Good morning, good afternoon and good evening, ladies and gentlemen. Welcome to the Samsonite International 2021 annual results conference call. Please note that this event is being recorded. I would now like to hand the conference over to Mr. William Yue, Senior Director of Investor Relations. Thank you. Please go ahead, sir. Thank you, ladies and gentlemen, for taking the time to join the call tonight. We're pleased to have our CEO, Kyle Gendreau, as well as our CFO, Reza Taleghani, with us tonight. To start with, Mr. Gendreau will have a few opening remarks. Thank you very much. Thanks, William. Thanks everyone for joining us. We're excited to report some really good numbers. We ended 2021 on a high note, and we really do have tremendous momentum as we step into 2022. I'm on page four. Our strong fourth quarter results, which I'll cover in a second, is real evidence that our efforts to navigate the business through the challenge of the pandemic are clearly working. In line with much of what we were saying at the start of last year, have played out the way we thought they would. We step into 2022 with really good momentum. We're really well positioned to grow market share, and we will fundamentally have a stronger operating margin as the business continues to recover in the years ahead. We do expect, and we are seeing continued travel recovery across all of our regions, really as the effects of COVID-19 start to wane down, including travel. We've seen countries moderating its restrictions really off the back of effectiveness of vaccines. We'll cover by region in just a bit on what we're seeing. We're ending the year in a lean inventory position, really driven by strong demand for our products, particularly in North America and Europe in Latin America. We are investing more in working capital. As you can imagine, and we're all fully aware of, stock replenishment has some challenges with shipping delays. We are well ordered, and goods are coming in, and we're seeing that play out as we step into Q1. We dramatically reduced our net debt position $258 million at the end of 2021 compared to 2020. We're generating meaningful cash. You saw in Q3 we generated strong cash flow. In Q4 we generated tremendous cash flow. I'll cover it in a second. For the second half of the year, this is a business that generated $290 million of cash. We're quite excited with what we've done there to get the business back on the right footing on the cash flow perspective. We have this amazing global platform, really a diverse set of product categories, complementary and leading brands, which we tailor products to each region preferences, and we really are well positioned to benefit as travel continues to recover. That's really to set some tone for you. We're quite excited. On page five, I thought I'd start with Q4 to give a real good indication of where we are trending. Our Q4 sales improved to down 28% to 2019. That's adjusting Speck out, so you have kind of the underlying improvement versus 2019. That's up from down 37% in Q3, so you can see a really you know meaningful improvement from Q3. Our gross margin has continued to improve. Very strong Q4 gross margin, 58.2%. That's from 55.5% in Q3, 52.4% in Q2, and Q1 was 48.7%, and in all of last year was 46%. We've moved effectively the gross margin back to historic levels despite the headwinds that we'll cover in our presentation as well. I'm quite happy with where we are there. We had tremendous EBITDA in Q4, $127 million of adjusted EBITDA. That's up from $72 million in Q3. Our adjusted EBITDA margins at 19.1% in Q4. If you remember at the end of Q1 and at the half year results, we were talking about moving the margin profile of the business up into kind of mid and upper teens, and we're seeing that clearly in Q4. I'll cover the half in a second. Positive adjusted net income. This is important. This is adjusted net income, $112 million in Q4. For the full year, we have positive adjusted net income, okay? For a business that's been navigating real travel disruption, I think that's a huge accomplishment. Generated cash of $176 million in Q4. Some of that is working capital and inventory and strong demand for our products. That's up from $116 million in Q3. For the half, this business generated $292 million of cash flow at the end of 2021. We have significant liquidity, as you can imagine. We have $1.5 billion in liquidity. That's up from $1.3 billion of liquidity at the end of Q3. We are in a liquidity generating mode as we exit 2021. On page six, just for a full year perspective, just to give you a sense. 2021, we had sales of $2 billion, just a little over $2 billion. That's an increase of 35% from the prior year, and it's down 43.5% versus 2019. Really driven by the increased vaccination rates that we talked about and easing restrictions, domestic travel moving, and starting to see, and I'll show you in a slide in a second, international travel starting to open up with plenty more of recovery to go. We've seen a marked step up in international travel as vaccination levels continue to rise. We saw an accelerated recovery in the second half, and our second half sales increased by $422 million compared to the first half of the year. You can see a meaningful pickup in the second half sales, $1.2 billion in sales. Gross profit margin increased to 54.5%, just shy of for the full year, just shy of historic levels of 55%, but that's up dramatically from 2020 at 46% as we were really navigating through the height of the pandemic in 2020. Our adjusted EBITDA and adjusted EBITDA margin for the full year, $182 million or 9%. When we started the year, I had set a target for our teams to get to 10% EBITDA margin. I think with everything that came at us, I think this was really a remarkable achievement by the team, which I'm highly appreciative of and really in line with what we were expecting to achieve for the year. Our adjusted EBITDA improved by a little over $400 million compared to 2020. It really underscores the positive impacts of the actions and decisions that all of our team members made over the last two years to get this business positioned. I think this is an important measure because Q4 was a really strong EBITDA margin, but the second half was up to an EBITDA margin of 16.3%. Second half results of $200 million compared to a loss of $70 million in the first half of the year. Okay, so you can really see the dramatic benefits of vaccination rates and the actions that we've taken to move the profit profile into the right place. I think this, it isn't the biggest number, but it's an important number. Positive adjusted net income for the full year 2021. For a business down 43% for the full year, we delivered positive net income, again, off the actions. As I said, cash generation was very strong, very strong in the second half of the year. The full year cash generation was $200 million, an improvement of $560 million from last year. Just for scale, all of 2019, which would be, I would say, our last kind of normal year, that's higher than what we generated in cash flow in 2019. We're really in a wonderful position from a cash generation perspective. Then I'll cover a few slides, but we're really ready for the recovery. We've continued to develop and launch new products. We're continuing to evolve our products. We've continued to prioritize sustainability. We have a tremendous amount of products launching with sustainable attributes and really driving our responsible journey, which we've talked about in past meetings, and we're really excited about that. I'll cover that before I finish as well. Revenue, I'm on slide seven. Revenue and adjusted EBITDA continued the trend. I think this chart captures kind of the start of the pandemic to where we're exiting the year. You can see obviously in 2020, which is kind of the middle of the page, how fast the sales dropped and the negative impacts, but then how quickly we started to adjust our EBITDA dollars to a positive point by the time we get to the second quarter of this year. You can see the rapid improvement that we're seeing in Q3 and Q4. Just for scale, and it's not on the page perfectly, but just for scale, Q4 2019, $961 million of sales, $145 million EBITDA, 15.1%. $300 million less sales, still plenty of recovery to go. We're generating really close to the same EBITDA, $127 million, and an EBITDA margin of 19%. This is really off the back of the work we've done to fundamentally position the profit profile of this business in a better place and allow us to navigate through pandemic and get to where we are today. As you can tell, we're excited with what we've achieved, and how we're stepping into 2022, in a really strong spot. On slide eight, I thought to give you some color because regions are at different places. What we're clearly seeing now are all regions are trending in a positive way. Some are a little ahead of others. If you look at North America, you can see the rapid improvement in our sales from Q1 to Q4. Just to give you some sense, in Q1 of this year, we look to be trending somewhere in the kind of mid- to upper-teens down. A continued improvement. The U.S. and North America particularly is experiencing probably the biggest impact of shipping challenges of getting goods in. I would tell you we're missing some sales. These numbers would be even better if we were in full stock of inventory as we stepped into the year. Asia, which as we've talked about is the long pole, is taking a little longer for Asia to recover. I'm quite encouraged with what we saw in Q3 and in Q4. Just to give you a sense for Q1, looks like it's trending down mid-30s. A continuing improvement from Q4 to Q1. I expect Asia will continue a trend of recovery as we move through the year. But really encouraged with what we've seen in the last two quarters of 2021. Europe very quickly started to recover in the middle of the year this year. You can see from a low of down 71% in Q1 to down 28% in Q4. Q1 looks to be down mid-20s, 25%, 26% down Q1. So this continues to be trending in the right direction. Then we've had a really rapid recovery in Latin America. Latin America, which was down 50s in the first half of the year, are almost to breakeven levels as we exit the year. Q4 was high at up 7% to 2019, but there was some unrest in Chile in Q4 of 2019. The number's a little bit inflated. As we step into Q1, close to breakeven growth rate versus 2019 for Latin America. Really strong and really amazing profit profile change for Latin America as well. As you can see, the trends continue. In my view, the trends will continue as we move forward, which is really the next slide to give you a sense for where we are in recovery. You know, considering the effectiveness of vaccines and the high vaccination rates, you can see a chart off to the side, which talks about where the world is on vaccination levels. The world really starting to moderate on its restrictions and ability to move and travel. We will continue to see an increased demand for our products and a demand for travel. We're really seeing the benefits clearly in countries, in regions where, you know, we've gotten to high vaccination levels, things are starting to move. I have a slide before I end on the crisis in Ukraine, because this has been obviously a really emotional and challenging situation. We have business in both Ukraine and Russia, as you know. It's added some uncertainty to our 2022 outlook. Just to give you a sense for where we are from a size, our Russian and Ukraine businesses collectively are about 1.5%-2% of our sales. You know, really over the last three years. We do think that there'll be some additional headwinds. As of now, we're not seeing those headwinds in the rest of our European business. We'll continue to watch this closely, and I'll talk about what we're doing in Russia at the end of my section as well. We are really hopeful that the headwinds that we're seeing here, a little bit of this uncertainty created by Russia and Ukraine and the ongoing kind of improvement in COVID will not really materially disrupt the recovery that we're continuing to see. On page 10, I guess you've seen this slide from us before, just looking at domestic travel and international travel, because our numbers are really trending very closely to the recovery in travel. You can see if I drew a line kind of in the February, March time frame, the rapid improvement we saw in domestic travel, which is the red line at the top. Really, as vaccination levels really got to levels and the world started to get vaccinated, this has recovered to really amazing levels in some markets above 2019 levels. There's ups and downs. A lot of this is being driven by some of the variants. You can see Delta and Omicron had a little bit of a dip. When Delta came, a little bit of a dip. At the start of this year with Omicron, we've seen that start to correct itself as we get to March. Markets like China, where we're seeing kind of more intense lockdowns and restrictions, those are causing some blips in the domestic travel. All in all, domestic travel has kind of reached the level, you know, that's continuing to improve, but getting very close to kind of down 20% to normal. The big shift from maybe the last time we talked, we started to see this in Q3, but international travel really starting to open up. Just for scale, Reza and I have been traveling around to our markets. We've been to Asia a few times, Europe a few times. We were in Chile last week with all of our Latin America team. You're seeing international traffic start to move, but still plenty of recovery to go. As vaccinations continue to improve and really restrictions start to come off, you'll continue to see international travel. This will fuel our recoveries as we get into Q2, Q3, and Q4 as that continues to open up. We're watching this closely, and we're excited with the trends we're seeing. If I go to page 11, this is just kind of a data source to really think about, you know, where do we think the world is from a recovery perspective. I might give you my outlook for 2022 on this page because our outlooks generally wind up with this. This is overall global demand for travel, and there is clearly a trend moving up. There's scenarios, obviously, as you'd expect. The reality is the takeaway is this baseline recovery, if I use the middle, I think will be slightly better than that, would have us at around 85% of 2019 levels, as we get to the end of the year. Our outlook is about the same. I think as we exit into 2022, we'll be getting very close to historic levels. Our full year expectation for 2022 is to be down around 15%-20% in sales from normal. To give you a sense for where we are, where we're trending, this would show that we have some recovery in the back half, but we're not, you know, so bullish that it gets all the way back. I do think, as I said before, as we step into 2023, I think we're right on the doorstep of historic levels, of both domestic travel and our own business. I think starts to get close to historic levels from a sales perspective. On page 12, just a moment on gross margin. Really, a few things on the page. One, you can see the journey that we had in 2021. And again, we exited 2020 at 46%. We're exiting 2021 at historic levels in many ways against some meaningful headwinds. As you know, there are headwinds across the board, inflation, inflationary pressures that we've seen. We have new inflationary pressures. We've seen real increases in freight and duty costs and all the dramatic pieces of that. We've had a GSP program in the U.S. that's not been renewed yet. We think that will renew in 2022. We think there'll be retroactive treatment, so that'll be quite helpful for us. Against all of these pressures, we've been managing the margin profile back to historic levels with lower promotion and discounts, as you'd expect with pressure on demand, but also really moving on price where we've needed to cover the increases in product costs to get margins back to historic levels. I would say we're working closely with our suppliers. This is, you know, off the back of really strong supplier relationships that matter as we're navigating through this. I myself and our team are really excited that we've navigated margins back to where we are. We'll have plenty of work to do to keep them here in 2022. The start of 2022, we're clearly right in this zone. We're trending right in line with where we are exiting 2021 at around 55%. I think we're well in control, but this will be another year of real challenge on sourcing and supply teams to manage through. Dramatic increase in margin. We are seeing delays in shipping, and it's impacting the timing of product arrivals. We're ordered out quite dramatically for the business. I would say on average, we're ordered out almost nine to 12 months across each of our regions, which will help with us managing margin for one thing. It's really a function of the ability to flow through products with the shipping delays. We're seeing some factory challenges in China today, right now because of Omicron. You can see and you've all seen in the news, you know, some closures and lockdowns within China. That has some impact to us, but those, we don't think will really impact our forward kind of moving progression on sourcing. Might be some short-term impacts, just like we're seeing on the shipping constraints, but, all well managed by our teams and moving in the right direction. We'll continue to take action. We are laser-focused on managing gross margin, and that's the historic levels. It matters for us. We'll be watching increased raw materials. Oil prices are up. That'll have a lag effect on material costs. There're higher labor costs. All of that we're factoring in and working with our suppliers and our teams to make sure we manage margin at the right place. Moving to the next page, just, it's another look at EBITDA but also cash flow. I really think the key takeaway here is the actions that we've taken to deliver on cash flow and cash generation and move EBITDA margin clearly show up in this page. As you know, in 2020, we took really aggressive actions to adjust the cost structure of the business. We have over $200 million in annual fixed cost savings that we're carrying in. We had temporary savings in 2021, which have helped us. We're seeing some of those carry into 2022, but they'll start to fall off, but we'll not lose the $200+ million of fixed savings. That's allowed us to achieve this really strong EBITDA margin at the end of Q4. Sales still down close to 30% in Q4. We're generating an EBITDA margin at historic levels and $127 million EBITDA. That will carry into 2022 for sure. Meaningful actions on cash flow. As you know, in 2021, I mean, in 2020 and 2021, we grabbed all the reins, and that really showed up in the cash generation of the business. In Q4, $175 million, and I said earlier, for the full year, we generated more cash than we did in 2019. We're in this really strong liquidity position, $1.5 billion, up a couple hundred million dollars from even where we were in Q3. We're well in control of our balance sheet and our net debt position. Reza will cover some of that on the balance sheet section as well. From a brand perspective, we're seeing recovery across all our brands. Some are moving at slightly different paces than others. You can see if you look at versus 2019 or versus last year where we are. Brand Samsonite's up 36%, down around 44% to 2019, in line with kind of the overall trajectory of the business. Tumi was up 56% to 2020 and only down 34%. If I look at Tumi, you've seen very strong recovery in North America, which is up almost 91% to last year, and that trend continues tremendously strong, being held back a bit by inventory. This is a U.S. North America, with shipping delays clearly holding this back just a bit, but really strong momentum in Tumi. Even American Tourister is trending right in line, up 38% to last year, in line roughly with the overall business. Other has some noise, but Other includes us exiting Speck, which is why you see a number that's flat to last year and down 50%. That's largely to do with the Speck transition. Brands within that, other brands within that continuing to perform well, like Gregory, continuing to perform very well for us. From a product perspective, just a few touch points here. We've continued to innovate. We've continued to develop exciting products. We're starting to really see some of these products launching as we get to the end of the year. I would tell you, we are so ready to capture demand as travel continues to recover. I just grabbed a few pieces of product, you know, there's quite an assortment of what we're offering. This is against a very active SKU reduction process we've taken in the business over the last 18 months. We've dramatically reduced SKU counts, but we're still launching in with really amazing products that incorporate recycled materials. I chose Ecodiver, which is really a fallout of Paradiver, which has been this tremendously successful product assortment, as you can see to the right of the page. This is a product that's now made out of 100% recycled interior and exterior fabric with recycled PET or water bottles, basically. This is our Recyclex material technology. The full material component of that bag is recycled. It's a waterproof product. It's really an amazing product and just a real indication of what we're stepping out and launching with, on, I might say the non-travel, though it has some travel components. There's a Minter collection, which is a really beautiful collection, which incorporates recycled material on the inside. All the interior fabrics, it's got tremendous suspension wheels. Again, a very commercial product launching as we get into the back half of this past year. You can see in the U.S. we have Elevation Plus. We're quite excited about this amazing product launching in the U.S. market. Again, interior lining 100% recycled, and really kind of one of the best, you know, polypropylene collections we've launched in the U.S. really excited to see this playing out with interesting features. Even brands like eBags, I threw eBags here. The CTS collection that we're launching with eBags, incorporating recycled materials, both exterior and interior for many of the products. This is bags that have convertible features, which our eBags customers really like. it's really an extension of the ongoing story of getting eBags allowed to utilize the design teams from the Samsonite team. really exciting. Reza is even carrying one of these bags now and quite likes the convertible backpack. Absolutely. Really a terrific collection. Again, just to give you a sense of what we're launching. A huge launch for Tumi. Tumi relaunched its really popular, it's over a decade of real innovation here, its Alpha Bravo collection at the start of 2022. This has been a home run right out of the gate with a campaign, Life in Forward Motion, really amazing celebrity endorsements from Lando Norris to Gracie Abrams, a songwriter, you know, really powering kind of the launch of this product. Really, really exciting. If you haven't seen the product yet, check it out. What's really key for this is, one, continues to deliver on kind of the innovation. It's got modularity pieces to it, so you can add features to this bag. It's sustainable, amazingly durable, and much of the exterior and interior of these collections is made from recycled material. You know, this is a terrific launch, and it is off to the races as we step into 2022. We've continued to prioritize sustainability in our responsible journey. We're taking tons of energy off of this within the business, and our consumers are reacting, and I think we really do have the ability to transform this industry across all the aspects of our responsible journey. Just one little snippet. We were testing kind of the circularity of products. In Belgium and the Netherlands, we tested at the end of the year, a return and recycle program where we're working with our recycling partners to take in bags and effectively disassemble and recycle those and offering a voucher to customers to use a discount going forward. This was tremendously successful. Pretty small launch, 300 bags were turned in. We'll continue to look at this. Just to give you a small sample of the level of work we're doing here to think about the full circle of our products. As we think about 2022, what are we focused on? We'll continue to expand innovative products using recycled and renewable materials. You're gonna see a meaningful increase across all of our brands on this front. To get into more of the details, we're estimating our full Scope three greenhouse gas emissions for the first time, really taking it to the next level. We've conducted a formal climate risk assessment for our business, and we're looking at the recommendations for that and continuing to push the business. We're expanding the use of our product life cycle assessment. Actually, Gregory is one of the early launchers of this for us, and we've now started to work this into our European design teams in looking at the full product life cycle for our products and really tells us interesting things around how we can impact our carbon footprint in the world. We conducted our first diversity and inclusion survey globally. We just did this a few weeks ago. Still gathering results, but the response from our teams was tremendous, higher than I think anybody would have anticipated. We're quite excited, and we have the whole organization focused on this mission as thinking about kind of diversity, inclusion, and development. How do we develop our teams and continue to create the amazing culture that we have in this business? We're very focused on it and taking feedback from all of our employees. It really is for me, this sustainability structure. We've created enhanced governance structure, and the whole organization is focused here. I think you'll continue to see exciting things as we continue on that journey. Just last, I'll come back at the end with some highlights. I wanted a page on our response to the crisis in Ukraine. As you can imagine, you know, we're deeply concerned. We have employees, as I said, in both markets, either through partners and distributors in Ukraine or our teams in Russia, and, you know, highly emotional challenges for all of us. We thought through and we've really been focused on the impact to our employees, our families, our partners, our customers. We took the action this week, really this weekend to suspend our commercial activities in Russia. We've temporarily closed our stores. We've closed our e-com site. We've stopped all shipments of products both into and within Russia. We've stopped all further investments, advertising as you expect. We've really temporarily discontinued all operations there as we watch what's going on. We're very close with our teams. You know, this is challenging for us. It's challenging for our Russian teams. We've continued to stay very close to our teams and suspend operations and really continue to watch out for the well-being of our employees there as well. I've spent a ton of time on this as our European teams have. I think we've made the right decisions as we continue to work. We've made a large donation. We literally finished it yesterday to the humanitarian effort. I think everybody has a responsibility on this front. We've made a $1 million donation to a UN relief agency fund, exactly the right thing to do. Equally as important, I'm saying here over 10,000 pieces of luggage and bags. We're moving bags to the crisis. You can imagine with the refugee crisis that we have here, really making sure that we can have an impact there. I say over 10,000 pieces; it'll be much higher than that as we're moving bags and excess bags and backpacks to the region very quickly. This number will grow, so we have kind of an impact in what we should do in reaction to this and helping with this crisis. Just from a scale, I covered this just a bit earlier. You know, it's not the biggest piece of our business. It's 1.5%-2% if I look at the last three years of our sales. It will create some uncertainties. The world is watching carefully across many fronts. I don't think it will dramatically impact our recovery. It might have moments and pockets of disruption, but the reality is I think we will navigate through this as best we can. As I said earlier, we're not quite seeing it in Europe, you know, excluding Russia and Ukraine. Europe continues to move in the right direction. We've taken the right response. We're staying close with our teams. We're following very closely both our partners in Ukraine. I have daily interaction with teams to keep up with where they are and are they staying safe. We're staying in touch with our Russian colleagues. They're part of our family. If you think about where we've been over the last two years, everybody's participated, including our team members there. That's our reaction. I think, you know, there may be questions at the end, but, you know, that's where we are on that. With that, I will turn to Reza, and I'll come back right at the end with outlook. Thank you so much, Kyle, and we're on page 21. Just to recap on the numbers, finished the year very strong in the second half. Final results are a little over $2 billion of sales, gross margin of $1.1 billion, with a gross margin percentage of 54.5% as Kyle noted, leading to adjusted EBITDA of $182 million and adjusted net income of $17 million. I think really the story here is the quarterly progression. If you're looking at it quarter by quarter, you know, on EBITDA, we were negative $28.5 million in Q1. From that base, we made it to breakeven, we were at $11.5 million in Q2. Q3, we were very proud of $72 million of adjusted EBITDA. Now, Q4, $127 million. That trajectory is what we've been waiting for, especially that we've had the cost cuts fully baked now for a little while. That trend is what we're basically rolling forward as we start this year as well in pretty good stead. I'll just say the same thing around net income. To sit here and it may not look like a big number when you look at net income with a little bar of $17.4 million. Bear in mind, the Q4 number was $112.4 million of that. You know, really shifting it from negative territory into positive territory. You know, we were slightly net income positive in Q3, but the real strong result in Q4 resulting in a profitable year for 2021, which means basically coming out of this pandemic, we had one year where we weren't profitable. We're very, very happy with that result. Going to page 22, just to go through some of the highlights. Again, some of this is repetitive, so I'll go through it relatively quickly to make time for questions. Net sales increased from the prior year by 35.1%. We've got into how that was spread by the various regions. You know, compared to 2019 Q4 net sales were down 28%, compared to Q4 of 2019. That's a consistent improvement quarter after quarter if we're looking at the progression. Adjusted EBITDA increased by $401 million, shifting from a loss of $219 million. We have negative EBITDA of $219 million in 2020 to positive territory of $182 million. Again, sequential improvement quarter after quarter, as I just went through. Fixed SG&A expenses, we've talked about this on all of the calls, $371 million lower than 2019. Obviously, that includes a component of fixed, and then there's some temporary savings that are in there that are continuing to roll forward. Again, as a guidance matter, we have told you on previous calls, and I think that guidance still holds, that if we're looking at going forward, you know, we should have at least $200 million of fixed cost savings as we enter, you know, Q1 of this year as well. Advertising spend was relatively tight at 4.1%. We are investing in advertising, and that's been improving quarter after quarter. As we look at Q1 of this year, we're having advertising budgets that are in line with what we've had at historical levels, and we hope to invest on the back half of the year as well. On the next page, Kyle mentioned that the net debt position improved to $1,477 million as of December. We have $1.3 billion of cash and cash equivalents, you know, $2.8 million of debt. I have a slide specifically on the balance sheet where I will cover that. We repaid a total of $370 million of borrowings. You know, we talked about this at the last quarter as well, where we had $125 million of Term Loan A pay down, $100 million of Term Loan B, $100 million of the revolving credit facility. You know, we disposed of Speck and used the proceeds of that to pay down another $40 million of the revolving credit facility as well. We are in a very strong balance sheet position, so liquidity of over $1.5 billion, which is as good as it's been. We have $177 million under the revolver available to us as well. That's largely due to the fact that we've had tremendous cash generation. Every quarter when we get together, we're expecting to have more inventory build and some net working capital build, and somehow the team's managed to just sell everything that comes in as soon as it gets off the dock. That trend has continued. Great cash generation. You know, I will say again, as we enter this year, there is a plan to try to invest some of that cash back into the business via CapEx, but really in terms of building inventory and stock levels. You know, as we sit here in the quarter and then we're looking at January and February, this trend of cash generation is continuing as well. On the next slide on page 24, again, the net working capital point. Net working capital of December was $157 million lower than December of 2020, with net working capital efficiency of almost 10% at the year-end. That's an improvement from 23.2% at the end of last year. Reduction of inventory is the primary driver. You know, we have this delayed stock replenishment issue, so you know, there isn't that much inventory in the channel, and as soon as it arrives here, it really is taken by customers and the end consumer as well. That trend and the fact that we have some supply chain delays, even in Q1, that sort of inventory build is still not happening yet. CapEx, we've been very tight and we've basically been very focused on making sure that we don't have a lot of extraneous CapEx. At some stage during the course of this year, as we get into recovery, we should expect a recovery and going back to normalized CapEx levels. We are starting to selectively look at refurbishing some of the stores that haven't been touched in a little while, especially now that we've rationalized the fleet. Again, CapEx for 2021 was $25.9 million, which is well below historical levels. During the course of 2021, we did have some restructuring charges that we talked about on previous calls. The total restructuring charge was $17.7 million. That's some of that is due to the IP restructuring that we did, as well as setting up our brand development hub in Singapore, as well as just general cost initiatives that we had. We also have had net impairment reversals happening in 2021 of $32 million. You know, due to IFRS accounting standards, we have to basically do valuations of our assets, and we have to basically reverse some of the impairment that we had taken in prior years, as it related to some of the trade names that we have, as well as some of the store impairments that we'd previously taken as well. Going on to page 25. Covering it by region in terms of the constant currency growth, I think really the progression again is the important point here. You know, North America contributing $807 million for the year, Asia $687 million, Europe $419 million, and Latin America just shy of $105 million. I think if you're looking at the constant currency growth compared to 2019, and we've highlighted the Q4 numbers, really strong performance. Kyle mentioned that the North America number down 21% would have probably been higher were it not for some shipping delays. All that means is some of that flows into this year, and even month by month, we're seeing that some of those delays still happening in the North America business. The Asia business under a little bit more strain as compared to some of the other regions, primarily due to, you know, the government lockdowns that you still have in some of the larger countries there. We hope that improves this year, but we ended Q4 down 39% to 2019. Europe, really strong recovery coming in starting in the summer and ending the year at down 28.4%. Latin America, strong performance, 7.7% up compared to 2019. Again, as we look at Q1, that trend is absolutely continuing in Latin America as well, both due to the cost reduction that they have, but really a strong sales environment as well in the region. Page 26, I won't go through this. Kyle covered most of this already in terms of the quarterly breakdown by each of the regions. We can go on to the next page. On page 27, it's really the channel mix shifting. We are seeing a shift back towards wholesale and retail. Obviously, if you're thinking about where we are now compared at the end of the year compared to if we were sitting in Q1 and Q2, we do have our fleet of stores fully open now. You know, the shift from e-commerce towards it. There's still growth in all of the channels. But really, when you're looking at the overall percentage split between the different buckets, you see that the retail stores and wholesale have picked up significantly over the course of the year, but really on the back half of the year. If you're looking at the mix, you see 124.05 in terms of wholesale and other, and then our retail fleet delevering $53.6 million with DTC e-commerce at $243 million. Again, an improvement in each of those sales channels. Obviously the mix is starting to shift a little bit more so to brick and mortar retail over the course. The travel, non-travel mix is exactly as you would anticipate. There has been a greater shift to travel products. If you're looking at the SKUs that are performing, we do expect that there's gonna be even more going into the summer in terms of this revenge travel after people have been locked up for a couple of years. We've started to see that already in the markets that are open in terms of travel products performing as compared to backpacks and non-travel. Moving to page 28. The SG&A story, something that we are very proud of over the course of the year. You know, this improvement, if you look at it at every single quarter, you know, we ended. If I could just highlight the Q4 number. Overall, we were $371 million lower than 2019 in terms of SG&A. What we also focus on is the trend. If I'm looking at Q4 specifically, we are still $84 million better as it relates to our fixed cost base. Obviously, there's some benefits that we've also had in terms of the variable component of it. We expect variable to increase, obviously commensurate with sales. That fixed cost number, if we look at fixed cost and admin, we are very disciplined about maintaining that cost structure. Yes, there will be some additional stores that will selectively come into the fleet over the coming years, et cetera. But we're. The process that we go through to making sure that everything that's entering our fleet is very, very disciplined in terms of those selected stores that we may look at. Overall, we fully expect that over the course of this year, we'll maintain the benefit of this, which should flow into the EBITDA margin. As it relates to advertising, we are concentrating on improving the percentage. We're trying to get back to historical levels and on the back half of the year, actually even trying to do above that. If we can get it back to, you know, high fives, even maybe low sixes as if we're thinking about the back half of this year, that's where we would like to be in terms of advertising as a percentage of sales. Looking at page 19, Kyle covered in his remarks what we're looking at in terms of the gross margin improvement that we've had. The teams have done a remarkable job in terms of defraying some of the costs that have come in by having very disciplined, very limited promotional activity, as well as making sure that we maintain price, the passing on price increases to our end customers to make sure that it offsets whatever inflationary pressures that we face. The gross profit improvement, $214 million was the impact of that, as we do the bridge over to our adjusted EBITDA. There's gross profit increase from the higher margin. That's the $172 million. Large component of it is in relation to what we've been doing on sales, as well as improving the gross margin profile of the business over the course of the year, and obviously the benefit of our fixed SG&A. You know, that decreased fixed SG&A of roughly $65 million offsets some of the other pressures that we felt overall. You know, our adjusted EBITDA basically is going from about -$218 million to $182 million, largely on the back of improved sales as well as discipline around gross margin and SG&A. On page 30, we are very proud it bears repeating again in terms of the cash generation of this business. Q4, $175 million of cash generation just in the quarter alone. That's on top of $116 million generated in Q3. If you think about where we are, sales are at $2 billion compared to $3.6 billion, yet we're generating even more cash than we did in 2019. Again, we're very disciplined in terms of SKU reduction. That's helped us in terms of inventory levels as well. We do expect some level of this cash being reinvested in the business as we think about Q1 and Q2. I can tell you sitting here at having seen the January and February results already, that hasn't reversed yet. You know, as soon as some of these supply chain issues open up, we do expect there'll be some inventories build and it won't be the same sort of levels. For now, we've enjoyed really strong cash generation over the course of the year. On Slide 31, again, Kyle has covered this one, so I won't spend too much time on it. I think the point is really that EBITDA has sequentially improved as well as the cash flow that generates, comes out of that. Onto the balance sheet on Slide 32. A couple of points to note. I'd just like to highlight both. Let me start with the net debt point. If you're looking at the columns here, we ended December of 2019 with net debt of $1.3 billion. That net debt over the course of the pandemic increased by $430 million. That's the difference between the $1.3 billion of net debt and the $1.735 billion that you see on the page. Over the course of this year, we reduced that by $258 million. We're ending with a net debt position of $1.477 billion. In 24 months, if I just add those two numbers together, in 24 months, we've gone through, our net debt is up a little bit shy of $172 million, which if you think about the sales impact of what we've been going through, I think that's a very, very strong result. Obviously, we're hyper-focused on delevering this business. As this cash generation continues to happen, we're applying that cash generation to repaying debt, and you've seen that. You know, when we disposed of Speck, the proceeds went to repaying debt. This is gonna continue over the course of this year. Delevering is definitely a strong focus for us. On page 33, working capital. We've covered a fair bit of this. The inventory days, if I'm looking at where we are, we're almost in line with where we were in 2019. Inventory days are 138 at the end of 2021, which is almost the same level of 132 that we used to have in 2019. Net working capital days, 34 as compared to 59 in 2019. I think in terms of balance sheet management, I think the teams have done a truly exemplary job in terms of managing the balance sheet and working capital. And again, as we sit here at the beginning of this year, this trend is continuing as well. Inventory turnover decreased by 63 days year-over-year. Inventory at the end of December $107 million lower than December 2020 despite the sales environment being weak. On page 34, just on CapEx, again, we've been very disciplined. If you look at both the 2020 and the 2021 number, you know, CapEx for those of you, most of you have been following us for some time. You know, CapEx in a normalized year, we would be in the 90s, $100 million, et cetera. We've been running at just around $25 million for two years now. That's why as we sit here right now and the business is really starting to get into full recovery, you will see that number pick up again because we do wanna make sure that we're making the right investments in our business. You know, the good thing about this business is we have flexibility, and if we need to dial it back, we will, which is what we've done in the past. With that, I'll turn it over to Kyle to talk about the outlook, and then we'll open it up for questions. Okay, great. Thanks, Reza. As I said to start, our strong 2021 results and really what we've seen in the back half of 2021, and as we step into 2022, I think it's clear that our actions have had a meaningful impact in our business, both in kind of recovery, cash generation, profit profile, positioning. As we step into 2022, we really have great momentum to gain market share, fundamentally higher operating profit, for this year and clearly as we step into 2023. We are seeing just as a caution, you know, in 2022 waves of new COVID cases. We saw Omicron at the start. I think the latest news in the last couple of days is Omicron BA.2, which, you know, again, we're not through the woods on COVID, and we continue to watch that closely. What's clear to me is that kind of the propensity to travel and the recovery to continue, I think is here. We will see some markets that will continue to be under strain. We didn't talk a lot about it, but China has clearly stepped into some new lockdowns that will have impacts on our business. Again, recovery and overall momentum I think will continue. Additionally, as I covered, crisis in Ukraine, I think adds a degree of uncertainty to our outlook in 2022, but I think we will manage through that. I think we're really well positioned, despite COVID, despite Ukraine, to continue the recovery that we're seeing. As I said in Q2 and where we're stepping into Q1, that looks like it's continuing to play out for us as well. As far as focus, as I said earlier, we really do remain very focused on maintaining our gross margin at historical levels. Really with all the levers that we have around promotion and discounting pricing increases to mitigate costs and inflationary costs, shipping challenges and the cost of freight, which has been dramatically increased. Our teams have been able to work through this, and we continue to work very closely with our suppliers to manage those pressures. I have a good degree of confidence that we will continue to maintain our gross margin, and our teams will across the globe at historic levels. As Reza said, we do intend to increase marketing spend. We're stepping into the year, you know, carefully. We're spending at about the same levels at the start of the year as we were at the end of 2021. I do have an ambition to increase. As we see recovery pick up in Q2 and particularly Q3 and Q4, you should expect that we'll be bringing this back to historic levels. I think it's the right moment to do that, where we've stayed very disciplined as we see recovery. We're ready to lean in here as well. You'll see that. With that said, we remain highly disciplined on expense management on our SG&A and our fixed SG&A. You know, because of uncertainties and outlook and the ongoing, it means we keep our guard up, and that's what our teams are doing. We are making select investments in core functions. We're pushing, as you'd expect, e-commerce and our teams there and really making sure that we're set up where our opportunities are to capture, but against a really disciplined team and cost structure. We will make some investments in CapEx, as Reza said. We've started to make and improve decisions on expanding production capacity in our new plant in India. We've also started to purchase new equipment in Europe as we see demand growing. We are moving forward here, but we'll be managed very closely, as said, and we won't get back to historic levels this year, but you should expect CapEx in the back half of the year to start to creep up from a very tight CapEx spend for the last two years. We're ending in a very lean inventory position, really driven by two things. Demand has been really strong in the U.S., Europe, Latin America, really starting to pick up in Asia. As we're bringing goods in, the goods are selling through very quickly. But we're also seeing real constraints on shipping and freight. Generally, our suppliers are okay. The recent kind of lockdowns in China we're watching closely within our production capacity. We're ordered so far forward, as I said, in most regions, we're nine months plus ordered, and it's really a function of navigating through, you know, the supply chain challenges. We will build inventory, but there'll be some delays. We're seeing some of that as we step into Q1 and Q2. That will catch up, and we should be well-positioned. We should be well-positioned ahead of our competitors as well, and our teams are really leaning forward. We really do have amazing brands coupled with the best team in the industry. You know, the team in this organization, across any function you could list, in my view, are the best in the industry. Our ongoing commitment to sustainability, innovation, new product development, and it will really help strengthen our long-term market position. I have zero doubt on that, as travel recovers to pre-COVID levels, which we'll see play out for the rest of the year. As Reza said, we are in good control of our balance sheet. We have meaningful liquidity. We're generating cash. We're reducing net debt as we move forward. We started to repay some debt. I think we're sitting exactly where we need to with the balance sheet to navigate the business through what's left to go on the recovery. With that, William, I think we can open it up to questions. I'll turn it back to you. Great. Thank you. Sounds good. Great. Thank you, Kyle and Reza. Operator, we can start taking questions. Thank you. Ladies and gentlemen, we will now open for questions. If you'd like to ask a question, please press star one on your telephone. Thank you. Our first question comes from Erwan Rambourg of HSBC. Please go ahead. Thank you. Hi there. Congrats, gentlemen, on the great results, notably on cash and operating leverage. Quite impressive. Just wondering if you can tell us a bit about how you see the full year developing. Obviously a lot of moving parts. I think you implied that we could see a level 15%-20% below 2019 this year. How are you seeing trading so far, and how do you see the differences quarter by quarter? I think you implied that the back half would probably be stronger. That's my first question. Second question would be around how do you think about oil prices and, you know, oil derivatives, and how does that impact your cost base, and how are you offsetting that eventually with price increases? Lastly, you exited last year with a pretty phenomenal high-teen adjusted EBITDA margin. I think you mentioned last time that you could hope for a mid-10 margin this year in 2022. Are you still comfortable with around a 15% level, or should we hope for a higher Q4-type margin for this year? Thank you. Okay. Great. Thanks, Erwan. And thanks for the compliment. We're pretty happy with the numbers, as you can tell. Full year development. What we're seeing at the start of the year is a trend that's slightly better than what we saw in Q4. You know, we're running down in the kind of 27% range, I think is where we'll be. January had a little bit of a stutter step with Omicron, as you could expect. Then we've seen February and March improve. Exiting Q1, I think we'll be down roughly 25% kind of trend. That will improve in Q2 for sure, and really Q3 and Q4. If you think about where I am at the start of the year with a slightly improving trend, and I think we'll be somewhere in this kind of down 15%-18%, I think, is the zip code of where I'm thinking. You can kind of do the math on the recovery with clearly a step-up in Q2, but still kind of constrained. Then as we get to Q3 and Q4, as we went through the regions, it's clear that you need Asia to move a bit more to start to get to those levels. I think, as I've said, Asia will be the long pole. But I, you know, I'm starting to look and watch at markets in Asia. Put China aside, we're seeing markets open. Our teams are now able to travel within Asia. I think that's a really good indicator of the lag effect of Asia. I think North America will continue a really strong trend. I think Europe will have a very strong summer travel trend. I think we're well-positioned. Latin America, as we said, is performing really well. If you blend that all together, you know me, we're fairly cautious guys. I think that's where we'll end up. Could we be a tad bit better? Yes. But there's enough uncertainty around us that we wanna be cautious. As far as oil prices go, we're watching this, right? There's been tremendous pressure across the board, I would say, in 2020, and particularly in 2021, on costs for the business. Our ability to manage all of that and deliver margins at historic levels to exit the year, and really Q1 is trending right in line with our historic gross margin levels. We're managing quite well. I do think oil will have its impact. As you remember maybe from past discussions, the material component of our costs are meaningful, but you know, not a tremendous percentage of the mix. It's often labor and freight and everything else that goes along with it. We will be able to pass on pricing. We'll be watching that closely. There's a lag effect of that, you know, so it takes a bit of time. The other pieces were ordered pretty far forward, Erwan, so you get the benefit of forward ordering on pricing. We'll be watching because we'll, you know, if the pressures come in strong, we'll have to work with our suppliers and think through that. I think we'll manage well, and I think there will be increases. On the offset, I think there'll be moments where shipping will start to correct itself. I think the blend of it will allow us to navigate that, just well. Adjusting EBITDA margin, I have full confidence in mid-teens. Maybe a tad better is the way to think about it. I would caution in Q4 of this year, it's very high, 19%, but the gross margin was a little bit high as well. We had some inventory adjustments, reserve adjustments that slightly inflated. That's why that margin is gross margin looks a little high, like 58%, but the underlying number is probably more like 56.5%. It's a strong end of the margin. Okay. Gross margin. That's why you see Q1 kind of in that 55% zip code, which is the right place for it to be. Blend that all together, you know, we've exited very strong in Q4. Blended second half of the year, if you use that as some indicator, Erwan, was 16.3%. Yep. You know? It's lining up quite well. You know, as you know, our Q1 numbers are a bit lower because of just the sales volume in Q1, but we're seeing a really strong carry through in our Q1 numbers of this year. I think we're set up for a story that clearly delivers mid-teens for the year, and maybe a tad better. We remain very disciplined on what we're managing, so I think we're really in control of managing to that number. Erwan, just a couple of points, and then I'll just add to that for color. FOBs, I think the point that Kyle made is very important, that depending on which region, like the North America business is fully ordered out to the end of the year, and we've locked in those FOB prices. Right. If we were to go out today and be ordering, you're about 3% or thereabouts higher so far, just to directionally give you a sense for it. But that's the FOB- Mm-hmm. Portion of it. It's the freight rate that we were very focused on, you know? You know, freight rates, at least it's not getting worse so far, but it hasn't exactly improved that much either. And all of that has been managed. The North America business with price increases has basically managed the gross margin remarkably well. That's been passed on. Against an industry that's all facing the same pressures. Excellent color. Excellent color. Thank you so much. Yeah. Yep. One of our advantages is, you know, our scale advantage to manage this. So you can imagine our competitors are in, you know, maybe a bit of a tougher spot. This is where scale does matter and our ability to manage, Erwan, and it's showing up in our numbers. Great. Okay. Thanks. Thanks a lot for the color, and, best of luck. Thanks. Thanks, Erwan. Thank you. Thank you. Our next question comes from Louis Lee with Bank of America. Please go ahead, Louis. Thank you. Hi. Thank you. Thank you, management, for taking my question. My first question is about our latest developing trends. Actually, it's very exciting to hear that we are still seeing improving trends, although there are so many moving parts. Just would like to check, like even in March, we don't see any negative impact, particularly in European markets, from the Ukraine crisis. Is that correct? This is first. The second is on the GP margin. Even we excluding the one-off inflation in Q4, the 56.5% is still a very high level compared with the previous quarters even before COVID. What do you think is the key impact here or key difference between what we did in Q4 last year and pre-COVID? Also, is this because of price hike we did in last year? Or even in this year, if we see increasing challenges from the raw materials, do we have any chance to do the incremental price hike? This is my second question. Sorry. My second question is also related to the OEM part in China. We have been talking about the OEM shift from China to outside China. Just would like to check the latest percentage from China. My third question is about our balance sheet. Do we plan to continuously pay down the debt in the upcoming quarters? What is interest cost to, I mean, considering our initiatives? Thank you. Okay. Why don't I take first two, and Reza can take the last one. Our trends, I mean, in Q1, is running a bit better than Q4. We saw a blip in January, and this was really Omicron, and our January numbers were a little softer. Some of that also had to do with timing of shipping. You know, we were seeing heavy shipping delays at the end of the year, which carried into January. That caught up a bit in February. I would tell you our March exit trend is, you know, roughly looks like it's gonna be down 25%-26% for March, okay? That's a kind of improving trend when you consider January was down kind of in the low 30s%, you know, with the Omicron blip that we saw. So the trend continues. I do think, you know, even in Europe, other than the impacts of maybe our Russia, Ukraine business, the rest of Europe continues to trend in a good way, as I said, and I gave you an indication of the trend versus Q4. So I think the trends are okay. We really do think this kind of propensity for travel, we're coming into effectively the quarter that carries into the summer holiday season. So I think we'll see a building story in Q2. Our historic numbers, our Q2 are good numbers. I think the only holdback for us will be, you know, shipping challenges. We're seeing some of that even in the numbers I talked about in Q1. That's on the back of shipping challenges. Those numbers would have been better if not for some delays in goods coming in. I think the trends are looking just fine. Knock on wood, I think they will continue. I do think people's desire and propensity to travel will continue to drive the business forward despite some of these uncertainties. There are uncertainties in the marketplace, but we're able to navigate them is what it looks like to me. I don't see it slowing down. We'll watch. You know, I paint that picture of uncertainties because, you know, the whole world's watching to see, you know, things like Ukraine and if there's spillover or whatever. From what we can see today, what we're managing, we feel very comfortable with that. As far as gross margin goes, Q4 was very high at 56.5% if I adjust for reserves. Really the reason the reserves are adjusting is because the sell-through is so strong, even products that we had put reserves against, we've been selling. And so you get the benefit of effectively reversing that. The right way to think about gross margin going forward is roughly 55%. That's what we're seeing comfortably at the start of the year. That's with a ton of work. The teams have done an amazing amount of work. We'll be watching for pricing and taking action. I do think we're able to take action against the market. Again, the whole industry will feel it if there are impacts. You should expect we will deliver historic gross margin for the year, with a lot of effort from the team. We've clearly shown off of 2021, we know how to do that. As far as kind of shift from China, you know, really the shift from China is a U.S. phenomenon, and we've made tremendous progress here. I think it's, it went from kind of 95% to something like 15%. Am I right, Reza? Correct. Yeah, 15% for the U.S. sourced from China. It's really an amazing journey that Mas and the team here in the U.S. have taken over the last few years. It's not that China's not important. We're still sourcing to Europe from China, within Asia from China, and we're watching it very closely. More recently, we're watching kind of shutdowns or lockdowns, and some of our plants are affected there. You know, the view there is those will be temporary. We're dealing with those over the last 18 months already, and they're temporary and come back. We've made tremendous product progress on the U.S. As I said earlier, we need GSP to renew in the U.S., and that will have a benefit to our business as far as a retro reversal. It'll also allow us to take some pressure off on the pricing because GSP will kind of carry through the U.S. business as well, so that we're expecting to renew as well sometime this year. On the balance sheet, I'll turn to Reza. Yeah. As it relates to the balance sheet, as we generate cash, obviously the use of that is really to repay debt. We've been hyper-focused on liquidity levels. You know, when we're looking at $1.5 billion, obviously we feel really good about that. I think you should expect us to take some of that cash and repay debt over the course of the year. Every time we say that though, there is some sort of pocket of uncertainty that pops up, so we were a little bit gun shy about it. There has been some negative carry as it relates to that. Kyle and I have discussions about this regularly. You know, I mean, $1.5 billion. I think you—it's fair to assume that over the course of the year, we'll whittle that down to something that gets back to normalized levels for us, which is, you know, $1.1 billion, $1.2 billion, thereabout, over the course of kind of the summer months. But we monitor it because every time we finish a quarter and we generated even more cash and the liquidity levels stayed up, it just only makes sense for us to do that. But I know one of the questions that oftentimes comes up is, you know, with this amount of liquidity, are you gonna be acquisitive and other things? Right now, the focus is debt repayment and maintaining a very disciplined, you know, in terms of our credit profile. Thank you very much. Just a quick follow-up on the GP margin side. If we still see more incremental raw material cost pressure, do we plan to raise the price further, or do we have any chance? We plan to maintain our gross margin at historic levels. That'll be a combination of actions, you know, working with our suppliers, maybe some pricing action if it's offset by other benefits that we might see. If we need to, we will. We will maintain the margins at this historical level. That's really the directive for the team, and that's what we were directed to do this year. We were working very closely this year to get to where we got to, as a team. I have really high confidence that we'll be able to continue to manage at the historic gross margin level with all the tools in the kit. It's not just a pricing action. Got it. Thank you very much. Okay. I don't have other questions. Thank you. Thank you. Thank you. Great. Thank you very much. At this point, we have a couple of questions from investors online. The first one is, are there any more concrete guidance about CapEx for 2022? I think we're gonna be somewhere in the $50 million-$70 million range. For the full year, William, we're managing it very closely. We're starting cautiously to start the year. I think you'll see in Q1 a lower number. We have made some commitments for equipment purchases, and I think we'll start to do some store refits in the back half of the year. I think we'll end up somewhere in that zip code, William. You know, probably still, you know, well short of kind of the $110 million historic levels. Thank you. The second question: How much of our temporary cost savings are going to go away in 2022, do we expect? I think we're still seeing a little bit as we trickle into Q1, William. Mm-hmm. I think by the time you get to Q2 in the back half of the year, the temporary will fall off. I think that's why we always focus, you know, on what we think are the real permanent fixed cost savings, which are a little north of $200 million, and we have good visibility to those. I think we're well in control of those. I think that's the way to think about it. You'll see a little bit of SG&A benefit above that as we start the year in Q1. That'll start to wane off towards the back half of the year. There's only so long we'll be able to get things like rent reductions or maybe some compensation benefits in certain markets, but they're, you know, largely kind of wrapping up as we step into Q2. Okay. The last question: When are we going to start looking at paying a dividend again? Well, that's probably a longer term question. Not this year, guys. I think this year we'll be focused on leverage liquidity. I think as we get back to historic EBITDA levels and we can get the debt, kind of repositioned, I think we'll get there, you know. I think a very good chance we could think about it in 2022, but 2023, but I'd really like to get our leverage profile in the right place while we get the business fully recovered. You know, I know that's not crystal clear, but I think what is clear is the ability for this business to generate cash and get back to kind of historic, if not slightly better than historic cash generation with a higher operating margin. We should be able to get to that. I think the priority for us would be, you know, solid footing and move our leverage profile. You know, ideally, you know, 2x or less is probably the right place to be before I think the board might consider that. I don't think we're so far away from that, you know, a handful of years away, a couple of years away, I think, William. Thank you very much, Kyle. Operator, let's get back to the callers waiting in line. Thank you. Thank you. Our next question comes from Dustin Wei of Morgan Stanley. Please go ahead, Dustin. Thank you. Hey, thanks for taking my questions. First question is regarding the GP margin. The management talk about that for the North America market is almost fully ordered out for the full year. Could you know, provide some update for other regions? If you would guess that based on your projection, you need to sort of aggressively reduce the promotion or increase the ASP because of the cost inflation and what quarter that would be. I'm just a little concerned about that you just, you know, finished increasing ASP by like 7%-10% in the end of the third quarter. If you just need to raise the price again, I'm not sure if the demand will get affected. That's the first question. The second question regarding the supply chain. Just, you know, could you please provide a little more sort of on the ground information about, you know, what's sort of the challenge in the supply chain? Is it still short of a cargo, or is the port congestion still, you know, very bad in the U.S. and the freight costs continue to go high or, you know, some of the colors that would help. In terms of the production, I'd like to know that, you know, the China. I still want to know in terms of for the whole group, not just to the U.S. market, but for the whole group, what kind of the like sourcing breakdown for the group now? Like, you know, China account for how much India and our own factories in Europe. Sort of try to get a sense about it. I guess the lastly is about just in case if there are some of the uncertainty, either is from the top line or from GP margin this year. From the SG&A perspective, like, you know, how much flexibility that management has to, you know, keep to strike, you know, to strike this, like, meeting EBITDA margin. Thank you very much. Why don't I start off, Dustin, and then Kyle, please chime in as we go. GP margin, I think I got most of your questions written down, but if I miss anything, just let me know. GP margin for the other regions. We covered North America. The one thing that you should just know about North America is just the GSP renewal has about a 70-basis point impact on the GP margin of the group. Be aware that if that comes back, obviously the North America business is largely wholesale, so a lot of that our wholesale customers would ask for as well. That lever, when we talk about the North America business, it is very price driven in terms of trying to make sure that the price increases have compensated for that. The GP margin, all of the regions has been improving overall. The one thing that I would just highlight for you is if I'm looking at Asia specifically, there's a question around country mix and what's happening. I'll give you one example of, you know, India, because India historically has had a different margin profile because of the brands that sell in India versus some of the other regions, that mix and the fact that India is performing versus, you know, Japan and Korea that have been largely shut down. All of a sudden, you start to see a GP margin that the average of it starts to shift because of which markets are performing and which are closed. That should only get better. That should only improve over time. Yeah. Because if anything, the more the world opens, the more you get back to a historical level of the normal mix that you have in terms of the different brands and the different countries that are performing. That'll help us over time. You asked about price increases. Most, if not all of the price increases have already gone through. There's a little bit left, specifically in certain markets in Asia. Most of those were done Q3, Q4 of last year out there. All of that has been in, and there has been negligible, if zero impact on demand. Again, I'll just anecdotally tell you, if you think about most of our products, if you're looking at travel products, it's not like you're going into a store every year or every quarter to buy a piece of luggage. In an inflationary environment where everything is more expensive, consumers will show up to a store and they'll take whatever is available, you know. If that product, it was normally a $199 price point, and now the only one on the shelf that's available is $249, they take the $249 bag, because that's what's available. Frankly, most consumers won't even remember what it cost last time they were in there to buy a bag. Long-winded way of just basically saying if you're thinking about price demand, that relationship, we haven't seen a drop off in demand due to the price increases, which I think is great, and that's what's helped our gross margin overall. As it relates to the supply chain, look, there's definitely port congestion. If you're thinking about the regions that are impacted the most, initially, I would say North America, especially if you're thinking about Los Angeles, and that port, which actually recently just went finally to 24 hours of operation. Before that, there was definitely a backlog there. I can tell you sitting here Q1, and if I'm looking at February results, there are still sales that were supposed to happen in February that have shifted to March because we couldn't get the ships offloaded in the month. Latin America has a strong back to school season. We were very nervous whether all of those backpacks would actually end up getting delivered on time due to congestion. The good news is they actually managed to get them all off, met the back-to-school season, had a great start to the year as a result. It is very much a little bit just in time right now, which is not the way that we love it, but at least thankfully, things are still moving. The problem with that is we're not able to do the replenishment into the channel that we really want to. As soon as the things arrive, we're basically selling through and delivering it to the customers. It's one of the upsides, to be honest with you, Dustin, is that we have there'll be a moment where we're able to replenish and think about our wholesale customers looking to replenish. I think that's to come here. We were probably thinking that would have been Q1 and Q2. I'm hopeful in the back half of Q2, we're gonna get to that. Some upside, because what we're doing today is really just selling through. There will be a moment where it catches up, and that'll carry into our numbers on the wholesale side. Yes. As it relates to production, we typically, our own factories do about 12%-15% of our own production, be it in Europe and in India. As you know, we have the three plants. We have Belgium, Hungary, and then India. What I can tell you, some of the CapEx that we were talking about, we have increased the capacity of the India plant specifically. We've added some additional warehouse capacity and some additional lines there to try to be able to boost production there. But generally speaking, we're doing about 15% for ourselves. The remainder is various countries, mostly in Asia. In terms of the mix of it varies by brands, you know, and honestly, depending on what's open. All I'll tell you is it's the same partners that we've historically used. Even to the extent that there was the earlier question from Louis from BofA. Basically, to the extent that we're even shifting production to Indonesia, it's the same people that we're working with. Right now, just given what's happening in terms of supply chains in China, what we're trying to do is I'll give you Tumi as an example, which isn't necessarily in China. We're trying to source factories that have capacity to be able to boost it in order to meet the supply, the demands that we have on our side. Production generally is within Asia, various countries. If GSP renewal happens, obviously that will help us. If you're thinking about different countries that we're looking to do more in, Indonesia is one example. You know, Thailand, we're looking to do more in. Obviously, there isn't a ton of capacity that's available. The good news about being the top producer is to the extent lines are available, they typically are offered to us first, or they end up kicking somebody else out in order to accommodate us. That's the good news. It impacts the entire industry, but us a little bit less so. We also have more production demand. That's there. You also asked about SG&A. Look, we always have levers. The biggest one is advertising, so we're talking about boosting advertising. If we were to have some headwinds, that would be the first thing that we dial back on. You've seen that we're not shy about being aggressive when we need to be, but I don't think that's the environment that we're in anymore. I think we're managing SG&A at the same levels, Dustin. We're managing closely. There's not a big aha on SG&A because our teams have delivered on that. I think Reza is right. Advertising is probably one of the levers, but I don't think we'll have to go there. We're managing it closely at the start of the year. We'll only throttle forward when we clearly see the recovery happening, so we'll be able to manage that with discipline, as well. On the SG&A side, you know, we've clearly managed, and we continue to manage that very close to the best. Thank you so much. Just to follow up on the GP margin, the price increase. You previously mentioned that for the North America market, I think you order for the full year of the products for the North America. You know, even the cost inflation hit, you then probably wouldn't affect the, I guess, the GP margin for North America. Just wonder, you know, what's the situation for the other region? Do you also order well ahead for other- Yeah. Yeah. Yeah. So we're at least nine months for the whole business forward. It's not a perfectly linear line, Dustin, because if there's real inflation, you know, our suppliers are partners, and so we work with them, but it helps us manage that. Again, I think we're in very good control of where we are in the margin side. You can see the progression we made. We've actually stepped ahead of 2019, maybe even a little ahead of where we thought we would be, so I have zero doubt. As I said in my presentation, this team is working very hard. There isn't a moment that our sourcing teams aren't paying attention to all of the moving pieces. That's always been one of our strengths. If you look at the history of our company, take out 2020, we have the ability to manage margins kind of in the zip code that we need them to be to deliver. That's no different today. Probably the most turbulent moments of the world were kind of in the last 15 months, and here we are kind of back to historic levels. I think I have a high degree of confidence in our ability to manage that, Dustin. Is that fair to say that, you know, for the first nine months of this year, unless there's a dramatic change in retail environment, actually company GP margin is pretty much safe. If we need to reduce the promotion or increase the prices again, that's probably the task for like fourth quarter of this year. Just realize there is seasonality, so don't expect- Of course. The Q4 GP margin to be the Q1 GP margin. I mean, obviously look historically at what the seasonality of the business is if you're trying to model it out. Yeah. I agree with what you're saying, Dustin, but the worlds in a different place today. You know, we've seen shipping costs up three times to historic levels. That's all sorting out. It's much more fluid than what it's been in the past. It's not as simple as just saying we have it in the bag. What I'm telling you is we are very actively working it. I have this tremendous confidence level in our teams to deliver on that. I don't wanna try to paint some picture that it's just in the bag. It's, there's work every day on this front, but we've got it. We have the best suppliers. The relationships are tremendously strong. We work very, very closely with them on the pressures across the board. It's not a vacuum, but so I don't wanna, you know, give you an answer that oversimplifies the question you just or the statement you just made. It's real work, but we're gonna do the work. Great. That's very good to hear. Thank you so much. Thank you. Yep. Thank you. The final question today comes from Anne Ling with Jefferies. Please go ahead. Thank you. Hey. Hi. Thank you very much. A couple of questions here. Would you share with us, like, you know, what is the current operating environment or, I mean, in terms of like, you know, how competitors are doing? Are we gaining market share, you know, in different areas? Maybe like, you know, some highlights, you know, on this part. Secondly, is on the cost structure. Would you share with us the cost structure, for example, like how much is from the raw material, like that is all related, how much is the freight cost, you know, and the others. Lastly, I would like to add, just to clarify, in terms of the quarterly sales target that you mentioned at the beginning of this call, that first quarter, you expect that it will be around like 25% of 2019's level. Is this correct that for the next few quarters you're expecting about like 15%-18% down versus 2019? Thank you very much. Okay. From a market share perspective, I think we have real opportunity, as I said in my presentation. I won't get so specific, but if you can imagine scale in the ability to have products put on the floor against the tremendous pressures that are out there, we're clearly winning on that front. I think we'll continue to have opportunity to gain share. I think the real trick is gain share and maintain it as we get to the end of the year and into next year, and our teams are very focused on that. I would say scale matters, and we're leveraging that scale against an amazing assortment of products. You know, this is a company that continued to innovate, and we're launching products, and we're launching with new products against a marketplace that you won't see as much of that for sure. I really am highly confident in our ability to gain share. Our teams are, and I think you'll really see that play out because it's muddled today, but it'll really play out back after the year into next year. As far as cost structure, I think maybe I'll have William follow up with you because we don't have the level of detail that you probably want there. Let us get back to you on that. William, if you could take that for me. You know, we have the numbers, but I just don't have it in front of me, so I don't wanna just kind of arbitrarily give you percentages. We can get that because it's not right in front of us. I think, did you have one other question? On quarterly sales. Oh, on quarterly sales. Again, the guidance I said is we'll be somewhere, you know, down 15%-20% for the full year. I gave you an indication for Q1, and we think it will continue to kind of sequentially get better. If you do the math, there's a real risk, a real opportunity we can be a bit better than that. But as I said earlier, we're cautious guys, and I think, you know, with everything around us, that's the range that I would have for the full year, knowing that we've got an improving trend. In Q1, and just to clarify, Q1 somewhere down 26%-27%. You know, I think with a little bit of tailwind, it can be 25%. It's a bit better than what we saw for Q4 with a stutter step in January, as I said, for Omicron. We're seeing an improving trend into March, for sure. I'll let you kind of map out an improving trend, because, you know, I think you'll see a better Q2, a better Q3, and clearly a better Q4. Again, I think it will step into 2023 probably getting very close to historic levels, is the way I would do the math. You know, we'll see. There's enough uncertainty around the world, too, but I think in that range, I think we have the ability to get to that, and the teams and our numbers and everything we're seeing would indicate that should be how it plays out. Okay, great. Okay? Thank you. Thank you. Good. William, thank you. I think, any other questions or ready to go? I think that'll be it for today. Thank you very much everyone for joining the call. Thank you, Kyle and Reza, for doing the presentation. Great. Appreciate it, everybody. Thank you as always. Have a great night or day. Thank you. Bye-bye. Thank you. Thank you for participation. This concludes the conference. Goodbye.