Yunhong Green CTI Ltd (YHGJ) 2023 Q1 法說會逐字稿

Good day and welcome to the Yunhong CTI First quarter 2023 earnings conference call. (Operator Instructions) This conference is being recorded today, April 27, 2023. The earnings press release accompanying this conference call was issued last night.

大家好，歡迎參加運鴻 CTI 2023 年第一季度財報電話會議。 （操作員說明）本次會議於今天（2023 年 4 月 27 日）進行錄製。本次電話會議附帶的收益新聞稿於昨晚發布。

On the call today is Yunhong CTI's Chief Executive Officer, Frank Cesario, as well as Chief Operating Officer, Jana Schwan.

今天參加電話會議的是運虹 CTI 首席執行官 Frank Cesario 以及首席運營官 Jana Schwan。

Before we begin, we want to note that you should read the forward-looking statements in the company's earnings press release. During today's call, management will make certain predictive statements that reflect the current views about future performance and financial results. The company bases these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. The company's Form 10-K for the year ended December 31, 2022, lists some of the most important risk factors that could cause ACT's results to differ from its predictions.

在開始之前，我們想指出，您應該閱讀該公司收益新聞稿中的前瞻性陳述。在今天的電話會議中，管理層將做出某些預測性陳述，反映當前對未來業績和財務業績的看法。公司的這些陳述以及某些假設和預期是基於存在風險和不確定性的未來事件。該公司截至 2022 年 12 月 31 日的年度 10-K 表格列出了一些可能導致 ACT 的結果與其預測不同的最重要的風險因素。

Please also note that the company's earnings press release makes reference to adjusted EBITDA, a non-GAAP financial measure. The company views adjusted EBITDA as an operating performance measure, and as such, the company believes that the GAAP financial measure most directly comparable to it is net income or loss. For further information, please refer to the earnings press release and the company's periodic filings with the Securities and Exchange Commission.

另請注意，公司的收益新聞稿參考了調整後的 EBITDA，這是一項非 GAAP 財務指標。該公司將調整後的 EBITDA 視為一項經營業績指標，因此，該公司認為與其最直接可比的 GAAP 財務指標是淨利潤或虧損。欲了解更多信息，請參閱收益新聞稿以及該公司向美國證券交易委員會提交的定期文件。

At this time, I'd like to turn the call over to Frank Cesario, Chief Executive Officer of Yunhong CTI. Sir, please go ahead.

在這個時候，我想把電話轉給雲鴻CTI的首席執行官Frank Cesario。先生，請繼續。

Thanks, Matthew. Good morning, everyone. We appreciate your joining us for our update call today. In considering our comments, I was struck by how much the world has changed since the third quarter of 2022, and that's not a lot of time. But helium pricing had become such a huge issue in our space, ultimately contributing to the largest player in the industry restructuring, and we saw our own revenue drop by more than half from the prior years we fought for bottom line.

謝謝，馬修。大家，早安。感謝您今天加入我們的更新電話會議。在考慮我們的評論時，我對自 2022 年第三季度以來世界發生的巨大變化感到震驚，而那段時間並不長。但氦氣定價已成為我們領域的一個巨大問題，最終導致了行業重組中最大的參與者，我們發現我們自己的收入比我們為盈利而奮鬥的前幾年下降了一半以上。

I'm pleased to share that helium prices have improved. They continue to fall and are approaching normalized levels. We can't wait for that to actually happen, but it's getting closer. This favorable trend, combined with the significant realignment of our operations and strengthening of our balance sheet achieved over the last couple of years, are all reflected in our overall improved financial results for the first quarter and growth in shareholder value.

我很高興地告訴大家，氦氣價格已經上漲。它們繼續下降並接近正常水平。我們迫不及待地希望它真正發生，但它越來越近了。這種有利的趨勢，加上我們過去幾年實現的業務重大調整和資產負債表的強化，都反映在我們第一季度整體財務業績的改善和股東價值的增長中。

Revenue only trailed the prior year by $0.7 million, going from $5.8 million last year to $5.1 million this year. And despite that, profitability still increased in terms of both percentage and dollar terms.

收入僅比上一年少 70 萬美元，從去年的 580 萬美元增至今年的 510 萬美元。儘管如此，盈利能力在百分比和美元方面仍然有所增長。

We are relentless in finding more efficient structures as we satisfy our customers, and that starts with our Chief Operating Officer, Jana Schwan. She played a critical role in strengthening our operations and driving sales in a challenging environment, all of which supported the improved results we reported in Q1.

我們堅持不懈地尋找更高效的結構來滿足客戶的需求，這從我們的首席運營官 Jana Schwan 開始。她在充滿挑戰的環境中加強我們的運營和推動銷售方面發揮了關鍵作用，所有這些都支持我們在第一季度報告的業績改善。

As I believe that's the driving force of today's conversation, I welcome Jana to share her thoughts on making Yunhong CTI even more profitable. Jana?

我相信這是今天談話的推動力，我歡迎 Jana 分享她對讓運鴻 CTI 更加盈利的想法。賈娜？

Thanks, Frank, and hello, everyone. We have talked about some of these elements in our prior calls, but they're worth revisiting in terms of efficiencies we have gained from these initiatives. Our incremental approach to automation of certain manufacturing lines have been the correct strategy, and we continue to make gradual investments in this arena.

謝謝，弗蘭克，大家好。我們在之前的電話會議中討論了其中一些要素，但就我們從這些舉措中獲得的效率而言，它們值得重新審視。我們對某些生產線的自動化採取增量方法是正確的策略，我們將繼續在這一領域進行逐步投資。

We track and measure our activities every day with a continuous improvement mindset. The discipline has identified opportunities in staffing and workflows that have allowed us to increase throughput year over year. While elevated helium prices reduced balloon volumes, we took advantage of the situation to eliminate costly overtime and inefficient processes.

我們以持續改進的心態每天跟踪和衡量我們的活動。該學科在人員配置和工作流程方面發現了機會，使我們能夠逐年提高吞吐量。雖然氦氣價格上漲減少了氣球體積，但我們利用這種情況消除了代價高昂的加班和低效流程。

Our vendor relationships are strong and longstanding. We have good insights into their operations and capabilities, which allows us to source efficiently and helps manage our liabilities while keeping our working capital deployment manageable.

我們的供應商關係牢固且長期。我們對他們的運營和能力有深入的了解，這使我們能夠有效地進行採購併幫助管理我們的負債，同時保持我們的營運資金部署易於管理。

Finally, I must call out our long-term employees for their leadership and dedication. It makes me proud to see 10-, 20-, 30-, and even 40-year employees. These are individuals who understand everything about what needs to be done every day to achieve our goals and are a driving factor in the efforts to exceed our customers' expectations. Frank?

最後，我必須讚揚我們的長期員工的領導能力和奉獻精神。看到10年、20年、30年甚至40年的員工讓我感到自豪。這些人了解每天需要做什麼才能實現我們的目標，並且是努力超越客戶期望的驅動因素。坦率？

Thanks, Jana. We are accountable for our results. A couple months ago, we reviewed 2022 performance, and we owned an adjusted EBITDA number that just didn't cut it. We've talked about helium, and it was a huge issue. We have to find a way to fight through, and we fought, but it definitely wasn't the number that we can accept.

謝謝，賈娜。我們對我們的結果負責。幾個月前，我們回顧了 2022 年的業績，我們擁有一個調整後的 EBITDA 數字，但並沒有削減它。我們討論過氦氣，這是一個大問題。我們必須找到一種方法來戰鬥，我們也戰鬥過，但這絕對不是我們可以接受的數字。

I'm pleased to share that we improved adjusted EBITDA from EUR0.3 million in the first quarter last year to EUR0.7 million today. We had atypical costs and benefits go in both ways, as will frequently occur, but we are staking out an improved measure of performance that, despite any market conditions, good or bad, we have to fight for that bottom-line answer.

我很高興地告訴大家，我們調整後的 EBITDA 從去年第一季度的 30 萬歐元提高到今天的 70 萬歐元。我們的非典型成本和收益是雙向的，正如經常發生的那樣，但我們正在製定一種改進的績效衡量標準，無論市場條件好壞，我們都必須為實現底線答案而奮鬥。

Nobody knows what the future holds. If we are in a recessionary period, it's been our experience that balloons and party supplies tend to be counter-cyclical, as they are low-cost solutions for individuals and families, as well as a mechanism for businesses calling attention to promotional items.

沒有人知道未來會怎樣。如果我們正處於經濟衰退時期，根據我們的經驗，氣球和派對用品往往是反週期的，因為它們是個人和家庭的低成本解決方案，也是企業引起人們對促銷品關注的機制。

Inflation supply chain issues haven't ended, but we've all become more comfortable with them and thus more effective in dealing with them. We ended the year with a reasonable debt level and a growing asset base.

通貨膨脹供應鏈問題尚未結束，但我們都已經變得更加適應它們，從而更有效地處理它們。我們以合理的債務水平和不斷增長的資產基礎結束了這一年。

We continue to work on biodegradable and compostable solutions, and next month we'll be visiting partner companies in Asia. We continue to work on the prototyping of these material alternatives with the single goal in mind of transitioning them to viable and attractive commercial solutions. While that sounds easy, it would have already happened if it were. But the prize is so huge we are engaged on this, particularly with our connection to the Yunhong Group, which holds related patents and know-how.

我們繼續致力於可生物降解和可堆肥的解決方案，下個月我們將拜訪亞洲的合作夥伴公司。我們繼續致力於這些材料替代品的原型設計，其唯一目標是將它們轉變為可行且有吸引力的商業解決方案。雖然這聽起來很容易，但如果是的話，它早就發生了。但回報是如此巨大，我們致力於此，特別是我們與擁有相關專利和專有技術的運鴻集團的聯繫。

With that, Matthew, I understand that most folks catch this on replay, but if anyone's here with us live and wants to ask a question, Matthew, please invite them into the Q&A. Thank you.

說到這裡，馬修，我知道大多數人都會在重播中看到這一點，但如果有人和我們一起現場並想問問題，馬修，請邀請他們參加問答。謝謝。

(Operator Instructions) Glenn Hamilton.

（操作員說明）格倫漢密爾頓。

Hey, Glenn.

嘿，格倫。

Hey, Frank and Jana.

嘿，弗蘭克和賈娜。

Hello.

你好。

Kind of good quarter, I guess. I don't know what I was expecting, so at least you're profitable. That's good. Quick question. When are you planning to go to the mainland? Is it next month?

我想這是一個不錯的季度。我不知道我在期待什麼，所以至少你是有利可圖的。那挺好的。快速提問。你打算什麼時候去大陸？是下個月嗎？

Yes. So the trip to China is early May.

是的。所以中國之行是五月初。

Is it just going to be you or Jana or any Board of Directors or just yourself at this point?

此時只有您、Jana 或任何董事會或您自己嗎？

No, we have a small team going, but it's going to be a mixed crowd, and, yes, I will be there. We have a lot of things that we have to connect on, so Jana and I both do a lot in connecting with our counterparts over there, and every once in a while, you just have to get there in person to move things.

不，我們有一個小團隊，但人群很混雜，是的，我會在那裡。我們有很多事情需要聯繫，所以賈娜和我都做了很多與那邊的同行聯繫的工作，每隔一段時間，你就必須親自去那裡搬東西。

Okay. I'd be happy to join you guys, and I would actually pay for my own airfare, but I'm kind of half joking, half not.

好的。我很樂意加入你們，而且我實際上會自己支付機票費用，但我半開玩笑，半不是。

How's your Mandarin?

你的普通話怎麼樣？

(laughter) Not too good. My daughter does speak Mandarin pretty well, though, but that's neither here nor there.

（笑聲）不太好。不過，我女兒的普通話確實說得很好，但那不是這裡也不是那裡。

What do you and John or the team hope to accomplish by going out to China and meeting with leadership there?

您和約翰或團隊希望通過前往中國並與那裡的領導層會面來實現什麼目標？

On a number of different levels, but the most important thing is this push for compostable solutions. So we're trying to launch new materials. And in doing that, there's always the disconnect between what we see as balloon party goods manufacturer and what folks who make materials see and other things they do.

在許多不同的層面上，但最重要的是推動可堆肥解決方案。所以我們正在嘗試推出新材料。在這樣做的過程中，我們所看到的氣球派對商品製造商與製造材料的人們所看到的以及他們所做的其他事情之間總是存在脫節。

So it's important to have things that we can look at together and talk about together and kind of push to try to get to commercial solutions. Otherwise, you're trading material back and forth and specs back and forth, and we find that that's slow going. So we're impatient by nature, and it seems like the right time to kind of align everybody on trying to move this forward into a commercial success.

因此，重要的是我們可以一起研究、一起討論一些事情，並推動達成商業解決方案。否則，您需要來回交換材料和規格，我們發現這種情況進展緩慢。因此，我們本質上是不耐煩的，現在似乎是讓每個人都努力推動這一業務取得商業成功的最佳時機。

Okay. I know you can't say anything at this point, but do you expect any revenue to be generated in the year 2023, even if it's in the fourth quarter, or hard to say at this point?

好的。我知道你現在不能說什麼，但你預計 2023 年會產生任何收入嗎，即使是在第四季度，或者目前很難說？

It's impossible to say at this point. I would love for that to be true. I just don't know. We've been working on prototyping for a while. Some things are closer than others. If you said, do you have something in your pocket, I'll say I don't. If you said, do you have something that could happen, I'll say we do. I just don't know how it's going to play out.

現在還不能說。我希望這是真的。我只是不知道。我們已經致力於原型設計有一段時間了。有些事情比其他事情更接近。如果你說，你口袋裡有東西嗎，我會說我沒有。如果你說，你有可能發生什麼事情，我會說我們有。我只是不知道事情會如何發展。

Okay. I guess no other questions. Keep it up. And I would like to see ownership, again, start buying [stairs]. You know how I feel about that. But I'm barking down the wrong tree, I think, on this one. But just keep up what you're doing, I guess.

好的。我想沒有其他問題了。繼續努力吧。我希望再次看到所有權，開始購買[樓梯]。你知道我對此的感受。但我想，我在這棵樹上咆哮著錯誤的樹。但我想，只要繼續你正在做的事情就可以了。

All right. I appreciate the call. Thanks, Glenn.

好的。我很感謝您的來電。謝謝，格倫。

Okay. Thank you. Bye.

好的。謝謝。再見。

Thank you. That concludes our Q&A session. I will now hand the conference back to Frank Cesario. Please go ahead.

謝謝。我們的問答環節到此結束。我現在將把會議交還給 Frank Cesario。請繼續。

All right. Thank you very much. And look, this is a nice touch point to share with you where we've been going, what we've been doing. I look forward to our next call when we talk about Q2 and what the second half looks like. In the meantime, we're pushing, and that's what we do. We're going to keep pushing, and it's our commitment to give you answers that you're happy with as well. So thank you for listening to our call, and have a good day.

好的。非常感謝。看，這是一個很好的接觸點，可以與您分享我們去過的地方，我們一直在做的事情。我期待著我們下次通話時討論第二季度以及下半年的情況。與此同時，我們正在推動，這就是我們所做的。我們將繼續努力，並承諾為您提供滿意的答案。感謝您收聽我們的電話，祝您有美好的一天。

Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

謝謝大家。今天的活動到此結束。此時您可能會斷開連接，並度過美好的一天。感謝您的參與。