Financial Data and Key Metrics Changes - For Q3 2025, total revenue was $13.8 million, an 11% decrease from $15.4 million in the prior year quarter, primarily due to lower contributions from healthcare operations [14] - Pharmacy prescription revenues increased by approximately $400,000 or 5% to $9.5 million compared to the prior year, driven by higher reimbursement rates [14] - Gross profit margin for the quarter was 19.9%, down from 23.2%, reflecting softer performance in both segments [16] Business Line Data and Key Metrics Changes - The healthcare operations segment experienced a decline of approximately $1.5 million, while the e-commerce segment saw a modest decrease of about $100,000 [14] - 340B contract revenue for Q3 2025 decreased to $600,000 from $2.5 million in the prior year quarter due to transitions of certain covered entities [15] - E-commerce revenue totaled $3.7 million compared to $3.8 million in the prior year quarter, a 4% decline mainly related to lower hardware sales [15] Market Data and Key Metrics Changes - The 340B business dispensed more than 1,600 prescriptions in October, resulting in over a 140% rise in monthly contract revenue compared to earlier lows [11] - Retail prescription business volumes increased by 27% from earlier lows in 2025, supported by new government pharmacy service contracts [11] Company Strategy and Development Direction - The company is focused on improving operations, reducing costs, and growing the business, with expectations for more significant impacts in Q4 2025 and into 2026 [3][5] - Plans include adding to the sales team and enhancing business development efforts to capitalize on market opportunities [20] - The company aims to achieve operational break-even in the second half of 2026 [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q3 results reflect ongoing challenges but believe they represent a low point, with expectations for improvement in subsequent quarters [19] - The company is encouraged by progress in the 340B business and overall operational improvements, positioning for continued growth [12][19] Other Important Information - The company has reduced employee headcount by 50 since the start of the year, resulting in approximately $200,000 in monthly payroll savings [10] - Total operating expenses decreased by nearly 40% to $4.7 million compared to approximately $7.8 million in Q3 2024 [16] Q&A Session Summary Question 1: Current plans for the buyback - The company continues to monitor the market for share repurchases while being prudent with cash deployment [21] Question 2: Impact of NASDAQ extension on stock price plans - The extension is welcomed, but the focus remains on improving financial results to boost investor confidence [21] Question 3: Views on China amid uncertainties - Despite tariff challenges, there are still opportunities for non-U.S.-made products, and inventory sells quickly once in China [21] Question 4: Status of ongoing lawsuits - The company has resolved two matters and is working to resolve the final matter while protecting shareholder interests [22]

Financial Data and Key Metrics Changes - The company achieved full year core operating profit growth of 8%, reflecting the resilience of its business model and growth strategy [7][27] - System-wide sales grew 5% in Q4, driven by 5% net new unit growth and 1% same store sales growth [29] - Core operating profit for the fourth quarter was $1.52 per share, with a 4% increase in EPS to $5.39 excluding special items [32][35] Business Line Data and Key Metrics Changes - Taco Bell U.S. delivered a strong year with full year system sales up 6% and same store sales rising 5% in Q4, significantly outperforming the industry [12][13] - KFC International achieved 7% system sales growth and 14% core operating profit growth in Q4, despite a 2% decline in same store sales for the full year [10][11] - Pizza Hut's full year system sales declined 1%, but same store sales growth improved 300 basis points sequentially in Q4 [15][17] Market Data and Key Metrics Changes - In the Middle East, KFC saw a strong recovery with same store sales increasing significantly, while Africa, Latin America, and Canada experienced mid- to high single-digit same store sales growth [11][12] - Digital sales grew approximately 15% in 2024, with over $30 billion in total digital sales [21][22] - KFC's digital sales surged more than 20% in markets excluding China, driven by expanded kiosk adoption [21] Company Strategy and Development Direction - The company is focused on enhancing its technology platform, introducing Byte by Yum, a collection of proprietary software products to streamline operations and improve consumer experiences [8][40] - The strategy emphasizes deepening market penetration and expanding product offerings while enhancing value perception [12][17] - The company plans to continue investing in technology and operational effectiveness to ensure agility and resilience [28][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of international markets and the overall health of franchisees, particularly in KFC [54][61] - The company anticipates another strong year of sales performance at Taco Bell U.S. and expects same store sales performance to improve in many markets [48][50] - Management acknowledged near-term headwinds but remains optimistic about long-term growth trajectory [47][50] Other Important Information - The company opened over 4,500 new units in 2024, with KFC leading the way with nearly 2,900 new units [36][37] - The company plans to host Taco Bell's Consumer Day in New York City on March 4, showcasing growth plans [51] Q&A Session Summary Question: Health of international franchisees and growth trajectory - Management noted improvements in international markets, with KFC's system sales growth in Q4 up to 10% in unimpacted markets, while acknowledging challenges in the Middle East [54][56][58] Question: Core operating profit growth expectations for 2025 - Management indicated confidence in achieving at least 8% core operating profit growth, driven by strong performance in KFC International and Taco Bell U.S. [64][66] Question: G&A outlook and long-term expectations - Management expects G&A to increase by a low single-digit percentage, with a long-term goal of reducing G&A as a percentage of system sales [68][72] Question: Scott's leadership impact on KFC U.S. - Management expressed excitement about Scott's leadership, focusing on modernizing the consumer experience and enhancing digital capabilities [75][77] Question: Technology strategy and Bite's impact - Management highlighted the advantages of an integrated technology platform, emphasizing the benefits for franchisees and the potential for improved sales and efficiency [80][88]