urban-gro Inc (UGRO) 2024 Q1 法說會逐字稿

Hello, and welcome to the urban-gro first-quarter 2024 earnings conference call. (Operator Instructions) Please note that this conference call is being recorded today, April 30, 2024, and a replay will be made available on the company's website following the end of the call.

您好，歡迎參加 Urban-Gro 2024 年第一季財報電話會議。（操作員說明）請注意，本次電話會議將於今天（2024 年 4 月 30 日）進行錄音，電話會議結束後將在公司網站上提供重播。

At this time, I'd like to turn the conference call over to Christian Monson, urban-gro's Executive Vice President and General Counsel. Sir, please go ahead.

這次，我想將電話會議轉給 Urban-gro 執行副總裁兼總法律顧問 Christian Monson。先生，請繼續。

Good afternoon, and thank you for joining us. Today's call will be led by Brad Nattrass, Chairman and Chief Executive Officer; and Dick Akright, Chief Financial Officer.

下午好，感謝您加入我們。今天的電話會議將由董事長兼執行長 Brad Nattrass 主持；和財務長迪克·阿克賴特(Dick Akright)。

I'd like to remind our listeners that remarks made during this call will include a discussion of non-GAAP metrics, including adjusted EBITDA and backlog. These items should not be utilized as a substitute for urban-gro's financial results prepared in accordance with GAAP. Reconciliations of our GAAP net loss to adjusted EBITDA are available in our press release and in our Form 10-Q filed with the Securities and Exchange Commission and can be accessed from the Investor Relations section of our website at ir.urban-gro.com.

我想提醒我們的聽眾，在這次電話會議中發表的言論將包括對非公認會計原則指標的討論，包括調整後的 EBITDA 和積壓工作。這些項目不應被用來取代城市集團根據公認會計準則編制的財務表現。我們的GAAP 淨虧損與調整後EBITDA 的調節表可在我們的新聞稿和向美國證券交易委員會提交的10-Q 表格中找到，並且可以透過我們網站ir.urban-gro.com 的投資者關係部分進行訪問。

On this call, we may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws and are based on urban-gro's current expectations. Actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements.

在這次電話會議上，我們可能會陳述管理層的意圖、信念、期望或未來預測。這些均為前瞻性陳述，涉及風險和不確定性。本次電話會議的前瞻性陳述是根據聯邦證券法的安全港條款做出的，並基於 Urban-gro 目前的預期。實際結果可能存在重大差異。因此，您不應過度依賴任何前瞻性陳述。

Some of the factors that could cause actual results to differ materially from such forward-looking statements are discussed in the periodic reports urban-gro files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We do encourage you to review these documents carefully.

Urban-Gro 向美國證券交易委員會提交的定期報告文件中討論了一些可能導致實際結果與此類前瞻性陳述有重大差異的因素。這些文件可在公司網站的投資者部分和美國證券交易委員會的網站上找到。我們鼓勵您仔細查看這些文件。

Lastly, a copy of our earnings press release and website for replay for today's call may be found on the Investor Relations section of our website, which again is ir.urban-gro.com. With that, I will now turn the call over to Brad.

最後，您可以在我們網站的投資者關係部分找到我們的收益新聞稿和今天電話會議重播網站的副本，該網站也是 ir.urban-gro.com。現在，我將把電話轉給布拉德。

Thank you, Christian. Good afternoon, everyone, and thank you for joining us today. What a phenomenal day for the cannabis industry. As I'm sure most of you are now aware, a few hours ago, there were credible reports in the media indicating that the US Drug Enforcement Agency is supporting the Department of Health's recommendation to reclassify cannabis from the most stringent Schedule I to the less stringent Schedule III, in turn, providing a long-awaited catalyst for the cannabis industry.

謝謝你，克里斯蒂安。大家下午好，感謝您今天加入我們。對於大麻產業來說，這是多麼非凡的一天。我相信你們大多數人現在都知道，幾個小時前，媒體有可靠的報道表明，美國緝毒局正在支持衛生部的建議，將大麻從最嚴格的附表I 重新分類為最寬鬆的附表I 。

While there still is a review period to complete with the expected removal of the two ADE-related tax burden from the DOJ addressing state run programs through a guidance memo, we believe many cannabis operators will realize significant increases to their working capital, that in turn could be reinvested in their business infrastructure to refresh existing facilities and build out new ones.

儘管預計司法部將透過指導備忘錄消除與 ADE 相關的兩項稅收負擔，以解決國營計劃，但仍有一個審查期需要完成，但我們相信許多大麻經營者將實現營運資本的大幅增加，這反過來可以對其業務基礎設施進行再投資，以更新現有設施並建造新設施。

For the last two years, I'm proud to sit on the board of the National Cannabis Roundtable alongside CEOs from some of the leading multistate operators in this space. It's the tireless dedication of MSL leaders like these and the lobbying efforts from organizations like NCR that has paved the way for our industry and the exciting wins along the way.

在過去的兩年裡，我很自豪能夠與該領域一些領先的跨國營運商的執行長一起擔任國家大麻圓桌會議的董事會成員。正是像這樣的 MSL 領導者的不懈奉獻以及 NCR 等組織的遊說努力，為我們的行業鋪平了道路，並一路取得了令人興奮的勝利。

As it relates to what this news and the subsequent final approval of rescheduling means for urban-gro's future, it's significant. With over 1,000 projects completed in the cannabis market over the last eight years and with 120 employees, which include architects, engineers, construction managers, and horticulturists, urban-gro is the leading professional services firm in the cannabis industry that refreshes existing operations, designs and/or builds new dispensary and cultivation facilities, and further procures and integrates cultivation equipment solutions as well. The successful rescheduling of cannabis is a long-awaited catalyst that we've anticipated to reinvigorate an industry that has been facing strong headwinds for the last couple of years.

由於它關係到這一消息以及隨後重新安排的最終批准對城市發展的未來意味著什麼，因此意義重大。Urban-gro 過去八年在大麻市場完成了1,000 多個項目，擁有120 名員工，其中包括建築師、工程師、施工經理和園藝師，是大麻行業領先的專業服務公司，致力於更新現有營運、設計和/或建造新的藥房和種植設施，並進一步採購和整合種植設備解決方案。大麻的成功重新安排是一個期待已久的催化劑，我們預計它將重振過去幾年一直面臨強勁阻力的行業。

With that said and moving on, I'm excited to report that in the first quarter, we had positive cash flow from operations and in turn delivered our strongest quarterly and adjusted EBITDA results in two years. This improved performance is attributed to both the diversified revenue streams that we've been seeking and building out as well as our focused efforts throughout 2023 to reduce operating expenses on a go-forward basis.

話雖如此，我很高興地向大家報告，在第一季度，我們的營運現金流為正，進而實現了兩年來最強勁的季度和調整後 EBITDA 業績。業績的改善歸功於我們一直在尋求和建立的多元化收入來源，以及我們在 2023 年全年為減少未來營運支出所做的集中努力。

Today, our multi-sector focused professional services and design build firm operates out of offices in three states and Europe. And our targeted markets extend from the cannabis and vertical farming sectors to also include light industrial, commercial, hospitality, recreation, education, and healthcare sectors.

如今，我們專注於多領域的專業服務和設計建造公司在三個州和歐洲設有辦事處。我們的目標市場從大麻和垂直農業領域延伸到輕工業、商業、旅館、娛樂、教育和醫療保健領域。

Looking at the highlights from our first-quarter performance, both revenue of $15.5 million and a slight adjusted EBITDA loss of $0.3 million beat our quarterly guidance. The $3.1 million year-over-year improvement in adjusted EBITDA was driven by a combination of reduced operating expenses and strengthening margins.

從我們第一季業績的亮點來看，1,550 萬美元的收入和 30 萬美元的略微調整後的 EBITDA 損失都超出了我們的季度指導。調整後 EBITDA 年增 310 萬美元，是由於營運費用減少和利潤率提高共同推動的。

As it relates to the reduced expenses and as a result of the optimization efforts made in '23, we began to benefit from the previously communicated $8 million reduction in general and administrative expenses. In fact, we realized a $2.8 million improvement from the first quarter versus Q1 of 2023.

由於這與費用減少有關，並且由於 23 年所做的最佳化工作，我們開始從先前通報的 800 萬美元的一般和管理費用減少中受益。事實上，我們發現第一季與 2023 年第一季相比增加了 280 萬美元。

The margin growth in the first quarter was tied to both increased productivity from our professional services providers, as well as the strengthening of our returns delivered by our construction business. And further backlog remained strong at $99 million.

第一季的利潤成長與我們的專業服務提供者生產力的提高以及建築業務帶來的回報的增強有關。進一步的積壓仍然強勁，達到 9,900 萬美元。

As a result, and relating to full year 2024, we are maintaining our guidance to recognize more than $84 million in revenue, and to generate positive adjusted EBITDA. I'll further note that this does not take into consideration today's rescheduling related developments as there are still unknowns, including timing that need to be clarified.

因此，就 2024 年全年而言，我們維持我們的指引，確認超過 8,400 萬美元的收入，並產生正的調整後 EBITDA。我還要指出的是，這並沒有考慮到今天的重新安排相關進展，因為仍有未知因素，包括需要澄清的時間安排。

Looking at market trends, diversification has most definitely assisted in insulating our business from the previously discussed headwinds that we've been facing within the cannabis and vertical farming sectors for the last couple of years. Consistent with the sector breakout in '23, in the first quarter, approximately 72% of our revenues came from the commercial sectors that we serve, and 28% from controlled environment ag.

從市場趨勢來看，多元化無疑有助於我們的業務免受過去幾年我們在大麻和垂直農業領域所面臨的先前討論的逆風的影響。與 23 年的行業突破一致，第一季度，我們約 72% 的收入來自我們所服務的商業部門，28% 來自受控環境公司。

In the commercial sector, our client base continues to be comprised of top tier companies, that include Fortune 50 and 500 firms, and revenues recognized in the quarter were from a combination of ongoing and new projects. In the cannabis sector, while the market sentiment has been stronger than it has been in more than a year, especially after today, we're actively engaged with clients on multiple fronts. However, cautious optimism has been the status quo for operators so far this year.

在商業領域，我們的客戶群仍然由頂級公司組成，其中包括財富 50 強和 500 強公司，本季確認的收入來自正在進行的項目和新項目的組合。在大麻產業，雖然市場情緒比一年多來更加強勁，特別是在今天之後，但我們在多個方面積極與客戶接觸。然而，今年到目前為止，謹慎樂觀一直是營運商的現狀。

In the interim and while we wait for the rescheduling narrative to play out in the months ahead, we're expecting to see steady activity and to continue signing both services and construction contracts and legal markets across the US as operators work through persistent state-level regulatory and legal delays. This being said and in addition to today's announcement, there are a couple of key additional catalysts, which could also result in a significant and sustained positive change in momentum for our business.

在此期間，當我們等待未來幾個月重新安排的故事展開時，我們預計會看到穩定的活動，並繼續在美國各地簽署服務和建築合約以及法律市場，因為運營商將通過持續的州級工作進行工作監管和法律方面的延誤。話雖如此，除了今天的公告之外，還有一些關鍵的額外催化劑，這也可能導致我們的業務勢頭發生重大且持續的積極變化。

First, on the federal level, there's prospects of successfully passing a banking-related bill by year end continues to be discussed. Of particular importance, this would potentially include a capital markets clause that allows plant-touching businesses to list on the larger public market exchanges, providing a more efficient path for them to access capital and create greater liquidity. This would attract institutional investors that can participate via these exchanges or provide capital directly to the issuers.

首先，在聯邦層面，年底前成功通過銀行相關法案的前景仍在討論中。特別重要的是，這可能包括一項資本市場條款，允許植物接觸企業在更大的公開市場交易所上市，為它們提供更有效的獲取資本和創造更大流動性的途徑。這將吸引機構投資者透過這些交易所參與或直接向發行人提供資金。

Second, at the state level, while progress continues to be made on legalization in multiple states, we maintain our position that the most impactful change would be in Florida, the nation's third most populous state and one of the fastest growing in the country. Now that it's confirmed to be on the ballot in November, a successful vote to allow adult use recreational sales would have a profound and sustained impact for Florida operators, and we anticipate for urban-gro as well.

其次，在州一級，雖然多個州在合法化方面繼續取得進展，但我們維持我們的立場，即最有影響力的變化將在佛羅裡達州，該州是美國人口第三大州，也是美國成長最快的州之一。現在已確認將在 11 月進行投票，成功投票允許成人使用娛樂銷售將對佛羅裡達州的營運商產生深遠而持續的影響，我們預計也會對城市農業產生深遠的影響。

In closing, and supported by our $99 million backlog, our qualified pipeline, the recognition of last year's $8 million general and administrative expense reduction, and today's positive regulatory development, we believe that we are well positioned to continue building momentum through the end of the year and beyond.

最後，在我們9,900 萬美元的積壓訂單、我們合格的管道、對去年800 萬美元一般和管理費用削減的認可以及今天積極的監管發展的支持下，我們相信我們處於有利位置，可以在2019 年末繼續增強勢頭。

Thank you. And with that, I will now turn the call over to Dick.

謝謝。現在我將把電話轉給迪克。

Thanks, Brad. In the first quarter of 2024, we generated revenue of $15.5 million, which represents a sequential improvement of $0.5 million or 4% over the $15.0 million of revenue generated in the fourth quarter of 2023 and a $1.2 million or 7% decrease over the $16.8 million of revenue generated in the prior-year period.

謝謝，布拉德。2024 年第一季度，我們的營收為1,550 萬美元，比2023 年第四季的1,500 萬美元收入增加了50 萬美元，即4%，比2023 年第四季的1,680 萬美元減少了120 萬美元，即減少了7%上一年期間所產生的收入。

The decrease in revenue over the prior-year period was driven by a $0.4 million decrease in construction design-build revenue, which reflected a decrease in the number of projects and average size of projects during those periods. Equipment systems revenue decreased by $0.4 million, and services revenue decreased by $0.3 million, which corresponds to the historical downturn in the cannabis industry.

收入較上年同期下降的原因是建築設計建造收入減少了 40 萬美元，這反映了該期間項目數量和項目平均規模的減少。設備系統收入減少了40萬美元，服務收入減少了30萬美元，這與大麻產業的歷史低迷相對應。

Gross profit was $3.1 million or 20% of revenue in the first quarter of 2024 compared to $1.7 million or 11% of revenue in the fourth quarter of 2023 and $2.1 million or 17% of revenue in the prior-year period. The increase in gross profit dollars and margin percentage from both of these comparable periods was driven by the impact of improved margins in services and construction design-build revenues, as we experienced improvements in delivery of services projects and started work on higher-margin construction design-build projects during the current quarter.

2024 年第一季的毛利為310 萬美元，佔營收的20%，而2023 年第四季的毛利為170 萬美元，佔營收的11%，去年同期毛利為210 萬美元，佔收入的17%。這兩個可比較期間的毛利和利潤率的增長是由於服務和建築設計建造收入的利潤率提高的影響，因為我們在服務項目的交付方面取得了進步，並開始了利潤率更高的建築設計工作- 本季建設項目。

Operating expenses were $5.2 million in the first quarter of 2024, which on a sequential basis is a decrease of $1.2 million and on a year-over-year basis is $2.7 million less than operating expenses of $7.9 million in the first quarter of 2023. Both of these decreases are associated with the company's expense optimization and resource reallocation initiative.

2024 年第一季的營運費用為 520 萬美元，比 2023 年第一季的營運費用 790 萬美元減少了 120 萬美元，年比減少了 270 萬美元。這兩項下降都與公司的費用優化和資源重新分配計劃有關。

Net loss was $2.1 million or a negative $0.18 per diluted share in the current quarter compared to a net loss of $5.1 million or a negative $0.48 per diluted share in the prior-year period. Adjusted EBITDA improved by $2.7 million sequentially to negative $0.3 million in the first quarter of 2024. This is an improvement in adjusted EBITDA of $3.1 million compared to the prior-year period. The improvement in our adjusted EBITDA for both periods was driven by lower operating expenses as previously discussed.

本季淨虧損為 210 萬美元，即稀釋後每股負 0.18 美元，去年同期淨虧損為 510 萬美元，即稀釋後每股負 0.48 美元。2024 年第一季調整後 EBITDA 季增 270 萬美元，達到負 30 萬美元。與去年同期相比，調整後 EBITDA 提高了 310 萬美元。如前所述，我們兩個時期調整後 EBITDA 的改善是由於營運費用降低所致。

Turning to our balance sheet, we ended the quarter with $0.7 million of cash and a balance on our line of credit of $2.0 million. With the support of the working capital line of credit that we put in place in December, we currently do not see the need to bring new dilutive capital into the company.

談到我們的資產負債表，本季末我們有 70 萬美元的現金，信用額度餘額為 200 萬美元。在我們12月份設立的營運資金信貸額度的支持下，我們目前認為沒有必要為公司引入新的稀釋資本。

Our total backlog as of March 31, 2024, was approximately $99 million, reflecting a decrease of $11 million or 10% on a sequential basis. This backlog is comprised of $93 million in construction design-build, $5 million of professional services, and $1 million of equipment systems contracts. Breaking backlog out by sector, 76% is with clients in the CEA sector, and 24% is with clients in the commercial sector.

截至 2024 年 3 月 31 日，我們的積壓訂單總額約為 9,900 萬美元，季減 1,100 萬美元，即 10%。該積壓訂單包括 9,300 萬美元的建築設計建造、500 萬美元的專業服務以及 100 萬美元的設備系統合約。按行業劃分的積壓訂單中，76% 是 CEA 行業的客戶，24% 是商業領域的客戶。

Supported by our backlog and pipeline, we remain confident that our cash position, combined with our $10 million line of credit, will provide us the necessary flexibility to manage through various macroeconomic scenarios. We continue to remain focused on our execution and returning to positive adjusted EBITDA on an ongoing basis.

在我們的積壓訂單和管道的支持下，我們仍然相信我們的現金狀況加上 1000 萬美元的信貸額度將為我們提供必要的靈活性來管理各種宏觀經濟情景。我們繼續專注於我們的執行力，並持續恢復正調整後的 EBITDA。

That concludes our prepared remarks. Operator, please open the call for questions.

我們準備好的演講到此結束。接線員，請打開電話提問。

(Operator Instructions) Eric Des Lauriers, Craig-Hallum.

（操作員說明）Eric Des Lauriers、Craig-Hallum。

Great. Thanks for taking my questions. So first one on the news of the day here with DEA agreeing to reschedule cannabis to Schedule III, obviously the (technical difficulty) is not applying to the cannabis operators --

偉大的。感謝您回答我的問題。因此，今天的第一個新聞是 DEA 同意將大麻重新安排到附表 III，顯然（技術困難）不適用於大麻經營者--

Apologies, Eric, your line is just really bad quality. We will reconnect you. We will dial out to you so that we can get a better connection, if that's okay with you. Brad, if it's okay, I'll move on to the next question, and we'll reconnect Eric as soon as possible.

抱歉，埃里克，你的產品品質真的很差。我們將重新與您聯繫。如果您同意的話，我們將撥打您的電話，以便獲得更好的連線。Brad，如果可以的話，我將繼續下一個問題，我們將盡快重新聯繫 Eric。

Sounds great, Paul. Thank you.

聽起來不錯，保羅。謝謝。

Scott Fortune, ROTH MKM.

斯科特·福瓊，羅斯·MKM。

Thank you for the question. Hopefully, you can hear me better. I will leave the DEA question for Eric. But just curious on Florida, Brad, obviously that's up for adult-use ballot vote now. It's still a big hurdle to get 60% of the vote. But are you seeing -- now that it's up for vote, are you seeing operators come in and engaging more in your services as they look to build ahead of a potential vote in Florida?

謝謝你的提問。希望你能更好地聽到我的聲音。我將 DEA 的問題留給埃里克。但只是對佛羅裡達州感到好奇，布拉德，顯然現在要進行成人用選票投票。想要獲得60%的選票仍然是一個很大的障礙。但是您是否看到，現在已經進行投票了，您是否看到運營商介入並更多地參與您的服務，因為他們希望在佛羅裡達州的潛在投票之前進行建設？

Or is still kind of muted interest from that standpoint to wait to see if this does pass in Florida from adult use side of things? Just curious on the operators' emphasis for moving forward now and building out potential ahead of some of these states.

或者從這個角度來看，仍然沒有興趣等待這是否會在佛羅裡達州從成人使用方面通過？只是對運營商強調現在向前推進並在其中一些州之前發揮潛力感到好奇。

Thanks, Scott. Thanks for the question. Yes, Florida, it is a hurdle at the 60%, and there's a lot of confidence that that will be beat. But the heavy work starts now, and it will be great for people to donate and to give to the path that Trulieve has created in the state with a lot of the other multistate leaders, so they can get the word out and keep pushing hard.

謝謝，斯科特。謝謝你的提問。是的，佛羅裡達州，60% 是一個障礙，而且人們非常有信心克服這個障礙。但繁重的工作現在就開始了，人們能夠捐款並為特魯利夫與許多其他多州領導人在該州創造的道路做出貢獻將是一件好事，這樣他們就可以宣傳並繼續努力推動。

The polls are trending higher than 60% at this time from what I've heard. But again, it's early stage, and it's important to give so we can fight that fight. In terms of uptick, yes, for sure. In terms of the uptick and the excitement and the planning moving forward to hard large orders, that's not quite here.

據我所知，目前民調的支持率高於 60%。但同樣，現在還處於早期階段，付出很重要，這樣我們才能打贏這場戰鬥。就上升而言，是的，當然。就大訂單的成長、興奮和計劃而言，情況並非如此。

The conversations on many fronts that we've been having are preparing to be in a good place from an equipment standpoint. Some equipment needs to be ordered four to six months in advance. Others is entering the design stage for new facilities, and then at some point in the future, proceeding to the build. But absolutely a very positive uptick in the state so far.

從設備的角度來看，我們在許多方面進行的對話正準備處於一個良好的位置。有些設備需要提前四到六個月訂購。其他人正在進入新設施的設計階段，然後在未來的某個時候進入建造階段。但到目前為止，該州絕對是一個非常積極的上升。

I appreciate color on that. Thank you. And then just focus on guidance, you guys are giving guidance of more than $84 million in revenue for 2024 with the projects and the backlog and focus. Can you provide a little more cadence to the remaining of the '24 year?

我很欣賞這方面的色彩。謝謝。然後只專注於指導，你們為 2024 年的收入提供超過 8,400 萬美元的指導，包括專案、積壓工作和重點。您能否為 24 年剩餘時間提供更多節奏？

Obviously, you had some delays from 4Q, and I assume those projects are recognized here in 1Q. But just kind of step us through the year as you see your backlog come into second half kind of loaded from the cadence standpoint to meet your revenue guidance.

顯然，從第四季度開始有一些延遲，我認為這些項目在第一季就得到了認可。但是，請讓我們回顧一下這一年，從節奏的角度來看，您的積壓工作進入下半年，以滿足您的收入指導。

Yes. First, addressing the three projects that we discussed on the Q4 '23 call, all three projects are active. Two of them are recognizing revenue in Q1, and the third has begun recognizing for us in the second quarter. So those are all on track.

是的。首先，解決我們在 23 年第 4 季電話會議上討論的三個項目，所有三個項目都處於活動狀態。其中兩個在第一季確認收入，第三個在第二季開始為我們確認收入。所以這些都已步入正​​軌。

We remain right now, we're cautiously optimistic. We believe that we've turned the corner. And I'm excited about where we're moving, and that's before today's development came to light. We are trying to under-promise and over-deliver in terms of our setting expectations.

我們現在仍然保持謹慎樂觀的態度。我們相信我們已經渡過了難關。我對我們的進展感到興奮，那是在今天的開發成果曝光之前。我們正在努力根據我們設定的期望少承諾多交付。

We're off to a good start in Q1. Backlog remains strong. Of course, we'd like to see it start to appreciate, and increase again, but we're in a very good place. We feel good, especially with the rightsizing of the company. In terms of an SG&A standpoint, we've lowered the breakeven level for the company, Scott. So that's actually as good as we're going forward, and we can keep growing the business as the demand increases.

我們在第一季有了一個好的開始。積壓依然強勁。當然，我們希望看到它開始升值並再次增加，但我們處於一個非常好的位置。我們感覺很好，尤其是在公司規模調整之後。就SG&A 的角度而言，我們降低了公司的損益平衡水平，斯科特。因此，這實際上與我們前進的方向一樣好，隨著需求的增加，我們可以繼續發展業務。

Perfect. I appreciate the detail, and I'll jump back in the queue. Congrats on -- well, still the DEA moving forward today, so thanks.

完美的。我很欣賞這個細節，我會插回隊列。恭喜你——嗯，緝毒署今天仍然在前進，所以謝謝。

Thanks Scott.

謝謝斯科特。

Eric Des Lauriers, Craig-Hallum.

埃里克·德斯·勞裡爾斯，克雷格·哈勒姆。

All right. Great. Thank you. Is this any better?

好的。偉大的。謝謝。這樣好點了嗎？

A little bit.

一點點。

All right. I'll give it a try. If this doesn't work, we'll just take my questions offline. So on the DEA [outside schedule of the day], I was wondering if you could provide us sort of an overview on the typical timing on one of your projects from your cannabis operators. What sort of timing for a project to go from discussion phase to pipeline to backlog and revenue? I'm kind of looking to kind of understand how quickly you will be able to have visibility into your potential [bona fide pickup in] capital expenditures for the cannabis industry? Thanks.

好的。我會嘗試一下。如果這不起作用，我們會將我的問題下線。因此，在 DEA [當天的外部日程安排] 上，我想知道您是否可以向我們提供有關您的大麻運營商的一個項目的典型時間安排的概述。專案從討論階段進入管道階段，再到積壓和收入階段需要什麼樣的時機？我想了解一下您能夠多快地了解大麻產業潛在的[真正的]資本支出？謝謝。

Perfect. Eric, I got most of that. Perfect. First of all, it depends on the size, right, and zoning, and where we're located -- state, city, and county, and those requirements around the country. But typically, they could take as long as, without any delays, as long as two years, depending on the size, probably as short as nine months on average, a year and a half.

完美的。艾瑞克，我明白了大部分。完美的。首先，這取決於規模、權利和分區，以及我們所在的位置——州、市和縣，以及全國各地的要求。但通常情況下，在沒有任何延誤的情況下，它們可能需要長達兩年的時間，具體取決於規模，可能短至平均九個月，甚至一年半。

From initial discussions, we move into the design stage, architecture, and engineering and the cultivation design. Civil and structural are all part of the engineering side there too. Once we have a whole set of CDs, it's put out to bid. Clients usually will look at multiple bids in which we're participating.

從最初的討論開始，我們進入了設計階段、建築、工程和種植設計。土木和結構也是工程的一部分。一旦我們有了整套 CD，就會進行拍賣。客戶通常會查看我們參與的多個投標。

And if awarded, we immediately move forward. We can cut weeks in terms of months off if we're proactively involved at certain stages. But overall, I'd say nine months to two years is a good average without delays.

如果獲獎，我們會立即繼續前進。如果我們在某些​​階段積極參與，我們可以縮短幾週甚至幾個月的時間。但總的來說，我認為九個月到兩年是一個不錯的平均時間，沒有延誤。

And how long would you take to see that there is an increase in CapEx coming industry-wide? I understand that some of these projects from discussion to completion can take up to two years. But how long will it take you to notice if there's a bona fide capital expenditure increase in the cannabis industry resulting from the DEA?

您需要多長時間才能看到整個行業的資本支出增加？據我了解，其中一些項目從討論到完成可能需要長達兩年的時間。但是，您需要多長時間才能注意到 DEA 是否真正增加了大麻行業的資本支出？

Is it a few weeks of lead time of discussions picking up and leading to pipeline and deposits, like is that a few weeks? Or is that -- could these discussion phases last several months that it's hard to see if there's a true pickup or not?

討論開始並導致管道和存款需要幾週的準備時間，就像幾週一樣嗎？或者說，這些討論階段是否會持續幾個月，以至於很難看出是否有真正的回升？

I think on the on the Q2 earnings call and looking at backlog at that point, from a services standpoint and new contracts that we've signed, that will be a really good indicator. And then also from an equipment standpoint, equipment in a strong cannabis market was a tremendous source of revenue for urban-gro.

我認為，在第二季的財報電話會議上，從服務的角度和我們簽署的新合約的角度來看，這將是一個非常好的指標。從設備的角度來看，強大的大麻市場中的設備是城市農業的巨大收入來源。

When you look at '21, it was $56 million. It decreased in '22 to $33 million, as we reported last month, and '23, it was down to $13 million. And so the backlog that we reported at the end of Q1 for equipment was $1 million.

當你看看 21 年的時候，它是 5600 萬美元。正如我們上個月報道的那樣，它在 22 年下降至 3300 萬美元，而在 23 年則下降至 1300 萬美元。因此，我們在第一季末報告的設備積壓金額為 100 萬美元。

So watch the backlog at the end of Q2 as well, that should be strengthening. I think the early indicators will be on services and on equipment, but I can tell you as a result of today's announcement, I already know it's stronger. We know it's stronger. Good, strong discussions with clients and some signatures today already.

因此，也要注意第二季末的積壓情況，這應該會有所加強。我認為早期指標將在服務和設備上，但我可以告訴你，根據今天的公告，我已經知道它更強了。我們知道它更強。今天已經與客戶進行了良好、深入的討論並獲得了一些簽名。

Well, that's very good to hear. And I just have one more question, given my poor connection here. The gross margin expansion, you called out increased productivity from architects, engineers, and an increase in construction margins.

嗯，很高興聽到這個消息。鑑於我這裡的網路狀況不佳，我還有一個問題。在毛利率擴張方面，您呼籲建築師、工程師提高生產力，並提高建築利潤率。

I guess just wondering if you could expand on those [events]. I'm wondering if there was any kind of [these projects in Q1] that maybe lent themselves to higher productivity or higher construction margins. And ultimately, what I'm wondering is, can we expect these productivity levels to remain somewhat steady going forward? Or is this something that will fluctuate quarter to quarter and we got a little lucky this quarter? I'm just wondering how to think about that going forward.

我想只是想知道你是否可以擴展這些[事件]。我想知道是否有任何類型的[第一季的這些項目]可能有助於提高生產力或更高的建設利潤。最終，我想知道的是，我們能否期望這些生產力水準在未來保持一定的穩定？或者這會按季度波動，而我們本季有點幸運？我只是想知道未來如何考慮這一點。

Dick, I'll let you take that one, please.

迪克，請我讓你拿走那個。

All right, thanks Brad. Eric, yeah, with regard to do we expect that same type margin. It certainly was a very high margin for us in the first quarter of 2024. Don't necessarily expect that it's going to be exactly that high on a go-forward basis.

好的，謝謝布拉德。艾瑞克，是的，關於我們是否期望同樣類型的利潤。對於 2024 年第一季的我們來說，這無疑是一個非常高的利潤率。不一定期望它會在未來的基礎上達到那麼高。

It was very low in the fourth quarter of 2023 as we had talked about from a construction project that we had that incurred some additional costs, went over budget, and we weren't able to pass all those on to our customer. Because of a couple of the construction projects that did get started in Q1, they are at very nice margins for us, above what we typically see for construction projects.

2023 年第四季的價格非常低，因為我們在一個建設項目中談到，我們產生了一些額外成本，超出了預算，而且我們無法將所有這些轉嫁給我們的客戶。由於第一季確實啟動了幾個建設項目，因此我們的利潤率非常好，高於我們通常看到的建設項目的利潤率。

So even though we might not expect that the Q1 margin we experienced is going to continue at that level going forward, we wouldn't expect it to fall off very much. And as always, and we've talked about before, from the standpoint of our total gross profit and margin, it depends on that revenue mix that we have. So you still have to pay close attention to what happens as the equipment or services total revenue number changes over time and that impact on the gross margin.

因此，儘管我們可能不會預計第一季的利潤率會繼續保持在這個水平，但我們預計它不會大幅下降。一如既往，我們之前已經討論過，從我們的總毛利和利潤率的角度來看，這取決於我們的收入組合。因此，您仍然必須密切注意設備或服務總收入隨著時間的推移而發生的變化以及對毛利率的影響。

And I'll add in on the back there, Dick, a little bit. It has been almost two years, Eric, since we completed the acquisition of the construction company. And so there were some legacy projects that came with the acquisition, and that ended up not being what we would have hoped, right?

迪克，我會在後面補充一點。艾瑞克，我們完成對建築公司的收購已經快兩年了。因此，收購帶來了一些遺留項目，但最終並沒有達到我們所希望的，對嗎？

So we call them legacy projects, and they're pretty much finished now. The project that Dick alluded to in the fourth quarter and some surprise costs come in was tied to one of those projects. So that's behind us. That's great positive.

所以我們稱它們為遺留項目，它們現在已經基本完成了。迪克在第四季度提到的項目以及一些意外成本的出現與其中一個項目有關。這就是我們身後的事了。這是非常積極的。

Second, in the middle of '23, we had all of the acquired companies on the same ERP. We've talked about that before. And as a result, our COO and his team were able to put some stronger internal controls in place, and now, we're seeing the results of those move. So definitely trending in the right direction and we weren't lucky in the quarter, I guess to answer that last question for you.

其次，在 2023 年中期，我們讓所有被收購的公司都使用同一個 ERP。我們之前已經討論過這一點。因此，我們的營運長和他的團隊能夠實施一些更強有力的內部控制，現在，我們正在看到這些措施的結果。因此，趨勢絕對是正確的，但我們在本季度並不幸運，我想為您回答最後一個問題。

Yes, that all makes sense to me. And certainly, good to hear that some of these initiatives like getting everyone on the same ERP system has led to some structural changes in margins. But I understand that, yes, there will be some degree of fluctuation going forward. Very helpful. Thank you for taking my questions.

是的，這對我來說都很有意義。當然，很高興聽到其中一些舉措（例如讓每個人都使用同一個 ERP 系統）導致了利潤率的一些結構性變化。但我明白，是的，未來將會出現一定程度的波動。非常有幫助。感謝您回答我的問題。

Thank you. Take care.

謝謝。小心。

Anthony Vendetti, Maxim Group.

安東尼文代蒂，馬克西姆集團。

Thanks. Just a couple of questions. On the backlog of $99 million at the end of March, I know today, obviously, big day to talk about cannabis and what this impact could mean in terms of future business. But in terms of the backlog, what percent of that is cannabis related and what percent obviously non-cannabis?

謝謝。只是幾個問題。關於 3 月底 9900 萬美元的積壓，我知道今天顯然是談論大麻以及這種影響對未來業務可能意味著什麼的重要日子。但就積壓而言，其中與大麻相關的百分比是多少，明顯非大麻的百分比是多少？

Yeah, 72% was commercial or non-cannabis. Sorry, Dick, 76%? Go ahead, Dick.

是的，72% 是商業大麻或非大麻。抱歉，迪克，76%？來吧，迪克。

Yes, 76% of it was CEA related, and 24% was commercial. That's pretty consistent with what we reported at the end of December in terms of the split by the factors that we have. So even though our recent revenue performance has been a shift of that, where we have had substantially more commercial than CEA, the backlog still continues to be more -- higher percentage on CEA than it is on commercial, partly due just to the size of some of the CEA projects that we have in backlog.

是的，其中 76% 與 CEA 相關，24% 與商業相關。這與我們 12 月底報告的按現有因素劃分的情況非常一致。因此，儘管我們最近的收入表現已經發生了轉變，我們的商業訂單比 CEA 多得多，但積壓訂單仍然更多——CEA 的百分比高於商業訂單，部分原因在於 CEA 的規模。 CEA 專案。

Okay. That's helpful. And then what this could mean, obviously less stringent rules should open up investments, there's the tax benefit as well. I know it's just happened a couple of hours ago, but have you heard from any potential customers eager to maybe speed up investment if indeed this gets passed? And maybe elaborate a little bit on what you think the timing is for a final like consent decree to come down say okay, boom, this is going to move and from a Schedule I to Schedule III, potentially?

好的。這很有幫助。這可能意味著，顯然不那麼嚴格的規則應該開放投資，還有稅收優惠。我知道這件事剛剛發生在幾個小時前，但是您有沒有聽到任何潛在客戶的消息，如果該法案確實獲得通過，他們渴望加快投資速度？也許可以詳細說明您認為最終同意令出台的時機，好吧，繁榮，這將從附表一轉移到附表三，有可能嗎？

Anthony, the removal of 280E is most definitely the largest benefit to a successful rescheduling. Some of the large multistate operators have publicly stated that the annual savings from the removal of 280E can range from $130 million- to $180 million-plus.

安東尼，取消 280E 絕對是成功重新安排的最大好處。一些大型多州業者公開表示，取消 280E 每年可節省 1.3 億至 1.8 億美元以上。

So it's significant funds that we believe -- and some of them have also stated publicly that they're looking to reinvest those funds into the company with refreshing existing facilities and building out new ones. And so that's definitely the largest benefit there.

因此，我們相信這是重要的資金 - 其中一些也公開表示，他們希望將這些資金重新投資到公司，更新現有設施並建造新設施。所以這絕對是最大的優點。

The period that it will be open for, anywhere from three to five months before the final approval would take place. But it has been stated publicly that if the DEA supported the Department of Health, all indicators are it will absolutely be approved in the long run, and not my opinion, but just opinions that I've read. So transformational for the industry.

開放期限為最終批准前三到五個月。但已經公開表示，如果DEA支持衛生部，從長遠來看，所有指標都絕對會獲得批准，這不是我的意見，只是我讀過的意見。對於這個行業來說是如此的變革。

As for clients, yes, just as we have had increased discussions and interest and excitement from clients in Florida with the ballot addition for November, we're having the same today. And just I'm not sure if you'd heard on an earlier answer, but we've had good, strong interest, even had some signatures today as well.

至於客戶，是的，就像我們在佛羅裡達州的客戶中隨著 11 月的選票增加而增加了討論、興趣和興奮一樣，我們今天也有同樣的情況。只是我不確定您是否聽說過之前的答案，但我們有很好的、強烈的興趣，甚至今天也有一些簽名。

So it'll take time, right, like there's a lot of excitement today. We're playing it cool. We didn't want to increase our guidance or anything at this point. There's so many unknowns, and we just want to under-promise and over-deliver. But exciting time for the industry and for urban-gro as well today.

所以這需要時間，對吧，就像今天有很多令人興奮的事情一樣。我們玩得很酷。我們此時不想增加我們的指導或任何東西。有太多的未知數，我們只是想少承諾多兌現。但對於產業和城市發展而言，今天也是令人興奮的時刻。

Right. Okay. So that will be upside then. If it goes from Schedule I to Schedule III, do you think that expedites changes in the banking regulations as well?

正確的。好的。那麼這將是有利的。如果從附表一改為附表三，您是否認為這也會加快銀行法規的變化？

I don't believe they're related. I think any momentum in the industry is fantastic. And from a banking standpoint, you've seen all of that. There's the [FAA bill]. They thought they could tie safer banking too, and that as of late, they've said that it won't be connected now.

我不相信他們有關係。我認為這個行業的任何勢頭都是非常棒的。從銀行業的角度來看，您已經看到了這一切。有的是[美國聯邦航空局法案]。他們認為他們也可以連接更安全的銀行業務，但最近他們表示現在不會連接。

It looks like it would go to the lame duck session later in the year, and that would be the best avenue to have it passed. But I think positive overall cannabis industry sentiment helps go a long way. The people are speaking. And I believe from a banking standpoint, politicians, they have no option but to listen. So I do see, overall, they're working together for a better industry for sure.

看起來它會在今年晚些時候進入跛腳鴨會議，這將是讓它通過的最佳途徑。但我認為大麻產業整體正面的情緒有很大幫助。人們在說話。我相信，從銀行業和政治家的角度來看，他們別無選擇，只能傾聽。所以我確實看到，總體而言，他們肯定正在為一個更好的行業而共同努力。

Okay. But separate on the banking thing. Okay. And then just in terms of productivity improvements, cost cutting, obviously you decreased expenses, but where are you sort of in that process? Halfway through? Completed? Maybe just give us an understanding where you're at.

好的。但銀行業務要分開。好的。然後就生產力提高、成本削減而言，顯然你減少了開支，但你在這個過程中處於什麼位置？已經過半了？完全的？也許只是讓我們了解您的處境。

From a productivity standpoint, it tied into some of the reductions in general and administrative expenses last year when we had line of sight in the middle of last year, when they all run the same ERP. We realized that we had too many service providers on the team. And that's when we started to adjust, and we've got to a right size now, where we're capturing a large amount of those salaries in COGS. That's the key.

從生產力的角度來看，這與去年一般和管理費用的一些減少有關，當時我們在去年年中看到了這些費用，當時他們都運行相同的 ERP。我們意識到團隊中有太多的服務提供者。就在那時我們開始調整，現在我們已經達到了合適的規模，我們在銷貨成本中捕獲了大量的工資。這就是關鍵。

On the last call, we had stated that in 2023, we moved over $1.3 million down into salaries just because of the fact that we weren't as productive as we wanted to be. So results in Q1 were very strong there. In terms of optimization, we don't anticipate, at this time, making any further reductions. We're rightsized right now year over year from the efforts and the moves we made in 2023.

在上次電話會議上，我們曾表示，到 2023 年，我們將超過 130 萬美元的薪資下調，因為我們的生產力沒有達到我們想要的水平。所以第一季的結果非常強勁。在優化方面，我們目前預計不會進一步減少。透過 2023 年的努力和採取的行動，我們現在每年都在進行規模調整。

We're expecting to recognize $8 million in '24 of savings from a G&A standpoint. And in Q1, we've already recognized $2.8 million versus Q1 of '23. So we feel we're in a great place, and we've lowered the breakeven level for the company, which is key, and we do not anticipate making additional cuts at this at this time.

從一般管理費用的角度來看，我們預計在 24 年的節省中將確認 800 萬美元。在第一季度，我們已經確認了 280 萬美元，而 23 年第一季則為 280 萬美元。因此，我們覺得我們處於一個很好的位置，我們已經降低了公司的損益平衡水平，這是關鍵，我們預計目前不會進行進一步的削減。

Now that being said, we're always looking at expenses, overall expenses and trimming where we can. Dick, is there anything you'd add to that?

話雖這麼說，我們總是在考慮費用、整體費用並盡可能進行削減。迪克，你還有什麼要補充的嗎？

I think the only thing I would potentially add, Anthony, is just during the first quarter, there continued to be some reductions. But generally, when we hit the end of the first quarter, that was where we got the head count levels we were looking to get to.

安東尼，我想我唯一可能補充的就是在第一季度，繼續有一些減少。但總的來說，當我們在第一季末時，我們就達到了我們想要達到的人數水準。

So anyway, as you're thinking about things going further out, yeah, the first quarter contains a little bit high on the G&A side. There would be further reductions expected for Q2. But by the time we got to the end of the quarter, we were kind of at exactly at levels we were looking get to.

所以無論如何，當你考慮更進一步的事情時，是的，第一季的一般行政費用有點高。預計第二季將進一步減少。但到本季末時，我們已經完全達到了我們想要達到的水平。

Okay. Great. That's good color. Thanks, guys. I'll hop back in the queue. Appreciate it.

好的。偉大的。這顏色真好啊謝謝，夥計們。我會跳回到隊列中。欣賞它。

Eric Beder, SCC Research.

貝爾德 (Eric Beder)，SCC 研究中心。

Good afternoon. Let's talk a little bit about something besides the phases here. Commercial, what are you seeing in terms of demand for the commercial business? Has it continued to be as robust, and have you been able to continue to expand the services you can offer for that division?

午安.讓我們談談除了階段之外的一些事情。商業方面，您對商業業務的需求有何看法？它是否繼續保持強勁，您是否能夠繼續擴展您可以為該部門提供的服務？

We haven't expanded the services at all at this point any further. Demand remained strong. The one area we're watching closely is the length of time. I talked about it in Q4 as well, but the length of time that passes in between when we're being verbally awarded contracts and we're actually getting signatures. And so far in Q1, that hasn't gotten worse, but it hasn't gotten better either.

目前我們還沒有進一步擴展服務。需求依然強勁。我們密切關注的一個領域是時間長度。我在第四季度也談到了這一點，但是從我們口頭授予合約到我們實際獲得簽名之間所經過的時間長度。到目前為止，第一季的情況並沒有變得更糟，但也沒有變得更好。

So that's one area that we're watching closely, but the nice thing is we're not losing. So it'd be one thing if we're losing clients or opportunities, but we're not losing. So it's just a timing issue. Our pipeline remains strong. We don't publicly speak about the quantity of pipeline, but it remains strong and very qualified for sure.

所以這是我們正在密切關注的一個領域，但令人高興的是我們沒有失去。因此，如果我們失去客戶或機會是一回事，但我們並沒有失去。所以這只是一個時間問題。我們的管道仍然強勁。我們不會公開談論管道的數量，但它仍然很強大且非常合格。

And are you seeing, when you look at your top accounts here, are you seeing them give you larger contracts going forward? I'm saying as they kind of like -- because I know the commercial is a little bit, it's not as much a one off and managed sometimes as the cannabis business can be. So are you seeing that trend continue?

當您查看這裡的頂級客戶時，您是否看到他們為您提供了更大的合約？我的意思是，他們有點喜歡——因為我知道商業廣告有點多，它不像大麻業務那樣一次性和有時可以管理。那麼您認為這種趨勢會持續下去嗎？

We have seen that trend continue or progress over the last year, not in Q1. We hit a lot of solid singles in Q1, but no triples or home runs, and hence the backlog backed off a little bit, 10% right, sequentially.

我們看到這種趨勢在去年持續或取得進展，而不是在第一季。我們在第一季度打出了很多穩定的單打，但沒有三壘安打或全壘打，因此積壓的數量有所減少，依次減少了 10%。

But hitting a lot a lot of add-on contracts to existing projects where they increase the scope and some new smaller projects, but on the larger ones, we do have some that are close and out. We believe that we will secure them. But we don't have the signatures yet, but no real material increase in size in Q1 to report.

但是，在現有項目中簽訂了許多附加合同，它們擴大了範圍和一些新的較小項目，但在較大的項目上，我們確實有一些已經接近的項目。我們相信我們會保護它們。但我們還沒有簽名，但第一季的規模沒有真正的實質成長需要報告。

Sure. Can we get an update on Europe? What are you seeing in terms of trends there? I know there's been talk about Germany. What are you seeing in terms of the European business going forward?

當然。我們能得到有關歐洲的最新消息嗎？您認為那裡的趨勢如何？我知道有人在談論德國。您對歐洲業務的未來有何看法？

Overall, in Germany, slow and steady. They're just coming into themselves. They made that announcement a couple of months ago. It's social licenses to start. So there's no requirement for the design and/or build of significant sized facilities.

總體而言，在德國，緩慢而穩定。他們剛剛回歸自我。他們幾個月前宣布了這項消息。首先是社會許可。因此，不需要設計和/或建造大型設施。

Overall, in Europe for us, the demand remains weak. We talked on the last call about rightsizing the organization in Europe, aligning the expense structure with the size of the opportunity right now. With that all being said, we believe we've rightsized it. There's definitely business that can be had in Europe.

總體而言，對我們來說，歐洲的需求仍然疲軟。我們在上次電話會議中討論了歐洲組織的規模調整，使費用結構與當前機會的規模保持一致。綜上所述，我們相信我們已經調整了規模。在歐洲一定有生意可做。

We want to be a part of the European cannabis and also in the future vertical farming market. It's going to grow a lot from a cannabis standpoint. A lot of the CEOs of multistate operators who are expanding into the European market have significant forecasts for where that market's going to grow over the next decade. So we know we want to be there.

我們希望成為歐洲大麻以及未來垂直農業市場的一部分。從大麻的角度來看，它將會成長很多。許多正在進軍歐洲市場的跨國營運商的執行長都對該市場未來十年的成長做出了重要預測。所以我們知道我們想去那裡。

That being said, in Q1, there was no additional new contract signed in Europe. However, we did have a nice services contract signed in Q2 so far. So we expect to continue signing contracts, but we don't expect any robust material improvement in the business throughout the remainder of the year.

話雖如此，第一季度，歐洲沒有簽署額外的新合約。然而，到目前為止，我們確實在第二季簽署了一份很好的服務合約。因此，我們預計將繼續簽署合同，但我們預計今年剩餘時間內業務不會出現任何強勁的實質改善。

Okay. All right. Thank you, and congrats.

好的。好的。謝謝你，恭喜你。

Thank you. Appreciate it.

謝謝。欣賞它。

Thank you. There were no other questions at this time. And that does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.

謝謝。此時沒有其他問題了。今天的會議到此結束。此時您可以斷開線路，度過美好的一天。感謝您的參與。