Toughbuilt Industries Inc (TBLT) 2023 Q3 法說會逐字稿

Good afternoon, everyone, and welcome to the ToughBuilt Industries third quarter 2023 earnings conference call. (Operator Instructions) Please also note today's event is being recorded. And at this time, I would like to turn the floor over to Martin Galstyan, Chief Financial Officer. Sir, please go ahead.

大家下午好，歡迎參加 ToughBuilt Industries 2023 年第三季財報電話會議。 （操作員說明）也請注意今天的活動正在錄製中。現在，我想請財務長 Martin Galstyan 發言。先生，請繼續。

Good afternoon and thank you all for joining us today to discuss ToughBuilt third quarter 2023 financial and operating results. Again, my name is Martin Galstyan, and I am the Chief Financial Officer of ToughBuilt.

下午好，感謝大家今天加入我們討論 ToughBuilt 2023 年第三季的財務和營運業績。再說一遍，我叫 Martin Galstyan，是 ToughBuilt 的財務長。

Joining me on today's call is Michael Panosian, ToughBuilt's President and Chief Executive Officer. Michael will begin today's discussion by providing operational and financial highlights from the third quarter. I will then review our financial performance. Michael will conclude the discussion with our growth plans for the upcoming fiscal year and beyond.

參加今天電話會議的是 ToughBuilt 總裁兼執行長 Michael Panosian。邁克爾將首先提供第三季度的營運和財務亮點，以開始今天的討論。然後我將回顧我們的財務表現。麥可將結束對我們下一財年及以後的成長計畫的討論。

Before turning the call over to Michael, I would like to remind you that forward-looking statements may be made by management during today's call and that any forward-looking statements are covered under the US Private Securities Litigation Reform Act of 1995. Actual results could differ materially from what is described in those statements and are subject to the changes, risks, and uncertainties as described in our press release and in our SEC, periodic, and other filings.

在將電話轉給邁克爾之前，我想提醒您，管理層在今天的電話會議中可能會做出前瞻性聲明，並且任何前瞻性聲明均受1995 年美國私人證券訴訟改革法案管轄。實際結果可能會受到影響。與這些聲明中所述的內容有重大差異，並可能受到我們的新聞稿以及我們的 SEC、定期文件和其他文件中所述的變更、風險和不確定性的影響。

Additionally, information on risk factors that can use the results to differ is available in the company's most recent Form 10-K filed with the SEC. In addition, during the course of the call, we may inadvertently use or refer to financial measures that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures by other companies. If any non-GAAP financial measures are mentioned in today's call, the company will promptly file a Form 8-K with the SEC reconciling such non-GAAP numbers to GAAP.

此外，公司最近向 SEC 提交的 10-K 表格中提供了有關可能導致結果出現差異的風險因素的資訊。此外，在通話過程中，我們可能會無意中使用或引用未按照美國普遍接受的會計原則編制的財務指標，並且可能與其他公司的非公認會計原則財務指標不同。如果今天的電話會議中提到任何非 GAAP 財務指標，公司將立即向 SEC 提交 8-K 表，將此類非 GAAP 數據與 GAAP 進行核對。

I will now turn the call to Michael.

我現在將電話轉給邁克爾。

Thank you, Martin, and thank you all for joining us today. For the third quarter of 2023, the company reported revenue of 20.6 million, a 9% increase compared to the prior quarter. We are very aware of the challenging macroeconomic background that has been affecting our industry. As a result, we continue to work diligently to decrease overhead.

謝謝馬丁，也謝謝大家今天加入我們。 2023年第三季度，該公司報告營收為2,060萬美元，較上一季成長9%。我們非常清楚充滿挑戰的宏觀經濟背景一直在影響我們的產業。因此，我們繼續努力減少管理費用。

For the third quarter. SG&A expenses were 12.5 million, a 33% decrease compared to the prior quarter and a decrease of 30% compared to the same quarter last year.

對於第三季。 SG&A 費用為 1,250 萬美元，較上一季下降 33%，比去年同期下降 30%。

Our gross profit for Q3 decreased by 20% to 4.9 million compared to the third quarter of 2022. Although the gross margin decreased this Q3, however, on first nine months comparison basis, it only declined to 0.32%. The decrease in gross profit margin in 2023 third quarter was primarily driven by a decrease in demand in the overall sector. We are focused on improving gross profit margins in the quarters ahead.

與 2022 年第三季相比，我們第三季的毛利下降了 20% 至 490 萬。雖然第三季的毛利率有所下降，但與前 9 個月相比，僅下降至 0.32%。 2023年第三季毛利率下降主要是由於整個產業需求下降所致。我們的重點是在未來幾季提高毛利率。

During the last quarter, we continue to streamline the organization and focus on driving efficiencies on our planned path towards profitability by focusing on innovation, and sustaining, and scaling customer partnerships.

在上個季度，我們繼續精簡組織，並透過專注於創新、維持和擴大客戶合作夥伴關係，專注於提高我們計劃的獲利路徑的效率。

We believe our 22 product lines provide a strong foundation for growth, even as we introduce additional new products. We believe that a significant portion of our major new design works. It has been completed and we will begin to reap the rewards of what we have built so far in the years to come.

我們相信，即使我們推出了更多新產品，我們的 22 條產品線也為成長提供了堅實的基礎。我們相信我們的主要新設計的很大一部分是有效的。它已經完成，我們將在未來幾年開始收穫迄今為止所建立的成果的回報。

We recently launched the newest product line, our StackTech Mobile Stacking Toolbox System. The StackTech line is not only the world's first auto locking stacking two storage solution, but with the launch, we are able to break into new market sectors. We anticipate our entrance into the stacking tool storage and toolbox markets will drive us closer to our profitability targets, and we expect to see a strong contribution to future net sales.

我們最近推出了最新的產品線，即 StackTech 行動堆疊工具箱系統。 StackTech 系列不僅是世界上第一個自動鎖定堆疊兩個儲存解決方案，而且隨著推出，我們能夠打入新的市場領域。我們預計，進入堆疊工具儲存和工具箱市場將使我們更接近獲利目標，並且我們預計將對未來的淨銷售額做出強勁貢獻。

I will now turn the call back to Martin to cover our financial results in greater details. Martin?

現在我將把電話轉回給馬丁，以更詳細地介紹我們的財務表現。馬丁？

Thank you, Michael. Revenues for the three months ended September 30, 2023, and 2022 were 20.6 million and 30.2 million, respectively, which consisted of metal goods, soft goods, and electronics goods. Also, customers revenues decreased in the third quarter of 2023 over the same period in 2022 by approximately 9.6 million or 31.8%, primarily due to a decrease in demand for tools sector.

謝謝你，麥可。截至2023年9月30日及2022年9月30日的三個月收入分別為2,060萬美元和3,020萬美元，其中包括金屬商品、軟體商品和電子產品。此外，2023 年第三季的客戶收入較 2022 年同期減少約 960 萬美元，即 31.8%，主要是由於工具產業的需求減少。

Cost of goods sold for the three months ended September 30, 2023, and 2022 was 15.7 million and 22.3 million, respectively. Cost of goods sold as a percentage of revenues in the third quarter of 2023 or 76%, up from 74% in the same period prior year.

截至2023年9月30日及2022年9月30日止三個月的銷售成本分別為1,570萬美元及2,230萬美元。 2023 年第三季銷售成本佔營收的比例為 76%，高於去年同期的 74%。

SG&A expenses for three months ended September 30, 2023, and 2022 were 12.5 million and 14.7 million, respectively. SG&A expenses as a percentage of revenues for the third quarter of 2023 was 61% compared to 49% for the same period prior year.

截至2023年9月30日和2022年9月30日的三個月的SG&A費用分別為1250萬美元和1470萬美元。 2023 年第三季的銷售、管理及行政費用佔收入的百分比為 61%，而去年同期為 49%。

We implemented cost-cutting strategies in preparation for an anticipated decrease in demand. We have and will continue to examine further operating expense leverages in the coming quarters.

我們實施了成本削減策略，為預期的需求下降做好準備。我們已經並將在未來幾個季度繼續研究進一步的營運費用槓桿。

Research and development costs for the three months ended September 30, 2023, and 2022 were 2.9 million and 2.8 million, respectively. The year-over-year increase was primarily due to the development of new innovative tools or the construction industry.

截至2023年9月30日及2022年9月30日止三個月的研發成本分別為290萬和280萬。年比成長主要是由於新的創新工具或建築業的發展。

For the third quarter of 2023, we recorded a net loss of 5.9 million as compared to a net profit of 8 million for the three months ended September 30, 2022.

2023年第三季度，我們錄得淨虧損590萬美元，而截至2022年9月30日的三個月淨利為800萬美元。

As of September 30, 2023, total cash position was 1.8 million. Accounts receivable and inventory for the period totalled 10.6 million and 27.5 million, respectively. This and a reduced net loss helped drive an 80% improvement in net cash used in operating activities for the first nine months of 2023 compared to net cash used of 6 million for the first nine months of 2022.

截至2023年9月30日，現金部位總額為180萬美元。期內應收帳款及存貨總額分別為1,060萬元及2,750萬元。這項措施加上淨虧損的減少，推動 2023 年前 9 個月經營活動使用的淨現金比 2022 年前 9 個月的 600 萬現金淨額改善了 80%。

Management anticipate that our capital resources will improve as our products gain even wider market recognition and acceptance, we seek to further improve our gross margins and we continue to work to decrease costs.

管理層預計，隨著我們的產品獲得更廣泛的市場認可和接受，我們的資本資源將會改善，我們尋求進一步提高毛利率，並繼續努力降低成本。

I'll now turn the call back to Michael for his final remarks. Michael?

現在我將把電話轉回給邁克爾，聽他最後的發言。麥可？

Thank you, Martin.

謝謝你，馬丁。

I would like to reiterate that ToughBuilt has tremendous market opportunities ahead and the infrastructure we have built to capitalize on those opportunities is sound. We are satisfied with our current operating structure and do not plan to add significant headcounts in 2023.

我想重申，ToughBuilt 未來擁有巨大的市場機會，我們為利用這些機會而建立的基礎設施也很健全。我們對目前的營運結構感到滿意，並且不打算在 2023 年大幅增加員工人數。

Moving forward, we plan to expand our product portfolio prudently, selectively adjust prices, and focus on efficiency throughout the organization. We are pleased to report that our commitment to innovation and market responsiveness has resulted in impactful product expansion, building a stronger foundation from which we believe can achieve sustained growth and long-term profitability.

展望未來，我們計劃審慎地擴大我們的產品組合，選擇性地調整價格，並專注於整個組織的效率。我們很高興地報告，我們對創新和市場響應能力的承諾帶來了有效的產品擴展，為我們相信能夠實現持續增長和長期盈利奠定了更堅實的基礎。

We anticipate that these efforts will enable us to create new revenue streams by increasing our global reach, launching additional new product categories, and moving us closer to profitability. We aim to reinforce our position as a leader in the industry by meeting demand and evolving customer needs.

我們預計這些努力將使我們能夠透過擴大我們的全球影響力、推出更多新產品類別並讓我們更接近獲利來創造新的收入來源。我們的目標是透過滿足需求和不斷變化的客戶需求來鞏固我們作為行業領導者的地位。

In closing, I want to thank our shareholders and our team for helping grow ToughBuilt into a high-quality brand that has a bright future.

最後，我要感謝我們的股東和團隊幫助 ToughBuilt 發展成為一個擁有光明未來的高品質品牌。

With that, I'd like to turn it over to our operator.

有了這個，我想把它交給我們的操作員。

Ladies and gentlemen, we do thank you for joining today's presentation. That does conclude today's conference. You may now disconnect your lines.

女士們、先生們，我們非常感謝你們參加今天的演講。今天的會議到此結束。現在您可以斷開線路。