Unifi Inc (UFI) 2024 Q1 法說會逐字稿

Good morning, everyone. Thank you for attending Unifi's first-quarter fiscal 2024 earnings conference call. We do apologize for the technical difficulties in the late start, but we will be quick and hope to answer your questions as quickly as possible. Today's conference is recorded.

大家，早安。感謝您參加 Unifi 2024 財年第一季財報電話會議。對於較晚開始的技術困難，我們深表歉意，但我們會盡快回答您的問題。今天的會議記錄下來了。

And you have the speakers for today is Al Carey, Executive Chairman; Eddie Ingle, Chief Executive Officer, and myself A.J. Eaker, Interim Chief Financial Officer and Treasurer.

今天的發言者是執行主席 Al Carey；執行長 Eddie Ingle 和我本人 A.J.埃克，臨時財務長兼財務主管。

During this call referencing a webcast presentation that can be found on the Investor Relations section of unifi.com. Please familiarize yourself with page 2 of that slide deck, as I turn the call over to Al Carey.

在本次電話會議期間，我們引用了網路廣播演示文稿，該演示文稿可以在 unifi.com 的投資者關係部分找到。當我將電話轉給阿爾·凱裡時，請熟悉該投影片的第 2 頁。

Okay. Thank you, A.J. Good morning, everybody. Thanks for joining the call this morning. I'll start by sharing some thoughts on the quarter and then discuss how we're managing through this challenging environment we're in right now, but also how we're preparing for what we think will be a much better calendar 2024. After that, I'll turn it over to Eddie Ingle, our CEO.

好的。謝謝你，A.J.大家早安。感謝您參加今天早上的通話。我將首先分享對本季度的一些想法，然後討論我們如何應對目前所處的充滿挑戰的環境，以及我們如何為我們認為會更好的 2024 年日曆做好準備。我會將其交給我們的首席執行長艾迪·英格爾(Eddie Ingle)。

If you look at our results, it was a tough quarter from a sales and profitability standpoint, as once again were impacted by these persistent high levels of apparel inventory at retail and also a slower consumer demand. But the big issue for us is the lack of orders to our plants, and that's the primary issue.

如果你看看我們的業績，從銷售和盈利能力的角度來看，這是一個艱難的季度，因為零售服裝庫存水平持續高企以及消費者需求放緩再次受到影響。但對我們來說最大的問題是我們的工廠缺乏訂單，這是首要問題。

While there are signs of inventory levels that are coming nearing a bottom across the industry. This destocking process that we've talked about in the US for quite some time, has moved at a slower pace than we expected. And I believe based on our feedback from customers and also public disclosures by others that are in our sector. The majority of industry would say the exact same thing.

儘管有跡象表明整個行業的庫存水準已接近底部。我們在美國談論的去庫存過程已經有一段時間了，但其進展速度比我們預期的要慢。我相信，基於我們客戶的回饋以及我們行業其他人的公開披露。大多數業界人士都會說同樣的話。

One thing we've heard from our customers is that while brands and retailers are showing encouraging progress towards the destocking and the inventories are getting actually back to right above pre-pandemic levels. Some retailers are taking a more conservative approach as they plan for the upcoming orders, and they've instructed their buyers to place smaller, more frequent orders than they have in the past in an effort to preserve cash, while the interest rates are where they are.

我們從客戶那裡聽到的一件事是，雖然品牌和零售商在去庫存方面取得了令人鼓舞的進展，但庫存實際上已恢復到疫情前的水平以上。一些零售商在計劃即將到來的訂單時採取了更為保守的方法，他們指示買家比過去下更小、更頻繁的訂單，以保留現金，同時利率也處於他們的水平。是。

We're beginning to see that now. All that being said, inventory levels are declining and at some point, the apparel industry has the stock back up to start to normalize. And it looks like that would be after the holidays. During a time like this is very important for our organization to focus on things that we can control and we're doing that. And I would tell you that our team's morale is good, and our heads are down and we're working hard.

我們現在開始看到這一點。話雖如此，庫存水準正在下降，到了某個時候，服裝業的庫存就會回升並開始正常化。看起來那會是假期之後。在這樣的時期，對於我們的組織來說，專注於我們可以控制的事情非常重要，而我們正在這樣做。我想告訴你們，我們團隊的士氣很好，我們正在埋頭苦幹。

But those things that we're focused on are preserving cash and managing inventories closely as well as CapEx. We're managing our cost tightly. We are gaining market share in the U.S. as our number one competitor has exited the market. We're gaining traction with new customers in the segment called beyond apparel. We have several new categories that we're moving forward on.

但我們關注的重點是保留現金、密切管理庫存以及資本支出。我們正在嚴格管理成本。隨著我們的第一大競爭對手退出市場，我們正在獲得美國的市場份額。我們在服裝以外的領域贏得了新客戶的青睞。我們正在推進幾個新類別。

And additionally, we have some very interesting innovations on reprieve, which will contribute to our long-term growth. And we would like to tell you more about that as soon as we have a little bit more details in the future. So we're going to keep executing against the things in our control in this difficult environment.

此外，我們在緩刑方面有一些非常有趣的創新，這將有助於我們的長期成長。將來一旦我們掌握更多細節，我們將立即告訴您更多相關資訊。因此，在這個困難的環境中，我們將繼續執行我們控制範圍內的事情。

We believe the future of sustainability only gets bigger with the consumer as time goes on and this bodes well for our repeat business, and we see the business getting substantially better in 2024 calendar year. So that's my piece. I'd like to turn it back over to Eddie Ingle, our CEO.

我們相信，隨著時間的推移，永續發展的未來只會隨著消費者的關注而變得更大，這對我們的回頭客業務來說是個好兆頭，我們看到業務在2024 年將大幅改善。這就是我的作品。我想把它轉回給我們的執行長 Eddie Ingle。

Thanks, Al, and good morning, everyone. As Al, highlighted, our first quarter results came in below our expectations as conditions across the apparel industry have continued to create difficult circumstances for our business. And while it's been absolutely challenging for us the last several quarters, we believe we're nearing the bottom of this destocking situation, and we're optimistic that the industry will begin its recovery in the first half of calendar 2024.

謝謝阿爾，大家早安。正如 Al 所強調的那樣，我們第一季的業績低於我們的預期，因為整個服裝行業的狀況繼續給我們的業務帶來困難。雖然過去幾個季度對我們來說絕對是一個挑戰，但我們相信我們已接近去庫存情況的底部，並且我們樂觀地認為該行業將在 2024 年上半年開始復甦。

In the meantime, we will continue to be nimble in managing our operations, navigating this environment and adapting as necessary, but at the same time, remaining positioned to meet the current and future needs of our customers.

同時，我們將繼續靈活地管理我們的營運、適應這種環境並根據需要進行調整，但同時，我們仍將繼續滿足客戶當前和未來的需求。

I'm pleased to note that we were able to generate positive free cash flows and a significant increase over recent periods of facing the macro headwinds.

我很高興地註意到，我們能夠產生正的自由現金流，並且在最近面臨宏觀阻力的時期顯著增加。

Now turning to slide 3 for an overview of the quarter, a continuation of weak demand levels led to lower than expected revenue and EBITDA performance during the quarter. In the first quarter, we recorded $138.8 million in net sales, marking an 8% sequential decrease compared to the fourth quarter of 2023.

現在轉向投影片 3，了解本季的概況，需求水準持續疲軟導致本季營收和 EBITDA 表現低於預期。第一季度，我們的淨銷售額為 1.388 億美元，與 2023 年第四季相比較上季下降 8%。

During the quarter, we made a focused effort to recapture customer interest in Central America spending time reengaging with customers based on these efforts and new competitive dynamics, we expect to gain market share in the Americas in the coming quarters.

在本季度，我們專注於重新奪回客戶對中美洲的興趣，基於這些努力和新的競爭動態，我們花時間與客戶重新互動，我們預計在未來幾季獲得美洲的市場份額。

From a competitive standpoint in the Americas, one of our direct competitors in the region Accra, a Mexico-based production patent subsidiary of Altec recent announced it was shutting down its operations. As a result, meaningful volumes are in our sights. We expect to capture a large portion of that opportunity. We project that we'll start to see the benefit of this as we move through the first half of calendar 2024 once the inventory from the closure has been pushed out of the market.

從美洲競爭的角度來看，我們在該地區的直接競爭對手之一阿克拉（Altec 位於墨西哥的生產專利子公司）最近宣布將關閉其業務。因此，我們看到了有意義的銷量。我們希望抓住這一機會的很大一部分。我們預計，在 2024 年上半年，一旦關閉的庫存推出市場，我們將開始看到這一點的好處。

Traditionally in the Americas, we continue to secure new orders for what we are calling beyond apparel in non-apparel markets such as mattresses soft [flooring] and more. In Brazil, we are experiencing record volumes and currently operating at 90 plus percent capacity utilization. However, our profitability has been negatively impacted due to the continued margin pressures resulting from Chinese competitors dumping import volumes due to weak demand in the local market, which is causing us to stay at lower pricing levels.

傳統上，在美洲，我們繼續在非服裝市場（例如軟床墊[地板]等）獲得我們所說的服裝以外的新訂單。在巴西，我們的產量創歷史新高，目前產能利用率高達 90% 以上。然而，由於當地市場需求疲軟，中國競爭對手傾銷進口量，導致持續的利潤壓力，我們的獲利能力受到了負面影響，這導致我們保持較低的定價水準。

Our pricing position should start to improve. Once China's operating environment occurs, our overall profitability has been temporarily hampered by some pricing adjustments. We've made to align lower raw material input costs to help mitigate these pricing pressures we've been deliberate with our actions to optimize our operations and maximize the productivity of our resources. This includes aligning labor and manufacturing resources to meet the needs of the current demand environment, protect margins and boost efficiency.

我們的定價地位應該開始改善。一旦中國的經營環境出現，我們的整體獲利能力會因一些定價調整而暫時受到阻礙。我們已經採取了降低原材料投入成本的措施，以幫助減輕這些定價壓力，我們一直在謹慎採取行動，以優化我們的營運並最大限度地提高我們資源的生產力。這包括調整勞動力和製造資源，以滿足當前需求環境的需求，保護利潤並提高效率。

Our continued focus on controlling costs across the business is evidenced by our positive cash flow generation during the quarter, despite the challenging profitability landscape and we remain committed to controlling costs and disciplined capital management going forward in order to maintain a healthy balance sheet, while ensuring we're strategically positioned to meet the recovery in demand levels in an efficient manner.

儘管獲利前景充滿挑戰，但本季產生的正現金流證明了我們對控制整個業務成本的持續關注，我們仍然致力於控製成本和嚴格的資本管理，以保持健康的資產負債表，同時確保我們的戰略定位是有效地滿足需求水準的恢復。

Important to note that we will continue to invest our resources, develop new innovative products as we believe our innovation capabilities are essential to our growth potential and expansion of our brand into new categories, especially as it relates to our strong free platform.

值得注意的是，我們將繼續投入資源，開發新的創新產品，因為我們相信我們的創新能力對於我們的成長潛力和將我們的品牌擴展到新類別至關重要，特別是因為它與我們強大的免費平台相關。

Turning to slide 4, to discuss reprieve in marketing. During the first quarter were pre represented 31% of sales marking a sequential quarter and year-over-year increase as a percentage of net sales, presales continued to be negatively impacted by the ongoing and economic environment in China and the overall slowdown in apparel productivity. We remain confident in the demand for our sustainable fibers and believe that as China begins to recover, we will see a rebound reprieve as a branded leader in the space.

轉向幻燈片 4，討論行銷中的緩刑。第一季預售佔銷售額的 31%，佔淨銷售額的百分比環比增長，同比增長，但預售繼續受到中國當前經濟環境以及服裝生產力整體放緩的負面影響。我們對永續纖維的需求仍然充滿信心，並相信隨著中國開始復甦，我們作為該領域的品牌領導者將看到反彈。

On the marketing front, our focus remains on elevating our flagship brands reprieve to a mix of B2B and B2C initiatives, leveraging our brand partners is vital, as evidenced by marketing partnerships with [TOMS telecom from Neil] and others during the quarter.

在行銷方面，我們的重點仍然是將我們的旗艦品牌提升為B2B 和B2C 計劃的結合，利用我們的品牌合作夥伴至關重要，本季度與[TOMS Telecom from Neil] 和其他公司的營銷合作夥伴關係就證明了這一點。

On the B2B front, we exhibited at a number of tradeshows globally over the quarter where interest in our costs cutting edge textile takeback remains very strong, providing our partners with the marketing support they need to tell the REPREVE(r) story is also critical. And as we move to Q2, we will continue to build on our established momentum with a new mix of partnerships combined with new product launches. I'll now pass the call over to A.J., to discuss the financial results.

在B2B 方面，我們在本季度在全球舉辦了許多貿易展覽會，人們對我們的尖端紡織品回收成本的興趣仍然非常濃厚，為我們的合作夥伴提供他們講述REPREVE(r) 故事所需的營銷支持也至關重要。隨著進入第二季度，我們將繼續透過新的合作夥伴關係和新產品發布來鞏固我們既定的勢頭。我現在將把電話轉給 A.J.，討論財務結果。

Thank you, Eddie. Let's move on to financial results beginning with slide 5. We've provided the year-over-year comparison on net sales and gross profit for each first quarter. As expected, consolidated net sales were 22.7% lower than the prior year, primarily resulting from the weak demand environment for apparel and the associated decline in pricing from lower raw material costs.

謝謝你，艾迪。讓我們從幻燈片 5 開始討論財務表現。我們提供了每個第一季淨銷售額和毛利的同比比較。如預期，綜合淨銷售額比上年下降 22.7%，這主要是由於服裝需求環境疲軟以及原物料成本下降導致的價格下降。

As mentioned on our last call, the expanded chip and flake product line sales continue to broaden the portfolio in the Americas segment, which also contributes to overall lower average selling prices for this segment.

正如我們在上次電話會議中提到的，擴大的晶片和薄片產品線銷售繼續擴大了美洲細分市場的產品組合，這也導致該細分市場的整體平均售價較低。

The Brazil segment again saw pricing pressures from competitive Chinese imports in connection with aggressive pricing on production coming out of China, the Asia segment maintained strong pricing and margin profile, thanks in part to Unifi's innovative pipeline, which is helping to limit the impact on net sales from the overall volume weakness.

巴西部門再次面臨來自具有競爭力的中國進口產品的價格壓力，原因是中國生產的產品定價激進，亞洲部門保持強勁的定價和利潤狀況，部分歸功於Unifi 的創新管道，這有助於限制對淨值的影響銷售來自整體成交量疲軟。

From a gross profit perspective on slide 6, the volume pressure in the Americas, together with the selling price pressures in Brazil unfavorably impacted gross profit.

從幻燈片 6 的毛利角度來看，美洲的銷售壓力以及巴西的售價壓力對毛利產生了不利影響。

Turning to slide 7, for a sequential sales comparison, there was a mix of volume and pricing impacts across the segments. Specifically in the Americas, volume declines were mostly offset by chip and flake sales. In Brazil, pricing pressures weighed heavily.

轉向投影片 7，對於連續銷售比較，各個細分市場存在銷售和定價影響。特別是在美洲，銷量下降大部分被切片和薄片銷售所抵消。在巴西，定價壓力很大。

Slide 8, conveys the change in gross profit, which is very similar to Q4 of fiscal 2023, in that weaker fixed cost absorption in the Americas was partially offset by modest sequential increases in gross profit within both the Brazil and Asia segments.

第 8 張投影片顯示了毛利的變化，這與 2023 財年第四季非常相似，美洲固定成本吸收的疲軟被巴西和亞洲業務毛利連續小幅成長所部分抵消。

Now moving onto our balance sheet and liquidity position on slide 9. I will cover a few highlights before passing the call back to Eddie. As you will recall, a year ago, we successfully refinanced our asset-backed credit facility, providing significant liquidity to complement our global cash on hand. During the quarter, we continued to focus on working capital management and cost controls, enabling us to produce operating cash flows and reduce net debt in this weak demand environment.

現在轉到投影片 9 上的資產負債表和流動性部位。在將電話轉回給 Eddie 之前，我將介紹一些要點。您還記得，一年前，我們成功地為我們的資產支持信貸安排進行了再融資，提供了大量流動性來補充我們的全球手頭現金。本季度，我們繼續關注營運資金管理和成本控制，使我們能夠在需求疲軟的環境下產生營運現金流並減少淨債務。

Furthermore, we produced positive free cash flows in the quarter as we were able to limit our CapEx spend until there was a more pronounced recovery in apparel industry demand. Accordingly, we are confident that our business remains well-positioned for realizing profitable growth opportunities when the apparel industry rebounds, and its supply chains normalize. I'll now pass the call back to Eddie.

此外，我們在本季產生了正的自由現金流，因為我們能夠限制資本支出，直到服裝業需求出現更明顯的復甦。因此，我們相信，當服裝業反彈且供應鏈正常化時，我們的業務仍能實現獲利成長機會。我現在將電話轉回給艾迪。

Thank you again. Before we turn the call over to our Q&A session, I'd like to turn to slide 10, for a review of some of our main fiscal 2024, for commercial and operational initiatives we implemented in the Americas business at the start of the year. We've already discussed the ways in which we have executed against many of these initiatives during the quarter and some capacity with our marks today.

再次感謝你。在我們將電話轉入問答環節之前，我想先看一下投影片 10，回顧我們 2024 年的一些主要財年，以及我們年初在美洲業務中實施的商業和營運舉措。我們已經討論了本季度執行許多此類舉措的方式以及今天我們的一些能力。

But I'll take a moment to provide a summary of the developments we've made across the initiatives during the quarter and the respective go-forward strategy for each.

但我將花點時間總結我們在本季度各項計劃中取得的進展以及每個計劃各自的前進戰略。

Starting with the commercial initiatives, we are focused on growth and optimizing the commercial process. Our efforts to diversify our portfolio in Americas through chip and flake sales have been successful and have experienced strong adoption, and we will continue to pursue this revenue opportunity going forward.

從商業計劃開始，我們專注於成長和優化商業流程。我們透過晶片和薄片銷售在美洲實現產品組合多元化的努力取得了成功，並得到了廣泛的採用，我們將繼續尋求這一收入機會。

Additionally, on the commercial front, we continue to develop our beyond apparel business and are excited about the growth opportunities in those markets. Further, we are constantly evaluating potential ways to enhance our sales process and improve our customers' experience.

此外，在商業方面，我們繼續發展服裝以外的業務，並對這些市場的成長機會感到興奮。此外，我們不斷評估增強銷售流程和改善客戶體驗的潛在方法。

We believe our newly implemented sales process supports better outcomes for us and better experiences for our customers. These efforts should also help us attack the Americas opportunity I mentioned earlier and capitalize on the exit of a competitor from the market.

我們相信，我們新實施的銷售流程可以為我們帶來更好的成果，為我們的客戶帶來更好的體驗。這些努力也應該幫助我們抓住我之前提到的美洲機會，並利用競爭對手退出市場的機會。

Lastly, on the commercial side, we're allocating our time to more frequent customer engagements to better understand their needs and identify ways and deliver the most value to them that we can. This is an ongoing constantly evolving process that we believe will enhance our customer relationships, which in turn drives increasing value creation over time.

最後，在商業方面，我們將時間分配給更頻繁的客戶參與，以便更好地了解他們的需求，找到方法並盡我們所能為他們提供最大的價值。這是一個持續不斷發展的過程，我們相信它將增強我們的客戶關係，從而隨著時間的推移推動價值創造的增加。

Moving to our operational priorities. The existing [ebo] installations and the benefits resulting from automation, including improved efficiency and productivity, have been value, valuable especially as we navigate the demand challenged environment.

轉向我們的營運重點。現有的 [ebo] 安裝以及自動化帶來的好處（包括提高的效率和生產力）具有價值，尤其是在我們應對需求挑戰的環境時。

From a labor standpoint in the Americas, we continued to manage our headcount through attrition during the quarter and will maintain a diligent hiring approach in this environment. I want to make sure that this is clear. We have not taken actions to significantly adjust headcount but have managed that through a careful attrition process. We've done so because we know that we need to flex our organization when market conditions return to normal, which we continue to believe will start in the first half of calendar 2024.

從美洲勞動力的角度來看，我們在本季繼續透過人員流失來管理我們的員工人數，並將在這種環境下保持勤奮的招募方式。我想確保這一點是清楚的。我們尚未採取行動大幅調整員工人數，但透過謹慎的減員流程進行了管理。我們這樣做是因為我們知道，當市場狀況恢復正常時，我們需要調整我們的組織結構，我們仍然相信這將在 2024 年上半年開始。

Some of our other key operational initiatives include aligning our customers, aligning our production with our customers' production activities, focusing our attention on working capital to improve cash flows through effective planning. And I want to reiterate how well our team executed on this initiative during the quarter. This will remain a critical focus area for us.

我們的其他一些關鍵營運措施包括與客戶保持一致、使我們的生產與客戶的生產活動保持一致、將注意力集中在營運資本上，以透過有效的規劃來改善現金流。我想重申我們的團隊在本季度執行此計劃的情況。這仍將是我們的關鍵重點領域。

Now let's turn to slide 11 of the presentation to discuss our expectations for the upcoming second fiscal quarter, our forecast for the second quarter of fiscal 2024 into sales and profitability performance that is generally consistent with the just-completed first quarter.

現在讓我們轉向簡報的第 11 張投影片，討論我們對即將到來的第二財季的預期，我們對 2024 財年第二季銷售和獲利表現的預測與剛完成的第一季基本一致。

We are confident in our position as a partner of choice to brands and customers across the globe. And we believe we have the right short and long-term strategy to drive value for our shareholders. And I want to close by thanking all of our Unifi employees for their hard work and efforts as we move through this difficult period. With that, we will now open the line for questions.

我們對自己作為全球品牌和客戶首選合作夥伴的地位充滿信心。我們相信我們擁有正確的短期和長期策略來為股東創造價值。最後，我要感謝所有 Unifi 員工在我們度過這段困難時期時所做的辛勤工作和努力。現在，我們將開通提問熱線。

Anthony Lebiedzinski, Sidoti. Anthony, your line is now open.

安東尼·萊別津斯基，西多蒂。安東尼，您的線路現已開通。

Good morning and thank you for taking the questions. So first, I guess just a quick observation. It's overall a nice job as far as managing your cash flows in a tough demand environment. So congrats on being able to do that.

早上好，感謝您提出問題。首先，我想只是快速觀察一下。總的來說，在嚴峻的需求環境下管理現金流是一項不錯的工作。所以恭喜你能夠做到這一點。

So my first question as far as, you know pricing. So that was down, I believe about 18% on a year-over-year basis in one of the slides you guys talked about doing some things as far as we are transforming the pricing and execution components of the sales process. So maybe you could can you just walk us through like us to know what happened with pricing in the quarter versus a year ago? And how do you think your new initiatives will help to certainly improve on that?

我的第一個問題是，你知道定價嗎？所以，我相信在你們談到的一張投影片中，我們正在改變銷售流程的定價和執行部分，比去年同期下降了約 18%。那麼也許您可以像我們一樣引導我們了解本季的定價與一年前相比發生了什麼？您認為您的新措施將如何幫助改善這一點？

Sure, Anthony, it's A.J. I'll start off with that question. The year-over-year difference that you're seeing labeled as price mix, there's very much a mix effect in there as well for price. We certainly need to align for our customer value, best align the pricing with the raw material costs as well as we can. And then I'll let Eddie, also comment on some of the other sales and commercial activities.

當然，安東尼，我是 A.J.我將從這個問題開始。您看到的同比差異被標記為價格組合，其中價格也存在很大的混合效應。我們當然需要與客戶價值保持一致，盡可能地將定價與原物料成本保持一致。然後我會讓艾迪也評論一些其他銷售和商業活動。

Yeah. As we mentioned the last call, we are having to react to the demand situation, and we're being very careful about making sure we support our customers at this time. And one of the main initiatives we have in this area is activity-based costing process. So we're really evaluating what is the cost to make these specialty yarn and what does it cost us to make the more commodity-type yarns, high running volume items.

是的。正如我們在上次電話會議中提到的，我們必須對需求情況做出反應，並且我們非常謹慎地確保此時為客戶提供支援。我們在這一領域的主要舉措之一是基於活動的成本核算流程。因此，我們正在真正評估製造這些特種紗線的成本是多少，以及製造更多商品型紗線、高運行量產品的成本是多少。

And so we're giving the opportunity for our customers to place larger orders and in turn, we can adjust our price accordingly. So we're going through this process right now. We're a long way to go, but it's certainly something that we are focusing on to make sure we bring the right value to our customer at the same time, protect our business.

因此，我們為客戶提供了下更大訂單的機會，反過來，我們也可以相應地調整我們的價格。所以我們現在正在經歷這個過程。我們還有很長的路要走，但這肯定是我們關注的事情，以確保我們為客戶帶來正確的價值，同時保護我們的業務。

Understood, okay. Thank you for that. And then as far as the changing competitive dynamics that you spoke about the any way that you guys maybe quantify about the as far as what the opportunity could be for you guys as far as benefits in calendar '24?

明白了，好吧。謝謝你。至於你們談到的不斷變化的競爭動態，你們可以用什麼方式來量化你們在 24 日曆年中可能獲得的機會和好處？

Yes, and we are right. We are very confident right now that we're going to pick up the majority of the majority of that business for several reasons. That business was being done. Product was produced in Mexico that was being exported up here. It was roughly GBP30 million a year. And we talked about beyond apparel a lot of that is in the beyond apparel areas like [mattress] and automotive.

是的，我們是對的。我們現在非常有信心，由於幾個原因，我們將接手大部分業務。那件事正在做。產品在墨西哥生產並出口到這裡。每年約 3000 萬英鎊。我們討論了服裝以外的領域，其中許多是在服裝以外的領域，例如[床墊]和汽車。

And we believe we're well-positioned to service the customers actually better out of the US than out of Mexico. We have built a lot of new relationships with some of our customers in the last several months as well. I've learned about these new developments and we're getting a lot of really positive signals from our customer base.

我們相信，我們處於有利地位，可以為美國以外的客戶提供比墨西哥以外的客戶更好的服務。在過去的幾個月裡，我們也與一些客戶建立了許多新的關係。我了解了這些新的發展，我們從客戶群中得到了很多非常正面的訊號。

We don't expect to see the business pickup from this until beginning of the calendar year as the inventories are depleted like we said on the call, but I'm very confident that we'll be able to support the markets and as this competitor exits.

我們預計直到年初才會看到業務回升，因為庫存已經耗盡，就像我們在電話中所說的那樣，但我非常有信心我們將能夠支持市場，並且作為競爭對手退出。

Understood. Okay, Well, that sounds good. And then in terms of the flake and chip revenue, how much of your sales is coming from that and kind of what's the opportunity you think going forward?

明白了。好吧，聽起來不錯。然後就薄片和晶片收入而言，您的銷售額有多少來自於此，您認為未來的機會是什麼？

Anthony, I'll start, there is still a modest just modest, not significant portion of the sales portfolio right now. We've continued to use much of that product to balance external sales and internal consumption, but we do see a lot of interest with customers in terms of some of the non-textile and beyond apparel applications with that. But currently, again not a significant portion of the portfolio, but something we continue to charge towards.

安東尼，我首先來說，目前銷售組合中仍然有一小部分，只是適度的，不是很大的一部分。我們繼續使用大部分該產品來平衡外部銷售和內部消費，但我們確實看到客戶對一些非紡織品和服裝以外的應用非常感興趣。但目前，這仍然不是投資組合的重要部分，但我們將繼續努力。

And I'll add to that. It is obviously lower price points in yarn because there's fewer steps involved. But what we are excited about it is a continuation of our drive to put more sustainable products out in the marketplace.

我還要補充一點。紗線的價格顯然較低，因為涉及的步驟較少。但令我們興奮的是，我們將繼續努力將更多永續產品推向市場。

And we do believe we have some quality attributes in our chip, especially in our resin, our reprieve resin that the market is taking a very nice, as we move through the year. While we did have a big jump quarter-over-quarter, year-over-year, we do expect to continue that growth as we move through this calendar, this fiscal year.

我們確實相信我們的晶片具有一些品質屬性，尤其是我們的樹脂，我們的緩刑樹脂，隨著我們度過這一年，市場表現非常好。雖然我們確實實現了季度環比和同比的大幅躍升，但我們確實預計在本日曆、本財年中將繼續保持這種增長。

Understood, Okay, Eddie, thank you for that. And so what do you look at the business kind of longer term. And the obviously the current demand environment is not good at the moment. But do you think perhaps maybe there's an opportunity for some facility consolidation maybe perhaps some streamlining opportunities. I mean, you do have a lot of fixed costs and a lot of, again, facilities here in the US.

明白了，好的，艾迪，謝謝你。那麼從長遠來看，您對這項業務有何看法？顯然目前的需求環境並不好。但您是否認為也許有一些設施整合的機會，也許還有一些精簡的機會。我的意思是，在美國確實有很多固定成本和很多設施。

So how do you think about this longer-term in the context of this environment that we're in. And you mentioned also that the retailers may be more careful as far as placing new orders so just, what are your longer-term thoughts on that?

那麼，在我們所處的環境背景下，您如何看待這個長期問題？您還提到，零售商在下新訂單時可能會更加謹慎，那麼您的長期想法是什麼？那？

Good question. I had first of all, on the retailers, I think they are going to be cautious around what they order and what that does mean they will be waiting till the last minute. But when the last minute comes, we do expect to see a sharp increase in demand, especially in Central America as the inventories are finally destocked and the consumer demand gets back to more normal.

好問題。首先，對於零售商，我認為他們會對訂購的商品持謹慎態度，這意味著他們會等到最後一刻。但當最後一刻到來時，我們確實預期需求會急劇增加，尤其是在中美洲，因為庫存最終被去化，消費者需求恢復到正常水準。

But from a fixed cost point of view, we are looking at that all the time we've done a lot of work already around trying to reduce our fixed costs. We are very diligent about looking at all and every option. And as we move through the fiscal year, we're going to be looking at what is the real demand out there in the marketplace and we are adjusting accordingly.

但從固定成本的角度來看，我們一直在關注這一點，我們已經做了很多工作來試圖降低固定成本。我們非常努力地考慮所有的選擇。當我們進入本財年時，我們將了解市場上的真正需求是什麼，並做出相應的調整。

Okay, understood. Well, thank you very much and best of luck.

好的，明白了。嗯，非常感謝你，祝你好運。

Thank you very much.

非常感謝。

Thank you, Anthony. There are no further questions at this time. I will now turn the call back over to the presenters.

謝謝你，安東尼。目前沒有其他問題。我現在將把電話轉回給演示者。

Thank you.

謝謝。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。