Insignia(LDWY) - 2025 Q3 - Quarterly Results

Financial Performance - Net revenue for the three months ended September 30, 2025, was $5.2 million, a decrease from $6.6 million in the same period of 2024, attributed to strategic changes in bulb growing schedules [5]. - Gross loss was $0.06 million, or 1.2% of sales, compared to a gross profit of $1.4 million, or 21.7% of sales, in the prior year, due to increased bulb costs and tariffs [6]. - Operating loss increased to $3.0 million from $1.4 million in the same quarter of 2024, primarily driven by lower revenue and higher costs [8]. - Net loss from continuing operations was $3.4 million, compared to a loss of $1.5 million in the prior year, reflecting lower operating income and increased foreign exchange losses [9]. - Net loss attributable to Lendway was $2.9 million, or $1.61 per diluted share, compared to a net loss of $1.1 million, or $0.64 per diluted share, in the same quarter of 2024 [10]. - EBITDA loss was $2.4 million, worsening from a loss of $0.6 million in the prior year, due to lower sales and higher bulb costs [11]. Cash and Debt Management - Cash and cash equivalents increased to $1.8 million as of September 30, 2025, from $0.9 million as of June 30, 2025, primarily due to debt proceeds for bulb purchases [13]. - Working capital rose to $11.3 million at September 30, 2025, compared to $1.1 million at June 30, 2025, reflecting seasonal purchasing for the upcoming high season [13]. - Total debt increased to $45.5 million as of September 30, 2025, from $34.1 million at June 30, 2025, due to drawing on credit lines for bulb purchases [13]. Management Expectations and Financial Metrics - Management expects revenue and gross margin to improve in the remaining quarters of fiscal year 2026 as more bulbs are grown into stems for sale [5][6]. - Management utilizes non-GAAP financial measures like EBITDA to assess historical and prospective financial performance [24]. - The company aims to measure operational profitability consistently using these financial metrics [24]. - The financial results are used in presentations to the Board of Directors for performance evaluation [24]. - Compliance with covenants and restricted activities under the terms of the Credit Agreement is evaluated using these measures [24].