臨挑戰，但毛利率提高了 90 個基點。巴西比去年同期提高了 230 個基點。我對我們的持續進步和盈利能力以及我們成功招募、留住和獎勵優秀人才來為客戶服務的能力感到滿意。

As a note, we were up 140 basis points year to date on consolidated gross margin percent. Consolidated EBITDA was approximately USD2.1 million against approximately USD2.2 million for the same period last year.

值得注意的是，今年迄今為止，我們的綜合毛利率上升了 140 個基點。合併 EBITDA 約 210 萬美元，去年同期約 220 萬美元。

Within this number, you will note that our attributable adjusted EBITDA was up 21.5% year on year for the quarter. In short, our shareholders own a greater percentage of the EBITDA than last year. This is not a single quarter change. Attributable adjusted EBITDA is up 23.8% for the first nine months of the year.

在這個數字中，您會注意到本季我們的權益調整後 EBITDA 年成長 21.5%。簡而言之，我們的股東所擁有的 EBITDA 比例比去年更高。這不是一個季度的變化。今年前 9 個月，調整後股東權益 EBITDA 成長 23.8%。

Lastly, operating income was $1.5 million. And our consolidated net income was $1.1 million compared to $900,000 for the same period in 2022.

最後，營業收入為 150 萬美元。我們的綜合淨利潤為 110 萬美元，而 2022 年同期為 90 萬美元。

I've noted in prior calls that clients have delayed remodel of transformation projects early in the year. We began to see the first signs of recovery in this business in the third quarter. While the US remodel business was still softer than the same period last year, it was up 60% of the second quarter this year.

我在之前的電話中註意到，客戶在今年年初推遲了改造專案的改造。我們在第三季開始看到該業務復甦的初步跡象。儘管美國改裝業務仍較去年同期疲軟，但今年第二季成長了 60%。

One of the other exciting developments in this market is the growth of this service in Canada. Our expectations for Canada remodel work in 2023 included growth of over 400% for this part of our business.

該市場的其他令人興奮的發展之一是該服務在加拿大的成長。我們對 2023 年加拿大改造工作的預期包括這部分業務成長超過 400%。

Again, I expect the remodel transmission service business to take another 9 to 12 months to fully recover. But retailers are all looking for ways to engage the consumer, refreshing the assortments in the store, changing the footprint to enable directly online fulfillment, and exploring alternative checkout solutions.

再次，我預計改裝傳輸服務業務還需要 9 至 12 個月才能完全恢復。但零售商都在尋找吸引消費者的方法，更新店內的品種，改變佔地面積以實現直接在線履行，並探索替代的結帳解決方案。

We believe there's great potential in this market. And this will be a sustainable, repeatable business for SPAR. After Antonio covers the detailed financial results, I will come back and share additional thoughts and insights about the business. With that, I'll turn the call over to Antonio to review the results.

我們相信這個市場有巨大的潛力。對於 SPAR 來說，這將是一項可持續、可重複的業務。在安東尼奧介紹了詳細的財務業績後，我將回來分享更多有關業務的想法和見解。這樣，我會將電話轉給安東尼奧查看結果。

Thank you, Mike. And good morning, everyone. Third quarter 2023 net revenues totaled $67.3 million, a decline of 3.6% on reported numbers. Net revenues included $53.8 billion of revenue from the Americas, $7.9 million from EMEA, and $5.7 million from Asia Pacific.

謝謝你，麥克。大家早安。 2023 年第三季淨收入總計 6,730 萬美元，比報告數字下降 3.6%。淨收入包括來自美洲的 538 億美元收入、來自歐洲、中東和非洲地區的 790 萬美元收入以及來自亞太地區的 570 萬美元收入。

Reported revenues by segment for quarter three versus the prior year were essentially flat for the Americas. While EMEA declined 12.1%. And APAC revenues declined by 20.6%.

美洲地區第三季按部門報告的收入與上一年基本持平。而 EMEA 則下降了 12.1%。亞太地區收入下降了 20.6%。

As Mike mentioned earlier, our Americas segment reflects strong merchandising revenues with softness from the US clients store remodels that have been pushed out. Similar to the second quarter, we continue to see strong state of [momentus] for the third quarter related to merchandise services in the US, Canada, Brazil, and Mexico.

正如麥克之前提到的，我們的美洲業務反映了強勁的商品銷售收入，但美國客戶的商店改造已被推遲，導致銷售收入疲軟。與第二季類似，我們繼續看到第三季與美國、加拿大、巴西和墨西哥的商品服務相關的強勁勢頭。

Third quarter gross profit was $13.4 million or 19.9% of revenues compared to $12.8 million or 18.4% of revenues in the prior year quarter. Mike discussed this 150-basis point improvement from the prior year, which was based on improvement, contract terms, and pricing, system enhancements, and other cost containments, as well as services mix shift in the quarter.

第三季毛利為 1,340 萬美元，佔營收的 19.9%，去年同期毛利為 1,280 萬美元，佔營收的 18.4%。 Mike 討論了與前一年相比 150 個基點的改進，這是基於改進、合約條款和定價、系統增強和其他成本控制以及本季度的服務組合轉變。

Selling, general, and administrative expenses for the first quarter totaled $11.3 million or 16.8% of revenues, compared to $10.6 million, or 15.2% of revenues in the prior year quarter. SG&A costs included nonrecurring items primarily associated with the project to review strategic alternatives, which totaled $143,000, as well as other corporate costs during the third quarter.

第一季的銷售、一般和管理費用總計 1,130 萬美元，佔營收的 16.8%，而去年同期為 1,060 萬美元，佔營收的 15.2%。 SG&A 成本包括主要與策略替代方案審查項目相關的非經常性項目，總計 143,000 美元，以及第三季的其他公司成本。

The third quarter operating income was $1.5 million, down 10.4% versus operating income of $1.7 million in the prior year quarter. Net income attributable to SPAR Group, Inc. for Q3 was $259,000 or $0.02 per share, compared to a net loss of $32,000 or $0.00 per share in the year-ago quarter.

第三季營業收入為 150 萬美元，比去年同期的 170 萬美元下降 10.4%。第三季歸屬於 SPAR Group, Inc. 的淨利為 259,000 美元，即每股 0.02 美元，而去年同期淨虧損為 32,000 美元，即每股 0.00 美元。

Adjusted net income attributable to SPAR Group, Inc. in the quarter was $570,000 or $0.02 per share compared to $212,000 or $0.01 per share in the year-ago quarter. Consolidated adjusted EBITDA in the 2023 first quarter was $2.5 million, unchanged from the prior year quarter. Q3 adjusted EBITDA attributable to SPAR Group, Inc. was $1.5 million, up from $1.2 million in the prior year quarter.

本季調整後歸屬於 SPAR Group, Inc. 的淨利潤為 570,000 美元，即每股 0.02 美元，而去年同期為 212,000 美元，即每股 0.01 美元。 2023 年第一季合併調整後 EBITDA 為 250 萬美元，與去年同期持平。第三季歸屬於 SPAR Group, Inc. 的調整後 EBITDA 為 150 萬美元，高於去年同期的 120 萬美元。

Now turning to the company's financial position as of September 30, 2023, the company's balance sheet remains strong. And total worldwide liquidity at quarter end was $12.4 million with $8 million in cash, cash equivalents, and restricted cash, and $4.4 million of unused availability at quarter-end.

現在看看公司截至 2023 年 9 月 30 日的財務狀況，公司的資產負債表仍然強勁。季度末全球流動性總額為 1,240 萬美元，其中現金、現金等價物和限制性現金為 800 萬美元，季度末未使用的可用資金為 440 萬美元。

The company's net working capital as of September 30 was $27.5 million. And the accounts receivable balance was $65.7 million. With that, I would like to turn it back to Mike.

截至 9 月 30 日，該公司的淨營運資本為 2,750 萬美元。應收帳款餘額為6570萬美元。說到這裡，我想把它轉回給麥克。

Thank you, Antonio. As we updated you last quarter, management and the Board are still running a process to evaluate potential strategic alternatives to maximize shareholder value. This includes a full range of options that we have shared, including a sale, strategic M&A deal, or going private transaction to name just a few options.

謝謝你，安東尼奧。正如我們上季度向您通報的那樣，管理層和董事會仍在運行一個流程來評估潛在的戰略替代方案，以最大限度地提高股東價值。這包括我們分享的一系列選項，包括出售、策略性併購交易或私有化交易等等。

The management team and I are fully engaged with the Board in exploring ways to unlock value for the shareholders of SPAR. While I appreciate that this process may be taking longer than most initially expected, I would encourage you to be patient. We've not completed this process yet. I do not have an update today. So I'm not answering questions about the company's strategic alternatives process after our remarks.

我和管理團隊與董事會充分合作，探索為 SPAR 股東釋放價值的方法。雖然我知道這個過程可能比大多數人最初預期的時間要長，但我鼓勵您保持耐心。我們還沒有完成這個過程。我今天沒有更新。因此，在我們發表演說後，我不會回答有關公司策略替代流程的問題。

As part of leading a global business, we have the responsibility to constantly assess and evaluate the performance of a complex set of variables. On the one hand, we need to develop broad and strategic relationships with some of the world's most impressive brand companies such as P&G, Clorox, Kraft Heinz, Lindt, et cetera.

作為領導全球業務的一部分，我們有責任不斷評估和評估一組複雜變數的績效。一方面，我們需要與一些世界上最令人印象深刻的品牌公司建立廣泛的策略關係，例如寶潔、高樂氏、卡夫亨氏、瑞士蓮等。

Secondly, we need to monitor the economies of each operating country to make good investments and optimize our capital. This means staying up to date with interest rates, fiscal policies, tax requirements, and more.

其次，我們需要監控每個營運國家的經濟，以進行良好的投資並優化我們的資本。這意味著及時了解利率、財政政策、稅收要求等。

Third, we need to enable leadership at each operating company and business to succeed. This could take the form of working alongside our leaders in each country or can mean investing in an infrastructure for growth and profitability.

第三，我們需要使每個營運公司和業務的領導階層能夠成功。這可以採取與每個國家的領導人合作的形式，也可以意味著投資基礎設施以實現成長和獲利。

After nearly three years leading the company, I have had the opportunity to evaluate each operating entity, to leadership, economies, and our opportunity. Results of this valuation is that not all parts are created equal. We have reviewed each part of our business for its performance, its potential, and likely capital needs.

在領導公司近三年後，我有機會評估每個營運實體的領導力、經濟性和我們的機會。這項評估的結果是，並非所有部件都是一樣的。我們審查了業務各部分的績效、潛力和可能的資本需求。

On behalf of our shareholders, our responsibility is to build and operate the most successful, focused, and profitable businesses. As a data point, the growth of our core US merchandising business of 27% in the third quarter and 72% top line growth in our Canadian business are a good example of the material market opportunity we have in North America. There's so much more we can do with some of these incredible clients.

代表我們的股東，我們的責任是建立和經營最成功、最專注和有利可圖的業務。作為一個數據點，我們的核心美國商品業務第三季成長了 27%，加拿大業務的營收成長了 72%，這是我們在北美擁有的材料市場機會的一個很好的例子。對於這些令人難以置信的客戶，我們可以做更多的事情。

SPAR is one of the most unique and successful services business in the market. We have a tangible window of opportunity for the next several years to take more market share, grow the bottom line, and expand our value-added services. Many of our competitors are distracted or entangled. We have a clarity of purpose and opportunity. This is a great time to be SPAR.

SPAR 是市場上最獨特、最成功的服務企業之一。未來幾年，我們有一個實際的機會窗口來佔據更多市場份額、增加利潤並擴大我們的加值服務。我們的許多競爭對手都心煩意亂或陷入困境。我們有明確的目標和機會。這是成為 SPAR 的好時機。

While we are intensely focusing on building from our strengths, we will be working aggressively to reduce our US debt and related interest expense. We have undertaken a number of initiatives to repatriate cash and ensure we optimize the use of every dollar on behalf of our shareholders.

在我們集中精力發揮我們的優勢的同時，我們將積極努力減少我們的美國債務和相關利息支出。我們採取了一系列措施來匯回現金，並確保代表股東優化每一美元的使用。

This is completely aligned with how we think of the market opportunity. As more and more large clients turn to us, take over their field organizations or provide services, we're exploring improved terms that improve our liquidity and reduce our carrying expense.

這與我們對市場機會的看法完全一致。隨著越來越多的大客戶轉向我們、接管他們的現場組織或提供服務，我們正在探索改進的條款，以提高我們的流動性並減少我們的持有費用。

In our first discussions with key clients, with these terms, we have found a willing partners. They see SPAR as a strategic partner. And our success means their success.

在我們與主要客戶的第一次討論中，根據這些條款，我們找到了願意合作的合作夥伴。他們將 SPAR 視為策略夥伴。我們的成功意味著他們的成功。

Our relationships with these large clients span years. We have long-tenured client relationships and partnerships. This provides us more opportunity. But it also means we become an important part of how they operate and succeed. In a way, their success is connected to our plans in growth.

我們與這些大客戶的關係持續多年。我們擁有長期的客戶關係和合作關係。這給了我們更多的機會。但這也意味著我們成為他們運作和成功的重要組成部分。在某種程度上，他們的成功與我們的成長計畫有關。

Our focus on operating results., portfolio contribution, and capital structure will evolve over the next few quarters. But I'm confident this sets SPAR for years to come as a strong leading services provider.

我們對營運績效、投資組合貢獻和資本結構的關注將在未來幾季發生變化。但我相信這將使 SPAR 在未來幾年成為強大的領先服務提供者。

One of the other exciting changes at SPAR in the quarter was the seating of three new Board members. We named the new Chairman and two other independent directors. These appointments advanced the company's corporate governance work. And I'm delighted to welcome James Gillis as our new Chairman of the Board, as well as two new directors, Ms. Linda Houston, and Mr. John Bode.

本季 SPAR 的另一個令人興奮的變化是三名新董事會成員的任命。我們任命了新董事長和另外兩位獨立董事。這些任命推進了公司的公司治理工作。我很高興歡迎詹姆斯·吉利斯 (James Gillis) 擔任我們的新任董事會主席，以及兩位新董事琳達·休斯頓 (Linda Houston) 女士和約翰·博德 (John Bode) 先生。

These highly respected business leaders each bring the valuable experience to further enhance and balance the diverse skills on the Board and develop our strategic growth plans to unlock value. We and I personally look forward to benefiting from their expertise as SPAR Group continues to accelerate its business strategy and build on its position as a leading global merchandising, marketing, and distribution services company.

這些備受尊敬的商業領袖各自帶來了寶貴的經驗，以進一步增強和平衡董事會的多元化技能，並製定我們的策略成長計劃以釋放價值。我們和我個人期待從他們的專業知識中受益，因為 SPAR 集團將繼續加快其業務策略並鞏固其作為全球領先的銷售、行銷和分銷服務公司的地位。

And lastly, before we open up the call to questions, I want to thank each of our team members, managers, leaders, and joint venture partners. Because we have the privilege of working with some of the most successful companies in the world as our clients, we need to perform at a world-class level. Our mantra is every client, every day.

最後，在我們開始提問之前，我要感謝我們的每一位團隊成員、經理、領導者和合資夥伴。因為我們有幸與世界上一些最成功的公司作為我們的客戶合作，所以我們需要達到世界一流的水平。我們的座右銘是每一位客戶，每一天。

Thank you for your commitment, passion, and dedication to SPAR. I'm grateful to lead this outstanding group of people and look forward to building shareholder value and generating revenue, profitability, and incremental cash flow. With that, I'd like to open the line for questions. Operator.

感謝您對 SPAR 的承諾、熱情和奉獻。我很高興能夠領導這支優秀的團隊，並期待創造股東價值並創造收入、獲利能力和增量現金流。說到這裡，我想開通提問專線。操作員。

Theodore O'Neill, Litchfield Hills Research.

西奧多·奧尼爾，利奇菲爾德山研究中心。

Thanks very much. Hey, Mike, on the last quarter, you talked specifically of the remodel business about big-box stores that are remodeling to handle, pack, and ship. And you also talked about small-box stores introducing perishables. And I was wondering if, is all that being pushed out or just part of that?

非常感謝。嘿，麥克，在上個季度，您專門談到了大型商店的改造業務，這些商店正在改造以處理、包裝和運輸。您還談到了引入易腐爛商品的小賣場。我想知道，是否所有這些都被排除了，或者只是其中的一部分？

Well, first of all, Theo, I appreciate the question. Good to hear from. No, some of the ones that are moving, and again, we're already experiencing recovery on this. Some of the notes I made in a moment ago that we're up 60% from second quarter to third quarter back in our remodel.

好吧，首先，西奧，我很欣賞這個問題。很高興收到訊息。不，有些正在移動，而且我們已經在這方面經歷了復甦。我剛才所做的一些筆記表明，我們的改造工作比第二季到第三季增加了 60%。

I'm hoping it will be fast. But it could take anywhere to the first half or a little bit later next year to come back fully. But a lot of the things that moved were the big box-stores. The small-box, I mean, a lot of that's in the discount space. But we didn't see as much slowing in that space. It was more in the larger boxes.

我希望它會很快。但可能要到上半年或明年晚些時候才能完全恢復。但很多改變的都是大型賣場。我的意思是，小盒子裡的很多東西都在折扣空間裡。但我們並沒有看到該領域的放緩程度有那麼大。更大的盒子裡的東西更多。

Okay. And what's driving the merchandise advertising growth in Mexico? Is this just a rebound from the employment law changes or is there something else going on there?

好的。是什麼推動了墨西哥商品廣告的成長？這只是就業法變化帶來的反彈還是有其他原因？

Now, one of this is we picked up a really great, big new client. There, we started to work in the third quarter. It's a large chocolate brand. And that contributed significantly to the quarter results.

現在，其中之一是我們找到了一位非常出色的新客戶。在那裡，我們從第三季開始工作。這是一個很大的巧克力品牌。這對季度業績做出了重大貢獻。

A part of the challenge in Mexico still remains for us to get our cost structure right. But now that we've got the top line moving in the right direction, I'm bullish on fixing that at the same time over the next couple of quarters.

我們在墨西哥仍面臨部分挑戰，即如何建立正確的成本結構。但現在我們的營收已經朝著正確的方向發展，我看好在接下來的幾季同時解決這個問題。

Okay. And I don't know if you've given any guidance on this. But gross margins between merchandising and the remodel business, is there any significant difference?

好的。我不知道你是否對此給予任何指導。但商品銷售改造業務的毛利率有顯著差異嗎？

Yeah, that's a great question. There is. And some of what we see the benefit of when merchandising grows so quickly then has grown over the last four quarters, it's a much healthier margin business for us than remodels.

是的，這是一個很好的問題。有。當商品銷售成長如此之快時，我們看到的一些好處在過去四個季度中也有所增長，這對我們來說是比改造更健康的利潤業務。

Then with the biggest factor is that remodel work often involves travel. And so travel is baked into the rate. So you can get a merchandising business that is almost twice the margin of remodel. So merchandising continues to grow that or give us some margin space and allow us to even pursue and grab more land share on the remodel the way I'm thinking about it over the next couple of quarters.

然後最大的因素是改造工作經常需要出差。因此，旅行費用也包含在房價中。這樣你就可以獲得幾乎是改造利潤兩倍的推銷業務。因此，商品銷售繼續增長，或者給我們一些利潤空間，讓我們甚至能夠在改造中追求和奪取更多的土地份額，就像我在接下來的幾個季度中所考慮的那樣。

Okay, thanks very much.

好的，非常感謝。

This concludes our question-and-answer session. I would like to turn the conference back over to Mike Matacunas for closing remarks.

我們的問答環節到此結束。我想將會議轉回給邁克·馬塔庫納斯 (Mike Matacunas) 致閉幕詞。

Thank you, operator. Just again, thank you for each participating in the call and listening to our earnings conference call. I look forward to providing an update on our progress on the next quarter. I'm excited about the next several quarters and our opportunity in the market. So, appreciate it. And thank you again for listening.

謝謝你，接線生。再次感謝大家參加電話會議並收聽我們的收益電話會議。我期待著提供下一季的最新進展。我對接下來的幾個季度以及我們在市場上的機會感到興奮。所以，欣賞它。再次感謝您的聆聽。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。