Financial Data and Key Metrics Changes - The company reported net sales of $47.3 million, representing a 15.4% sequential growth from the previous quarter [5][12] - Gross margins expanded to 27.2%, up from 21.6% in the same quarter last year [12][13] - Adjusted EBITDA turned positive at $1.3 million, a $3.7 million improvement year-over-year [5][15] - GAAP net loss narrowed to $2.4 million, compared to a net loss of $11.4 million in the prior year [15] Business Line Data and Key Metrics Changes - Net sales in the cultivation and gardening segment were $38.4 million, down from $41.4 million in the same period last year [12] - Proprietary brand sales represented 31.6% of cultivation and gardening revenue, up from 23.8% a year ago [12][15] - The storage solution segment generated $8.9 million in revenue, slightly up from $8.6 million in the third quarter of 2024 [13] Market Data and Key Metrics Changes - The company closed five stores during the quarter, bringing the total to 24 locations, as part of its footprint optimization strategy [6] - The company is expanding its reach into independent garden centers and specialty agriculture markets [8][10] Company Strategy and Development Direction - The company aims to increase proprietary brands to approximately 40% of cultivation and gardening revenue by 2026 [5][6] - A distribution partnership with Aritz Sales was announced to expand wholesale and B2B reach into thousands of new retail stores across 32 states [9] - The company is entering the home gardening market through the acquisition of ViaGro, enhancing its distribution capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation strategy, highlighting strong demand across commercial and specialty agriculture channels [10][11] - The company anticipates fourth quarter revenue of approximately $40 million and expects positive revenue growth into 2026 [11][12] Other Important Information - The company ended the quarter with $48.3 million in cash and no debt, indicating a strong balance sheet [10][16] - The controlled environmental agriculture industry is still in the early stages of growth, presenting substantial opportunities for the company [11] Q&A Session Summary Question: Thoughts on sales mix and proprietary brands - Management expects proprietary brands to reach 40% of sales next year, with around 35% of that coming from the cannabis space [20][21] Question: Insights on gross margin expectations - Management noted that while higher proprietary brand mix should help margins, there are ongoing pricing pressures and increased durable sales impacting margins [22][23][24]