Financial Data and Key Metrics Changes - Consolidated net sales were $126.8 million compared to $128.1 million a year ago and $126.6 million in Q2 of fiscal 2025 [22] - Consolidated gross margin was 30.7% in Q3 compared to 30.4% a year ago and improved from 26.7% in Q2 [26] - Consolidated operating loss for Q3 decreased to $1.5 million compared to a $3.5 million operating loss in Q3 of last year and a $10.3 million operating loss last quarter [28] - Consolidated adjusted EBITDA for Q3 increased to $12.6 million compared to $11.9 million in Q3 of last year and $2.9 million in Q2 [29] - The company generated positive GAAP cash flow from operations of $2.3 million this quarter, the first positive cash flow in the past eight quarters [20] Business Line Data and Key Metrics Changes - The Terrestrial and Wireless (T and W) segment experienced higher net sales of $59.2 million, a 12% increase sequentially, driven by higher sales of next-generation 911 services [25] - The Satellite and Space (S and S) segment's net sales decreased 8.3% to $67.6 million, impacted by lower sales of troposcatter solutions, but achieved a more favorable product mix [26] Market Data and Key Metrics Changes - The T and W segment's growth is driven by new cloud-based emergency response products and increased interest from international carriers in 5G location technologies [19] - The S and S segment is capitalizing on differentiated technologies and extensive customer relationships to develop new growth vectors [14] Company Strategy and Development Direction - The company is executing a transformation plan aimed at addressing historical challenges while leveraging core strengths and capitalizing on opportunities [9] - The transformation plan includes reducing costs, improving operational efficiency, and streamlining product lines, with over 70 products discontinued in the satellite and space business [12][44] - The company aims to return to positive cash flow and has made significant progress in improving financial performance and accountability [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges longstanding challenges but emphasizes strong assets and compelling growth opportunities [32] - The company has secured a $40 million capital infusion to improve financial flexibility and address prior covenant breaches [10] - Management expresses optimism about the renewed sense of purpose and progress within the organization [20] Other Important Information - The company has amended its credit facility to waive defaults and suspend testing of certain covenants until October 31, 2025 [29] - The company is supporting a review by the director of defense trade controls regarding potential misclassification of certain modem variants [17] Q&A Session Summary Question: Status of next-generation digital back-end modems development - Management reports good progress on the development of next-generation platforms, with expectations for significant progress towards certification by the end of the calendar year [36] Question: Outstanding competitions in the 911 business - Management confirms there are several compelling bids in the RFP process but prefers not to disclose specifics [39] Question: Current quarter bookings characterization - Management refrains from providing guidance on Q4 bookings at this stage [40] Question: Impact of discontinued products on revenue - Management expects the impact from discontinued products to be less than 10% of satellite and space segment revenue [43] Question: Outlook for terrestrial wireless segment growth - Management sees growth opportunities in international carrier markets, especially in 5G, and is launching new products to enhance market presence [48]

Financial Data and Key Metrics Changes - For Q3, total revenue was $821.1 million, up 0.5% from the prior year quarter [21] - Restaurant revenue increased by 1.2% to $679.3 million, while retail revenue decreased by 2.7% to $141.8 million [22] - Comparable store restaurant sales grew by 1%, while comparable store retail sales decreased by 3.8% [22] - Adjusted EBITDA was $48.1 million, or 5.9% of total revenue, compared to $47.9 million, or 5.9% of total revenue in the prior year [28] Business Line Data and Key Metrics Changes - Restaurant cost of goods sold was 26.2% of restaurant sales, up from 25.9% in the prior year, primarily due to menu mix and commodity inflation [23] - Retail cost of goods sold was 48.9% of retail sales, down from 49% in the prior year, driven by higher vendor allowances [24] - Labor and related expenses were 37.1% of revenue, down from 37.8% in the prior year, due to improved productivity [25] Market Data and Key Metrics Changes - Off-premise sales accounted for 19.1% of restaurant sales, compared to 18.9% in the prior year [22] - Pricing for the quarter was approximately 4.9%, consisting of 1.5% carry forward pricing from fiscal 2024 and 3.4% new pricing from fiscal 2025 [22] Company Strategy and Development Direction - The company is focused on brand refinement and enhancing guest engagement through various initiatives, including partnerships and promotions [11][12] - The transformation plan is aimed at driving relevancy, delivering food and experiences guests love, and growing profitability [19] - The company is leveraging AI technology to improve efficiency and effectiveness across various operations [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the macroeconomic environment but expressed confidence in executing the business and transforming for the future [18] - The company raised its guidance for total revenue and adjusted EBITDA for fiscal 2025, reflecting positive trends and strong start to Q4 [30][31] Other Important Information - The company is actively working to mitigate tariff impacts, with approximately one-third of retail products sourced from China [17] - The board declared a quarterly dividend of $0.25 per share payable on August 13, 2025 [29] Q&A Session Summary Question: What does a strong start to Q4 mean in the context of the 1% restaurant same-store sales number reported in Q3? - Management noted improving trends from Q3 into Q4, particularly pleased with the Campfire promotion resonating with guests [33][34] Question: Can you provide more detail on managing expenses in Q3? - Management indicated that they adjusted discretionary expenses and G&A to align with the challenges faced in Q3 [35][36] Question: How do you view G&A as a percent of sales for the upcoming year? - Management stated that fiscal 2025 is an investment year, and G&A will return to historical levels as the transformation plan progresses [38] Question: Can you share average check size and mix benefits for Q3? - The average check was up 6.6% for the quarter, with 4.9% from pricing and 1.7% from mix [40][41] Question: What is the anticipated impact of tariffs on Q4? - Management expects a $5 million net tariff impact on Q4 EBITDA, with ongoing efforts to mitigate this through vendor negotiations and alternate sourcing [30][51] Question: Can you elaborate on the back of house optimization initiative? - The initiative aims to improve food quality and ease of operations, with expectations for benefits to flow through in Q4 and into fiscal 2026 [61][65] Question: What have you learned from the remodeling initiatives? - Management indicated that they will provide more insights in September regarding the impact of remodels and future plans [70]