Financial Data and Key Metrics Changes - The company reported a net income of $1.8 million for the nine months ended September 30, 2025, compared to a net loss of $2.7 million for the same period in 2024, marking a $4.5 million improvement [13] - Basic net income per share was approximately $0.20 for the nine-month period ended September 30, 2025, compared to a net loss of $0.34 per share in the prior year [15] - Gross margin as a percentage of product sales increased to 43% during the third quarter of 2025, up from 26% in the same quarter of 2024 [17] Business Line Data and Key Metrics Changes - Total product sales decreased by 8% or $505,000 in the third quarter of 2025 compared to the same quarter in 2024 [15] - Domestic sales increased by 2% in the third quarter of 2025 compared to the same quarter in 2024, and were up 9.5% compared to the second quarter of 2025 [12] - International sales were down during the third quarter of 2025 compared to the same quarter in 2024, primarily due to timing of shipments and short supply management [12] Market Data and Key Metrics Changes - The U.S. market represented about 86% of total sales during the trailing 12-month period ended September 30, 2025 [12] - International sales for the nine-month period ended September 30, 2025, were 15% higher than the same period in the prior year [13] Company Strategy and Development Direction - The company aims to regain customers lost during supply shortages and expand the use of scour preventatives [11] - There is a focus on operational excellence and execution while reviewing next capacity expansion opportunities [14] - The company is awaiting FDA approval for its Retain product, which targets subclinical mastitis, and is conducting investigational product use studies in collaboration with Michigan State University [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position and the potential for growth, emphasizing the importance of their work in animal health [9][10] - The management team highlighted the need for continued strong production yields and sales growth to ensure future success [18] Other Important Information - The company has seen significant improvements in gross margins due to better manufacturing performance and a composite price increase of around 6% in 2025 [35] - Adjusted EBITDA for the three-month, nine-month, and trailing 12-month periods ended September 30, 2025, were $751,000, $4.4 million, and $5.8 million, respectively, showing strong year-over-year improvements [19] Q&A Session Summary Question: What active steps are being taken to increase growth for First Defense? - Management indicated that they have reached a level of capacity set during the expansion project and have implemented quality measures to ensure predictable manufacturing levels [26] Question: How do you plan to balance production with cash management given the growing inventory? - The CFO noted that inventory levels have increased to a more desirable level as they approach peak selling season, and they are closely monitoring inventory management [32] Question: What is attributed to the margin improvement in Q3? - The CFO attributed margin improvements to enhanced manufacturing performance and a price increase, along with the benefits of scale from increased sales volume [35]

Financial Data and Key Metrics Changes - The company reported a net income of $1.8 million for the nine months ended September 30, 2025, compared to a net loss of $2.7 million for the same period in 2024, marking a $4.5 million improvement [13] - Basic net income per share was approximately $0.20 for the nine-month period ended September 30, 2025, compared to a net loss of $0.34 per share in the prior year [16] - Gross margin as a percentage of product sales increased to 43% during the third quarter of 2025, up from 26% in the same quarter of 2024 [17] Business Line Data and Key Metrics Changes - Total product sales decreased by 8% or $505,000 in the third quarter of 2025 compared to the same quarter in 2024 [16] - Domestic sales increased by 2% in the third quarter of 2025 compared to the same quarter in 2024, and were up 9.5% compared to the second quarter of 2025 [12] - International sales were down during the third quarter of 2025 compared to the same period in 2024, primarily due to timing of shipments and short supply management [12] Market Data and Key Metrics Changes - The U.S. market represented approximately 86% of total sales during the trailing 12-month period ended September 30, 2025 [12] - International sales for the nine-month period ended September 30, 2025, were 15% higher than the same period in the prior year [13] Company Strategy and Development Direction - The company aims to regain customers and expand the use of scour preventatives while exploring new market opportunities more aggressively [11] - The focus is on operational excellence and execution, with a priority on production capacity and quality [14] - The company is awaiting FDA approval for the Re-Tain product, which targets subclinical mastitis, and is conducting investigational product use studies to gather market feedback [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position and the positive changes in the commercial team, emphasizing a shift from managing short supply to winning new customers [26] - The company is focused on maintaining strong production yields and achieving sales growth to drive future success [18] - Management acknowledged that difficult sales comparisons may persist due to backlog fulfillment but expects to lap this dynamic by the second half of 2026 [17] Other Important Information - The company has undergone significant management transitions, with Olivier te Boekhorst appointed as the new President and CEO effective November 1, 2025 [6] - The company has improved its cash position to $3.9 million as of September 30, 2025, from $3.8 million at the end of 2024, while investing in inventory [19] Q&A Session Summary Question: What active steps are being taken to increase growth for First Defense? - Management indicated that they have reached a level of capacity set during the expansion project and have implemented quality measures to ensure predictable manufacturing levels [26] Question: How does the company plan to balance production with cash generation? - The CFO noted that inventory levels have increased to a desirable level as they approach peak selling season, and they are closely monitoring inventory management [32] Question: What factors contributed to the margin improvement in Q3? - The CFO attributed margin improvement to enhanced manufacturing performance and a composite price increase of around 6% in 2025 [35]