Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 for the same period in 2024[126] - Loss before income taxes for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.0 million, or 110%, from $1.8 million for the same period in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 for the same period in 2024[130] - The Company incurred rent expenses of $12,000 for the nine months ended April 30, 2025, compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to a loss of $338,255 for the same period in 2024, reflecting a significant increase in losses[20] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 for the three months ended April 30, 2024, to $1,400,028 for the same period in 2025[123] Customer Concentration - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - As of April 30, 2025, one customer accounted for 100% of the Company's consolidated accounts receivable[61] Future Plans and Strategic Direction - The Company plans to transition its consulting services from PRC-based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company aims to expand operations to other Asian countries, including Malaysia, Vietnam, and Singapore, while maintaining a focus on the North American market[111] Legal and Regulatory Matters - The company is facing substantial doubt about its ability to continue as a going concern due to a history of net losses and the need for additional capital[137] - A lawsuit filed by J.P. Morgan Securities LLC claims damages of $5,064,160 related to a stock transaction, with ongoing mediation efforts[103][104] - The parties involved in a dispute have agreed to mediate before litigation, with mediation held on May 6, 2024, but no resolution was reached[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Accounting and Compliance - The company is in the process of evaluating the impact of recent accounting standards updates on its consolidated financial statements[64][65][66][67] - The company is currently evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and establishing an internal audit function[152] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93]

Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 in 2024[126] - Net loss for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.1 million, or 110%, from a net loss of $1.8 million in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The Company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 in 2024[130] - Rent expenses for the nine months ended April 30, 2025, were $12,000 compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to $338,255 for the same period in 2024, reflecting a significant increase in losses[24] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 in 2024 to $1.4 million in 2025 for the three months ended April 30[123] - Loss from investment in trading securities for the nine months ended April 30, 2025, was approximately $2.5 million, compared to $338,255 in 2024, representing an increase of $2.2 million, or 650%[133] Revenue Concentration Risk - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - For the three and nine months ended April 30, 2025, substantially all of the Company's revenues were generated from going public related consulting services[62] Future Plans and Concerns - The company plans to transition its consulting services from PRC based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company is currently facing uncertainties regarding its ability to continue as a going concern due to a history of net losses and cash outflows from operating activities[137] - The company plans to support future operations primarily from cash generated from operations and cash on hand, but may need to raise additional funds[136] Legal Matters - A settlement agreement with Boustead Securities, LLC requires the company to pay a total of $1,000,000, with $750,000 already paid in two installments[102] - The company is involved in a pending legal proceeding with J.P. Morgan Securities LLC, claiming damages of $5,064,160 related to a stock transaction[103] - The parties involved in a dispute have agreed to attempt mediation, but no resolution was reached as of May 6, 2024[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Tax Matters - The company is subject to a federal tax rate of 21% and a state tax rate of 8.84% in the US, but did not incur any income tax expenses for the three and nine months ended April 30, 2025[91][92] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93] - The company has no uncertain tax positions as of April 30, 2025, and does not expect changes in unrecognized tax benefits over the next twelve months[94] Cash Flow - Operating cash outflows for the nine months ended April 30, 2025, were approximately $2.1 million, significantly higher than approximately $0.08 million for the same period in 2024[32] - The company recorded net cash used in operating activities of approximately $2.1 million for the nine months ended April 30, 2025, primarily due to a net loss of approximately $3.9 million[143] - Net cash provided by financing activities was approximately $6.9 million for the nine months ended April 30, 2025, compared to $2.3 million for the same period in 2024, showing a significant increase in financing[147] Miscellaneous - The Company operates in one reporting segment, which is the consulting service business, as of April 30, 2025[57] - The Company recorded accrued litigation fees of $250,000 as current liabilities as of April 30, 2025[76] - The company is in the process of evaluating the impact of recent FASB updates on its consolidated financial statements[64][65][66][67] - The company is in the process of evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and implementing training programs[152] - The company extended a loan of $93,013 to Mr. Jun Liu during the nine months ended April 30, 2025, which was subsequently collected[86] - The company has a total of $600,000 due from Mr. Jun Liu as of April 30, 2025[88] - The Company recognized a decrease in fair value of investments of $1,400,028 for the three months and $2,538,592 for the nine months ended April 30, 2025[73] - The Company recorded a loss on disposal of property and equipment amounting to $53,765 due to the premature termination of a lease agreement[71] - As of April 30, 2025, the company had 3,355,106 outstanding and exercisable warrants, with a weighted average exercise price of $0.89[82]

Financial Performance - Net sales decreased from $1.53 billion to $1.49 billion, representing a period-over-period decrease of 2.3%[82] - Operating income improved to $16.4 million, compared to an operating loss of $16.8 million in the prior year period[82] - Net loss attributable to Class A and B-1 common stockholders decreased from $46.5 million to $11.7 million[82] - Adjusted EBITDA increased from $75.6 million to $89.4 million[82] - Comparable sales change was a decline of 1.3% for the thirteen weeks ended May 3, 2025[84] - Adjusted EBITDA for the thirteen weeks ended May 3, 2025, was $89.4 million, compared to $75.6 million for the same period in 2024, representing a 18.2% increase[96] - Net sales for the thirteen weeks ended May 3, 2025, were $1.49 billion, a decrease from $1.53 billion in the same period in 2024, reflecting a 2.5% decline[96] - Adjusted EBITDA Margin improved to 6.0% for the thirteen weeks ended May 3, 2025, compared to 4.9% in the same period in 2024[96] Cost and Expenses - Gross profit margin improved to 38.2% from 37.8% year-over-year[87] - SG&A expenses as a percentage of net sales decreased from 38.9% to 37.1%[88] - Interest expense decreased by $3.3 million, or 9.0%, to $33.5 million[89] Cash Flow and Liquidity - Free Cash Flow for the thirteen weeks ended May 3, 2025, was $(43.9) million, compared to $(41.1) million for the same period in 2024, indicating a slight increase in cash outflow[100] - As of May 3, 2025, the company's liquidity was $647.9 million, including $133.3 million in cash and cash equivalents and $514.6 million available on the ABL Revolving Credit Facility[102] - Net cash used in operating activities was $(15.5) million for the thirteen weeks ended May 3, 2025, compared to $(8.4) million for the same period in 2024, primarily due to lower sales and higher incentive bonuses[106] - Cash used in investing activities decreased to $27.1 million for the thirteen weeks ended May 3, 2025, from $31.7 million in the same period in 2024, driven by fewer new pet care centers and hospitals[107] - Net cash used in financing activities was $(0.3) million for the thirteen weeks ended May 3, 2025, a decrease from $(5.6) million in the same period in 2024, due to lower tax withholding payments[108] Debt and Credit Facilities - The First Lien Term Loan outstanding as of May 3, 2025, was $1.60 billion, with variable interest rates that could increase annual cash interest by approximately $16.2 million if rates rise by 100 basis points[118] - The company has a secured asset-based revolving credit facility with availability of up to $581.0 million, maturing in 2029, to support its liquidity needs[109] Business Operations - Total pet care centers in the U.S. and Puerto Rico decreased from 1,423 to 1,393[84] - The company continues to experience momentum in services, driven by strategic investments in customer acquisition and retention[85]

Revenue Performance - Total revenue for the first quarter of fiscal 2026 was $8.8 billion, a decrease of 0.9% compared to $8.8 billion in the same period last year[77]. - Comparable sales declined by 0.7% in the first quarter of fiscal 2026, with declines in home theater, appliances, and drones, while growth was seen in computing, mobile phone, and tablet categories[78]. - Domestic segment revenue was $8.13 billion, a decline of 0.9% year-over-year, with comparable sales also down by 0.7%[85]. - International segment revenue decreased by 0.6% to $640 million, with a comparable sales decline of 0.7%[91]. - Foreign currency exchange rate fluctuations negatively impacted revenue by approximately $29 million in the first quarter of fiscal 2026, primarily due to the strength of the U.S. dollar against the Canadian dollar[127]. Profitability Metrics - Gross profit for the first quarter of fiscal 2026 was $2.05 billion, representing 23.4% of revenue, compared to 23.3% in the prior year[77]. - Operating income decreased to $219 million, with an operating income margin of 2.5%, down from 3.5% in the same quarter last year[77]. - Diluted EPS for the first quarter of fiscal 2026 was $0.95, a decrease from $1.13 in the prior year[77]. - International segment gross profit decreased to 22.0% of revenue, down from 22.8% in the previous year[91]. - Adjusted operating income for the consolidated entity was $333 million, unchanged from the previous year, representing 3.8% of revenue[97]. Expenses and Charges - Restructuring charges in the first quarter of fiscal 2026 amounted to $109 million, primarily related to optimizing the Best Buy Health business[79]. - Domestic segment adjusted SG&A decreased, primarily due to a favorable indirect tax settlement[90]. - Cash flows from operating activities decreased to $34 million from $156 million in the previous year[106]. Tax and Financial Position - The effective tax rate decreased to 8.6% in the first quarter of fiscal 2026, down from 24.7% in the same period last year[83]. - The effective tax rate for the consolidated entity decreased to 8.6% from 24.7% in the previous year[97]. - As of May 3, 2025, the company has $1.4 billion in cash, cash equivalents, and restricted cash, with $0.5 billion of debt swapped to floating rate, resulting in a net asset balance exposed to interest rate changes of $0.9 billion[125]. Debt and Credit Facilities - The company entered into a $1.25 billion five-year senior unsecured revolving credit facility agreement, replacing the previous facility[111]. - The company has $1.25 billion in undrawn capacity on its Five-Year Facility Agreement as of May 3, 2025, which could be included in short-term or long-term debt if drawn[117]. Market and Interest Rate Exposure - A 50-basis point increase in short-term interest rates would lead to an estimated $5 million increase in interest income, while a decrease of the same magnitude would result in a $5 million decrease[125]. - The company is exposed to changes in short-term market interest rates, which will impact net interest expense and interest income[124]. Strategic Initiatives - The company plans to reduce its Domestic Best Buy store count by approximately 5 to 10 stores in fiscal 2026[82]. - The company emphasizes the importance of managing strategic ventures, alliances, or acquisitions as part of its growth initiatives[121]. Currency Management - The company utilizes foreign currency forward contracts to manage foreign currency exposure related to certain forecasted inventory purchases and recognized receivable and payable balances[126]. - The estimated impact of foreign exchange rate fluctuations on net earnings in the first quarter of fiscal 2026 was not significant[127]. Other Financial Information - Cash and cash equivalents decreased to $1,147 million from $1,578 million as of February 1, 2025, primarily due to inventory purchases and dividend payments[104]. - Total cost of shares repurchased increased to $100 million in the first quarter of fiscal 2026, with an average price per share of $64.39[115]. - There have been no significant changes in the company's significant accounting policies or critical accounting estimates since the end of fiscal 2025[119]. - The company has not experienced any material changes in contractual obligations since the end of fiscal 2025[118].

Revenue and Income - Advent's revenue primarily comes from the sale and servicing of fuel cell systems and Membrane Electrode Assemblies (MEAs), with expectations for significant future income from these markets[208]. - Total revenue from continuing operations increased by approximately $1.7 million or 113.3% from approximately $1.5 million in 2023 to approximately $3.3 million in 2024, driven by an increase in Joint Development Agreements[267]. - Revenues are expected to increase materially, with a focus on Joint Development Agreements (JDAs) and Technology Assessment Agreements (TAAs)[254]. - Advent anticipates substantial increased demand for its fuel cell systems and MEAs, with existing customers expected to increase order volume[251]. Grants and Collaborations - The company secured a €34.5 million grant from the EU Innovation Fund for the RHyno Project, aimed at developing innovative fuel cells and electrolysers[215]. - Advent entered a joint development agreement with Hyundai to enhance the HMC-Advent Ion Pair™ MEA, focusing on heavy-duty and stationary applications[228]. - The company has engaged in a multi-million-dollar collaboration with Airbus to optimize the Ion Pair™ MEA for aviation fuel cells, expected to last two years[218]. - Advent's collaboration with the Department of Energy National Laboratories aims to advance HT-PEM fuel cells for heavy-duty transportation and stationary power systems[226]. - The company is collaborating with BASF to develop a closed-loop supply chain for fuel cells, focusing on improved performance and cost competitiveness[230]. Product Development - Advent launched the Honey Badger 50™ Fuel Cell System, capable of generating up to 50W of continuous power with 65% weight savings compared to traditional batteries[236]. - In September 2023, Advent secured a $2.2 million contract with the US DoD to optimize the HB50 system, focusing on integrating Ion Pair MEA technology[239]. - A new $2.8 million contract was secured in December 2023 to develop advanced manufacturing processes for the HB50 system, aiming to increase production capacity[240]. - As of December 31, 2024, Advent continues to collaborate with the US DoD to advance HB50 technology[241]. - The company is developing its next generation MEA technology, which is expected to deliver up to three times the power output of current products[252]. Financial Performance - Cost of revenues decreased by approximately $5.5 million from approximately $7.0 million in 2023 to approximately $1.5 million in 2024, primarily due to a shift from product sales to Joint Development Agreements[268]. - Research and development expenses decreased from approximately $7.6 million in 2023 to approximately $3.2 million in 2024, reflecting cost reductions[270]. - Administrative and selling expenses decreased from approximately $28.8 million in 2023 to approximately $14.3 million in 2024, primarily due to cost and staff reductions[271]. - Net cash provided by operating activities from continuing operations was approximately $1.2 million in 2024, a significant improvement from $(21.0) million in 2023[286][287]. - Cash flows from investing activities provided approximately $1.2 million in 2024, primarily related to the sale of equipment, compared to $(5.3) million in 2023[288][289]. Stock and Equity - A reverse stock split of 1-for-30 was executed on May 13, 2024, adjusting all historical share amounts accordingly[213]. - Advent's stockholders' equity was reported at ($2,879,000) as of June 30, 2024, leading to non-compliance with Nasdaq's listing requirements[245]. - The company is authorized to issue 501,000,000 shares of Common Stock, which did not change as a result of the Reverse Stock Split[294]. Impairments and Contingencies - The company received an arbitration award in favor of F.E.R. for approximately €4.5 million, which it is appealing[249]. - Impairment losses of $9.8 million were recognized in 2023, primarily related to goodwill and other intangible assets[274]. - The company recorded a goodwill impairment charge of $0.6 million for the UltraCell Reporting Unit during the year ended December 31, 2023[316]. - A goodwill impairment charge of $5.1 million was recorded for the SerEnergy and FES Reporting Unit during the year ended December 31, 2023[317]. - The company recognized an impairment charge of $3.3 million related to the Patented Technology during the second quarter of 2023[316]. - The company recognized a loss contingency of $4.7 million related to litigation during the year ended December 31, 2024[278]. Tax and Interest - Advent follows the asset and liability method of accounting for income taxes under ASC 740, recognizing deferred tax assets and liabilities for estimated future tax consequences[319]. - For the years ended December 31, 2024 and 2023, net income tax benefits of $0.1 million were recorded in the consolidated statements of operations for both years[323]. - The Company recognized $26 thousand of interest income related to the Bond Loan for the year ended December 31, 2023[327]. - The estimated fair value of the Bond Loan was fully reserved as an expected credit loss as of December 31, 2023, and continues to be reserved as of December 31, 2024[328]. Cash Flow and Debt - The company had a working capital deficit of $(26.1) million as of December 31, 2024, with current assets of $2.7 million and current liabilities of $28.8 million[282]. - Advent's cash flows from financing activities from continuing operations were approximately $0.9 million for the year ended December 31, 2024, compared to $9.1 million for the year ended December 31, 2023[290][291]. - The Company had an unrestricted cash balance of approximately $0.4 million as of December 31, 2024[339]. - Advent's short-term debt was $0.5 million, with limited exposure to interest rate risk in the future[339]. - The Company has not entered into any hedging transactions for foreign exchange risk due to relatively low exposure[341]. Losses and Adjusted Metrics - For the three months ended December 31, 2024, the net loss from continuing operations was $0.77 million, a decrease of $23.60 million compared to the same period in 2023[335]. - Adjusted EBITDA for the three months ended December 31, 2024 was $1.95 million, an increase of $26.44 million compared to the same period in 2023[335]. - Adjusted net loss from continuing operations for the year ended December 31, 2024 was $0.77 million, a decrease of $23.63 million compared to 2023[337]. Corporate Tax Changes - The U.S. corporate income tax rate was reduced from 35% to 21% as part of the Tax Cuts and Jobs Act of 2017[324].

Financial Performance - Net income for the first quarter was $0.7 million, down from $2.1 million in the same period last year, primarily due to a large disaster recovery order last year [1]. - Net sales for the first quarter were $33.754 million, down from $46.735 million in the same period last year [19]. - Operating loss for the first quarter was $94, compared to an operating income of $2.971 million in the prior year [19]. Margins and Costs - Gross margin improved to 47.5%, up 400 basis points from 43.5% in the prior year, attributed to lower margins on last year's disaster recovery order and a higher proportion of full-service orders [2]. Shareholder Returns - The company repurchased $4.0 million worth of shares and paid $0.4 million in cash dividends during the first quarter [7]. - A quarterly dividend of $0.025 per share was declared, payable on July 11, 2025 [3]. Market Outlook - Shipments plus backlog declined by 22.9% to $105.6 million compared to the previous year [3]. - The current year is expected to represent a "pause" in the recovery of the school furniture market post-COVID, but there are hopeful signs for mid-term growth in school construction [10]. - The company maintains an opportunistic stance to navigate challenges and opportunities in the upcoming year [9]. Investments - The company invested over $2.0 million in major platform processes to expand operations and support domestic market expansion [7].

Financial Performance - For the three months ended April 30, 2025, the Company reported a net income of $0.7 million on sales of $33.8 million, a decrease of approximately 27.8% in sales compared to $46.7 million in the same period last year [81]. - Gross margin for the first quarter of 2025 was 47.5%, an increase from 43.5% in the prior year, attributed to a higher proportion of full-service orders [82]. - Selling, general and administrative expenses decreased by approximately $1.3 million compared to the same period last year, primarily due to lower variable selling expenses [83]. - The effective income tax rate for the three months ended April 30, 2025, was 26.4%, compared to 25.5% in the prior year [86]. Backlog and Orders - The Company's backlog as of April 30, 2025, was $70.4 million, down from $88.5 million on April 30, 2024, reflecting a decrease in incoming orders [77]. Share Repurchase - The Company spent $4.0 million to repurchase 348,944 shares of its common stock, with $7.2 million authorized for future repurchases as of April 30, 2025 [91]. Accounts and Inventory - Accounts Receivable decreased by $7.5 million at April 30, 2025, due to decreased shipments and improved collections [88]. - Inventory increased by $2.7 million at April 30, 2025, primarily due to increased material costs during the quarter [88]. Compliance and Future Outlook - The Company believes it will maintain compliance with its financial covenants under the Credit Agreement, despite risks related to economic conditions and raw material costs [92]. - Management cautions that future growth rates are unlikely to match those of the past several years due to various uncertainties, including trade policies and funding for educational institutions [78].

Financial Performance - Net sales decreased by $14.0 million, or 12.0%, to $102.7 million in the first quarter of fiscal 2025 compared to $116.7 million in the same period of fiscal 2024[119]. - Gross profit decreased by $8.3 million, or 13.4%, to $53.4 million, with gross margin decreasing to 52.0% from 52.8% year-over-year[121]. - The net loss for the first quarter of fiscal 2025 was $15.3 million, compared to a net loss of $7.9 million in the prior year[111]. - Adjusted EBITDA decreased to ($3.8) million in the first quarter of fiscal 2025, down from $1.8 million in the same period of fiscal 2024[111]. - Net loss attributable to controlling interest was $15.3 million for the three months ended May 4, 2025, compared to a net loss of $7.9 million for the same period in 2024[125]. - Adjusted EBITDA decreased by $5.6 million to $(3.8) million in the three months ended May 4, 2025, compared to $1.8 million in the same period of 2024, representing a decrease to (3.7%) of net sales from 1.6%[127]. Sales Breakdown - Store market net sales decreased by $6.4 million, or 8.2%, to $71.6 million, while non-store market net sales decreased by $5.5 million, or 16.5%, to $28.0 million in the same period[120]. - The decrease in net sales was primarily driven by a decline in web traffic due to slower promotional activity[119]. Expenses and Cash Flow - Selling, general and administrative expenses decreased by $4.9 million, or 6.9%, to $65.7 million, but as a percentage of net sales, it increased to 64.0% from 60.5%[122]. - Net cash used in operating activities was $56.5 million for the three months ended May 4, 2025, compared to $33.7 million for the same period in 2024[134]. - Cash used in operating assets and liabilities was $50.3 million for the three months ended May 4, 2025, primarily due to a $28.2 million decrease in accounts payable and a $9.6 million increase in inventory[134]. - Income tax expense was $1.3 million for the three months ended May 4, 2025, compared to an income tax benefit of $2.1 million for the same period in 2024[124]. - Net cash used in investing activities was $1.3 million for the three months ended May 4, 2025, compared to $1.5 million for the same period in 2024[136]. Capital Expenditures and Financing - The company expects to spend approximately $17.0 million on capital expenditures in fiscal 2025, primarily for logistics optimization and information technology[129]. - Net cash provided by financing activities was $63.0 million for the three months ended May 4, 2025, compared to $9.8 million for the same period in 2024[137]. - The company believes that cash flow from operating activities and available cash under the credit facility will be sufficient to cover working capital requirements and anticipated capital expenditures for the foreseeable future[130]. Operational Overview - The company operated 62 retail stores and three outlet stores as of May 4, 2025, reflecting ongoing expansion efforts[103]. - The macroeconomic environment is experiencing inflation and recessionary concerns, impacting store traffic and consumer demand[108]. - The company continues to focus on direct-to-factory sourcing initiatives to improve product costs despite challenges in gross margin[121].

Financial Performance - Hurco reported a net loss of $4,063,000, or $0.62 per diluted share, for Q2 FY 2025, compared to a net loss of $3,922,000, or $0.61 per diluted share, in Q2 FY 2024[1]. - Sales and service fees for Q2 FY 2025 were $40,867,000, a decrease of $4,305,000, or 10%, compared to the same period in FY 2024[2]. - Orders for Q2 FY 2025 were $43,700,000, a decrease of $492,000, or 1%, compared to Q2 FY 2024[7]. - Gross profit for Q2 FY 2025 was $7,829,000, or 19% of sales, compared to $8,019,000, or 18% of sales, in Q2 FY 2024[12]. - Selling, general, and administrative expenses for Q2 FY 2025 were $10,897,000, or 27% of sales, compared to $11,461,000, or 25% of sales, in Q2 FY 2024[13]. - The net loss for the three months ended April 30, 2025, was $4,063,000, compared to a net loss of $3,922,000 for the same period in 2024[19]. - Selling, general and administrative expenses as a percentage of sales increased to 27% for the three months ended April 30, 2025, from 25% in the same period of 2024[20]. - Gross profit for the six months ended April 30, 2025, was $16,119,000, down from $17,714,000 in 2024, reflecting a gross margin of 18% compared to 20% in the prior year[19][20]. Cash and Working Capital - Cash and cash equivalents totaled $43,807,000 at April 30, 2025, compared to $33,330,000 at October 31, 2024[15]. - Working capital was $175,914,000 at April 30, 2025, down from $180,788,000 at October 31, 2024[15]. - Total current assets decreased to $222,909,000 as of April 30, 2025, from $228,577,000 as of October 31, 2024[22]. - Shareholders' equity decreased to $202,280,000 as of April 30, 2025, from $207,172,000 as of October 31, 2024[22]. - The company reported a decrease in accounts receivable, net, to $25,583,000 as of April 30, 2025, from $36,678,000 as of October 31, 2024[22]. - Days sales outstanding increased to 51 days as of April 30, 2025, compared to 49 days as of October 31, 2024[20]. Sales Performance by Region - Sales in the Americas decreased by 9% in Q2 FY 2025 compared to Q2 FY 2024, primarily due to decreased shipments of Hurco and Takumi machines[4]. - European sales decreased by 5% in Q2 FY 2025 compared to Q2 FY 2024, driven by decreased shipments in Germany, France, and Italy[5]. - Asian Pacific sales decreased by 29% in Q2 FY 2025 compared to Q2 FY 2024, primarily due to decreased sales of higher-performance machines in India[6]. Tax and Capital Expenditures - The effective tax rate for the six months ended April 30, 2025, was (44)%, compared to 9% in the same period of 2024[20]. - Capital expenditures for the six months ended April 30, 2025, were $1,356,000, compared to $1,311,000 in 2024[20].

Financial Performance - Total revenue for the three months ended April 30, 2025, was $69.6 million, a decrease of 7.2% year-over-year compared to $75.0 million in the same period of 2024[128] - Gross Profit was $21.9 million, representing a gross margin of 31.5%, down from 37.9% in the previous year[128] - Net Loss for the quarter was $(26.1) million, with a net loss as a percentage of revenue of (37.5)%, compared to (29.3)% in the prior year[128] - Adjusted EBITDA was $(1.3) million for the three months ended April 30, 2025, down from $6.5 million in 2024, with Adjusted EBITDA margins of (1.9)% and 8.7% respectively[158] - Total revenue, net for the three months ended April 30, 2025, was $69.6 million, a decrease of $5.4 million, or 7.2%, compared to $75.0 million for the same period in 2024[173] - Subscription and Reserve rental revenue was $62.0 million for the three months ended April 30, 2025, a decrease of $4.1 million, or 6.2%, compared to $66.1 million for the same period in 2024[174] - Other revenue was $7.6 million for the three months ended April 30, 2025, a decrease of $1.3 million, or 14.6%, compared to $8.9 million for the same period in 2024[175] - Total costs and expenses were $89.3 million for the three months ended April 30, 2025, a decrease of $2.2 million, or 2.4%, compared to $91.5 million for the same period in 2024[176] - General and administrative expenses were $20.7 million for the three months ended April 30, 2025, a decrease of $2.1 million, or 9.2%, compared to $22.8 million for the same period in 2024[183] - Interest expense, net was $(6.3) million for the three months ended April 30, 2025, an increase of $0.7 million, or 12.5%, compared to $(5.6) million for the same period in 2024[191] Subscriber Metrics - Active Subscribers increased by 1% year-over-year, reaching 147,157 as of April 30, 2025, compared to 145,837 in 2024[128] - Active Subscribers increased to 147,157 as of April 30, 2025, up from 145,837 year-over-year, driven by improved retention and promotional activity[152] Customer Engagement - Customer engagement metrics improved, with Spring 2025 rental products showing a 23% higher share of views and 46% more hearts compared to Spring 2024[128] - The company plans to focus on increasing the quantity and desirability of rental product purchases to enhance customer satisfaction and retention in fiscal year 2025[136] Cash Flow and Liquidity - Cash and Cash Equivalents decreased to $70.4 million from $82.0 million year-over-year[128] - Cash flows from operations for the three months ended April 30, 2025 were $8.3 million, an increase from $4.6 million in the same period of 2024[203] - Total cash and cash equivalents, along with restricted cash, decreased to $79.4 million as of April 30, 2025, down from $86.5 million at the beginning of the period[203] - The cash consumption of the business was $(6.4) million for the three months ended April 30, 2025, compared to $(1.4) million for the same period in 2024, indicating higher operational costs[203] Operational Strategy - The company launched 36 new brands and over 1,000 new styles in the first quarter of fiscal year 2025, with a projected 134% increase in rental product receipts year-over-year[126] - The company expects to double the new rental product added to its site in fiscal year 2025 compared to fiscal year 2024[131] - The company is focused on investing in customer value and improving the customer experience to mitigate inflationary pressures and rising labor costs[147] - The company plans to continue leveraging technology and automation to drive efficiencies and improve margins as it scales its operations[140] - The company plans to significantly increase rental product availability, which may impact cash and cash equivalents in fiscal year 2025[197] Financial Challenges - Net loss for the three months ended April 30, 2025, was $26.1 million, compared to a net loss of $22.0 million for the same period in 2024[172] - The company's accumulated deficit reached $(1,149.1) million as of April 30, 2025, indicating ongoing financial challenges since inception[197] - The macroeconomic environment remains uncertain, impacting consumer discretionary spending, price sensitivity, and overall business operations[145] Cost Management - Transportation costs decreased as a percentage of revenue in fiscal year 2024, attributed to higher revenue per order and a new transportation contract, with expectations to further reduce these costs in fiscal year 2025[147] - Fulfillment expenses were $20.4 million for the three months ended April 30, 2025, representing 29.3% of revenue, compared to 27.5% for the same period in 2024[177] - The January 2024 restructuring plan is expected to generate total annual operating expense savings of approximately $12 million[189] Market and Risk Factors - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to adopt new accounting guidance within the same time periods as private companies[214] - There were no material changes to the company's quantitative and qualitative disclosures about market risk in the three months ended April 30, 2025, compared to the 2024 Annual Report[215] - The company experienced seasonality in subscriber acquisition, typically peaking in March through May and September through November, with disruptions noted during fiscal year 2022 and 2023 due to pricing changes and inventory levels[143] Asset Management - The company performed an impairment analysis of its long-lived assets as of April 30, 2025, and January 31, 2025, concluding that undiscounted cash flows exceeded carrying values, resulting in no impairment recognized for the respective periods[212]