Q1 2022 Toughbuilt Industries Inc Earnings Call
Speaker 1: Greetings. Welcome to the Tough Built first quarter 2022 earnings.
Greetings and welcome to the tough first quarter of 2022 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Speaker 1: At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.
Speaker 1: If anyone should require operator assistance during the conference, please press star zero on your telephone key.
Anyone should require operator assistance during the conference. Please press star zero audience on phone keypad.
Speaker 1: Please note this conference is being recorded. I will now turn the conference over to your host, CFO , Martin Galison. You may begin.
Please note this conference is being recorded.
Now I'll turn the conference over to your host CFO Martin Johnson you may begin.
Good morning, and thank you all for joining us today to discuss <unk> first quarter 2022 financial and operating results.
Speaker 2: Good morning and thank you all for joining us today to discuss Tuff Belt's first quarter 2022 financial and operating results.
Speaker 2: Again, my name is Martin Galstian, and I am the Chief Financial Officer of Tough Builds.
Again, my name is marching to opt in and I am the Chief Financial Officer I've talked about.
Speaker 2: Joining me on today's call is Michael Panolfian, President and Chief Executive Officer of Tough Builds.
Joining me on today's call is Michael <unk>.
President and Chief Executive Officer, Tom Hill.
Speaker 2: Michael will begin today's discussion by providing operational and financial highlights from the first quarter. I will then review our financial performance for the same period.
Michael will begin today's discussion by providing operational and financial highlights from the first quarter.
Then review our financial performance for the same period.
Speaker 2: Michael will conclude the discussion with our growth plans for 2022 and beyond.
Michael will conclude that discussion, what's our growth plans for 2022 and beyond.
Speaker 2: Before turning the call over to Michael, I would like to remind you that any overlooking statements made by management are covered under the U.S. Private Securities Dedication Reform Act of 1995 and are subject to the changes, risks, and uncertainty described in the press release and in our U.S. security filing.
Before turning the call over to Michael I would like to remind you that any overlooking statements made by management are covered under the U S. Private Securities Litigation Reform Act of 90 95.
And are subject to the changes risks.
Third entity described in the press release and in our U.
Security filings.
Speaker 2: In addition, during the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States that may be different from non-GAAP financial measures used by other companies.
In addition, during the course of the call. We may refer to non-GAAP financial measures are not prepared in accordance with accounting principles.
Generally accepted in the United States that may be different from non-GAAP financial measures used by other companies.
Speaker 2: Investors are encouraged to review Tuftel's current report on Form 8K, furnished with the SEC for Tuftel's reasons for not including those non-GAAP financial measures in its earning through release and presentation.
Investors are encouraged to review those current report on form 8-K.
Or the S&P or telco.
We're not including those non-GAAP .
That's all the measures in the earnings release and presentation.
Speaker 2: The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our U.N. Express release issued earlier today, unless otherwise noted therein. Universal
Installation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings press release issued earlier today, unless otherwise noted therein.
I will now turn the call to Michael.
Speaker 3: Thank you, Martin, and thank you all for joining us on today's call. The first quarter of 2022 was very strong for Tough Build, culminating in revenues of $17.2 million, an approximate 40% year-over-year increase compared to 2021. Revenue growth in the first quarter was driven by a combination of onboarding new retail customers, demand to expand in new categories within our existing customers, and the introduction of new products.
Thank you Martin and thank you all for joining us on today's call. The first quarter of 2022 was very strong for its I'll still culminating in revenues of $17 2 million, an approximate 40% year over year increase compared to 2021.
Revenue growth in the first quarter was driven by a combination of onboarding, new retail customers demand to expand in new categories within our existing customers and the introduction of new products.
Speaker 3: Tuftsville continues to be a leader known for innovation and for developing some of the most unique products for the construction and home improvement industry.
Commscope continues to be a leader known for innovation and for developing some of the most unique products for the construction and home improvement industry.
We believe that much of our success is due to our ability to attract the best talent. Our unique platform has proven to be a tremendous draw for professionals eager to join the organization known for its creativity and ability to quickly and efficiently bring ideas from concept to shelves in a matter of months.
Speaker 3: We believe that much of our success is due to our ability to attract the best talent. Our unique platform has proven to be a tremendous draw for professionals eager to join an organization known for its creativity and ability to quickly and efficiently bring ideas from concept to shelves in a matter of months.
Speaker 3: To help combat logistic-related costs in 2022, we have negotiated improved shipping rates as well as working with our large retail partners to implement direct import ordering where possible.
To help combat logistic related costs in 2022 we have negotiated improved shipping rates as well as working with our large retail partners to implement direct import orders where possible.
Speaker 3: Direct import ordering would result in our retail partners taking tough-built products directly from the port and shipping to their own warehouse.
Direct import ordering would result in our retail partners, taking taco codecs directly from the ports and shipping to their own warehouses.
Speaker 3: In the months to come, we anticipate that this will decrease our shipping costs by shifting several supply chain steps from Toughbill to our partners.
In the months to come we anticipate that this will decrease our shipping cost by shifting several supply chain steps from tough built to our partners.
Speaker 3: This is a win-win scenario in which our larger partners can leverage their existing logistics infrastructure to ship at cheaper rates while allowing us to focus on designing and manufacturing innovative products, thereby enabling more lines of products to be shipped.
This is a win win scenario in which our larger partners can leverage their existing logistics infrastructure to ship at cheaper rates, while allowing us to focus on designing and manufacturing innovative products, thereby enabling more lines of products to be shipped.
I will now turn the call back to Martin to cover our financial results in greater detail Martin.
Speaker 3: I will now turn the call back to Martin to cover our financial results in greater details. Martin.
Speaker 2: Thank you, Michael. Revenues for the three months ended March 31, 2022 were approximately $17.2 million, an increase of 40% compared to the same period in 2021. The increase in sales for both periods was mainly attributable to the continued demand for our portfolio of products and international expansion.
Thank you Michael revenues for the three months ended March 31, 2022, we're all familiar with 17 2 million an increase of 40% compared to the same period in 2020 one.
Sales for both periods was mainly attributable to the continued demand for our portfolio of products and international expansion.
Speaker 2: Cost of goods sold for the three months ended March 31, 2022 were approximately $14.2 million compared to $8.8 million for the same period in 2021. Cost of goods sold increased primarily due to industry-wide supply chain disruptions, which have led to historically high shipping costs and increases in the cost of materials.
Cost of goods sold for the three months and then March 31, 2022 were approximately $14 2 million compared to $8 8 million for the same period in 2020 one.
So increased primarily due to industry wide supply chain disruption.
I'll have led to a historically high shipping costs and increases in the cost of materials.
Speaker 2: Selling general and administrative expense for the three months ended March 31, 2022 were approximately 15.9 million compared to 7.9 million for the same period last year.
Selling general and administrative expense for the three months ended March 31 2022.
Approximately 15.9 million compared to $7 9 million for the same period last year.
Speaker 2: SG&A expenses increased primarily due to the hiring of additional employees and the increased use of independent contractors, which when combined now include 198 people.
SG&A expenses increased primarily due to the hiring of additional employees.
The increased use of independent contractors, which when combined now include 198 people.
Speaker 2: Research and development costs for the three months ended March 31, 2022, were approximately $2.5 million, compared to $1.4 million for the same period in 2021.
Research and development costs for the three months ended March 31, 2022 were approximately $2 5 million compared to one 4 million for the same period.
In 2020 one.
We expect.
Speaker 2: to maintain similar levels of R&D costs as the company continues to develop new tools for the construction industry.
To maintain similar levels of R&D cost as the company continues to develop you know too well.
Construction industry.
Speaker 2: In the first quarter of 2022, we had a net loss attributable to common stockholders of approximately 12.2 million or a loss of 14.04 per share.
In the first quarter of 2022, we had a net loss attributable to common stockholder Ah Ah.
Only $12 2 million or a loss of 14.04 per share.
Speaker 2: The net loss is mainly attributable to build-out of our design and engineering team inflated shipping costs.
And that loss is mainly attributable to a build out of our design and engineering team.
Ladies Chipping car.
Speaker 2: As of March 31st, 2022, the common, basic, and diluted wage average common shares outstanding total 861,997 shares.
As of March 31st 2020 O two common basic and diluted weighted average common shares outstanding totaled 861997 shares.
Speaker 2: I will now turn the call back to Michael for his final remarks. Michael.
I'll now turn the call back to Michael for his final remarks, Michael.
Thank you Martin before I open the call for questions I would like to reiterate the tremendous market opportunities that exist that tough pills and the infrastructure, we have in place to capitalize on those opportunities.
Speaker 3: Thank you, Martin. Before I open the call for questions, I would like to reiterate the tremendous market opportunities that exist at Toughbill and the infrastructure we have in place to capitalize on those opportunities.
Speaker 3: Right now, the top retailers around the world are selling Tough Build products, and we continue to expand to new retailers and strengthen our existing relationships.
Now the top retailers around the world are selling tosco products, and we continue to expand to new retailers and strengthen our existing relationships.
Speaker 3: through our growing amazon.com sales and repeat orders from our strong retail base.
Through our growing Amazon Dot com sales and repeat orders from our strong retail base.
Speaker 3: We are seeing increased demand for ToughBuild products across professional contractors and DIYers globally.
We're seeing increased demand for tufted products across professional contractors and DIY ours globally.
Speaker 3: As demand for our products increase, we continue to expand our capabilities and are currently in a position to launch 5 to 10 product lines every year.
As demand for our products increase we continue to expand our capabilities and are currently in a position to launch five to 10 product lines every year.
Speaker 3: To capture additional international e-commerce demand, we will be offering TuffBuild products on Amazon in Europe and Latin America.
To capture additional international E Commerce demand, we will be offering <unk> products on Amazon in Europe , and Latin America.
Speaker 3: As we look ahead, our future revenue opportunities can be broken into three buckets.
As we look ahead, our future revenue opportunities can be broken into three buckets.
Speaker 3: expanding existing relationship with retail partners.
Expanding existing relationship with retail partners.
Speaker 3: adding new retail partners, and introducing new product categories.
The new retail partners and introducing new product categories.
Speaker 3: These revenue opportunities are dependent on one another, but ultimately driven by end user recognition of our brand, quality, and innovation.
These revenue opportunities are dependent on one another but ultimately driven by end user recognition of our brand quality and innovations.
Speaker 3: For example, when we onboard a new retail partner, the first order typically includes a select portion of tough build SKUs. As underlying customer demand for these products grows, the retailer is likely to expand the number of products offered in their stores or made available online to their customers.
For example, when we onboard a new retail partner. The first order typically includes a select portion of cost built skus.
As underlying customer demand for these products grows the retailer is likely to expand the number of products offered in their stores or made available online to their customers.
Speaker 3: Furthermore, as we introduce new products that are differentiated from their current offerings, our existing retail partners are more likely to expand their offerings to increase those newest items.
Furthermore, as we introduce new products that are differentiated from their current offerings, our existing retail partners are more likely to expand their offerings to increase those newest items.
Speaker 3: The result of this process and positive customer experiences is increased revenue on recurring basis for the long term.
The results of this process I'm positive customer experiences is increased revenue on recurring basis for the long term.
Speaker 3: To us, this demonstrates the longevity of ToughBuild's brand and product.
To us this demonstrates the longevity of tough fields brand and products.
Speaker 3: Even our oldest product lines are still increasing in revenue year over year with peak revenue potentials ahead of us.
Even though our oldest product lines are still increasing in revenue year over year with peak revenue potential is ahead of us.
Speaker 3: We are building something great at Tuftsville, and I truly believe that we have the potential to disrupt many categories in the entire home improvement industry.
We are building something great tough built and I truly believe that we have the potential to disrupt many categories in the entire home improvement industry.
Speaker 3: I, along with the entire Tough Build organization, including our best-in-class design engineers that work on never-before-seen products for home improvement, have full confidence in our ability to operate and design unlike any other company in the world.
I, along with the entire field organization, including our best in Class design engineers that can work on never before seen products for home improvement I have full confidence in our.
Our ability to operate and designed unlike any other company in the world.
Speaker 3: With that, I would like to turn over to our operator to begin the question and answer session.
With that I would like to turn over tour operator to begin the question and answer session.
Speaker 1: Thank you. And at this time, we'll be conducting a question and answer.
Thank you and at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 1 to ask a question.
Information tone will indicate your line is in the question queue.
You May press star two if he would like to remove your question from the queue.
Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment, please.
For participants using speaker equipment, it may be necessary to pick up your handset before Christmas donkeys.
One moment, please while we poll for questions.
Okay.
Speaker 1: And again, as a final reminder, if you have any questions, you may press star one on your telephone key.
And again I was just kind of remind me. If you have any questions. You May press star one on your telephone keypad.
Speaker 1: And our first question comes from the line of Kevin D. with H.C. Wainwright. Please proceed with your question.
And our first question comes from the line of Kevin Dede with H C. Wainwright. Please proceed with your question.
Speaker 4: Thank you, sir. Hi, Michael. Hi, Martin. Thank you so much for taking my call. Hello, Kevin.
Thank you sure Hi, Michael Hi, Martin. Thank you so much for taking my call.
Hello, Kevin Hello, Kevin.
Speaker 4: So, Martin, I apologize. I hadn't expected to hear some of the numbers you offer. Would you mind giving me the cost of goods, again, for the quarter and operating expenses for the quarter?
So Martin I, I apologize I hadn't expected to hear.
Some of the numbers you offer would you mind, giving me the cost of goods again for the quarter and operating expenses for the quarter.
Speaker 2: Sure. Cost of goods was $14.2 million. Gross profit was $3 million.
Sure.
Cost of goods was $14 2 million.
Gross profit was $3 million.
Okay, and what was your Opex.
Speaker 5: OPEX was 12.1 million net loss. Okay.
Opex was 12.1 million net loss.
Oh, okay.
Okay.
When do you think you'll have your Q files.
Speaker 4: It was filed about 15 to 20 minutes ago. I believe we get. Oh, yeah, I just checked. I just I'll take a look again later. I'm sorry. Uh, I just checked that guard and see it up
It was filed about 15 to 20 minutes ago I believe Oh.
Oh, Yeah, I just checked off.
I'll take a look again later I'm sorry.
I just checked and go ahead and see it up.
Speaker 4: Um, okay, no problem. I'll, I'll figure that out. Not a big deal. Um, Michael, could you just a little elaborate a little bit on the, the, uh,
Okay, No problem I'll I'll figure that out not a big deal.
Michael could you talk a little elaborate a little bit on the.
The.
The direct.
Speaker 4: import ordering plan. When do you expect to implement that and what sort of savings do you think you might see?
Import ordering.
<unk>.
When do you expect to implement that and what sort of savings do you think you might see.
Sure.
Speaker 3: Well, we are implementing it right now. It just hasn't hit our books yet. So, a lot of our purchases now are being, we are asking our clients to basically take it directly from the factories. Those who can will have more savings on their part and instead of ours, which is more expensive than their shipping costs, and that allows us to reduce inventory and allows us to save money.
Well, we are implementing it right now it just hasn't hit our books, yet so a lot of our purchases are.
Now are being we are asking our clients to basically taken directly from the factories.
Those who can we will have more savings on their part.
And instead of ours, which is more expensive than their shipping costs and that allows us to reduce inventory and allows us to save money.
Speaker 3: How much effect it will have, I can't give you an exact number right now, but there is a lot of things that we're doing to reduce costs this year.
How much effect they will have I can't give you a exact number right now, but there is a lot of things that we're doing to reduce costs. This year.
Speaker 4: Okay, good. Could you highlight some of the other initiatives? I know you mentioned them at the year-end call, but just please help refresh my memory.
Okay could you.
You highlight some of the other initiatives.
I mentioned them at the year end call, but I just please help me.
My memory.
Speaker 3: No, I'll be happy to. This is important because I don't want our shareholders to think that we don't think about these things or we're not serious about these things. We absolutely are. We need to get to profitability and we will. We are making a global run and also we are launching a lot of lines. That's why our costs are high right now, but it's not forever. Now, some of the initiatives is we are going to reduce our shipping costs.
I'll be happy to this is important because I don't want our shareholders to think that we don't think about these things are we're not serious about these things. We absolutely are we need to get to profitability and we will we are making good global run and also we are launching a lot of lines. That's why our costs are high right now.
But it's not forever now some of the initiatives is we are going to reduce our shipping costs, mostly because we are negotiating a contract that will drastically reduce our costs are.
Speaker 3: mostly because we are negotiating a contract that will drastically reduce our costs from what it was.
From what it was last year.
Speaker 3: And I mentioned that before, now it's coming to fruition. We are bringing in less inventory.
And I mentioned that before and now it's coming to fruition.
We are bringing in less inventory.
Speaker 3: As last year, we loaded up because of safety and we wanted to make sure we could service the customers. So we're going to bring in less inventory so there will be less spending on that. We are also looking for different avenues of inventory financing actively. We just haven't found the right one that is good for the company yet.
As last year, we loaded up because of safety and we wanted to make sure we could service the customers so be golden bringing less inventory. So there would be less spending on that we are also looking for a different avenues ob inventory financing actively we just haven't found the right. One that is good for the company yet.
Speaker 3: Also, we brought in all the marketing and social media in-house, and that's going to save us quite a bit of money as well. And we are not hiring.
Also we brought in all the marketing and social media are in house, and that's going to save us quite a bit of.
On the as well.
And we're not hiring as many people as before.
Okay.
Speaker 4: Do you still expect to be able to introduce products as you had hoped, or do you think it makes more sense to just—okay.
Do you still expect to.
Be able to introduce products as you had hoped or do you think.
Instead of just okay.
Speaker 3: Yes, somewhere between 5 to 10 lines. The fastest way to get profitable is to participate in categories that we're not currently in. That opens a lot of doors within our.
Yes somewhere between five to 10 lines are the fastest way to get profitable is to participate in the categories that we're not currently in that opens a lot of doors are within our current existing customer base as they love our products and they were taking more and more.
Speaker 3: current existing customer base as they love our products and they're taking more and more. So to generate more revenue, to cover more of our costs, the fastest way is that. Secondly, we're adding new customers and each new customer we add is taking a wider range of product lines.
So to generate more revenue to cover more of our costs.
The fastest way as that.
Secondly, we are adding new customers and each new customer we add he's taking a wider range of product lines.
Speaker 3: And that's why we do continuous development.
And that's why we do continuous development.
Just to make sure that everyone understands again. This is important we are building two platforms. Once these platforms are complete.
Speaker 3: Just to make sure that everyone understands, again, this is important, we are building two platforms. Once these platforms are complete...
Speaker 3: The flywheel is going to be very strong and growth is going to keep being dynamic while we are profitable. The two platforms are our sales platform globally and our internal design and engineering team so that we can launch over 20 lines of products per year. So in general, imagine somewhere roughly a $5 million revenue per every new product line that's introduced.
Flywheel, he's going to be very strong and growth is going to keep being dynamic wildly unprofitable. The two platforms our sales platform globally.
And our internal.
Design and engineering team. So that we can launch over 20 lines of products per year. So in general imagine somewhere roughly a a $5 million revenue for every new product line that's introduced.
Speaker 3: So once we are launching 20 of them every year, we'll have $100 million growth, so on and so forth. It's painful to build this platform, I understand it, but we must do that.
So once we are launching 20 of them every year without 100 million dollar growth so on and so forth. It's painful to build this platform I understand it but we must do that.
Speaker 4: Both, Michael, both Walmart and Target seem to think that some of the logistics issues
Both Michael both Walmart and target seem to think that some of the logistics issues.
Speaker 4: are in sourcing, I guess, are working some of the, you know, the kinks out. Now, I completely understand that your sourcing is a hundred percent different than theirs, but I was wondering if you might be able to just sort of talk to the trends that you've seen over the past.
Our in sourcing I guess are working some of the you know.
The Kinks out now I completely understand that you're sourcing is 100% different than theirs, but I was wondering if you might be able to just sort of talk to the trends that you've seen.
Over the past say six months.
Speaker 3: Sure. Well, we have actually reduced some of our costs before we were paying somewhere around $21,000 a container when this whole thing started, this pandemic and the demand, and then it went down. We pushed it down as far as around 14,000, and then now we're pushing it down another considerable amount, which I hope to announce sometime within the next month or so.
Sure.
Well, we have actually reduced some of our cost before we were paying somewhere around $21000 a container. When this whole thing started this pandemic and that demand and then he went down we pushed it down as far as around 14000, and then now we are pushing it down another considerable amount.
Which I hope to announce sometime within the next month or so.
Speaker 3: I see it also going back towards normal, but it's far from being normal. Before, we used to pay somewhere between $3,000 and $5,000 a container.
I I see it also going back towards normal, but it's far from being normal before we used to pay somewhere between 3000 or $5000 of container.
Okay.
Our.
Speaker 4: Your manufacturers able to find the material that they need any easier in building the products for you?
Your manufacturers able to find the material that they need any easier.
And in building new products for you.
Speaker 3: Yes, in general, but there are some of them that have issues in rising costs in materials, even metal costs go up and down in different regions of the world. The hardest materials to get our hands on with viable costs.
Yes in general, but there is some of them that have issues in a rising cost in materials, even metal costs go up and down in different regions of the world the hardest materials to get our hands on with viable cost or the electronics, we have a lot of.
Speaker 3: are the electronics. We have a lot of electronic products that are developed. We are not launching them moment for right now because the costs are extremely high for the microchips and other electronic parts, which are also very difficult to get, even with the high cost.
Sonic products that are developed we are not launching them moment for right now.
Because the costs are extremely high for the microchips and other electronic parts, which are also very difficult to get even with the high cost.
Speaker 3: So, for those products, we kind of are holding on until things normalize, and it is normalizing, it's just not in my hands how quickly it can normalize.
For those products, we kind of are holding on until things normalize and it is normalizing you're just not my hands how quickly you can normalize.
Understood.
Speaker 4: I apologize, I haven't seen the queue yet, but you mentioned electronic products. I know they contributed in the fourth quarter. Was March a similar sales level or has, you know, pulling back a little bit curtailed sales of electronics?
I apologize I haven't seen the Q, yet, but you mentioned electronic products I know they contributed in the fourth quarter was March similar sales level.
Or.
Has you know pulling back a little bit.
Curtailed sales of electronics.
Speaker 3: It went down a little bit, but you know that's just one quarter. We look at the success of a product two ways, what it does over a year and what it does, how much life it has over the years.
It went down a little bit, but you know that's just one quarter, we look at the success of our product.
Two ways, what it does over a year.
And what he does how much life it has over the years.
Speaker 3: So, most of our products are still generating new revenue. Even our oldest products are generating more and more revenue. But some of the electronics right now are lower, but this is just for last quarter.
So most of our products are still generating new revenue.
Even our oldest products are generating more and more revenue, but some of the electronics are right now are lower.
But.
This is just for last quarter.
Okay.
Yes.
Speaker 4: Last question for me, if I may, please, sir, could you talk a little bit about the distribution side? Obviously, it's, you know, penetrating deeper into existing customers and bringing new products on board. But give us a little insight on how you're building relationships with
Last question for me if I may please sir could you just talk a little bit about the distribution side obviously.
Penetrating deeper into existing customers.
And bringing new products on board, but give us a little insight on how are you.
How you are building.
Our relationships with new customers.
Speaker 3: Sure, that's a great question. New customers, because of all the hard work, investment, and exposure we've given, are becoming faster to add on. We have over 15,000 doors now, and it's growing quite rapidly. Our goal is to do around 70,000 doors globally.
Sure that's it.
Great question, new customers because of all the hard work investment and the exposure we've given are becoming.
Faster to add on we have over 15000 doors now and it's growing quite rapidly. Our goal is to do around 70000 doors globally.
So the way we do that is as well our portfolio is wider they take us in easier rather than having one or two lines of items and then convincing them to take us. So we are doing that mostly throughout Latin America, all over Europe , which is 40 countries plus.
We are just starting our efforts in the middle East and there as there is a lot of distributors that are calling us to partner with US we are not making any investments in the middle East we're working with a distributors that already have all the channels on warehousing. So there shouldn't be any cost we are also selling into.
Speaker 3: And as there is a lot of distributors that are calling us to partner with us, we are not making any investments in Middle East. We're working with distributors that already have all the channels and warehousing, so there shouldn't be any cost. We're also selling into the East.
To the east.
Korea, starting to sell into Japan, and other surrounding countries as well and.
And possibly thinking of opening markets in China.
Speaker 3: to take advantage of all the market there as we already have legs there so we are also trying to capitalize on that.
To take advantage of all the market there as we already have legs. There. So we're also trying to capitalize on that.
Thank you very much Michael I appreciate you taking the questions.
Thank you Kevin.
Okay.
Speaker 1: And we have reached the end of the question-and-answer session. I'll now turn the call back over to CEO Michael Panasian for a closing remark.
We have reached the end of the question and answer session I will now turn the call back over to CEO , Michael Yang for closing remarks.
Speaker 3: Thank you, operator. In closing, I want to thank our investors and our employees for growing Tuff Built into a quality first brand that customers can rely on and remaining dedicated to our mission even through a global pandemic. I'm excited for what the rest of 2022 has in store and confident in our ability to execute on our growth and upcoming cost reduction plans.
Thank you operator in closing I want to thank our investors and our employees for growing costs built into a quality first brand.
That customers can rely on and remaining dedicated to our mission even through a global pandemic I'm excited for what the rest of 2022 has in store.
And confident in our ability to execute on our growth and upcoming cost reduction plans.
Thank you.
Speaker 1: And this concludes today's conference and you may disconnect your line at this time.
And this concludes today's conference and you may disconnect your line or at this time. Thank you for your participation.
Speaker 6: Thank you for your participation. Thank you for your participation. Thank you for your participation.
Okay.
Yeah.
Yeah.
Thanks.
Mhm.
Yeah.
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