Vince Holding Corp (VNCE) 2022 Q4 法說會逐字稿

Thank you all for joining today. I would like to welcome you all to the Vince's Q4 2022 Earnings Conference Call. My name is Brika, and I'll be your operator for today's call. (Operator Instructions) I would now like to turn the conference over to your host, Caitlin Churchill to begin. So Caitlin, please proceed.

感謝大家今天的加入。歡迎大家參加 Vince 的 2022 年第四季度收益電話會議。我叫 Brika，我將是您今天電話的接線員。 （操作員說明）我現在想將會議轉交給主持人凱特琳丘吉爾開始。凱特琳，請繼續。

Thank you, and good morning, everyone. Welcome to Vince Holding Corp.'s Fourth Quarter and Full Year Fiscal 2021 Results Conference Call. Hosting the call today are Jack Schwefel, Chief Executive Officer; and Amy Levy, Chief Financial Officer.

謝謝大家，早上好。歡迎來到 Vince Holding Corp. 的第四季度和全年 2021 財年業績電話會議。今天主持電話會議的是首席執行官 Jack Schwefel；和首席財務官 Amy Levy。

Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that the company expects. Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume that statements made during the call will remain operative at a later time, and the company undertakes no obligation to update any information discussed on the call. Following today's remarks, there will be no question-and-answer session. Now I will turn the call over to Jack.

在我們開始之前，讓我提醒您，在本次電話會議上所做的某些陳述可能構成前瞻性陳述，這些陳述存在風險和不確定性，可能導致實際結果與公司預期的結果不同。這些風險和不確定性在今天的新聞稿和公司向美國證券交易委員會提交的文件中有所描述，這些文件可在公司網站上查閱。投資者不應假設電話會議期間所作的聲明將在以後繼續有效，公司不承擔更新電話會議討論的任何信息的義務。在今天的發言之後，將沒有問答環節。現在我將把電話轉給傑克。

Thank you, Caitlin, and thank you, everyone, for joining us on today's call. As you saw in our press release this morning, we are excited to announce a transformative strategic partnership with Authentic Brands Group, or Authentic, which we believe will position Vince for its next chapter. Before I review details of the partnership, let me touch on our fourth quarter and full year fiscal 2022 results we released in conjunction with this morning's announcement.

謝謝凱特琳，也謝謝大家參加今天的電話會議。正如您在今天早上的新聞稿中看到的那樣，我們很高興地宣布與 Authentic Brands Group 或 Authentic 建立變革性的戰略合作夥伴關係，我們相信這將為 Vince 開啟新的篇章。在回顧合作夥伴關係的細節之前，讓我談談我們在今天上午的公告中發布的第四季度和全年 2022 財年業績。

For the full year, we delivered double-digit sales growth across our wholesale and direct-to-consumer segments for Vince culminating in a net sales growth of over 12% compared to the prior year. That said, given the macro-related headwinds faced, we delivered loss from operations for the Vince brand, including unallocated corporate expenses of $4.2 million for the year. Included in these results was a challenging fourth quarter performance, driven primarily by our wholesale segment, while we saw growth in our direct-to-consumer segment sales.

全年，我們為 Vince 的批發和直接面向消費者的細分市場實現了兩位數的銷售額增長，最終實現了與上一年相比超過 12% 的淨銷售額增長。也就是說，鑑於面臨與宏觀相關的不利因素，我們公佈了 Vince 品牌的運營虧損，包括當年 420 萬美元的未分配公司費用。這些結果包括具有挑戰性的第四季度業績，這主要是由我們的批發部門推動的，同時我們看到直接面向消費者的部門銷售額有所增長。

Our direct-to-consumer performance was driven by our store channel, which more than offset a decline in our e-commerce business, which continued to be impacted by softer traffic trends, increased promotional activity. Despite these headwinds, I am pleased with the continued resiliency and dedication of our teams as we continue to focus on our strategic objectives, substantially completed the wind down of the Rebecca Taylor business and ended the year in a healthier inventory position.

我們的直接面向消費者的業績是由我們的商店渠道推動的，這大大抵消了我們電子商務業務的下滑，電子商務業務繼續受到交通趨勢疲軟和促銷活動增加的影響。儘管存在這些不利因素，但我對我們團隊持續的彈性和奉獻精神感到滿意，因為我們繼續專注於我們的戰略目標，基本上完成了 Rebecca Taylor 業務的結束，並在今年年底以更健康的庫存狀況結束。

As I will discuss today, through our actions we took in fiscal 2022 and with the transaction we announced today, we believe we are well positioned to focus on our growth initiatives and deliver long-term success.

正如我今天將討論的那樣，通過我們在 2022 財年採取的行動以及我們今天宣布的交易，我們相信我們已做好充分準備，可以專注於我們的增長計劃並取得長期成功。

Turning now on more -- on our new partnership with Authentic -- as detailed in today's press release and SEC filings, as part of this arrangement, Vince will contribute its intellectual property to Authentic's newly formed subsidy, ABG Vince. And in return, we'll receive $76.5 million in cash from Authentic and a 25% membership interest in ABG Vince.

現在開始更多——關於我們與 Authentic 的新合作夥伴關係——正如今天的新聞稿和 SEC 文件中詳述的那樣，作為這項安排的一部分，Vince 將把其知識產權貢獻給 Authentic 新成立的子公司 ABG Vince。作為回報，我們將從 Authentic 獲得 7650 萬美元的現金和 ABG Vince 25% 的會員權益。

In addition, in connection with this transaction, we will enter into an exclusive 10-year license agreement with eight 10-year renewal options to continue to operate the business substantially in the same manner as we do today through our wholesale, retail and e-commerce channels. We expect the transition to close within the second quarter of the calendar 2023, and we will use the proceeds to strengthen our balance sheet. Looking ahead, we believe this partnership is not only transformative for our business, but an important step in capitalizing on the potential for the Vince brand with a highly experienced and equally committed partner.

此外，關於此次交易，我們將簽訂一份為期 10 年的獨家許可協議，其中包含八個 10 年續約選擇權，以繼續通過我們的批發、零售和電子商務業務以與今天相同的方式大體上經營業務。商業渠道。我們預計過渡將在 2023 年第二季度內完成，我們將使用所得款項來加強我們的資產負債表。展望未來，我們相信這種夥伴關係不僅對我們的業務具有變革性，而且是與經驗豐富且同樣忠誠的合作夥伴一起利用 Vince 品牌潛力的重要一步。

Let me now turn the discussion over to Amy, who will review our fourth quarter financial results as well as more details of the transaction and its impact on our financial model going forward.

現在讓我將討論轉交給艾米，她將審查我們第四季度的財務業績以及交易的更多細節及其對我們未來財務模式的影響。

Thank you, Jack. As expected, our fourth quarter financial results were impacted by the continued wind down of the Rebecca Taylor business as well as aggressive actions we have taken to reduce our Vince inventory levels, especially in light of the continued challenging macro environment.

謝謝你，傑克。正如預期的那樣，我們第四季度的財務業績受到 Rebecca Taylor 業務持續停滯以及我們為降低 Vince 庫存水平而採取的積極行動的影響，尤其是在宏觀環境持續充滿挑戰的情況下。

With respect to Rebecca Taylor, the business contributed $11 million in net sales for the quarter, and we incurred net charges of $3.7 million related to the wind-down activity, including the write down of inventory as well as accelerated operating lease amortization, accelerated depreciation and amortization as well as other costs, partially offset by the benefit from the release of operating lease liabilities. In addition, we recorded a $1.6 million gain on the sale of the Rebecca Taylor intangible assets during the period.

關於 Rebecca Taylor，該業務在本季度貢獻了 1100 萬美元的淨銷售額，我們產生了 370 萬美元與停業活動相關的淨費用，包括庫存減記以及加速經營租賃攤銷、加速折舊和攤銷以及其他成本，部分被釋放經營租賃負債的收益所抵消。此外，我們在此期間記錄了出售 Rebecca Taylor 無形資產的 160 萬美元收益。

Turning now to our results in more detail. Total company net sales for the fourth quarter decreased 7.8% to $91.3 million compared to $99 million in the fourth quarter of fiscal 2021. The year-over-year decrease was driven by an 8% decline in Vince brand sales and a 6.4% decrease in Rebecca Taylor and Parker combined net sales. The Vince brand net sales decrease was entirely driven by our Wholesale segment, which declined 20.9% compared to last year, primarily due to a higher rate of sales allowances, lower full price shipments and the timing of off-price shipments. This performance was partially offset by the 4.7% increase in our Vince direct-to-consumer segment sales, which was entirely driven by our store channel.

現在更詳細地談談我們的結果。與 2021 財年第四季度的 9900 萬美元相比，第四季度公司總淨銷售額下降 7.8% 至 9130 萬美元。同比下降的原因是 Vince 品牌銷售額下降 8%，而 Vince 品牌銷售額下降 6.4%。麗貝卡·泰勒 (Rebecca Taylor) 和帕克 (Parker) 合併後的淨銷售額。 Vince 品牌的淨銷售額下降完全是由我們的批發部門推動的，與去年相比下降了 20.9%，這主要是由於更高的銷售津貼率、更低的全價出貨量和低價出貨時間。這一業績被我們文斯直接面向消費者的細分市場銷售額增長 4.7% 部分抵消，這完全是由我們的商店渠道推動的。

Gross profit in the fourth quarter was $36.2 million or 39.6% of net sales. This compares to $43.6 million or 44% of net sales in the fourth quarter of last year. The decrease in the gross margin rate was primarily driven by the increase in promotional activity in the direct-to-consumer channel, a higher rate of sales allowances in the wholesale channel and unfavorable year-over-year adjustments to inventory reserves. This was partially offset by favorable channel and product mix.

第四季度的毛利潤為 3620 萬美元，占淨銷售額的 39.6%。相比之下，去年第四季度為 4360 萬美元，占淨銷售額的 44%。毛利率下降的主要原因是直接面向消費者渠道的促銷活動增加、批發渠道的銷售津貼率提高以及庫存儲備同比調整不利。這部分被有利的渠道和產品組合所抵消。

The wind down of the Rebecca Taylor business negatively impacted the fourth quarter 2022 gross margin rate by approximately 100 basis points. Selling, general and administrative expenses in the quarter was $42.3 million or 46.3% of net sales as compared to $41.8 million or 42.2% of net sales in the fourth quarter of last year. The increase in SG&A dollars was driven by $3.3 million in net expenses related to the wind down of Rebecca Taylor as well as higher salaries and benefits, which offset lower marketing expenses in Rebecca Taylor, lower rent expense and lower consulting and other third-party costs during the period.

Rebecca Taylor 業務的結束對 2022 年第四季度的毛利率產生了約 100 個基點的負面影響。本季度的銷售、一般和管理費用為 4230 萬美元，占淨銷售額的 46.3%，而去年第四季度為 4180 萬美元，占淨銷售額的 42.2%。 SG&A 美元的增加是由於與 Rebecca Taylor 的停業相關的 330 萬美元淨支出以及更高的薪水和福利，這抵消了 Rebecca Taylor 較低的營銷費用、較低的租金費用以及較低的諮詢和其他第三方成本期間。

Operating loss for the fourth quarter was $5.5 million, which includes the $3.7 million in net charges associated with the wind down of Rebecca Taylor, the $1.6 million gain on the sale of the Rebecca Taylor intangible assets and $1 million in noncash charges related to the impairment of property and equipment for certain Vince retail locations. This compares to operating income of $1.8 million in the same period last year.

第四季度的運營虧損為 550 萬美元，其中包括與 Rebecca Taylor 停業相關的 370 萬美元淨費用、出售 Rebecca Taylor 無形資產獲得的 160 萬美元收益以及與減值相關的 100 萬美元非現金費用某些 Vince 零售點的財產和設備。相比之下，去年同期的營業收入為 180 萬美元。

Income tax expense for the fourth quarter was $1.7 million as a result of an annual noncash deferred tax expense created by the amortization of indefinite-lived goodwill and intangible assets for tax but not for book purposes. Net loss for the fourth quarter, which includes the gain on the sale of the Rebecca Taylor intangible assets, the impact of the net charges associated with the wind down of Rebecca Taylor and the noncash charges related to the impairment of property and equipment for certain Vince retail locations was $11 million or an $0.89 loss per share compared to a net loss of $2.7 million or a $0.23 loss per share in the fourth quarter of last year.

第四季度的所得稅費用為 170 萬美元，這是由於無限期商譽和無形資產的攤銷產生的年度非現金遞延稅費用，但不用於賬面目的。第四季度的淨虧損，包括出售 Rebecca Taylor 無形資產的收益、與 Rebecca Taylor 結束相關的淨費用的影響以及與某些 Vince 的財產和設備減值相關的非現金費用零售店淨虧損 1100 萬美元或每股虧損 0.89 美元，而去年第四季度淨虧損 270 萬美元或每股虧損 0.23 美元。

Moving to inventory. Net inventory was $90 million at the end of the fourth quarter as compared to $78.6 million at the end of the fourth quarter last year. While we are still feeling the impact of the higher investment in replenishment products, higher product costs as well as the increase of carryover pre-fall and fall assortments compared to last year, we are pleased with the sequential improvement in inventory compared to the third quarter. As we have mentioned previously, through the actions we have taken, we continue to believe we will return to more normalized inventory levels in the second half of fiscal 2023.

移動到庫存。第四季度末的淨庫存為 9000 萬美元，而去年第四季度末為 7860 萬美元。雖然我們仍然感受到補貨產品投資增加、產品成本增加以及與去年相比秋季結轉和秋季分類增加的影響，但我們對庫存與第三季度相比的環比改善感到滿意.正如我們之前提到的，通過我們採取的行動，我們仍然相信我們將在 2023 財年下半年恢復到更正常的庫存水平。

Let me now turn and provide more details on the financial impact our transaction with Authentic will have on our results going forward. As Jack reviewed, as part of our arrangement with Authentic, we expect to operate our business in substantially the same manner we do today through our wholesale, retail and e-commerce channels. That said, we will be transferring our current licensing business for footwear and soft accessories, which has historically benefited annual wholesale revenue by over $2.5 million to ABG Vince.

現在讓我轉過來提供更多詳細信息，說明我們與 Authentic 的交易將對我們未來的結果產生的財務影響。正如傑克評論的那樣，作為我們與 Authentic 安排的一部分，我們希望通過我們的批發、零售和電子商務渠道以與今天基本相同的方式經營我們的業務。也就是說，我們將把目前的鞋類和軟配飾許可業務轉讓給 ABG Vince，這在歷史上每年為 ABG Vince 帶來超過 250 萬美元的批發收入。

In addition, as part of the transaction and the new long-term licensing agreement we are entering into, we expect to pay an annual minimum [royalty] to ABG Vince, which will be reflected in SG&A expenses going forward beginning after the close of the transaction.

此外，作為交易和我們正在簽訂的新長期許可協議的一部分，我們預計每年向 ABG Vince 支付最低[特許權使用費]，這將反映在 SG&A 費用中，從交易結束後開始交易。

With the proceeds from this transaction, we expect to strengthen our overall liquidity position and increase our working capital. We plan to repay in full $27.7 million outstanding under the term loan credit facility and to repay a portion of the outstanding borrowings under our revolving credit facility. Concurrent with this transaction, we have also entered into an amendment with our ABL facility to adjust the initial commitment level commensurate with the expected net proceeds after transaction-related fees and expenses and the aforementioned term loan paydown.

通過此次交易的收益，我們預計將加強我們的整體流動性狀況並增加我們的營運資金。我們計劃根據定期貸款信貸額度全額償還 2770 萬美元的未償債務，並根據我們的循環信貸額度償還部分未償借款。在進行此項交易的同時，我們還與我們的 ABL 設施進行了修訂，以調整初始承諾水平，使其與扣除交易相關費用和支出以及上述定期貸款還款後的預期淨收益相稱。

Given the updated terms, covenants and conditions with this amendment, we are actively working on ABL refinancing options to strengthen our financial flexibility going forward. While the changes related to this transaction will have a negative impact on our pro forma operating income and net income in the near term, we expect the impact to pro forma net income to be partially offset by the quarterly distribution received from ABG Vince as well as lower interest expense following the anticipated reduction in debt.

鑑於此修正案的更新條款、契約和條件，我們正在積極研究 ABL 再融資方案，以加強我們未來的財務靈活性。雖然與此交易相關的變化將在短期內對我們的備考營業收入和淨收入產生負面影響，但我們預計對備考淨收入的影響將部分被從 ABG Vince 收到的季度分配以及預期債務減少後利息支出降低。

In addition, we continue to expect to utilize our net operating loss carried forward. And at the end of fiscal 2022, the remaining gross value of our federal NOLs was approximately $524 million. We believe this will continue to provide a cash tax shield for both proceeds from this transaction as well as the quarterly cash distribution received from ABG Vince going forward.

此外，我們繼續期望利用結轉的淨經營虧損。到 2022 財年末，我們聯邦 NOL 的剩餘總價值約為 5.24 億美元。我們相信，這將繼續為此次交易的收益以及今後從 ABG Vince 收到的季度現金分配提供現金稅盾。

Turning to our expectations for fiscal 2023. While we are not providing formal earnings guidance at this time, we do expect fiscal 2023 to continue to be impacted by the ongoing macro headwinds but expect improved trends for the back half of the year as we anniversary easier comparisons. As we look longer term, with a stronger balance sheet in place, we believe we will be well positioned to execute against our objectives, including driving growth -- driving margin expansion through disciplined cost management and reduced promotional activity, strengthening our vendor relationships and focusing on our strategic growth initiatives, which I will now turn the call back over to Jack to review.

談到我們對 2023 財年的預期。雖然我們目前沒有提供正式的收益指引，但我們確實預計 2023 財年將繼續受到持續的宏觀不利因素的影響，但預計隨著我們週年紀念日的輕鬆，下半年的趨勢會有所改善比較。從長遠來看，憑藉更強大的資產負債表，我們相信我們將能夠很好地執行我們的目標，包括推動增長——通過嚴格的成本管理和減少促銷活動來推動利潤率增長，加強我們的供應商關係並專注於關於我們的戰略增長計劃，我現在將把電話轉回給傑克進行審查。

Thank you, Amy. As Amy mentioned, we believe fiscal 2023 will continue to be impacted by macro headwinds, but we plan to stay focused on strengthening the foundations of our operations in fintech. We believe this partnership will allow our teams to focus on our core ready-to-wear assortment for both women's and men's and build on our profitable domestic wholesale business while focusing on the execution of our key near-term strategic growth initiatives, including leveraging our enhanced e-commerce capabilities and CDP platform to drive greater loyalty and conversions and capture a broader customer base, expanding our international presence in Asia, Canada and select European countries, growing our men's business, both in the direct-to-consumer and wholesale channels and selectively opening new retail doors in the U.S. market.

謝謝你，艾米。正如 Amy 提到的，我們認為 2023 財年將繼續受到宏觀逆風的影響，但我們計劃繼續專注於加強我們在金融科技領域的運營基礎。我們相信這種夥伴關係將使我們的團隊能夠專注於我們的核心女裝和男裝成衣系列，並在我們有利可圖的國內批發業務的基礎上發展，同時專注於執行我們的關鍵近期戰略增長計劃，包括利用我們的增強電子商務能力和 CDP 平台，以推動更高的忠誠度和轉化率並吸引更廣泛的客戶群，擴大我們在亞洲、加拿大和部分歐洲國家的國際影響力，在直接面向消費者和批發渠道中發展我們的男裝業務並有選擇地在美國市場開設新的零售店。

We made significant enhancements to our omnichannel capabilities in 2022, including the relaunch of our Vince website and the rollout of our new customer data platform or CDP. With the initial launch of CDP, we were able to increase our personalization efforts for select events and we're pleased with the conversion we serve during these times. These enhancements allow us to be a far more data-driven than we've ever been. We look forward to further leveraging these capabilities going forward.

我們在 2022 年顯著增強了我們的全渠道能力，包括重新啟動我們的 Vince 網站和推出我們的新客戶數據平台或 CDP。隨著 CDP 的首次推出，我們能夠加大對特定活動的個性化力度，我們對我們在這段時間所服務的轉化率感到滿意。這些增強功能使我們比以往任何時候都更受數據驅動。我們期待在未來進一步利用這些能力。

Next, we see opportunities to continue to build our international presence through our wholesale and retail channels and expand our men's business as we continue to operate in major regions, including Europe, Canada and Asia. In Asia, where the pandemic has taken far longer to dissipate, we see long-term growth potential in Korea, Japan and especially China. Our men's business represented less than 20% of our 2022 revenue performance, and we believe we can grow this business to approximately 30% of our top line performance in the next 4 years. As part of this strategy, we plan to test men's only retail stores and are very excited for our first men's store opening, which occurred earlier this month in the Roosevelt Field Mall in Long Island, New York.

接下來，我們看到機會繼續通過我們的批發和零售渠道建立我們的國際影響力，並隨著我們繼續在主要地區（包括歐洲、加拿大和亞洲）開展業務而擴大我們的男裝業務。在亞洲，疫情消散的時間要長得多，我們在韓國、日本，尤其是中國看到了長期增長潛力。我們的男士業務占我們 2022 年收入業績的不到 20%，我們相信我們可以在未來 4 年內將該業務增長到我們收入業績的 30% 左右。作為該戰略的一部分，我們計劃測試男士專賣店，並對本月早些時候在紐約長島 Roosevelt Field 購物中心開業的第一家男士專賣店感到非常興奮。

We expect -- we continue to expect to selectively open new stores and new markets in the United States and plan to leverage our retail footprint along with our e-commerce business to drive omnichannel growth. As we look ahead, we are excited for this new chapter for the company. With an improved balance sheet in place, we will be in a better position to focus on our near-term growth initiatives and to capitalize on opportunities that may arise to drive long-term success and stakeholder value.

我們期望 - 我們繼續期望有選擇地在美國開設新店和新市場，併計劃利用我們的零售足跡和我們的電子商務業務來推動全渠道增長。展望未來，我們為公司的新篇章感到興奮。隨著資產負債表的改善，我們將能夠更好地專注於我們的近期增長計劃，並利用可能出現的機會來推動長期成功和利益相關者價值。

With that, we conclude our fiscal year 2022 year-end and Q4 results conference call. Thank you again to everyone at Vince Holding Corp. and have a great week. Thank you.

至此，我們結束了 2022 財年年終和第四季度業績電話會議。再次感謝 Vince Holding Corp. 的每一個人，祝您度過愉快的一周。謝謝。

Thank you all again for joining. That does conclude today's call. Please have a lovely day, and you may now disconnect your lines.

再次感謝大家的加入。今天的電話會議到此結束。祝你有美好的一天，你現在可以斷開你的線路了。