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solo stove(DTC) - 2025 Q1 - Earnings Call Transcript
2025-05-12 14:00
Financial Data and Key Metrics Changes - Total net sales for Q1 2025 were $77.3 million, down 9.5% from the prior year [11] - Adjusted gross profit was $42.8 million, representing 55.4% of net sales, compared to 59.5% in the prior year [12] - GAAP net loss was reduced to $12.2 million, down over 65% from the fourth quarter [13] - Adjusted EBITDA for the quarter was $3.5 million, with a margin of 4.5% of net sales, compared to $4.3 million or 5% of net sales in the prior year [13] Business Line Data and Key Metrics Changes - Chubby's segment sales grew by 43.9%, contributing an incremental $13 million in sales through retail expansion and increased DTC channel sales [7][11] - Solo Stove segment sales declined by $25.3 million, primarily due to the elimination of extensive discounting and a lack of new product launches [8][11] Market Data and Key Metrics Changes - The company is diversifying its manufacturing footprint to mitigate tariff impacts, with plans to reduce reliance on China-sourced products [10] - The company is exploring near-shore options and U.S. production alternatives to offset expected tariff costs starting in Q2 [10] Company Strategy and Development Direction - The company is focused on a profit-oriented transformation plan, emphasizing operational financial improvements for both the near and long term [6][20] - Strategic initiatives include aligning DTC and retail promotional strategies, implementing pricing strategies, and enhancing product innovation [18][19] - The company plans to launch five new products in the Solo Stove division this year, with a focus on premium brand launches and reduced promotional activities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business as initiatives begin to yield results, particularly in the Chubby's segment [7] - The company is working closely with lenders to address its debt structure and has a plan to regain compliance with NYSE listing requirements [5][6] - Management acknowledged the challenges posed by tariffs but is taking proactive steps to mitigate their impact [10] Other Important Information - The company reported a going concern disclaimer in its Form 10-Q due to expected non-compliance with certain financial covenants [14] - The company is not planning any acquisitions in 2025, focusing instead on stabilizing performance [14] Q&A Session Summary - The management indicated that many questions would require a "no comment" response due to ongoing discussions with lenders regarding the company's debt structure [21]
solo stove(DTC) - 2025 Q1 - Quarterly Report
2025-05-12 12:15
FORWARD-LOOKING STATEMENTS This section outlines forward-looking statements regarding the Company's going concern status, liquidity, debt refinancing, and potential stock delisting - The report contains forward-looking statements covered by safe harbor provisions, including those related to the Company's ability to continue as a going concern, improve liquidity, refinance debt, and the impacts of stock delisting[10](index=10&type=chunk) - Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially, such as going concern risks, non-compliance with debt covenants, limited liquidity, reliance on third-party manufacturers, and market competition[11](index=11&type=chunk) WHERE YOU CAN FIND MORE INFORMATION This section details where to find company information, including investor relations website, social media, and SEC filings - The Company uses its investor relations website (https://investors.solobrands.com) and social media channels (X, Facebook, Instagram, TikTok, LinkedIn) as distribution channels for material information, including press releases, investor presentations, and notices[14](index=14&type=chunk) - All periodic and current reports filed with the SEC (10-K, 10-Q, 8-K) are available free of charge on the SEC's website (www.sec.gov) and the Company's investor relations website[15](index=15&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Solo Brands, Inc.'s unaudited consolidated financial statements and notes, highlighting significant accounting policies, debt, equity, and segment information, alongside substantial doubt about the Company's ability to continue as a going concern - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, and include all necessary adjustments for a fair statement of results[29](index=29&type=chunk) - The Company's ability to continue as a going concern is in substantial doubt due to a net loss of **$18.6 million** for the quarter, an accumulated deficit of **$241.0 million**, and non-compliance with interest coverage and total net leverage ratio financial covenants as of **March 31, 2025**[30](index=30&type=chunk)[31](index=31&type=chunk) - As a result of covenant non-compliance, the entire outstanding debt balance of **$427.9 million** has been reclassified from non-current to current liability as of **March 31, 2025**[31](index=31&type=chunk) [Consolidated Balance Sheets (Unaudited)](index=7&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents the unaudited consolidated balance sheets, detailing assets, liabilities, and equity as of **March 31, 2025**, and **December 31, 2024** **Consolidated Balance Sheet Highlights (March 31, 2025 vs. December 31, 2024):** | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $206,394 | $11,980 | | Total current assets | $372,610 | $172,218 | | Total assets | $692,399 | $495,060 | | Total current liabilities | $486,970 | $121,713 | | Long-term debt, net | $— | $142,060 | | Total liabilities and equity | $692,399 | $495,060 | | Retained earnings (accumulated deficit) | $(241,006) | $(228,814) | | Total equity | $174,622 | $193,357 | - The significant increase in cash and cash equivalents is primarily due to proceeds from the credit facility[18](index=18&type=chunk)[22](index=22&type=chunk) - The reclassification of long-term debt to current debt significantly increased total current liabilities[18](index=18&type=chunk)[31](index=31&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Unaudited)) This section presents the unaudited consolidated statements of operations and comprehensive income (loss), detailing revenue, expenses, and net income (loss) for the three months ended **March 31, 2025** and **2024** **Consolidated Statements of Operations Highlights (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Net sales | $77,252 | $85,324 | $(8,072) | -9.5% | | Gross profit | $42,605 | $50,544 | $(7,939) | -15.7% | | Operating expenses | $53,248 | $56,896 | $(3,648) | -6.4% | | Income (loss) from operations | $(10,643) | $(6,352) | $(4,291) | -67.6% | | Interest expense, net | $5,570 | $3,106 | $2,464 | +79.3% | | Net income (loss) | $(18,577) | $(6,484) | $(12,093) | -186.5% | | Net income (loss) attributable to Solo Brands, Inc. | $(12,192) | $(3,402) | $(8,790) | -258.4% | | Basic and diluted EPS | $(0.21) | $(0.06) | $(0.15) | -250.0% | - Net sales decreased by **9.5%** YoY, primarily due to declines in the Solo Stove segment's DTC channel, partially offset by growth in Chubbies' retail and DTC channels[20](index=20&type=chunk)[93](index=93&type=chunk)[102](index=102&type=chunk) - Net loss significantly widened from **$(6.5) million** in **Q1 2024** to **$(18.6) million** in **Q1 2025**, driven by lower sales, increased interest expense, and higher restructuring charges[20](index=20&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the unaudited consolidated statements of cash flows, detailing cash movements from operating, investing, and financing activities for the three months ended **March 31, 2025** and **2024** **Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(75,188) | $(18,527) | $(56,661) | +305.8% | | Net cash (used in) provided by investing activities | $(3,207) | $(2,387) | $(820) | +34.4% | | Net cash (used in) provided by financing activities | $272,811 | $16,344 | $256,467 | +1569.2% | | Net change in cash and cash equivalents | $194,414 | $(4,431) | +$198,845 | N/A | | Cash and cash equivalents, end of period | $206,394 | $15,411 | +$190,983 | +1239.3% | - Cash used in operating activities increased significantly by **$56.7 million**, primarily due to increased cash usage from changes in working capital (accounts payable) and a decline in net income[134](index=134&type=chunk) - Cash provided by financing activities surged by **$256.5 million**, mainly driven by **$277.3 million** in proceeds from the Revolving Credit Facility[22](index=22&type=chunk)[136](index=136&type=chunk) [Consolidated Statements of Equity (Unaudited)](index=10&type=section&id=Consolidated%20Statements%20of%20Equity%20(Unaudited)) This section presents the unaudited consolidated statements of equity, detailing changes in capital and retained earnings for the three months ended **March 31, 2025** and **2024** **Consolidated Statements of Equity Highlights (March 31, 2025 vs. December 31, 2024):** | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Additional paid-in capital | $363,960 | $363,601 | | Retained earnings (accumulated deficit) | $(241,006) | $(228,814) | | Total equity | $174,622 | $193,357 | - The accumulated deficit increased by **$12.2 million** to **$(241.0) million** as of **March 31, 2025**, reflecting the net loss incurred during the quarter[24](index=24&type=chunk)[31](index=31&type=chunk) - Total equity decreased by **$18.7 million**, primarily due to the net loss attributable to Solo Brands, Inc[24](index=24&type=chunk) [Notes to the Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to the unaudited consolidated financial statements, explaining significant accounting policies, debt, equity, and segment information [NOTE 1 – Significant Accounting Policies](index=12&type=section&id=NOTE%201%20%E2%80%93%20Significant%20Accounting%20Policies) This note details significant accounting policies, emphasizing the Company's going concern doubt due to financial performance and debt covenant non-compliance, and outlining policies for debt, restructuring, and commitments - The Company's ability to continue as a going concern is in substantial doubt due to a net loss of **$18.6 million**, an accumulated deficit of **$241.0 million**, and non-compliance with interest coverage and total net leverage ratio covenants as of **March 31, 2025**[30](index=30&type=chunk)[31](index=31&type=chunk) - Due to covenant non-compliance, the entire **$427.9 million** outstanding debt has been reclassified as a current liability, and lenders could declare all amounts immediately due and payable[31](index=31&type=chunk) - Strategies to address the going concern issue include debt refinancing/restructuring, obtaining waivers, issuing new debt, or potentially filing for Chapter 11 bankruptcy, alongside cost savings and operational improvements[32](index=32&type=chunk) [NOTE 2 - Restructuring, Contract Termination and Impairment Charges](index=13&type=section&id=NOTE%202%20-%20Restructuring,%20Contract%20Termination%20and%20Impairment%20Charges) This note details the **$5.8 million** in **Q1 2025** restructuring, contract termination, and impairment charges, driven by workforce reductions, distribution center closures, and strategic consulting for financial improvement and debt refinancing - In **Q1 2025**, the Company engaged strategic consulting firms to improve financial results and support potential debt refinancing/restructuring, leading to cost-saving initiatives[40](index=40&type=chunk) **Restructuring, Contract Termination and Impairment Charges (Three Months Ended March 31):** | Charge Type (in thousands) | 2025 | 2024 | | :------------------------- | :--- | :--- | | Restructuring charges | $5,208 | $— | | Impairment charges | $471 | $— | | Contract termination | $160 | $— | | **Total** | **$5,839** | **$—** | - Key initiatives included a reduction in force, closure of two distribution centers, and reduction in marketing spend for the Solo Stove segment[45](index=45&type=chunk) [NOTE 3 – Revenue](index=14&type=section&id=NOTE%203%20%E2%80%93%20Revenue) This note explains the **9.5%** net sales decrease to **$77.3 million** in **Q1 2025**, primarily due to declining direct-to-consumer sales, partially offset by retail growth **Net Sales by Channel (Three Months Ended March 31):** | Channel (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------- | :--- | :--- | :--------- | :--------- | | Direct-to-consumer | $33,800 | $51,043 | $(17,243) | -33.8% | | Retail | $43,452 | $34,281 | $9,171 | +26.8% | | **Net sales** | **$77,252** | **$85,324** | **$(8,072)** | **-9.5%** | - The decline in DTC sales was primarily due to reduced promotional discounting and marketing spend in the Solo Stove segment, while retail sales increased due to higher demand in the Chubbies segment[102](index=102&type=chunk) [NOTE 4 – Inventory](index=16&type=section&id=NOTE%204%20%E2%80%93%20Inventory) This note details a slight decrease in total inventory to **$103.1 million** as of **March 31, 2025**, mainly due to reduced finished products in transit **Inventory Composition (in thousands):** | Inventory Type | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | Finished products on hand, net | $93,910 | $80,098 | | Finished products in transit | $4,423 | $21,756 | | Raw materials | $4,735 | $6,721 | | **Total Inventory** | **$103,068** | **$108,575** | - Inventory obsolescence reserve decreased from **$15.2 million** to **$5.8 million**[46](index=46&type=chunk) [NOTE 5 – Prepaid Expenses and Other Current Assets](index=16&type=section&id=NOTE%205%20%E2%80%93%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note details the decrease in prepaid expenses and other current assets to **$10.3 million**, primarily due to non-trade receivable reclassification and reduced insurance and tax receivables **Prepaid Expenses and Other Current Assets (in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Inventory deposits | $2,206 | $2,066 | | Insurance | $1,791 | $2,556 | | Software | $1,318 | $1,016 | | Tax receivables | $1,073 | $2,026 | | Non-trade receivables | $1,038 | $2,953 | | Other | $2,860 | $1,606 | | **Total** | **$10,286** | **$12,223** | - Non-trade receivables decreased by **$1.9 million** due to reclassification to accounts receivable[47](index=47&type=chunk) [NOTE 6 – Intangible Assets, Net](index=16&type=section&id=NOTE%206%20%E2%80%93%20Intangible%20Assets,%20Net) This note details the decrease in net intangible assets to **$185.4 million** due to amortization and prior-year impairment, with recoverability tests indicating no further impairment **Intangible Assets, Net (in thousands):** | Asset Type | March 31, 2025 | December 31, 2024 | | :--------- | :------------- | :---------------- | | Brand (gross) | $198,514 | $205,614 | | Patents (gross) | $6,699 | $14,211 | | **Intangible assets, net** | **$185,430** | **$189,701** | - Triggering events for impairment testing in **Q1 2025** included a sustained decline in Class A common stock share price and potential tariff increases, but the recoverability test indicated carrying amounts were recoverable[48](index=48&type=chunk) [NOTE 7 – Goodwill](index=18&type=section&id=NOTE%207%20%E2%80%93%20Goodwill) This note confirms goodwill remained at **$73.1 million** for the Chubbies reporting unit, with a qualitative analysis concluding its fair value exceeded carrying value despite impairment indications **Goodwill by Segment (in thousands):** | Segment | March 31, 2025 | December 31, 2024 | | :------ | :------------- | :---------------- | | Chubbies | $73,119 | $73,119 | | **Consolidated** | **$73,119** | **$73,119** | - A qualitative goodwill analysis for the Chubbies reporting unit determined that its fair value was more likely than not to exceed its carrying value, despite identified impairment indications[49](index=49&type=chunk) [NOTE 8 – Accrued Expenses and Other Current Liabilities](index=18&type=section&id=NOTE%208%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note details the decrease in accrued expenses and other current liabilities to **$34.5 million**, driven by reduced inventory accruals and sales rebates, partially offset by contingent consideration and interest accruals **Accrued Expenses and Other Current Liabilities (in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Leases | $8,657 | $9,370 | | Inventory | $5,092 | $14,812 | | Contingent consideration | $3,505 | $— | | Income taxes | $2,599 | $56 | | Interest | $2,354 | $484 | | Allowance for sales rebates | $1,452 | $3,434 | | Non-income taxes | $1,756 | $3,602 | | **Total** | **$34,509** | **$41,661** | - The inventory line item decreased by **$9.7 million** due to invoices received after **December 31, 2024**[50](index=50&type=chunk) - Contingent consideration increased by **$3.5 million** due to reclassification from non-current liabilities[50](index=50&type=chunk) [NOTE 9 – Debt, Net](index=18&type=section&id=NOTE%209%20%E2%80%93%20Debt,%20Net) This note details the significant increase in net debt to **$427.9 million**, reclassified as current due to covenant non-compliance, and a **$277.3 million** draw from the Revolving Credit Facility **Debt, Net (in thousands):** | Debt Type | Weighted-Average Interest Rate (Mar 31, 2025) | March 31, 2025 | December 31, 2024 | | :-------- | :-------------------------------------------- | :------------- | :---------------- | | Term loan | 6.43% | $82,500 | $83,000 | | Revolving credit facility | 6.52% | $346,322 | $69,000 | | Unamortized debt issuance costs | N/A | $(932) | $(1,315) | | **Total debt, net** | N/A | **$427,890** | **$150,685** | - All outstanding debt was reclassified from non-current to current due to expected non-compliance with interest coverage and total net leverage ratio financial covenants[51](index=51&type=chunk) - The Company borrowed **$277.3 million** from the Revolving Credit Facility in **Q1 2025**, with no availability for future draws as of **March 31, 2025**[55](index=55&type=chunk) - Interest expense, net, increased by **79.3%** to **$5.6 million** for the three months ended **March 31, 2025**, compared to **$3.1 million** in the prior year, due to a higher average debt balance[54](index=54&type=chunk)[112](index=112&type=chunk) [NOTE 10 – Other Non-Current Liabilities](index=20&type=section&id=NOTE%2010%20%E2%80%93%20Other%20Non-Current%20Liabilities) This note details the decrease in other non-current liabilities to **$5.3 million** as of **March 31, 2025**, primarily due to the reclassification of contingent consideration to current liabilities **Other Non-Current Liabilities (in thousands):** | Item | March 31, 2025 | December 31, 2024 | | :--- | :------------- | :---------------- | | Contingent consideration | $3,657 | $7,232 | | Long-term non-income taxes | $1,130 | $1,130 | | Finance lease liability | $532 | $694 | | **Total** | **$5,319** | **$9,056** | - Contingent consideration declined by **$3.5 million** due to its reclassification to accrued expenses and other current liabilities[56](index=56&type=chunk) [NOTE 11 – Equity-Based Compensation](index=20&type=section&id=NOTE%2011%20%E2%80%93%20Equity-Based%20Compensation) This note explains the **$0.9 million** equity-based compensation benefit in **Q1 2025**, a decrease from a **$1.2 million** expense in **Q1 2024**, driven by forfeitures exceeding current quarter expense - Equity-based compensation resulted in a **$0.9 million** benefit in **Q1 2025**, compared to a **$1.2 million** expense in **Q1 2024**, driven by forfeitures exceeding current quarter compensation expense[57](index=57&type=chunk) **Equity-Based Compensation Awards (Three Months Ended March 31, 2025):** | Award Type | Number of Shares Granted (in thousands) | Number of Shares Forfeited (in thousands) | | :--------- | :-------------------------------------- | :---------------------------------------- | | RSUs | 1,307 | (446) | | EPSUs | — | (1,468) | | SPSUs | — | (357) | [NOTE 12 – Income Taxes](index=20&type=section&id=NOTE%2012%20%E2%80%93%20Income%20Taxes) This note details the **$2.9 million** income tax expense in **Q1 2025**, a significant increase from a **$3.2 million** benefit in **Q1 2024**, primarily due to valuation allowances on deferred tax assets - Income tax expense was **$2.9 million** in **Q1 2025**, compared to a **$3.2 million** benefit in **Q1 2024**, primarily due to valuation allowances on Solo Brands, Inc. deferred tax assets[62](index=62&type=chunk)[114](index=114&type=chunk) - The effective income tax rate was **(18.9)%** for **Q1 2025**, down from **33.0%** in **Q1 2024**, due to valuation allowances and earnings from foreign operations[60](index=60&type=chunk) - A full valuation allowance remains in place against Oru's deferred tax assets, and the Company concluded that not all Solo Brands, Inc. deferred tax assets are likely to be realized[66](index=66&type=chunk) [NOTE 13 – Fair Value Measurements](index=22&type=section&id=NOTE%2013%20%E2%80%93%20Fair%20Value%20Measurements) This note details fair value measurements, including the **$7.2 million** contingent consideration and the reclassification of **$427.9 million** outstanding debt to Level 3 due to covenant non-compliance **Financial Liabilities Measured at Fair Value (in thousands):** | Item | March 31, 2025 Total Fair Value | December 31, 2024 Total Fair Value | | :--- | :------------------------------ | :--------------------------------- | | Contingent Consideration | $7,162 | $7,232 | - The contingent consideration is a Level 3 estimate, valued using a threshold and cap structure based on forecasted results[69](index=69&type=chunk) - Outstanding debt was transferred from Level 2 to Level 3 in the fair value hierarchy due to expected non-compliance with financial covenants, with a fair value of **$416.3 million** compared to a carrying value of **$427.9 million** as of **March 31, 2025**[73](index=73&type=chunk)[74](index=74&type=chunk) [NOTE 14 – Net Income (Loss) Per Share](index=24&type=section&id=NOTE%2014%20%E2%80%93%20Net%20Income%20(Loss)%20Per%20Share) This note details basic and diluted net loss per Class A common stock, which widened to **$(0.21)** in **Q1 2025** from **$(0.06)** in **Q1 2024**, reflecting increased net loss **Net Income (Loss) Per Class A Common Stock (Three Months Ended March 31):** | Metric (in thousands, except per share) | 2025 | 2024 | | :------------------------------------ | :--- | :--- | | Net income (loss) attributable to Solo Brands, Inc. | $(12,192) | $(3,402) | | Weighted average shares outstanding | 58,986 | 58,068 | | **Basic and diluted EPS** | **$(0.21)** | **$(0.06)** | - Approximately **0.1 million** options and **1.9 million** restricted stock units in **2025** (and **0.1 million** options and **1.1 million** RSUs in **2024**) were anti-dilutive and excluded from diluted EPS calculation[76](index=76&type=chunk) [NOTE 15 - Variable Interest Entities](index=24&type=section&id=NOTE%2015%20-%20Variable%20Interest%20Entities) This note describes the consolidation of a Variable Interest Entity (VIE) related to an Oru manufacturing entity, where the Company acts as the primary beneficiary - The Company consolidates a VIE related to an Oru manufacturing entity, acting as the primary beneficiary with decision-making power over its economic performance[77](index=77&type=chunk) **VIE Assets and Liabilities (in thousands):** | Metric | March 31, 2025 | December 31, 2024 | | :----- | :------------- | :---------------- | | Total assets of VIE | $2,400 | $2,200 | | Total liabilities of VIE | $2,900 | $2,800 | - The VIE's assets are restricted to settling its own obligations, and its liabilities are non-recourse to the Company's other consolidated entities[79](index=79&type=chunk) [NOTE 16 - Segments](index=24&type=section&id=NOTE%2016%20-%20Segments) This note outlines the Company's two reportable segments, Solo Stove and Chubbies, detailing a significant shift in net sales contribution with Solo Stove decreasing and Chubbies increasing in **Q1 2025** - The Company's two reportable segments are Solo Stove (firepits, stoves, accessories) and Chubbies (casual apparel and activewear)[81](index=81&type=chunk)[92](index=92&type=chunk) **Percentage of Net Sales by Segment (Three Months Ended March 31):** | Segment | 2025 | 2024 | | :------ | :--- | :--- | | Solo Stove | 33.8% | 60.3% | | Chubbies | 55.3% | 34.8% | **Segment Net Sales and EBITDA (Three Months Ended March 31, 2025):** | (in thousands) | Solo Stove | Chubbies | All Other | Consolidated | | :------------- | :--------- | :------- | :-------- | :----------- | | Net sales | $26,128 | $42,689 | $8,435 | $77,252 | | Segment EBITDA | $(1,486) | $11,295 | $380 | $10,189 | **Segment Net Sales and EBITDA (Three Months Ended March 31, 2024):** | (in thousands) | Solo Stove | Chubbies | All Other | Consolidated | | :------------- | :--------- | :------- | :-------- | :----------- | | Net sales | $51,477 | $29,657 | $4,190 | $85,324 | | Segment EBITDA | $7,645 | $4,932 | $(1,483) | $11,094 | - International sales, primarily from the Solo Stove segment, accounted for **7.2%** of consolidated net sales in **Q1 2025**[84](index=84&type=chunk)[147](index=147&type=chunk) [NOTE 17 - Related Parties](index=26&type=section&id=NOTE%2017%20-%20Related%20Parties) This note details minor related party transactions, primarily merchandise sales to an employee-owned entity, with accounts receivable of **$1.04 million** as of **March 31, 2025** - The Company engages in occasional transactions with a related party, an entity wholly owned by an employee and their family, for merchandise sales in a specific geographical market[87](index=87&type=chunk) **Accounts Receivable Due From Related Party (in thousands):** | Metric | March 31, 2025 | December 31, 2024 | | :----- | :------------- | :---------------- | | Accounts receivable due from related party | $1,041 | $1,074 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the Company's financial condition and results, highlighting **Q1 2025** net sales decline, significant net loss, macroeconomic impacts, restructuring efforts, and the critical going concern issue due to debt covenant non-compliance - Net sales decreased from **$85.3 million** in **Q1 2024** to **$77.3 million** in **Q1 2025**, primarily due to the Solo Stove segment's decline, partially offset by Chubbies' growth[93](index=93&type=chunk) - The Company faces substantial doubt about its ability to continue as a going concern due to a net loss of **$18.6 million**, an accumulated deficit of **$241.0 million**, and non-compliance with debt covenants, leading to the reclassification of **$427.9 million** in debt to current liabilities[128](index=128&type=chunk) - Management is evaluating strategies including debt refinancing, waivers, new financing, or Chapter 11 bankruptcy, alongside cost savings and operational improvements, but there's no assurance of success[129](index=129&type=chunk) [Overview](index=27&type=section&id=Overview) This section provides an overview of Solo Brands, Inc.'s business, including its premium brands and sales channels - Solo Brands, Inc. owns and operates premium brands like Solo Stove (firepits, stoves, accessories) and Chubbies (casual apparel and activewear), focusing on direct-to-consumer and retail partnerships[92](index=92&type=chunk) - Net sales decreased to **$77.3 million** in **Q1 2025** from **$85.3 million** in **Q1 2024**, mainly due to the Solo Stove segment's decline (lack of new products, reduced marketing), partially offset by growth in the Chubbies segment[93](index=93&type=chunk) [Economic Factors Affecting our Performance](index=27&type=section&id=Economic%20Factors%20Affecting%20our%20Performance) This section discusses global macroeconomic factors, including tariffs, interest rates, and inflation, and their potential impact on the Company's financial performance - The Company is exposed to global macroeconomic factors, including increased tariffs on goods from China, Vietnam, and Mexico, which are expected to significantly impact inventory and cost of goods sold in future periods[94](index=94&type=chunk)[95](index=95&type=chunk) - Current macroeconomic factors like economic and political uncertainty, financial market instability, high interest rates, and inflation could further reduce net sales and negatively impact gross margin, net income, and cash flows[95](index=95&type=chunk) [Key Factors Affecting Our Financial Condition and Results of Operations](index=29&type=section&id=Key%20Factors%20Affecting%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) This section outlines key factors influencing the Company's financial condition and results, including strategic consulting engagements and cost-saving initiatives - In **Q1 2025**, the Company engaged strategic consulting firms to improve financial results and support potential debt refinancing/restructuring, capitalizing related activities as debt issuance costs[97](index=97&type=chunk) - Cost-saving initiatives executed in **Q1 2025** include a reduction in force, closure of two distribution centers, and reduced marketing spend in the Solo Stove segment, with upfront cash outlays of **$3.6 million**[98](index=98&type=chunk)[99](index=99&type=chunk)[103](index=103&type=chunk) [Consolidated Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024](index=29&type=section&id=Consolidated%20Results%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202024) This section provides a comparative analysis of the Company's consolidated financial results for the three months ended **March 31, 2025** and **2024** [Consolidated Net Sales](index=29&type=section&id=Consolidated%20Net%20Sales) This section analyzes consolidated net sales performance, detailing changes across direct-to-consumer and retail channels **Consolidated Net Sales by Channel (Three Months Ended March 31):** | Channel (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------- | :--- | :--- | :--------- | :--------- | | Net sales | $77,252 | $85,324 | $(8,072) | -9.5% | | Direct-to-consumer net sales | $33,800 | $51,043 | $(17,243) | -33.8% | | Retail net sales | $43,452 | $34,281 | $9,171 | +26.8% | - The decrease in net sales was primarily due to a decline in Solo Stove's DTC channel (reduced promotions, marketing, lack of new products), partially offset by increased retail demand and DTC growth in the Chubbies segment[102](index=102&type=chunk)[104](index=104&type=chunk) [Consolidated Gross Profit and Gross Margin](index=30&type=section&id=Consolidated%20Gross%20Profit%20and%20Gross%20Margin) This section analyzes consolidated gross profit and gross margin, explaining factors influencing profitability **Consolidated Gross Profit and Gross Margin (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Gross profit | $42,605 | $50,544 | $(7,939) | -15.7% | | Gross margin | 55.2% | 59.2% | -400 bps | N/A | - Gross margin declined by **400 basis points**, primarily due to a shift in channel mix towards lower-margin retail sales[106](index=106&type=chunk) [Consolidated Operating Expenses](index=30&type=section&id=Consolidated%20Operating%20Expenses) This section details consolidated operating expenses, including selling, general and administrative, restructuring, and depreciation and amortization **Consolidated Operating Expenses (Three Months Ended March 31):** | Expense Type (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Operating expenses | $53,248 | $56,896 | $(3,648) | -6.4% | | Selling, general and administrative expenses | $38,990 | $48,410 | $(9,420) | -19.5% | | Restructuring, Contract Termination and Impairment Charges | $5,839 | $— | $5,839 | +100.0% | | Depreciation and amortization expenses | $6,889 | $6,275 | $614 | +9.8% | | Other operating expenses | $1,530 | $2,211 | $(681) | -30.8% | - The decrease in total operating expenses was driven by a **$9.4 million** reduction in SG&A (lower advertising, marketing, and distribution costs), partially offset by a **$5.8 million** increase in restructuring, contract termination, and impairment charges[108](index=108&type=chunk)[109](index=109&type=chunk) [Consolidated Interest Expense](index=31&type=section&id=Consolidated%20Interest%20Expense) This section analyzes consolidated interest expense, net, and its drivers **Consolidated Interest Expense, Net (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Interest expense, net | $5,570 | $3,106 | $2,464 | +79.3% | - Interest expense, net, increased by **79.3%** due to a higher average debt balance[112](index=112&type=chunk) [Consolidated Income Taxes](index=31&type=section&id=Consolidated%20Income%20Taxes) This section details consolidated income tax expense (benefit) and its contributing factors **Consolidated Income Tax Expense (Benefit) (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Income tax expense (benefit) | $2,944 | $(3,195) | $6,139 | -192.1% | - Income tax expense increased significantly due to valuation allowances recorded on Solo Brands, Inc. deferred tax assets[114](index=114&type=chunk) [Solo Stove Segment Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024](index=31&type=section&id=Solo%20Stove%20Segment%20Results%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202024) This section provides a comparative analysis of the Solo Stove segment's financial results for the three months ended **March 31, 2025** and **2024** [Solo Stove Net Sales](index=31&type=section&id=Solo%20Stove%20Net%20Sales) This section analyzes Solo Stove's net sales performance, detailing changes across direct-to-consumer and retail channels **Solo Stove Net Sales by Channel (Three Months Ended March 31):** | Channel (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------- | :--- | :--- | :--------- | :--------- | | Net sales | $26,128 | $51,477 | $(25,349) | -49.2% | | Direct-to-consumer net sales | $18,512 | $37,419 | $(18,907) | -50.5% | | Retail net sales | $7,616 | $14,058 | $(6,442) | -45.8% | - Solo Stove's net sales declined by **49.2%** YoY, with both DTC and retail channels significantly impacted by a lack of new product launches, reduced promotional discounting, and lower marketing spend[115](index=115&type=chunk) [Solo Stove Cost of Goods Sold](index=31&type=section&id=Solo%20Stove%20Cost%20of%20Goods%20Sold) This section analyzes Solo Stove's cost of goods sold and its relationship to net sales **Solo Stove Cost of Goods Sold (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Cost of goods sold | $11,470 | $20,748 | $(9,278) | -44.7% | - Cost of goods sold decreased in line with net sales, but the decline was less pronounced due to a channel mix shift towards higher-cost retail sales[116](index=116&type=chunk) [Solo Stove Segment Operating Expenses](index=32&type=section&id=Solo%20Stove%20Segment%20Operating%20Expenses) This section details Solo Stove's segment operating expenses, including marketing and employee-related compensation **Solo Stove Segment Operating Expenses (Three Months Ended March 31):** | Expense Type (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Segment operating expenses | $16,144 | $23,084 | $(6,940) | -30.1% | | Marketing expenses | $5,712 | $9,865 | $(4,153) | -42.1% | | Employee related compensation | $3,309 | $2,181 | $1,128 | +51.7% | | Other segment operating expenses | $7,123 | $11,038 | $(3,915) | -35.5% | - Segment operating expenses decreased by **30.1%** due to lower marketing expenses, seller fees, and shipping costs, stemming from the decline in DTC net sales[118](index=118&type=chunk) [Chubbies Segment Results for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024](index=32&type=section&id=Chubbies%20Segment%20Results%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202024) This section provides a comparative analysis of the Chubbies segment's financial results for the three months ended **March 31, 2025** and **2024** [Chubbies Net Sales](index=32&type=section&id=Chubbies%20Net%20Sales) This section analyzes Chubbies' net sales performance, detailing changes across direct-to-consumer and retail channels **Chubbies Net Sales by Channel (Three Months Ended March 31):** | Channel (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------- | :--- | :--- | :--------- | :--------- | | Net sales | $42,689 | $29,657 | $13,032 | +43.9% | | Direct-to-consumer net sales | $13,483 | $10,630 | $2,853 | +26.8% | | Retail net sales | $29,206 | $19,027 | $10,179 | +53.5% | - Chubbies' net sales increased by **43.9%** YoY, driven by strong growth in both retail (**53.5%**) and DTC (**26.8%**) channels, reflecting successful strategic partnerships and meeting consumer demand[119](index=119&type=chunk) [Chubbies Cost of Goods Sold](index=32&type=section&id=Chubbies%20Cost%20of%20Goods%20Sold) This section analyzes Chubbies' cost of goods sold and its relationship to net sales **Chubbies Cost of Goods Sold (Three Months Ended March 31):** | Metric (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------- | :--- | :--- | :--------- | :--------- | | Cost of goods sold | $18,173 | $12,408 | $5,765 | +46.5% | - Cost of goods sold increased by **46.5%**, slightly more than net sales, due to the growth in higher-cost retail channel sales[120](index=120&type=chunk) [Chubbies Segment Operating Expenses](index=32&type=section&id=Chubbies%20Segment%20Operating%20Expenses) This section details Chubbies' segment operating expenses, including marketing and employee-related compensation **Chubbies Segment Operating Expenses (Three Months Ended March 31):** | Expense Type (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Segment operating expenses | $13,221 | $12,317 | $904 | +7.3% | | Marketing expenses | $3,314 | $3,648 | $(334) | -9.2% | | Employee related compensation | $3,434 | $3,236 | $198 | +6.1% | | Other segment operating expenses | $6,473 | $5,433 | $1,040 | +19.1% | - Segment operating expenses increased by **7.3%**, primarily driven by higher seller fees, shipping, and fulfillment costs due to increased DTC net sales[121](index=121&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity position and capital resources, including debt facilities and cash flow activities [Going Concern](index=34&type=section&id=Going%20Concern) This section addresses the Company's going concern status, outlining the financial challenges and management's mitigation strategies - Substantial doubt exists about the Company's ability to continue as a going concern due to a **$18.6 million** net loss, **$241.0 million** accumulated deficit, and non-compliance with debt covenants, leading to **$427.9 million** debt reclassification to current[128](index=128&type=chunk) - The Company is actively negotiating with lenders for debt refinancing/restructuring, waivers, or new financing, and implementing cost savings, but success is not assured[129](index=129&type=chunk) - Without an agreement or waiver, the Company will be unable to meet cash obligations for the next twelve months[130](index=130&type=chunk) [Revolving Credit Facility and Term Loan](index=34&type=section&id=Revolving%20Credit%20Facility%20and%20Term%20Loan) This section details the Company's Revolving Credit Facility and Term Loan, including outstanding balances, interest rates, and covenant compliance - The Revolving Credit Facility allows borrowing up to **$350.0 million**, maturing **May 12, 2026**, with **$346.3 million** outstanding and no further availability as of **March 31, 2025**[131](index=131&type=chunk) - The Term Loan, used for the Chubbies acquisition, allows borrowing up to **$100.0 million**, maturing **May 12, 2026**, with **$82.5 million** outstanding as of **March 31, 2025**[132](index=132&type=chunk) - Both facilities bear variable interest rates based on SOFR plus an applicable margin and are subject to financial and non-financial covenants, with the Company currently in non-compliance[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) This section summarizes the Company's cash flow activities from operations, investing, and financing **Cash Flow Summary (Three Months Ended March 31):** | Activity (in thousands) | 2025 | 2024 | Change ($) | Change (%) | | :---------------------- | :--- | :--- | :--------- | :--------- | | Operating activities | $(75,188) | $(18,527) | $(56,661) | +305.8% | | Investing activities | $(3,207) | $(2,387) | $(820) | +34.4% | | Financing activities | $272,811 | $16,344 | $256,467 | +15
solo stove(DTC) - 2025 Q1 - Quarterly Results
2025-05-12 12:01
Grapevine, Texas, May 12, 2025: Solo Brands, Inc. (NYSE: DTC; OTC: DTCB) ("Solo Brands" or "the Company") a leading portfolio of lifestyle brands (Solo Stove, Chubbies, Isle and Oru) that are redefining the outdoor and apparel industries, today announced its financial results for the three months ended March 31, 2025. (1) John Larson, Interim President and Chief Executive Officer, commented, "The first quarter's performance reflected strong sales from the Chubbies segment, up 44% from a year ago, generating ...
Solo Brands, Inc. Announces First Quarter 2025 Results
GlobeNewswire News Room· 2025-05-12 11:30
GRAPEVINE, Texas, May 12, 2025 (GLOBE NEWSWIRE) -- Solo Brands, Inc. (NYSE: DTC; OTC: DTCB) (1) ("Solo Brands" or "the Company") a leading portfolio of lifestyle brands (Solo Stove, Chubbies, Isle and Oru) that are redefining the outdoor and apparel industries, today announced its financial results for the three months ended March 31, 2025. John Larson, Interim President and Chief Executive Officer, commented, "The first quarter's performance reflected strong sales from the Chubbies segment, up 44% from a y ...
Solo Brands, Inc. Fiscal 2025 First Quarter Financial Results To Be Released Monday, May 12, 2025
Globenewswire· 2025-05-07 20:00
Core Viewpoint - Solo Brands, Inc. plans to report its fiscal 2025 first quarter financial results on May 12, 2025, before the market opens, and will hold a conference call to discuss its strategy and financial results [1]. Group 1 - The conference call is scheduled to begin at 9:00 a.m. ET, and investors and analysts can join by dialing the provided numbers [2]. - A recorded replay of the call will be available shortly after its conclusion and will remain accessible until May 19, 2025 [3]. Group 2 - Solo Brands is headquartered in Grapevine, TX, and operates as an omnichannel lifestyle brand company, offering products through five brands: Solo Stove, TerraFlame, Chubbies, ISLE, and Oru Kayak [4].
Solo Brands, Inc. Appeals NYSE Delisting Determination
GlobeNewswire News Room· 2025-05-06 20:30
Core Viewpoint - Solo Brands, Inc. is appealing the NYSE Regulation's decision to delist its Class A common stock due to "abnormally low" price levels, with the aim of restoring compliance with NYSE listing standards [1][2][4]. Group 1: Company Actions and Status - The NYSE Regulation staff determined that Solo Brands' Class A common stock was unsuitable for listing, leading to a trading halt and current quotation on the OTC Pink Market under the symbol "DTCB" [2][3]. - The company plans to continue operating in compliance with SEC regulations and NYSE listing requirements during the appeal period [5]. - If the appeal is successful, trading of the Class A common stock may resume on the NYSE [3]. Group 2: Company Perspective - The interim President and CEO of Solo Brands stated that the current trading price and market capitalization do not reflect the company's value, prompting the appeal [4]. - The company is committed to executing action plans, including a reverse stock split, to restore compliance with NYSE standards [4]. Group 3: Company Overview - Solo Brands is headquartered in Grapevine, TX, and operates a portfolio of lifestyle brands, including Solo Stove, Chubbies, Isle, and Oru, focusing on innovative outdoor and apparel products [6].
Levi's Stock Gains Momentum With DTC Turnaround
MarketBeat· 2025-04-10 12:15
Core Insights - Levi Strauss & Company's shift to a direct-to-consumer (DTC) model is timely and strategically beneficial for its future growth [1] - The DTC model addresses previous challenges with third-party vendor displays, enhancing consumer experience and sales performance [2] Financial Performance - The company reported a revenue growth of 3.4% for fiscal Q1 2025, with a 12% increase in DTC sales contributing to a 9% organic growth [4] - Adjusted diluted earnings increased by 52% to $0.38, significantly surpassing consensus expectations by nearly 2500 basis points [5] - Gross margin improved by 330 basis points and adjusted EBITDA margin by 400 basis points, driven by price realization and cost reductions [5] Market Position and Outlook - The international business showed strong performance with a 9% growth, while U.S. growth was solid at 8% [4] - Women's category sales grew by double digits, now representing 38% of total sales, and non-denim items accounted for 35% of sales [4] - The company projects a 4% organic growth at the midpoint for the year, with an expected gross margin expansion of 100 basis points [5] Capital Return Strategy - Levi's capital return strategy includes a dividend yield of approximately 3.85% and a payout ratio of less than 20%, indicating a sustainable distribution policy [6] - The company has increased its distribution six times since 2021, reflecting a healthy growth outlook despite a brief pandemic-related suspension [7] Balance Sheet Strength - The company's balance sheet remains strong, with equity up by 3.2% despite reduced cash and assets, and leverage is low at less than 0.5x equity [8] - Liquidity is robust, exceeding $1.4 billion, which supports ongoing capital returns and distribution increases [8] Analyst Sentiment - Analysts have mixed responses to Levi's results, with some price target reductions but an upgrade to Overweight by JPMorgan, indicating a potential minimum upside of 10% [11] - The stock is currently rated as Moderate Buy, with a projected earnings growth of 9.45% [9]
Warner Bros. Discovery: Beating John Malone At His Own Game
Seeking Alpha· 2025-04-06 05:44
Group 1 - The article discusses the analysis of oil and gas companies, focusing on identifying undervalued names in the sector, including balance sheet evaluations, competitive positioning, and development prospects [1] - John Malone, a board member of Warner Bros. Discovery, has been a proponent of the company's acquisition from AT&T, indicating his long-term interest and support for the business [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector that requires patience and experience for successful investment [2] Group 2 - The article emphasizes the importance of thorough analysis and understanding of the companies involved in the oil and gas industry for potential investors [1]
Royalties Inc. Announces DTC Eligibility
Newsfile· 2025-04-03 17:41
Toronto, Ontario--(Newsfile Corp. - April 3, 2025) - Royalties Inc. (CSE: RI) (OTC Pink: ROYIF), ("the Company") is pleased to announce that its common shares are now eligible for electronic clearing and settlement in the United States through the Depository Trust Company ("DTC"). DTC eligibility is expected to simplify the process of trading and enhance the liquidity of its common shares in the United States, the world's largest capital market.DTC eligibility streamlines the trading process, making it mor ...
solo stove(DTC) - 2024 Q4 - Earnings Call Transcript
2025-03-12 19:13
Financial Data and Key Metrics Changes - Total net sales for 2024 were $455 million, down 8% from the prior year [13] - Adjusted gross profit margin improved to 61.7% [13] - Adjusted EBITDA for the year was $32.6 million, representing 7.2% of net sales [19] - Fourth quarter net sales were $143.5 million, down 13.2% year-over-year [14] - Reported gross profit margin for the fourth quarter was 61.1%, up 280 basis points from the previous year [16] - GAAP net loss for 2024 was $180.2 million, an improvement from a net loss of $195.3 million in 2023 [19] Business Line Data and Key Metrics Changes - Declines in retail and direct-to-consumer channels within the Solo Stove segment were noted, partially offset by increased sales in the Chubbies segment [14] - Selling, general and administrative expenses decreased to $81.8 million in the fourth quarter from $84.3 million in the prior year [16] - Adjusted net income for the year was $11.4 million, with an adjusted EPS of $0.12 [19] Market Data and Key Metrics Changes - The company ended the quarter with $12 million in cash and cash equivalents [25] - Inventories were reported at $108.6 million, down from a year ago [25] - Cash provided by operating activities for the year was $10.5 million [26] Company Strategy and Development Direction - The company is focused on an aggressive turnaround plan for 2025, with over 30 value-accretive initiatives [7][10] - Key initiatives include resetting the cost structure, focusing on profitability by channel and product, and revamping the marketing approach [31][32] - A new water sports division was created by consolidating ISLE paddle boards and Oru Kayaks to enhance profitability [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges ahead but expressed confidence in the company's foundation, including strong brands and loyal customers [11] - The company is pausing financial guidance due to an uneven consumer environment and uncertainty with tariffs [23] - Management expects performance improvements to be more visible in the latter half of the year as initiatives ramp up [40] Other Important Information - The company is actively addressing tariff impacts by shifting production to alternative countries [24] - A disciplined capital allocation strategy is being maintained, with no M&A planned for 2025 [26] - The company is evaluating strategies to refinance existing debt and improve liquidity [28] Q&A Session Summary - No questions were taken after the prepared remarks, as management aimed to address most inquiries during the presentation [12]