Stephen Merrick
大家早上好，感谢各位参加本次电话会议。我是Stephen Merrick，我将与我们的首席财务官Tim Patterson以及公司董事兼投资者关系总监Stan Brown一起汇报我们的业绩。总体而言，我们第二季度的业绩通常是全年中最弱的，我们预计今年也会如此。尽管如此，我们在第二季度和今年上半年的表现仍低于我们的预期。虽然在此期间我们的铝箔气球和乳胶气球产品线表现相对强劲，但真空密封和商业薄膜产品线的收入远低于去年同期，并对我们的业绩产生了负面影响。我们已经采取了一系列措施来提高今年下半年的盈利能力，并相信我们的表现将在该期间大幅改善。我们预计真空密封产品线的收入将在下半年有所改善，因为去年底主要客户进行的大规模促销活动的影响正在逐渐消退。我们将在9月安装两台新的铝箔气球转换机，这将提高我们在第四季度的铝箔气球产量。此外，我们已经采取并正在采取重大行动来降低运营费用，并努力实现至少140万美元的年度运营费用总削减。总结来说，今年第二季度，净销售额为12,812,000美元，较2016年第二季度的14,151,000美元下降了9.5%。截至2017年6月30日的六个月期间，净销售额为28,171,000美元，较2016年同期的29,355,000美元下降了4%。第二季度，我们录得亏损526,000美元，即每股基本亏损0.15美元，稀释后每股亏损0.14美元，而2016年第二季度亏损为83,000美元，即每股亏损0.02美元。上半年，我们录得净亏损468,000美元，即每股亏损0.13美元，而2016年同期净亏损为76,000美元，即每股亏损0.02美元。我们销售业绩下滑的一个重要因素是真空密封产品线的销售。第二季度，该产品线的销售额为1,563,000美元，而2016年第二季度销售额为2,444,000美元，下降了36%。上半年，销售额为3,271,000美元，而2016年同期为4,768,000美元。我们认为，今年第一和第二季度真空密封产品线的销售受到了主要客户因2016年第四季度实施的促销活动而清仓处理这些产品过剩库存的影响，当时他们购买了大量的机器。我们认为这些过剩库存现已售罄，并预计今年第三和第四季度机器订单将会增加。层压薄膜产品的销售也有所下降。上半年，该产品线的销售额为1,536,000美元，而去年同期为2,370,000美元。该产品线的主要客户仍然是长期客户，但今年迄今为止他从我们这里的采购量有所减少。这两个产品线的下滑是我们在第二季度录得亏损的主要因素。第二季度的销售毛利为3,117,000美元，而去年第二季度为3,837,000美元。毛利的下降很大程度上是由于真空密封产品线和层压薄膜产品销售减少所致。我们核心产品线和其他收入来源的收入在第二季度和六个月期间保持相对强劲。第二季度铝箔气球销售额增长近7%，达到6,788,000美元，而去年第二季度为6,350,000美元。上半年，铝箔气球销售额增长9.2%，达到15,680,000美元，而去年同期为14,362,000美元。在此期间，我们看到对美国、欧洲和墨西哥多个客户的销售有所增长。乳胶气球销售保持良好，上半年为4,349,000美元，而去年同期为4,308,000美元。我们的其他收入来源包括糖果花产品线、容器和组织产品销售，以及通过我们在墨西哥的子公司销售的派对用品。上半年，这些产品线的收入为3,335,000美元，而去年同期为3,547,000美元。正如我们所说，第二季度和上半年的业绩未达到我们的预期。我们已经采取了几项措施来改善今年下半年及以后的业绩。首先，我们预计真空密封产品线的销售将在下半年增加，因为我们客户大规模促销活动的影响正在逐渐消退。我们已经看到这些销售有所增长。其次，我们将在9月安装两台新的铝箔气球转换机，这将提高我们约25%的生产能力，我们相信这将支持下半年额外的铝箔气球收入。第三，我们已经采取了一系列行动来降低今年下半年及以后的运营费用。这些措施包括减少外部服务和人员，其中大部分已经实施，并将使年度运营成本降低约1,400,000美元。此外，我们还确定了在英国运营、健康保险和福利、采购效率和生产效率方面的额外成本削减或节省，我们相信这可能带来高达100万美元的额外节省。我们公司的管理层完全致力于以盈利水平运营公司，并采取一切必要行动来实现这一目标。同时，我们正在与主要贷款机构进行谈判和努力，以延长我们的贷款关系，或用其他来源替代部分或全部现有债务。尽管我们上一季度的表现不尽如人意，但我可以报告，我们在今年上半年通过运营产生了超过320万美元的现金流。截至2017年6月30日，我们的营运资本为6,239,000美元，现金及现金等价物为456,000美元。我们的报告到此结束。接线员，可以请您协助吗？
Stephen Merrick
Good morning everyone and thank you for participating in this call. My name is Stephen Merrick and I will be presenting our report with Tim Patterson, our Chief Financial Officer; and Stan Brown, our Director of our Company and Director of Investor Relations. In general, our results for our second quarter are the weakest of our year and we do expect that will be the case this year as well. Even with that history though, our performance in the second quarter and the first half of this year has been below our expectations. While performance in our foil and latex balloon product lines has been reasonably strong during this period, revenues in our vacuum sealing and commercial film lines have been well below the same periods of last year and have negatively affected our results. We have undertaken a number of initiatives to improve our profitability in the second half of this year and believe that our performance will improve substantially in that period. We do anticipate improvement in our revenues for our vacuum sealing line in the second half of the year as the effects of a major sales promotion by a principal customer late last year wears off. We are installing two new foil balloon converting machines in September which will enhance our production of foil balloons in the fourth quarter. Further, we have taken and are taking now significant actions to reduce our operating expenses and are working to achieve total annualized reductions in operating expense of at least $1.4 million. In summary, for the second quarter of this year, net sales were $12,812,000, down 9.5% from net sales of $14,151,000 for the second quarter of 2016. For the six-month period ended June 30, 2017, net sales were $28,171,000, down 4% from net sales of $29,355,000 for the same period of 2016. In the second quarter, we incurred a loss of $526,000 or $0.15 per share basic, $0.14 diluted compared to a loss of $83,000 or $0.02 per share for the second quarter of 2016. For the six months, we incurred a net loss of $468,000 or $0.13 per share, compared to a net loss of $76,000 or $0.02 per share for the same period of 2016. A significant factor in the decline in our sales performance has been sales of our vacuum sealing line. In the second quarter, sales in that line were $1,563,000 compared to second quarter 2016 sales of $2,444,000, a drop of 36%. For the six months, sales were $3,271,000 compared to $4,768,000 for the same period of 2016. We believe that sales of our vacuum sealing line were affected during both the first and second quarters this year by the sell-off of excess inventory of these products by a principal customer due to a sales promotion the customer implemented during the fourth quarter of 2016, for which they purchased a large quantity of machines. We believe that this excess inventory has now been sold and do anticipate increased orders for machines during the third and fourth quarters of this year. Sales of laminated film products are also off . For the six months, sales in this product line were $1,536,000 compared to $2,370,000 for the same period last year. Our principal customer for this line remains a long term customer, but the volume of his purchases from us this year so far has been reduced. The declines in these two lines of products were a principal factor in the loss we incurred in the second quarter. Our gross profit from sales in the second quarter was $3,117,000 compared to $3,837,000 in the second quarter last year. Much of that decline in gross profit came about as a result of the reduced sales in the vacuum sealing line and the laminated film products. Revenues from our core product lines and other sources of revenue remained reasonably strong both for the second quarter and for the six-month period. Foil balloon sales in the second quarter were up by almost 7% to $6,788,000 compared $6,350,000 in the second quarter last year. For the six-month period, foil balloon sales were up 9.2% to $15,680,000 from $14,362,000 for that period last year. We saw increases in sales to a number of customers in this period in the United States, Europe, and Mexico. Sales of latex balloons held up well and were $4,349,000 for the six months, compared to $4,308,000 for the same period last year. Our other resources of revenue include our candy blossom line, our sales of container and organizing products, and our sales of party goods in Mexico through our subsidiary there. For the six months, revenues in these lines were at $3,335,000, compared to $3,547,000 for the six months last year. As we have said, our results for the second quarter and six months are short of our expectations. We have undertaken several initiatives to improve performance in the second half of this year and beyond. First, we do anticipate the sales of vacuum sealing line will increase in the second half as the effects of our customer's major sales promotion wears off. We are already seeing some increases in those sales. Second, we are installing two new foil balloon converting machines in September, which will enhance our production capacity by about 25% and we believe will support additional foil balloon revenues in the second half. Third, we have undertaken a series of actions to reduce our operating expenses for the second half of the year and beyond. These include reductions in both outside services and personnel, much of which has already been implemented and which will reduce operating costs on an annualized basis in the range of about $1,400,000. Further, we have identified additional cost reductions or savings in our U.K. operations, health insurance and benefits, purchasing efficiencies and production efficiencies which we believe may generate as much as an additional $1 million in savings. Management of our company is fully committed to operating our company at a profitable level and to taking any and all actions which are necessary to accomplish that goal. At the same time, we are engaged in negotiations and efforts to extend our lending relationship with our principal lenders or to replace some or all of our existing debt with other sources. Despite our less than satisfactory performance this past quarter, I can report that we generated over $3.2 million in cash flow from operations over the first six months of this year. As of June 30, 2017, we had working capital of $6,239,000 and we had cash and cash equivalents of $456,000. That concludes our report. Operator, may we have your assistance please?
