Financial Data and Key Metrics Changes - Net sales for Q3 were $56.6 million, down 3.3% year-over-year, but ahead of expectations [5][16] - Gross margin was 41%, down 370 basis points from the previous year, impacted by new tariffs and an inventory reserve of $1.2 million [17][18] - GAAP EPS for Q3 was a loss of $0.32 compared to a gain of $0.01 last year, while non-GAAP EPS was $0.12 compared to $0.21 last year [20] - Adjusted EBITDA for the quarter was $3.3 million, down from $4.7 million in the same quarter last year [21] Business Line Data and Key Metrics Changes - Outdoor lifestyle category net sales increased 5.4% year-over-year to $35.3 million, driven by BOG and MEAT! Your Maker brands [16][8] - Shooting sports category net sales declined 15%, primarily due to softness in aiming solutions [16][8] - New products represented over 26% of net sales in the quarter, indicating strong innovation [9][10] Market Data and Key Metrics Changes - Domestic net sales decreased 3.4%, while international net sales remained flat compared to last year [17] - Traditional channel net sales decreased by 2.1%, and e-commerce net sales decreased by 4.6% [17] Company Strategy and Development Direction - The company is focused on disciplined execution of its strategy, concentrating resources on brands and product categories that create the most value [5][10] - The decision to divest the UST brand reflects a commitment to capital allocation and portfolio management [11][12] - The company aims to build connected product ecosystems around select growth brands to enhance consumer engagement and create recurring revenue opportunities [10] Management's Comments on Operating Environment and Future Outlook - Management believes the underlying operating model remains intact despite ongoing uncertainties in the fiscal environment [5] - The company maintains its full-year guidance for net sales and adjusted EBITDA, expecting net sales in the range of $191 million to $193 million [25][26] - Management noted that consumer behavior remains uncertain, with affluent consumers continuing to spend while lower-income consumers are pulling back [56] Other Important Information - The company ended the quarter with $10.4 million in cash and no debt, maintaining a strong balance sheet [21][24] - Capital expenditures for Q3 were $1.2 million, with a revised full-year CapEx expectation of $3.5 million to $4 million [24] Q&A Session Summary Question: Can you remind us what was pulled forward in the fourth quarter last year? - Retailers pulled in roughly $10 million in the last two weeks of Q4 [31] Question: What are the current inventory levels of your retail customers? - Retailers are under-ordering relative to demand, but the majority of the business is performing well [33] Question: What was the reason for the increase in inventories? - The main driver for the increase in inventories was the rise in tariffs [40] Question: Should we expect continued gross margin pressure in the first half of 2027? - Yes, continued gross margin pressure is expected due to capitalized tariffs rolling into the P&L [44] Question: Did the third quarter sales borrow from the fourth quarter? - No, there was no shifting of orders; all sales came through as expected [48] Question: Was the impairment solely related to UST? - Yes, 100% of the impairment was related to UST [52]

Financial Data and Key Metrics Changes - Net sales for Q2 were $57.2 million, a decrease of 5% compared to $60.2 million in Q2 last year [16] - Gross margin was 45.6%, down from 48% in Q2 last year, primarily due to actions taken to clear slow-moving inventory [18] - GAAP EPS for Q2 was $0.16 compared to $0.24 last year, while non-GAAP EPS was $0.29 compared to $0.37 last year [18] Business Line Data and Key Metrics Changes - In the outdoor lifestyle category, net sales were $34.6 million, down 5% year-over-year, mainly due to a decrease in meat processing equipment [16] - The shooting sports category saw a 5.1% decline in net sales, driven by decreases in gun cleaning and personal protection products, partially offset by strong sales in the Caldwell brand [16] - Traditional channel net sales increased by 2.3%, while e-commerce net sales decreased by 15.9% compared to last year [17] Market Data and Key Metrics Changes - Domestic net sales, which accounted for approximately 95% of revenue, decreased by $2.4 million, or 4.3%, while international net sales decreased by roughly $600,000 compared to Q2 of last year [19] - The company noted that online-only customers now represent just 20%-25% of total net sales, indicating a shift in consumer purchasing behavior [8] Company Strategy and Development Direction - The company is focused on innovation and expanding into new outdoor product categories, which is driving the strength of its Growth Brands [5] - A major mass-market retailer is introducing Caldwell and BOG brands into thousands of stores, enhancing visibility and consumer engagement [10] - The company aims to reduce inventory levels over time to improve working capital, targeting a decrease to roughly $115 million by the end of the fiscal year [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year but remains cautious about the macro environment and evolving consumer spending patterns [13] - The company expects net sales for the full fiscal year to decline approximately 13%-14% year-over-year, but underlying net sales decline would be roughly just 5% when adjusting for accelerated orders from the prior year [25] - Management believes that the full year could deliver net sales that are down roughly 8% year-over-year in Q3, reflecting macro challenges and retailer dynamics [26] Other Important Information - The company ended the quarter with $3.1 million in cash and no debt, maintaining a strong balance sheet [19] - A new $10 million share repurchase program was approved, with approximately 74,000 shares repurchased at an average price of $8.76 per share [23] Q&A Session Summary Question: Visibility into revenue at POS and brand performance - Management indicated that they have visibility into about 60% of revenue through POS data, with outdoor lifestyle performing well and Caldwell brand significantly outperforming others [32] Question: Disconnect between November performance and Q3 guidance - Management explained that while POS is strong, retailers are managing lower inventory levels and adjusting their purchasing patterns based on available capital [34] Question: Mitigating softness in the e-commerce channel - Management noted that the evolution of consumer behavior and the growth of omnichannel sales are expected to reduce volatility in the e-commerce channel over time [36] Question: Seasonality and margin expectations - Management confirmed that Q2 and Q3 are typically the highest sales quarters, with expected gross margins in the range of 42%-43% for the full fiscal year [37] Question: Tariff mitigation and its impact on P&L - Management clarified that tariff costs are capitalized in inventory and will start to amortize in December, with mitigation efforts expected to offset tariff impacts by FY27 [39] Question: Insights on Black Friday performance - Management reported strong POS results during Black Friday and November, particularly in the direct-to-consumer segment [44] Question: New product pipeline and market entry - Management expressed excitement about the innovation pipeline, focusing on building ecosystems around existing brands and entering new markets [46] Question: M&A landscape updates - Management noted an increase in M&A opportunities, particularly among family-owned businesses looking to divest, and expressed optimism about potential larger assets surfacing in the near future [49]