Financial Data and Key Metrics Changes - For the fourth quarter, net sales were $114.6 million, representing a growth of 3.4% compared to $110.8 million in the prior year quarter, marking the seventh consecutive quarter of sales growth [14] - The adjusted operating margin was 9% in the quarter, a 340 basis point improvement over the prior year quarter, while the adjusted operating profit increased by 71% to $31.2 million for the fiscal year [5][7] - Free cash flow for the quarter was $19.1 million, contributing to an ending cash balance of $40 million [6][7] Business Line Data and Key Metrics Changes - Growth in core markets was driven by strategic accounts and new product introductions, particularly in the health and wellness category with ZCLINER products [5] - The company experienced a sales order backlog of $66.5 million at the end of the period, an increase of $6.9 million compared to the prior year [14] Market Data and Key Metrics Changes - The company noted soft market conditions and tariff uncertainty as industry headwinds, yet managed to achieve sales growth in both core and new markets [4][10] - The demand environment was characterized as "choppy," with retail traffic being soft during the summer months, influenced by uncertainty around tariffs and inflation [40] Company Strategy and Development Direction - The company plans to focus on further penetrating the health and wellness and case goods product categories, with an emphasis on innovation and marketing to drive brand awareness [9][10] - Strategic initiatives include enhancing customer experience, product relevance, and faster product launches to maintain growth momentum [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current environment, despite anticipating continued difficult industry conditions [10][21] - The company is actively working on cost savings initiatives to mitigate the impact of tariffs, including supply chain adjustments and pricing actions [11][12] Other Important Information - The company has increased its dividend twice in the past twelve months and maintains a healthy cash balance [7] - The effective tax rate for fiscal year 2026 is expected to be in the range of 25% to 27% [19] Q&A Session Summary Question: Initial reaction to pricing actions or surcharges - Management noted that they are closely collaborating with retailers to understand the impact of pricing changes on demand and believe they are positioned well despite the challenges [25][26] Question: New cost savings initiatives - Management confirmed that they are pursuing cost savings across the supply chain and these initiatives are factored into the first quarter guidance for margins [27][28] Question: Focus on new product innovation - Management indicated that the focus on new product innovation is a continuation of previous efforts, which have been key to their growth success [30] Question: Inventory management - Management expressed confidence in their inventory position and ability to serve customers, while also noting potential incremental costs due to higher tariff rates [31][32] Question: Capital allocation strategy - Management reiterated their capital allocation strategy of reinvesting 70% of operating cash flow back into the business and returning 30% to shareholders [33][34] Question: Demand characterization - Management characterized demand as choppy, influenced by external factors such as tariffs and inflation, but remains optimistic about long-term recovery [40][41]