Financial Data and Key Metrics Changes - In the third quarter, net revenues decreased to $7 million from $11.1 million year-over-year, while year-to-date revenues fell to $18.7 million from $27.6 million [5][6] - Average active brand partners dropped to 5,100 in Q3 from 12,400, and year-to-date average active brand partners decreased to 6,200 from 13,300 [5][6] - Earnings before income taxes improved to $10.6 million from a loss of $1.1 million in Q3 last year, while year-to-date earnings before income taxes were $7.4 million compared to a loss of $5.3 million [5][6] - Net earnings for the quarter were $7.8 million compared to an $800,000 loss last year, and year-to-date net earnings were $5.4 million compared to a $3.9 million loss [5][6] - Earnings per share rose to $0.91 from a loss of $0.10 in Q3 last year, and year-to-date earnings per share increased to $0.63 from a loss of $0.47 [5][6] Business Line Data and Key Metrics Changes - The company launched the Gathered Goods fundraising program, which allows for custom products and better margin control, marking a strategic shift from the previous Cards for a Cause program [8][10] - The Book Friday promotion was highlighted as a significant marketing strategy, driving customer engagement despite a decline in brand partner count [9][10] Market Data and Key Metrics Changes - The company reported a decrease in inventory levels from $44.7 million at the beginning of fiscal year 2026 to $39.1 million at the end of November, generating $5.6 million in cash flow from inventory reductions [6][7] - The company maintained a cash position of $3.4 million and had no bank debt following the sale of the Hilti Complex [6][7] Company Strategy and Development Direction - The company aims to return to growth and profitability in fiscal 2027, focusing on increasing brand partner counts and launching new products to energize sales [3][12] - A refreshed marketing strategy targeting Gen Z is being developed to attract new brand partners [13][14] - The company is exploring AI applications to automate tasks and enhance operational efficiency [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a committed leader base and more productive brand partners as key factors for growth [11][12] - The management acknowledged the challenges faced in recent years due to bank restrictions but is now positioned for growth following the sale of the Hilti Complex [12][16] Other Important Information - The company has a 17-acre tract of excess land beside the Hilti Complex, which is being held for potential future development or sale [32] Q&A Session Summary Question: Has the sale of the building reinvigorated the salesforce? - Management noted increased activity in leader promotions and excitement among brand partners following the sale, indicating a positive shift [18][19] Question: Is there a new credit line in place? - Management is in discussions with banks for a new banking relationship but currently maintains a sufficient cash position [20][22] Question: Is the inventory fully insured? - The inventory is insured at replacement cost, ensuring that the value on the books matches the insurance coverage [23][24] Question: What percentage of inventory could be out of date? - Management stated that historically, they have not written down inventory and do not typically offload titles, indicating confidence in inventory value [25][26] Question: What is the status of the relationship with Usborne Publishing? - There has been no negative change in the relationship, and Usborne is eager for the company to resume ordering titles [30][31] Question: What are the plans for the excess land beside the Hilti Complex? - The land is currently being held with potential for development or sale, and there has been interest from external parties [32]

Financial Data and Key Metrics Changes - In Q3 2026, net revenues decreased to $7 million from $11.1 million in Q3 2025, a decline of approximately 37.5% [5] - Average active brand partners fell to 5,100 from 12,400 year-over-year [5] - Earnings before income taxes improved to $10.6 million from a loss of $1.1 million in the prior year, but excluding the building sale gain of $12.2 million, the loss would have been $1.6 million [5] - Net earnings for the quarter were $7.8 million compared to a loss of $800,000 in Q3 2025 [5] - Year-to-date net revenues were $18.7 million, down from $27.6 million in the previous year [6] - Year-to-date earnings before income taxes were $7.4 million compared to a loss of $5.3 million last year [6] - Cash position at the end of the quarter was $3.4 million with no bank debt [7] Business Line Data and Key Metrics Changes - The company launched a new fundraising program called Gathered Goods, which aims to improve margins and expand digital fundraising opportunities [9][10] - The decline in brand partner count is not proportional to revenue decline, indicating that remaining partners are more productive [11] Market Data and Key Metrics Changes - The company is focusing on adapting its marketing strategy to attract the next generation of brand partners, particularly Gen Z [15] Company Strategy and Development Direction - The sale of the Hilti Complex has removed bank restrictions, allowing the company to focus on growth and profitability [3] - The company plans to increase brand partner counts and has initiated a new product reorder and title purchase plan [14] - An AI task force has been established to explore automation and efficiency improvements [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth due to a committed leader base and more productive brand partners [12] - The company is preparing for a growth plan now that bank restrictions have been lifted, with a focus on new product launches and marketing strategies [13][15] Other Important Information - The company has maintained a strong relationship with Usborne Publishing, with no negative changes reported [33] - Inventory is fully insured at replacement cost, and approximately 50% of the inventory is related to Usborne [30][31] Q&A Session Summary Question: Has the sale of the building reinvigorated the salesforce? - Management noted increased activity in leader promotions and excitement among brand partners, indicating a positive shift [20][21] Question: Is there a new credit line in place? - The company is in discussions with banks for a new banking relationship but is currently in a stable cash position [22][23] Question: Is the inventory fully insured? - Yes, the inventory is insured at replacement cost [26] Question: What percentage of inventory could become outdated? - Historically, the company has not written down inventory, and titles can remain in stock for over 10 years without issues [28] Question: What is the status of the relationship with Usborne Publishing? - There has been no change, and Usborne is eager for the company to resume ordering titles [32] Question: What are the plans for the excess land beside the Hilti Complex? - The company is holding onto the land for now, with potential development options being considered [35]