Turning Point Brands Inc (TPB) 2022 Q4 法說會逐字稿

Good morning, and welcome to the Turning Point's -- Turning Point Brands Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions) Please note that this event is being recorded.

早上好，歡迎來到轉折點——轉折點品牌 2022 年第四季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Louie Reformina, Chief Financial Officer. Please go ahead.

我現在想將會議轉交給首席財務官 Louie Reformina。請繼續。

Thank you. Good morning, everyone. This is Louie Reformina, Chief Financial Officer. Joining me are Turning Point Brands President and CEO, Graham Purdy; and Chief Revenue Officer, Summer Frein.

謝謝。大家，早安。我是首席財務官 Louie Reformina。加入我的是 Turning Point Brands 總裁兼首席執行官 Graham Purdy；和首席營收官 Summer Frein。

This morning, we issued a news release covering our fourth quarter results. This release is located in the IR section of our website www.turningpointbrands.com. There is also a presentation we will be referencing on the call available on the site.

今天早上，我們發布了一份涵蓋第四季度業績的新聞稿。此新聞稿位於我們網站 www.turningpointbrands.com 的 IR 部分。還有一個演示文稿，我們將參考網站上提供的電話會議。

During this call, we will discuss our consolidated and segment operating results and provide our perspective on the operating environment and our progress in our strategic plan. As is customary, I direct your attention to the discussion of forward-looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission. On the call today, we will reference certain non-GAAP financial measures. These measures and reconciliations to GAAP can be found in today's earnings release, along with reasons why management believes that they provide useful information.

在這次電話會議中，我們將討論我們的綜合和分部經營業績，並提供我們對經營環境和戰略計劃進展的看法。按照慣例，我請您注意今天新聞稿中對前瞻性和警示性陳述的討論，以及我們向美國證券交易委員會提交的文件中的風險因素。在今天的電話會議上，我們將參考某些非 GAAP 財務指標。這些措施和與 GAAP 的對賬可以在今天的收益發布中找到，以及管理層認為它們提供有用信息的原因。

I will now turn the call over to our CEO, Graham Purdy.

我現在將把電話轉給我們的首席執行官 Graham Purdy。

Thanks, Louie. Good morning, everyone, and thank you for joining our call. Last quarter was my first as CEO of Turning Point, and I discussed my excitement about our team and our ability to build a world-class CPG company for the benefit of our stakeholders, employees and value customers.

謝謝，路易。大家早上好，感謝您加入我們的電話會議。上個季度是我第一次擔任 Turning Point 的首席執行官，我討論了我對我們團隊的興奮以及我們為利益相關者、員工和重要客戶的利益打造世界級 CPG 公司的能力。

As I mentioned on our last call, my main priority is to focus on internal execution across all areas of our business to best position Turning Point for profitable, long-term growth to drive shareholder value. Since my appointment as CEO, the team has been focused on evaluating all aspects of our business from our distribution and channel strategies to our product portfolio and go-to-market plans and improving our systems and logistics capabilities to become more efficient. There's a lot on our plate but it is all designed to help build a stronger foundation for long-term growth.

正如我在上次電話會議中提到的那樣，我的主要優先事項是專注於我們業務所有領域的內部執行，以最好地定位轉折點，實現盈利的長期增長，從而推動股東價值。自從我被任命為首席執行官以來，該團隊一直專注於評估我們業務的各個方面，從我們的分銷和渠道戰略到我們的產品組合和上市計劃，並改進我們的系統和物流能力以提高效率。我們有很多事情要做，但都是為了幫助為長期增長打下更堅實的基礎。

The main components of our strategy are: number one, to expand our market penetration and competitive share, especially within the [alternative panel] being the power of our brands and differentiated product portfolio. Number two, to leverage our unique distribution and marketing platforms (technical difficulty) customer and consumer relationships by providing value-added products across channels and platforms. Number three, invest in high-return, operational and productivity initiatives throughout the organization to drive efficiencies and better manage what's fully in our control. And number four, to attract, train and build a world-class team that is aligned and incentivized to drive shareholder value. Number five, to adopt an owner's mindset throughout the organization to empower our team to attract our best opportunities and operating like true owners with required speed and focus. We've been as focused and energized behind the strategy, and I'm excited by the compelling opportunity to build long-term shareholder value.

我們戰略的主要組成部分是：第一，擴大我們的市場滲透率和競爭份額，特別是在 [alternative panel] 作為我們品牌和差異化產品組合的力量。第二，通過跨渠道和平台提供增值產品，利用我們獨特的分銷和營銷平台（技術難度）客戶和消費者關係。第三，投資於整個組織的高回報、運營和生產力計劃，以提高效率並更好地管理完全在我們控制範圍內的事情。第四，吸引、培訓和建立一支世界一流的團隊，該團隊協調一致並受到激勵以推動股東價值。第五，在整個組織中採用所有者的心態，使我們的團隊能夠吸引我們最好的機會，並以所需的速度和專注度像真正的所有者一樣運作。我們一直專注於該戰略並充滿活力，我對建立長期股東價值的絕佳機會感到興奮。

Before moving, Summer and I go into the recent quarter guidance, let me discuss some of the progress we've made in some of our operational priorities [going forward]. First, as we discussed during our last call, Zig-Zag remains the #1 rolling paper brand in North America, and we're beginning to see early fruits of our labor to further penetrate the alternative channel. We firmly believe that brands with scale are increasingly important in our enhanced portfolio across categories, from traditional papers to cones, wraps, accessories, including Clipper, allows us to offer our retail customers a more complete product assortment to address their needs across a variety of adjacent categories in the store.

在移動之前，Summer 和我進入最近的季度指導，讓我討論我們在一些運營優先事項 [向前發展] 方面取得的一些進展。首先，正如我們在上次電話會議中所討論的那樣，Zig-Zag 仍然是北美排名第一的捲紙品牌，我們開始看到我們在進一步滲透替代渠道方面的早期成果。我們堅信，具有規模的品牌在我們增強的跨類別產品組合中越來越重要，從傳統紙張到錐體、包裝紙、配件（包括 Clipper），使我們能夠為零售客戶提供更完整的產品種類，以滿足他們在各種領域的需求商店中的相鄰類別。

Our portfolio of Zig-Zag products continues to benefit from cannabis legalization and the underlying trends remain strong. Flowers continues to lead the way across the country. And while revenue growth has slowed for cannabis operators, much of the moderation relates to significant flower price compression, which is masking continued growth in consumer demand and unit volumes, which should benefit the Zig-Zag portfolio over time.

我們的 Zig-Zag 產品組合繼續受益於大麻合法化，潛在趨勢依然強勁。花卉繼續引領全國。雖然大麻運營商的收入增長放緩，但大部分放緩與花卉價格大幅壓縮有關，這掩蓋了消費者需求和單位數量的持續增長，隨著時間的推移，這應該有利於 Zig-Zag 投資組合。

Regarding the current environment, inflation and rising interest rates continues to pressure our end consumer and the entire value chain. This is causing our wholesale customers to evaluate inventory levels. This has made projecting quarterly results more challenging particularly at the segment and SKU level in recent quarters. 2022 was a challenging year for many CPG companies given the inflationary pressures and economic uncertainty, and we certainly weren't immune. However, our fourth quarter was in line with our expectations on both top and bottom line. While inflation seems to be abating in some areas, for example, gas prices have eased since October, our end consumer is still feeling economic pressure, and our wholesale customers are carefully monitoring inventory levels in response to lower in-store traffic and pressure on working capital. This thing is consistent with what we are seeing across other CPG categories.

關於當前環境，通貨膨脹和利率上升繼續給我們的終端消費者和整個價值鏈帶來壓力。這導致我們的批發客戶評估庫存水平。這使得預測季度業績更具挑戰性，尤其是在最近幾個季度的細分市場和 SKU 級別。鑑於通脹壓力和經濟不確定性，2022 年對許多 CPG 公司來說是充滿挑戰的一年，我們當然也不能倖免。然而，我們的第四季度符合我們對收入和利潤的預期。雖然某些地區的通貨膨脹似乎正在減弱，例如天然氣價格自 10 月以來有所回落，但我們的終端消費者仍然感受到經濟壓力，我們的批發客戶正在仔細監控庫存水平，以應對店內客流量下降和工作壓力首都。這與我們在其他 CPG 類別中看到的一致。

On a segment basis, Zig-Zag saw growth in the quarter despite the previously disclosed headwind of a pull forward from promotional activities in Q3. Stoker's delivered another solid quarter, highlighted by double-digit growth in MST as we saw strong share gains in both MST and loose-leaf categories. NewGen's year-over-year decline moderated from previous quarters and remained profitable during the fourth quarter despite the continued challenging regulatory environment.

在細分市場上，Zig-Zag 在本季度實現了增長，儘管此前披露的第三季度促銷活動帶來了不利影響。由於我們看到 MST 和活頁類別的份額增長強勁，Stoker's 又迎來了一個穩定的季度，MST 的兩位數增長凸顯了這一點。儘管監管環境持續充滿挑戰，但 NewGen 的同比跌幅較前幾個季度有所緩和，並在第四季度保持盈利。

As I committed back in October, we've taken a critical first step with our NewGen business by announcing the creation of Creative Distribution Solutions, a newly formed and wholly owned unrestricted TPB subsidiary that will house our NewGen assets and certain minority investments overseen by an independent Board. We believe this reorganization best positions the business to navigate the current regulatory environment, adapt to future marketplace changes and pursue further value maximizing opportunities as they arise.

正如我在 10 月份承諾的那樣，我們宣布創建 Creative Distribution Solutions，這是一家新成立的全資無限制 TPB 子公司，將容納我們的 NewGen 資產和某些少數股權投資，由獨立董事會。我們認為，此次重組最適合企業在當前的監管環境中游刃有餘，適應未來的市場變化，並在出現時尋求進一步的價值最大化機會。

All of our stakeholders will continue to participate in the asset's potential upside optionality while providing us more flexibility to maximize value as the regulatory environment and marketplace continue to evolve. Looking ahead, we're currently projecting full year 2023 adjusted EBITDA of $88 million to $94 million. But I wanted to give you some additional context.

我們所有的利益相關者將繼續參與資產的潛在上行選擇權，同時隨著監管環境和市場的不斷發展，為我們提供更大的靈活性以最大化價值。展望未來，我們目前預計 2023 年全年調整後的 EBITDA 為 8800 萬美元至 9400 萬美元。但我想給你一些額外的背景信息。

At the midpoint, we expect first quarter 2023 EBITDA to be down year-over-year, but to show year-over-year stability for the balance of the year. Here's what's going on in the first quarter. For one thing, we think the macro environment, principally inflation, started impacting our consumers in earnest in the second quarter of 2022. Last year's first quarter was generally stronger than what we saw as the year progressed. Second, as a result of the rising interest rate environment, which has increased the carrying cost of inventory, we have seen the reduction of inventory by some of our large customers, and others have communicated they plan to do the same through the first several months of the year.

在中點，我們預計 2023 年第一季度 EBITDA 將同比下降，但在今年餘下時間將顯示同比穩定。這是第一季度發生的事情。一方面，我們認為宏觀環境，主要是通貨膨脹，從 2022 年第二季度開始真正影響我們的消費者。去年第一季度的情況總體上比我們今年看到的情況要好。其次，由於利率環境上升，增加了庫存的持有成本，我們已經看到我們的一些大客戶減少了庫存，其他人也表示他們計劃在頭幾個月這樣做的一年。

Lastly, when we launch a new product like CLIPPER, there's typically an initial surge in sales as we load the channel. We benefited from that situation in the second half of 2022. That initial load-in is typically followed by a pause as that inventory gets absorbed. This was coupled with inventory remaining from previous distributors and retailers from the transition. We expect to see this dynamic play out early in the year followed by a rebound and steadier rate of growth moving forward.

最後，當我們推出像 CLIPPER 這樣的新產品時，通常會在我們加載頻道時出現最初的銷量激增。我們從 2022 年下半年的這種情況中受益。隨著庫存被吸收，最初的裝載通常會暫停。再加上之前的分銷商和零售商在轉型過程中留下的庫存。我們預計會在今年年初看到這種動態，隨後出現反彈和更穩定的增長率。

Despite these temporary inventory factors impacting our expectations from the first quarter, when we have look through these transitory drivers, we are seeing encouraging trends with consumer takeaway that gives us confidence in our growth prospects.

儘管這些暫時的庫存因素影響了我們對第一季度的預期，但當我們審視這些暫時的驅動因素時，我們看到了令人鼓舞的消費者外賣趨勢，這讓我們對我們的增長前景充滿信心。

With that, let me hand the call over to Summer to walk through the progress and results of some of our specific go-to-market initiatives.

有了這個，讓我把電話轉給 Summer 來了解我們一些具體的上市計劃的進展和結果。

Thank you, Graham. Starting with our increased focus on the alternative channel, which we previously defined as direct-to-consumer storefronts, like Amazon, brick-and-mortar head shops, smoke shops and dispensaries, we see continued store growth and consumer traffic as legalization spreads throughout the country, not only with legal dispensaries, but also with head shops and smoke shops that also benefit from new state program launches. Approximately half of the country's population now live in approved legal recreational state. This is a meaningful jump from around 20% 5 years ago, and we expect continued state expansion over time.

謝謝你，格雷厄姆。從我們更加關注替代渠道開始，我們之前將其定義為直接面向消費者的店面，如亞馬遜、實體總店、煙店和藥房，隨著合法化的普及，我們看到了持續的商店增長和消費者流量這個國家，不僅有合法的藥房，還有總店和煙店，它們也受益於新的國家計劃的啟動。該國大約一半的人口現在生活在經批准的合法休閒狀態。與 5 年前的 20% 左右相比，這是一個有意義的跳躍，我們預計隨著時間的推移，州會繼續擴張。

Our e-commerce and direct B2B alternative business, which effectively captures some of this new demand and serves as a proxy to measure our alternative sales efforts, grew 26% in the quarter. For this year, we will leverage our progress to further exploit this opportunity. We have a clear game plan for this market and some highlights include enhancing our in-store presence, accelerating product innovation and focusing our distribution efforts to ensure better sales coverage to increase penetration of new doors. I believe this approach will best leverage our ongoing strategy to invest in Zig-Zag to solidify the brand as a leading, must-carry item.

我們的電子商務和直接 B2B 替代業務在本季度增長了 26%，該業務有效地抓住了部分新需求，並作為衡量我們替代銷售努力的指標。今年，我們將利用我們的進展進一步利用這一機會。我們針對這個市場製定了明確的遊戲計劃，其中一些亮點包括加強我們的店內影響力、加速產品創新和集中我們的分銷工作以確保更好的銷售覆蓋率以增加新門的滲透率。我相信這種方法將最好地利用我們正在進行的投資 Zig-Zag 的戰略，以鞏固該品牌作為領先的必備單品的地位。

While we're still in the early innings of executing our alternative strategy, I'm encouraged by these results and the progress we've made on many initiatives since we last spoke in October. We believe that improving our presence in this faster-growing channel represents a tremendous opportunity as we estimate it currently represents half of the papers in ancillary accessories market.

雖然我們仍處於執行我們的替代戰略的早期階段，但我對這些結果以及自我們 10 月份上次談話以來我們在許多舉措上取得的進展感到鼓舞。我們相信，提高我們在這個增長更快的渠道中的地位是一個巨大的機會，因為我們估計它目前佔輔助配件市場紙張的一半。

Meanwhile, CLIPPER lighters is continuing its expansion. Over the first 5 months of the launch, our sales force sold CLIPPER lighters into approximately 25,000 new retail accounts, making it one of the most successful initial launches in our company's history. With less than 3% share and a roughly $500 million market, CLIPPER has plenty of runway for growth as we follow a playbook that has delivered 20% to 50% market share in other developed markets around the world.

與此同時，CLIPPER 打火機正在繼續擴張。在推出後的前 5 個月裡，我們的銷售人員將 CLIPPER 打火機銷售給了大約 25,000 個新零售客戶，使其成為我們公司歷史上最成功的首次推出產品之一。憑藉不到 3% 的份額和大約 5 億美元的市場，CLIPPER 有足夠的增長空間，因為我們遵循在全球其他發達市場中提供 20% 至 50% 市場份額的劇本。

Moving on to the Stoker's segment. Stoker's had a strong quarter and year gaining market share in points of distribution. We were also able to continue to take pricing during the year. We firmly believe we're still in the middle innings of the brand evolution driven by Stoker's positioning as a high-quality MST product priced for the value consumer.

轉到 Stoker 的部分。 Stoker's 在分銷點的市場份額上取得了強勁的季度和年度增長。我們還能夠在年內繼續定價。我們堅信，在 Stoker 定位為為價值消費者定價的高質量 MST 產品的推動下，我們仍處於品牌演變的中間階段。

Our Stoker's business is also benefiting from the secular trend of consumer trade down. The inflationary backdrop has likely helped to accelerate market share growth and drive new consumers to the brand. Once consumers experience Stoker's, we generally keep them as the brand consistently delivers on its brand promise to provide premium satisfaction with significant savings.

我們的 Stoker's 業務也受益於消費者貿易下降的長期趨勢。通貨膨脹的背景可能有助於加速市場份額增長並推動新消費者加入該品牌。一旦消費者體驗了 Stoker's，我們通常會保留他們，因為該品牌始終如一地兌現其品牌承諾，即提供優質滿意度並節省大量費用。

On the product innovation front with smokeless, our recent launch in the modern oral category with our FRE brand is allowing us to participate in the growing $1 billion white pouch category. In rapidly expanding markets, such as modern oral, we believe we don't need to be the biggest or spend the most to generate significant value for shareholders as we've proven with Stoker's MST. We are taking a highly disciplined approach towards growth and are encouraged by early consumer feedback. We are fine-tuning our strategy to profitably scale into this segment.

在無菸產品創新方面，我們最近以 FRE 品牌在現代口腔類別中的推出使我們能夠參與價值 10 億美元的不斷增長的白色袋裝類別。在快速擴張的市場中，例如現代口服，我們相信我們不需要成為最大的或花費最多的來為股東創造巨大的價值，正如我們在 Stoker 的 MST 上所證明的那樣。我們正在採取高度紀律的增長方式，並受到早期消費者反饋的鼓舞。我們正在微調我們的戰略，以盈利地擴展到這一領域。

In summary, we are hyper focused on maximizing value of our world-class brands and extensive distribution capabilities.

總之，我們非常專注於最大化我們世界級品牌的價值和廣泛的分銷能力。

Let me now turn the call back over to Louie to go through our results.

現在讓我把電話轉回給 Louie 以查看我們的結果。

Thank you, Summer. Starting with our consolidated quarterly results. Q4 sales were down 1.8% to $103.4 million impacted by NewGen, which had an 11% year-over-year decline. Our core product, Zig-Zag and Stoker's grew 0.9% and 2.6%, respectively, or 1.6% combined. Adjusted gross margin was flat at 47.9%. Adjusted EBITDA was down $0.7 million year-over-year, with a decrease coming from the decline in our vapor distribution business.

謝謝你，夏天。從我們的綜合季度業績開始。受 NewGen 影響，第四季度銷售額下降 1.8% 至 1.034 億美元，同比下降 11%。我們的核心產品 Zig-Zag 和 Stoker's 分別增長 0.9% 和 2.6%，合計增長 1.6%。調整後的毛利率持平於 47.9%。調整後的 EBITDA 同比下降 70 萬美元，下降的原因是我們的蒸汽分銷業務下滑。

Going through segment performance. Zig-Zag sales increased 0.9% year-over-year to $52.1 million or 0.8% from volume and 0.1% from price/mix, despite the negative impact of a pull forward in sales into the previous quarter. Wraps revenue was down 9% year-over-year as we compared against the period when we launched natural leaf wraps and Zig-Zag hemp wraps.

通過細分性能。 Zig-Zag 銷售額同比增長 0.9% 至 5210 萬美元，銷量增長 0.8%，價格/產品組合增長 0.1%，儘管上一季度的銷售額增長帶來了負面影響。與我們推出天然樹葉包裝和 Zig-Zag 大麻包裝的時期相比，包裝收入同比下降 9%。

Our U.S. papers and e-commerce business was down 13% year-over-year, driven by a paper booklet decline partially from the pull forward into Q3 and some of the trade inventory adjustments that Graham mentioned earlier. This was offset by double-digit growth in e-commerce.

我們的美國紙張和電子商務業務同比下降 13%，部分原因是紙質小冊子的下降部分是由於進入第三季度以及格雷厄姆之前提到的一些貿易庫存調整。這被電子商務兩位數的增長所抵消。

Canada was up 22% during the quarter with solid growth aided by the launch of CLIPPER. The cigars and other smoking accessories subcategory grew dramatically off a low base due to the sales force efforts behind CLIPPER. Gross margins declined 180 basis points during the quarter, driven primarily by the CLIPPER launch and higher growth in lower-margin products like paper cones. Operating margin declined 430 basis points for the quarter due to the gross margin decline, variable SG&A costs from increased e-commerce sales, increased TPB Canada SG&A and the reallocation of segment costs.

在 CLIPPER 推出的幫助下，加拿大在本季度增長了 22%。由於 CLIPPER 背後的銷售人員努力，雪茄和其他吸煙配件子類別從低基數開始急劇增長。本季度毛利率下降了 180 個基點，這主要是受 CLIPPER 推出和紙錐等低利潤產品的更高增長推動。由於毛利率下降、電子商務銷售增加帶來的可變 SG&A 成本、TPB Canada SG&A 增加以及部門成本的重新分配，本季度營業利潤率下降了 430 個基點。

The fundamental long-term drivers for this segment remain intact as cannabis legalization continues to drive growth in the [alternative] channel and the CLIPPER penetration provides further tailwinds. Stoker's products net sales increased 2.6% to $32.0 million in the quarter, with a 6.1% volume decline and 8.7% price/mix increase. Net sales for the MST portfolio grew 13%. Stoker's volume was up 4.3% despite category volume down 8.9% with store growth accelerating 80 basis points year-over-year to 6.6% during the quarter according to MSAi.

由於大麻合法化繼續推動 [alternative] 渠道的增長，而 CLIPPER 的滲透提供了進一步的推動力，這一細分市場的基本長期驅動因素仍然完好無損。 Stoker's 產品本季度淨銷售額增長 2.6% 至 3200 萬美元，銷量下降 6.1%，價格/產品組合增長 8.7%。 MST 產品組合的淨銷售額增長了 13%。根據 MSAi 的數據，Stoker 的銷量增長了 4.3%，儘管類別銷量下降了 8.9%，本季度門店增長同比加速 80 個基點至 6.6%。

Its share in store selling was up 100 basis points year-over-year to 10.2%, with focus now in stores representing 64% of industry volumes, which still provides a long runway for growth. FRE was a marginal contributor to segment sales during the quarter. FRE sales declined 15% from the previous year. Stoker's Chew was the #1 chewing brand in the quarter, gaining 240 basis points of share to 29.0% share according to MSAi. Category volume was down 8.6% during the quarter according to MSAi driven by a larger decline in premium loose-leaves compared to discount brands with TPB's products outperforming.

它在商店銷售中的份額同比增長 100 個基點至 10.2%，目前重點放在商店，佔行業銷量的 64%，這仍然為增長提供了漫長的跑道。 FRE 是本季度分部銷售額的邊際貢獻者。 FRE 銷售額比上一年下降了 15%。根據 MSAi 的數據，Stoker's Chew 是本季度排名第一的咀嚼品牌，份額增加 240 個基點至 29.0%。根據 MSAi 的數據，本季度品類銷量下降了 8.6%，這是由於與 TPB 產品表現出色的折扣品牌相比，優質活頁紙的降幅更大。

Gross margin decreased 50 basis points, primarily due to mix from FRE and a mix shift to discount loose-leaf products. Operating margin decreased 70 basis points due to gross margin declines, higher sales and marketing costs and increased shipping costs.

毛利率下降了 50 個基點，這主要是由於 FRE 的組合以及向折扣活頁產品的組合轉變。由於毛利率下降、銷售和營銷成本增加以及運輸成本增加，營業利潤率下降了 70 個基點。

Moving to NewGen, where we continue to manage through a disruptive environment with sales down 11.1% from the previous year, $24.9 million. Adjusted gross margins were up 110 basis points year-over-year primarily due to the higher inventory write-downs in the prior year period. Adjusted operating income increased $2.5 million to $0.1 million due to higher freight costs in the PACT Act transition in the previous year and reallocation of segment costs. The business remained profitable despite the challenging environment.

轉到 NewGen，我們繼續在顛覆性環境中進行管理，銷售額比上一年下降 11.1%，為 2490 萬美元。調整後的毛利率同比增長 110 個基點，主要原因是去年同期存貨減記較多。調整後營業收入增加 250 萬美元至 10 萬美元，原因是上一年 PACT 法案過渡期間的運費增加以及分部成本的重新分配。儘管環境充滿挑戰，該業務仍保持盈利。

Moving to our balance sheet. We ended the quarter with $106.4 million of cash on the balance sheet and $127.8 million of available liquidity, providing flexibility in capital deployment. I would note that we had an unusual inventory build year of close to $33 million in fiscal year 2022 driven by several factors. Our annual tobacco purchase for MST was above our requirements last year, and our planned purchases will decrease this excess inventory over the next several years. We added inventory to scale new products, including CLIPPER in the U.S. and Canada to prepare for increased distribution in 2023 and also built up inventory of Zig-Zag products to protect against logistical supply chain constraints early in the year. We expect to benefit from the overall inventory build and for inventory to trend down to more normalized levels over time.

轉到我們的資產負債表。本季度末，我們的資產負債表上有 1.064 億美元的現金和 1.278 億美元的可用流動資金，為資本部署提供了靈活性。我要指出的是，在幾個因素的推動下，我們在 2022 財年的庫存增加了近 3300 萬美元。去年，我們為 MST 購買的年度煙草超出了我們的要求，我們計劃的採購將在未來幾年內減少這種過剩庫存。我們增加了庫存以擴大新產品的規模，包括美國和加拿大的 CLIPPER，為 2023 年增加分銷做準備，我們還增加了 Zig-Zag 產品的庫存，以防止年初的物流供應鏈受限。我們預計將從整體庫存構建中受益，並且隨著時間的推移，庫存會下降到更正常的水平。

We repurchased $2.2 million of shares during the quarter and $10 million notional value for our convertible bonds for $9 million. We continue to closely monitor the financing markets ahead of our July 2024 convertible note maturity. We believe our current cash balance and free cash flow generation provides us with optionality to adjust that maturity. We recorded approximately $35 million of noncash asset impairments during the quarter, mostly related to NewGen intangibles and in our minority investments.

我們在本季度回購了 220 萬美元的股票，並以 900 萬美元的價格回購了名義價值為 1000 萬美元的可轉換債券。在 2024 年 7 月可轉換票據到期之前，我們將繼續密切關注融資市場。我們相信，我們目前的現金餘額和自由現金流的產生為我們提供了調整期限的選擇權。本季度我們記錄了大約 3500 萬美元的非現金資產減值，主要與 NewGen 無形資產和我們的少數股權投資有關。

On to guidance. Given the expected weakness in Q1 due to contracting trade inventory and realignment of internal resources, we currently expect consolidated adjusted EBITDA of $88 million to $94 million for fiscal year '23. As Graham mentioned, based on the midpoint, we currently expect a year-over-year decline in Q1 EBITDA but expect year-over-year stability in adjusted EBITDA for the balance of the year.

關於指導。鑑於第一季度因貿易庫存收縮和內部資源調整而出現的預期疲軟，我們目前預計 23 財年的綜合調整後 EBITDA 為 8800 萬美元至 9400 萬美元。正如格雷厄姆提到的那樣，根據中點，我們目前預計第一季度 EBITDA 將同比下降，但預計今年餘下時間調整後的 EBITDA 將同比穩定。

Other projections include effective income tax rate of 22% to 24%. We expect CapEx to be temporarily elevated this year at approximately $13 million with $9 million related to a manufacturing project we expect to complete this year. This compares to $7.7 million in the previous year, of which $4.6 million was related to the manufacturing project that offers an attractive rate of return. We expect CapEx to return to more normalized levels in 2024.

其他預測包括 22% 至 24% 的有效所得稅率。我們預計今年資本支出將暫時提高至約 1300 萬美元，其中 900 萬美元與我們預計今年完成的製造項目相關。相比之下，上一年為 770 萬美元，其中 460 萬美元與回報率極具吸引力的製造項目有關。我們預計資本支出將在 2024 年恢復到更正常的水平。

We expect to spend $12 million to $15 million in capitalized software implementation costs relating to our ERP and CRM implementation, which is currently on track and expected to be completed by the end of the year. We continue to carefully evaluate potential PMTA spend related to our modern oral products, all of which have been accepted by FDA.

我們預計將花費 1200 萬至 1500 萬美元用於與我們的 ERP 和 CRM 實施相關的資本化軟件實施成本，該項目目前正在按計劃進行，預計將在今年年底完成。我們繼續仔細評估與我們現代口腔產品相關的潛在 PMTA 支出，所有這些產品都已被 FDA 接受。

Now let me turn it back to Graham.

現在讓我把它轉回給格雷厄姆。

Before I open the call to Q&A, I wanted to give you some thoughts on why I'm so excited about the long-term opportunity we have in front of us. When looking past the transitory disruption we anticipate early in the year, the following inherent strengths will drive performance.

在我打開問答電話之前，我想給你一些想法，說明為什麼我對我們面前的長期機會如此興奮。回顧今年年初我們預計的暫時性中斷，以下內在優勢將推動業績。

We have a portfolio of iconic brands that consumers love. Zig-Zag is the #1 rolling paper in wraps brand in North America that's benefiting from secular growth trends in cannabis consumption with a compelling opportunity in front of us. We've entered a new category in Lighters with a proven global brand in Clipper that significantly expands the addressable market we compete in. Stoker's is the #1 loose-leaf brand and Stoker's Moist Snuff remains one of the fastest-growing brands in the category where we crossed 10 share in-store selling for the first time last quarter with a sizable market we have yet to penetrate. These brands are being sold, distributed and marketed by our world-class team and our entire organization is aligned towards driving organic growth and being financially disciplined to create shareholder value.

我們擁有一系列深受消費者喜愛的標誌性品牌。 Zig-Zag 是北美排名第一的捲筒紙品牌，受益於大麻消費的長期增長趨勢，擺在我們面前的是一個令人信服的機會。我們已經進入了打火機的一個新類別，Clipper 是一個久經考驗的全球品牌，顯著擴大了我們競爭的潛在市場。Stoker's 是排名第一的活頁品牌，Stoker's Moist Snuff 仍然是該類別中增長最快的品牌之一上個季度，我們的店內銷售額首次超過 10 份額，我們尚未進入一個相當大的市場。這些品牌由我們的世界級團隊進行銷售、分銷和營銷，我們的整個組織都致力於推動有機增長和財務紀律，以創造股東價值。

Thank you for participating in the call today. And with that, I'd like to open the call for questions.

感謝您參加今天的電話會議。有了這個，我想打開問題的電話。

(Operator Instructions) Your first question today comes from the line of Vivien Azer with Cowen.

（操作員說明）您今天的第一個問題來自 Vivien Azer 與 Cowen 的合作。

I wanted to start on the Zig-Zag segment, please. Obviously, you're cycling multiyear toward growth driven by innovation, but ultimately, I think, for the Street and for investors, this is a hard segment to kind of track given the nontracked channel exposure. So can you just offer some commentary on the competitive landscape, please?

我想從 Zig-Zag 段開始。顯然，你正在多年朝著創新驅動的增長方向發展，但最終，我認為，對於華爾街和投資者來說，鑑於非跟踪渠道的曝光率，這是一個很難跟踪的部分。那麼，您能就競爭格局發表一些評論嗎？

Yes. Vivien, look, I think the interesting aspect of the portfolio of the Zig-Zag products is there -- we have a wide range of products for the end consumer, whether it's tobacco wraps, hemp wraps, papers, cones. Generally, the way we look at it is the end markets are healthy for our consumers. And there's always a little bit of noise with ins and outs, with launching new products and seeding the marketplace. And so we generally just feel really good about the end markets and our share growth profile in Q4 across a number of our Zig-Zag products.

是的。 Vivien，你看，我認為 Zig-Zag 產品組合的有趣方面就在那裡——我們為最終消費者提供範圍廣泛的產品，無論是煙草包裝紙、大麻包裝紙、紙、錐體。一般來說，我們看待它的方式是終端市場對我們的消費者來說是健康的。在推出新產品和投放市場時，來龍去脈總會有一些雜音。因此，我們通常對終端市場和我們在第四季度的許多 Zig-Zag 產品的份額增長情況感覺非常好。

And is there anything to call out competitively?

有什麼可以競爭的嗎？

Vivien, this is Summer. I think I would just add from the competitive perspective that we are monitoring that external competitive environment very closely and remain focused on continuing to grow the Zig-Zag brand and continuing to focus on the long heritage and quality that Zig-Zag brings to market while monitoring the competitive environment very closely.

薇薇安，這是夏天。我想我只想從競爭的角度補充一點，我們正在非常密切地監控外部競爭環境，並繼續專注於繼續發展 Zig-Zag 品牌，並繼續專注於 Zig-Zag 為市場帶來的悠久傳統和品質，同時密切關注競爭環境。

Okay. Fair enough. And then given the revised approach to guidance which seems more than appropriate, segment level revenue ranges is probably more detailed it's been and justified for the size of the business. Maybe if you could just kind of contextualize how you're thinking about what like durable medium-term top line growth is because double-digit CAGR over the last 5 years reflects a lot of benefits from COVID, a lot of benefits from outsized growth from Zig-Zag, which probably needs to normalize. So how do you think about top line over the medium term? Maybe just for the core tobacco segment.

好的。很公平。然後考慮到修訂後的指導方法似乎更合適，細分市場級別的收入範圍可能更詳細，並且對於業務規模來說是合理的。也許如果你可以將你是如何思考持久的中期收入增長的，因為過去 5 年兩位數的複合年增長率反映了 COVID 帶來的很多好處，來自 COVID 的超額增長帶來的很多好處Zig-Zag，可能需要歸一化。那麼，您如何看待中期的頂線？也許只針對核心煙草部分。

Yes. So as we mentioned earlier, we've got some adjustments that we're making in Q1 on the trade in-source. What we are seeing is more encouraging trends in the sell-through side. So what you'll see in the back half of the year for us is we do think that we normalize back the growth of our Zig-Zag and Stoker's.

是的。因此，正如我們之前提到的，我們在第一季度對源代碼貿易進行了一些調整。我們看到的是銷售方面更令人鼓舞的趨勢。所以你會在今年下半年看到我們確實認為我們將 Zig-Zag 和 Stoker's 的增長正常化。

Your next question comes from the line of Eric Des Lauriers with Craig-Hallum.

你的下一個問題來自 Eric Des Lauriers 與 Craig-Hallum 的對話。

First one for me is also on the Zig-Zag competitive side. One of your competitors there recently received a court order to stop selling certain products based on false claims. Just wondering if you see this as more of an opportunity to take share? Or if this is perhaps something you just see as more of like a marketing warning to the industry at large? So just wondering if you can comment on what you see as this -- in respect to an opportunity to take share. And if there's any early feedback from some of your alternative shop customers in response to that.

對我來說，第一個也是在 Zig-Zag 競爭方面。您的一位競爭對手最近收到法院命令，要求其停止銷售基於虛假聲明的某些產品。只是想知道您是否認為這更像是一個分享的機會？或者，如果您認為這更像是對整個行業的營銷警告？所以只是想知道您是否可以就分享的機會發表評論。如果您的一些替代商店客戶對此有任何早期反饋。

Yes. Thanks for that question. We, as you noted, have been following that activity very closely. We have been engaged with both our consumers and especially our retail customers, to your point, because they're interested in what's going on in the market as well. I think for us, we believe it's important to really stay focused on Zig-Zag. We have a long-standing reputation of bringing high-quality products to market, continuing to focus on bringing that new product innovation to market and reinforcing all of those benefits to our customers and our consumers to reinforce that brand love that everyone has for Zig-Zag.

是的。謝謝你的問題。正如您所指出的，我們一直在密切關注該活動。我們一直在與我們的消費者，尤其是我們的零售客戶接觸，就您的觀點而言，因為他們也對市場上發生的事情感興趣。我認為對我們來說，我們相信真正專注於 Zig-Zag 很重要。我們在將高質量產品推向市場方面享有長期聲譽，繼續專注於將新產品創新推向市場，並為我們的客戶和消費者強化所有這些好處，以加強每個人對 Zig-扎格。

Okay. That's helpful. On the sort of Q1 inventory weakness guide. Was I hearing that correctly that that's primarily within Zig-Zag? And I suppose if so, could you provide some commentary on how that might be impacting the various subsegments within Zig-Zag? It sounds like perhaps weaker on some of the CLIPPER areas. Not sure if this is impacting wraps as much as it is rolling papers and cones. If you could just provide some commentary if you're seeing that's impacting some subsegments more than others, that would be helpful.

好的。這很有幫助。關於 Q1 庫存弱點指南。我沒聽錯嗎，那主要是在 Zig-Zag 之內？我想如果是這樣，您能否提供一些評論，說明這可能如何影響 Zig-Zag 中的各個子細分市場？在某些 CLIPPER 區域聽起來可能更弱。不確定這是否像捲紙和錐體一樣影響包裝。如果您發現這對某些細分市場的影響大於其他細分市場，那麼您可以提供一些評論，那將很有幫助。

Yes. Thanks, Eric. Yes. So it's really more on the papers and wraps. So kind of a some of our legacy products that we've kind of stopped with our trade for a while. It is really what we view it as an adjustment in Q1 to kind of return to more normalized levels beyond that.

是的。謝謝，埃里克。是的。所以它更多地出現在報紙和包裝紙上。所以我們的一些遺留產品我們已經停止了一段時間的交易。這實際上是我們將其視為第一季度的調整，以恢復到更正常化的水平。

Okay. That's helpful. And then last one for me here. So just wondering if you can provide maybe just a bit more commentary on the competitive dynamics you're seeing within MST. Stoker's is, obviously, very well positioned in that value segment. Obviously, continuing to benefit from consumer down trading really for assumingly a few years here now. Wondering if you're seeing any renewed push from competitors in that value segment. I mean, obviously, you guys have kind of a strong competitive advantage with that in-house manufacturing of those products. But just wondering if you're seeing any renewed push from competitors into that value segment and just overall commentary on some of the competitive dynamics within MST would be great.

好的。這很有幫助。然後最後一個給我。所以只是想知道您是否可以就您在 MST 中看到的競爭動態提供更多評論。顯然，Stoker's 在該價值領域的定位非常好。顯然，假設現在幾年，繼續從消費者降價交易中受益。想知道您是否看到該價值領域的競爭對手有任何新的推動。我的意思是，很明顯，你們在內部製造這些產品方面具有強大的競爭優勢。但只是想知道您是否看到競爭對手重新推動進入該價值領域，並且只是對 MST 內部一些競爭動態的總體評論會很棒。

Yes. Eric, this is Graham. Look, I think that, that category is generally stable from a competitive perspective and no sort of amplified or different activity from the competitors that's beyond what you sort of consider normal business at this point in time. Stoker's had a strong quarter in Q4. We grew volume, we grew share. Last year, we were able to carry the pricing activity throughout the year. That was amplified by being able to pull a price increase forward for our tub product, which ended up benefiting us throughout the back half of the year. The brand is strong. It's performing 10 share across the 10 share line in store selling. So we feel good about where we're positioned right now to continue growing, plus we've got a lot of runway with 35% of the volume that we don't compete in. So I think generally, we feel like we're confident in the Stoker's MST brand.

是的。埃里克，這是格雷厄姆。看，我認為，從競爭的角度來看，該類別通常是穩定的，並且沒有任何來自競爭對手的放大或不同的活動超出您目前認為的正常業務範圍。 Stoker's 在第四季度表現強勁。我們增加了銷量，我們增加了份額。去年，我們能夠全年進行定價活動。由於能夠推動我們的浴缸產品提價，這一點得到了放大，這最終使我們在整個下半年受益。品牌力強。它在商店銷售的 10 股線中表現出 10 股。所以我們對我們現在繼續增長的定位感到滿意，而且我們有很多跑道，其中 35% 的數量是我們沒有參與競爭的。所以我認為總的來說，我們覺得我們是對 Stoker 的 MST 品牌充滿信心。

(Operator Instructions) There are no further questions at this time. I would like to turn the call back over to the Turning Point team for any closing remarks.

（操作員說明）目前沒有其他問題。我想將電話轉回 Turning Point 團隊，聽取任何結束語。

I wanted to thank everybody for joining the call today. I look forward to speaking to you again here in a couple of months.

我想感謝大家今天加入電話會議。我期待著幾個月後再次在這裡與您交談。

This concludes today's conference call. Thank you for attending. You may now disconnect.

今天的電話會議到此結束。感謝您的出席。您現在可以斷開連接。