Financial Data and Key Metrics Changes - The company achieved 4% net sales growth and 6% growth in adjusted EBITDA during Q1 2025, despite challenging weather conditions [5][12] - Adjusted EBITDA for the quarter increased 6% to $22.4 million, with an adjusted EBITDA margin improvement of 10 basis points to 2.4% [16][29] - The net loss attributable to the company was $27.3 million for Q1 2025, compared to a loss of $19.3 million in the prior year [28] Business Line Data and Key Metrics Changes - Organic daily sales decreased 1% in Q1 2025, with agronomic products increasing by 7% and landscaping products decreasing by 4% [25][23] - Acquisitions contributed approximately $45 million or 5% to net sales growth [26] - Selling, general and administrative expenses (SG&A) increased 5% to approximately $343 million, with SG&A as a percentage of net sales rising to 36.5% [26][16] Market Data and Key Metrics Changes - Four out of nine regions achieved positive organic daily sales growth in Q1 2025, with weather and tough comparisons being the primary differentiators [25] - The company estimates its market share at approximately 18% in a fragmented $25 billion wholesale landscaping products distribution market [7] Company Strategy and Development Direction - The company aims to leverage its scale and resources to deliver superior value to customers and suppliers while focusing on organic growth and acquisitions [9][10] - The acquisition strategy remains robust, with the company completing its 100th acquisition in March 2025, adding over $2 billion in acquired revenue since 2014 [12][33] - The company plans to fill in its product portfolio primarily through acquisitions, especially in nursery, hardscapes, and landscape supplies categories [13] Management's Comments on Operating Environment and Future Outlook - Management expects commodity price deflation to continue moderating in 2025, with price increases expected to offset declines in certain products [37] - The outlook for new residential single-family completions is flat for 2025, with mixed feedback from builders regarding future demand [38][39] - The company anticipates low single-digit organic daily sales growth for the full year 2025, supported by strong commercial initiatives [41] Other Important Information - The company has increased its working capital to approximately $1 billion, primarily due to acquisitions and early inventory purchases [30] - The effective tax rate for Q1 2025 was 25.5%, down from 33.4% in the prior year, due to a decrease in excess tax benefits from stock-based compensation [28] Q&A Session Summary Question: Can you define and provide recent wins regarding Dispatch Track and focus branch efforts? - Management highlighted significant progress in both areas, with Dispatch Track improving customer service and efficiency in delivery operations [46][48] Question: What efforts are being targeted to gain a larger share of wallet from existing customers? - The company is focusing on increasing product lines for existing customers and targeting small customers, where market share is currently low [50][52] Question: What is the expectation for organic sales growth in the second quarter? - Management expects low single-digit organic growth in Q2, with pricing anticipated to be flat to negative 1% [61][62] Question: Can you provide details on the impact of tariffs on pricing? - The company indicated that 10% to 15% of sales are indirectly affected by tariffs, primarily from suppliers sourcing from Mexico and China [63][64] Question: How is the company managing inventory levels amid inflationary pressures? - The company is selectively purchasing inventory to mitigate risks associated with supply chain disruptions and inflation [76][77] Question: How does the company balance cash for acquisitions versus share repurchases? - Management emphasized a focus on maintaining a strong balance sheet while being selective in capital allocation, including share repurchases when stock performance is favorable [78][79]

Financial Performance - In Q1 2025, the Company reported revenue of RMB 2,671 million, a decrease of 16.0% compared to RMB 3,099 million in Q1 2024 [10] - Net profit for Q1 2025 was RMB 231 million, down 32.5% from RMB 306 million in Q1 2024 [10] - Non-IFRS net profit slightly decreased by 3.1% to RMB 339 million from RMB 349 million in Q1 2024 [10] - Net operating cash flow was RMB 746 million, a decline of 14.4% from RMB 853 million in Q1 2024 [10] Revenue Composition - Revenue from China entities accounted for 88%, while overseas subsidiaries contributed 12% [12] - Laboratory services generated 60% of total revenue, followed by small molecule CDMO services at 22%, and clinical development services at 14% [12] - Revenue from the top 20 pharmaceutical customers grew by 29.1%, while revenue from other customers increased by 14.0% [12] Growth Rates - New purchase orders (POs) achieved over 10% year-on-year growth in Q1 2025 [10] - Revenue from China entities grew by 15.7%, while overseas subsidiaries saw an 18.3% increase [12] - North America revenue increased by 16.8%, and EU revenue grew by 26.6% [12] Cost and Margin Analysis - Gross margin for laboratory services improved to 45.5% in Q1 2025 from 44.1% in Q1 2024, reflecting a 1.4 percentage point increase [14] - Gross margin for small molecule CDMO services rose to 30.4%, up 2.5 percentage points from 27.9% in Q1 2024 [15] - Clinical development services in China achieved a gross margin of 11.8%, an increase of 2.5 percentage points from 9.3% in Q1 2024 [16] Future Outlook - The Company maintains a revenue growth guidance of 10-15% for 2025 [27] - Despite macroeconomic uncertainties, the Company believes in sustained industry development driven by healthcare demands and technological innovations [27]

Financial Data and Key Metrics Changes - Depletions decreased by 1% compared to the first quarter of the previous year, while shipments increased by 5.3% [22][7] - Revenue for the quarter increased by 6.5% due to volume and price increases [23] - Gross margin for the first quarter was 48.3%, an increase of 460 basis points year over year [24] - Earnings per diluted share (EPS) was $2.16, more than double compared to the prior year [25] Business Line Data and Key Metrics Changes - Twisted Tea grew dollar sales by 1% in measured channels and maintained an over 86% share in the hard tea category [12] - Hard seltzer category sales declined by 5% in the first quarter, impacting Truly's performance [14] - Samuel Adams and Dogfish Head brands achieved flat depletions, with Dogfish Head's Grateful Dead Juicy Pale Ale launch being particularly successful [17] Market Data and Key Metrics Changes - The broader beer category is expected to remain relevant, but inflation and economic uncertainty are significant drivers of recent weakness [8] - The hard seltzer category continues to decline, with Truly facing challenges in maintaining market share [14][15] Company Strategy and Development Direction - The company is focusing on supporting category-leading brands, launching strong innovations, and expanding gross margins [8] - Increased advertising investment in 2025 aims to improve market share trends and ensure successful product launches [9] - The strategy includes nurturing core brands and pursuing a "fewer things better" approach to innovation [10] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment is challenging, with inflation and consumer confidence impacting performance [8][62] - Management remains confident in the strategies and team in place to deliver on 2025 plans and generate long-term sustainable growth [9] - The company expects to see improvements in depletions in the second half of the year, driven by increased brand support [84] Other Important Information - The company has repurchased $61 million in shares year to date [7] - Tariffs are expected to have an unfavorable cost impact of approximately $20 million to $30 million in 2025 [29] - The company ended the quarter with a cash balance of $152.5 million and an unused credit line of $150 million [34] Q&A Session Summary Question: Can you unpack the gross margin performance in the quarter? - Management indicated that stronger shipments contributed to the gross margin uplift, but the main driver was ongoing gross margin initiatives [38][39] Question: What is driving the cost pressure from tariffs? - Key drivers include the cost of aluminum and point of sale materials from countries with higher tariffs, particularly China [41][42] Question: Can you break out the contribution of Sun Cruiser and Truly Unruly to shipment volume? - Management typically does not break out shipments by product but confirmed that Sun Cruiser is meeting expectations and is margin accretive [48][49] Question: What gives confidence in Twisted Tea's growth after a slowdown? - Management noted the presence of smaller competitors and emphasized ongoing investments in advertising and innovation to regain market share [52][53] Question: How is the company addressing changes in consumer demand? - Management acknowledged the impact of macroeconomic trends and consumer behavior changes, including reduced sociability and health concerns [62] Question: Will depletions flip positive in the second half of the year? - Management expects depletions to improve, potentially flipping positive in the second quarter or second half of the year [84]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $132 million, at the high end of the guided range, with EPS of $0.18, also at the midpoint of guidance [11][19] - Gross margins for the MedTech and Specialty Audio segment were 48.7%, down 450 basis points year-over-year, primarily due to a supply agreement impacting margins [19] - Precision Devices segment revenues were $73 million, flat compared to Q4, with gross margins at 35.7%, unchanged from the previous year [13][20] Business Line Data and Key Metrics Changes - MedTech and Specialty Audio revenue was $60 million, slightly up year-over-year but seasonally down from Q4 [11][19] - Precision Devices segment saw a flat revenue performance, with production challenges in the specialty film line being addressed [13][20] - The company expects year-over-year revenue growth to accelerate in Q2 2025, driven by strong demand in MedTech and Specialty Audio [12][17] Market Data and Key Metrics Changes - The company estimates that less than 5% of revenue is subject to current tariffs, with less than 3% of cost of goods sold impacted [7][8] - Inventory levels at distributors have normalized to 3-3.5 months, indicating increased order activity [34][52] - The company is seeing strong bookings trends across most end markets, particularly in Precision Devices [15][52] Company Strategy and Development Direction - The company is focused on growth in 2025, with strong design wins and increasing backlog across its product portfolio [17] - There is an emphasis on exploring acquisition opportunities while maintaining manageable debt levels [16][22] - The upcoming Investor Day will detail future growth plans and competitive advantages [17][60] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the tariff environment but believes the company is well-positioned for growth despite potential impacts [5][10] - The outlook for the MedTech and defense sectors remains strong, with essential devices expected to maintain demand [32][33] - Management anticipates a stronger second half of 2025, driven by improved capacity utilization and demand recovery [41][42] Other Important Information - The company repurchased $5 million in shares and reduced debt by $15 million in Q1 2025 [16][22] - Capital spending is projected to be $7 million in Q2, with full-year capital spending expected to be 5% of revenues [24] Q&A Session Summary Question: Overall end market customer exposure and outlook - Management indicated no change in demand and higher expectations for Q2, particularly in essential devices like pacemakers and hearing aids [31][32] Question: Updates on the $75 million capacitor order - A substantial prepayment was received, indicating strong customer commitment with no expected delivery impacts [37] Question: Gross margin trajectory for Q2 and Q4 - Management expects significant sequential improvement in gross margins, projecting an exit range of 45% to 47% by year-end [40][44] Question: Potential for gaining market share from competitors - Management noted increased inquiries from customers considering switching suppliers due to tariff impacts, particularly in the industrial space [46][47] Question: Commentary on bookings and receivables - Bookings were strong, with inventory levels at distributors decreasing, indicating rising demand [52][56]