Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2026 were $82.1 million, down $13 million, or 13.6% year-over-year, primarily due to declines at Home Meridian [4][5] - Consolidated operating loss was $4.4 million compared to $3.1 million in the prior year quarter, reflecting lower sales volume and unfavorable customer mix [4] - Consolidated net loss was $3.3 million, or $0.31 per share, with a six-month net loss of $6.3 million, or $0.60 per diluted share [4][5] Business Line Data and Key Metrics Changes - Hooker branded net sales increased by 1.3% year-over-year, reaching breakeven compared to a $329,000 loss in the same quarter last year [3][15] - Home Meridian net sales decreased by 44.5%, heavily impacted by tariff-related buying hesitancy and macroeconomic pressures [3][16] - Domestic upholstery segment's net sales were flat, with a slight decline of 1.7% for the first six months, but operating losses were reduced by 68% in Q2 [3][18] Market Data and Key Metrics Changes - The decline in Home Meridian was attributed to a loss of a major customer due to bankruptcy, accounting for about 25% of the sales decrease [4][16] - The hospitality business within Home Meridian saw a decline due to project timing, while traditional furniture channels faced macroeconomic pressures [3][16] Company Strategy and Development Direction - The company is focused on cost reduction efforts, aiming to eliminate approximately $25 million, or 25% of fixed costs, with significant savings expected by the end of Q3 2026 [13][14] - A new Margaritaville license collection is set to launch in October, which is anticipated to enhance growth opportunities [10][22] - The company is adapting to tariff impacts by evaluating pricing on a SKU-level basis and implementing mitigation strategies [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the home furnishings industry is facing challenges from low existing home sales, elevated mortgage rates, and persistent inflation [21] - There is optimism regarding the upcoming cost structure changes and the potential for growth when market demand returns [8][22] - The company is confident that its restructuring efforts will not hinder growth or customer service capabilities [10][22] Other Important Information - The company reported a significant improvement in operational results at Hooker branded and domestic upholstery, despite ongoing challenges [9] - Incoming orders for Hooker branded and domestic upholstery increased by nearly 11% and 1.6%, respectively, indicating some positive momentum [21] Q&A Session Summary Question: What is driving the increased orders at Hooker branded and domestic upholstery? - Management indicated subtle macro improvements at the retail level, with positive feedback from partners regarding Labor Day sales [27] Question: How do you plan to return the Home Meridian segment to profitability? - Management emphasized the importance of aligning cost savings with revenue growth, particularly focusing on customer relationships [29] Question: What is the breakdown of restructuring costs for the quarter? - Approximately two-thirds of the restructuring costs were in cost of goods sold, and one-third in selling and administrative expenses [31]

Financial Data and Key Metrics Changes - For the second quarter, the company's healthcare revenue was $370 million, achieving earnings per share of $1.33, with a 600 basis points operating margin expansion [6][22][24] - Non-GAAP earnings per share grew by 46% year-over-year [24] - The gross margin improved to 62.9%, up 40 basis points year-over-year, while the operating margin reached 27.5%, reflecting a 600 basis points improvement [24][25] Business Line Data and Key Metrics Changes - Consumable and service revenue grew by 8.4%, while capital equipment and other revenue declined by 2% [22][24] - The company shipped 63,100 technology boards and monitors during the quarter, aligning with expectations [23] Market Data and Key Metrics Changes - The healthcare business is projected to reach full-year revenue guidance of $1.505 billion to $1.535 billion, reflecting 8% to 11% growth on a constant currency basis [25][27] - The company anticipates growth in adjacent markets of 10% to 20% [15] Company Strategy and Development Direction - The company is focused on three waves of growth: elevating commercial excellence, accelerating intelligent monitoring, and innovating wearable technologies [12][15][18] - Key leadership additions have been made to enhance commercial execution and operational excellence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 24% to 30% EPS growth for the year despite tariff impacts [21] - The company has successfully mitigated tariff impacts by over 50% compared to original estimates [20][29] Other Important Information - The cybersecurity incident incurred net expenses of approximately $4.5 million, which are excluded from non-GAAP results [30] - The divestiture of Sound United is on track to close by the end of the year, with proceeds expected to prioritize share repurchases [31] Q&A Session Summary Question: Guidance update and inputs - Management indicated that guidance reflects strong consumer growth and capital sales growth in the low single-digit range [34][36] Question: Salesforce alignment and early feedback - Positive feedback was received regarding dedicated specialty sales representatives, but quantifying growth impact is premature [38] Question: Status of relationship with Philips - The relationship with Philips remains strong, with ongoing discussions for future partnership [44][46] Question: Tariff impact and mitigation - Current guidance implies a tariff impact of $17 million to $19 million, with ongoing efforts to further mitigate this [49][50] Question: Incremental metric performance - Incremental value from new contracts is on track, with a strong pipeline for the second half of the year [56][58] Question: Board shipments expectations - Expected board shipments remain in the range of 60,000 to 65,000 per quarter [67] Question: Competitive dynamics and product lines - The company has not experienced significant pressure from generics or reprocessing, and growth in advanced categories is in line with long-range targets [86][88] Question: Tax rate assumptions - The assumed tax rate for the year is around 23.8% at the midpoint of the EPS guidance range [115]