Financial Data and Key Metrics Changes - Fiscal 2025 was a transformational year for the company, retiring all outstanding debt and returning capital to shareholders via a $2 per share special dividend and a $5 million share buyback [4] - Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by lower billable hours and weak demand [11] - Gross profit in the fourth quarter was $7.7 million, with a gross profit margin of 35%, negatively affected by $147,000 in out-of-period workers' comp costs [11] - SG&A expenses for the fourth quarter were $9.3 million, down from $10.5 million in the prior year [12] - Fourth quarter adjusted EBITDA was a loss of $947,000, an improvement from a loss of $1.6 million in the prior year [12] - The company reported a fourth quarter GAAP net loss from continuing operations of $0.11 per diluted share [13] Business Line Data and Key Metrics Changes - The company is now solely focused on property management staffing, with ongoing G&A costs estimated at around $12 million [5] - Significant cost-cutting measures in SG&A expenses were the main drivers behind the improved EBITDA loss [12] Market Data and Key Metrics Changes - Customer feedback indicates a greater willingness to spend on services compared to the previous year, with a more optimistic sentiment [27] - Top-line sales through the first two months of the year are slightly ahead of 2025, indicating a positive start [32] Company Strategy and Development Direction - The company is transitioning its website to BGStaffing.com to improve SEO performance and brand positioning [8] - A key opportunity identified is the expansion into the PropTech support market, with a partnership announced with Yardi, an industry-leading property management technology platform [9] - The focus is on leveraging technology and AI to enhance client and candidate experiences, driving better outcomes [10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment compared to the previous year, noting a willingness to invest in staffing and PropTech support services [27] - The company expects full-year sales in 2026 to be over 2025, with mid-single-digit growth anticipated [34] Other Important Information - The company has purchased 522,000 shares of stock totaling approximately $2.4 million as part of its share buyback program [13] - The TSA agreement following the sale of the professional division is progressing well and is expected to conclude by the end of Q1 [5] Q&A Session Summary Question: Can you walk us through the Yardi relationship and its implications for the business? - The Yardi partnership allows the company to fill gaps in implementation and training for property management customers, serving as a referral base for independent consultants [17][18] Question: What is the potential size of the Yardi business? - The potential is significant as Yardi is widely used in property management, with opportunities at both corporate and on-site levels [19][20] Question: How do you characterize the overall market environment today compared to last year? - There is a more optimistic sentiment this year, with customers planning to leverage staffing and PropTech support services [27] Question: What are the ongoing SG&A costs expected to be? - Ongoing G&A costs are estimated to be around $12 million, with the Q4 SG&A number being higher due to transitional costs [23][24] Question: How do you expect growth to unfold in 2026? - The company expects growth in every quarter of 2026, driven by both market conditions and improved execution [58][61]

Financial Data and Key Metrics Changes - The headline EBITDA for Q4 2025 was CAD 78 million, significantly impacted by a CAD 13 million retroactive life-to-date adjustment for the Fargo project [3][6] - Combined revenue for the quarter was CAD 344 million, with a positive trend towards the CAD 1.6 billion midpoint for 2026, which would be a company record [4][20] - Adjusted earnings per share for the quarter was a loss of CAD 0.14, reflecting the EBIT generated by the business net of interest and taxes [7] Business Line Data and Key Metrics Changes - Australia revenue for Q4 was AUD 176 million, a record for the region despite adverse weather conditions [3] - The oil sands region also posted solid top-line numbers for the quarter, contributing to the overall revenue growth [3] - Gross profit margin for the combined business was approximately 15%, consistent with the more routine third quarter of 2025 [6] Market Data and Key Metrics Changes - Australia and Canada combined revenue increased by 10% in 2025, with Australia up 17% and Canada up 4% [4] - The company’s backlog is approximately CAD 3.9 billion, with CAD 1.2 billion already secured for 2026 [19] Company Strategy and Development Direction - The company is focused on executing its operational priorities for 2026, including safety, optimizing workforce mix in Australia, and completing the Fargo Moorhead Diversion project [11][13] - The acquisition of Iron Mine Contracting (IMC) is expected to close in Q2 2026, which will enhance the company’s capabilities in Australia and increase its backlog by approximately 30% [11][12] - The company aims to scale into a tier one contractor platform in Australia and expand mining services across Canada and the U.S. [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated cost estimates for the Fargo project, expecting completion in 2026 at forecasted levels [6] - The company anticipates another year of growth in 2026, with a stable first half performance and meaningful improvements expected in the second half as IMC synergies are realized [19][20] - Management highlighted the importance of operational efficiencies and improved equipment availability to enhance margins in the oil sands [33] Other Important Information - Net debt levels at the end of the quarter were CAD 878 million, a decrease of CAD 26 million, with a leverage ratio of 2.4 times [9][10] - Free cash flow for Q4 was CAD 57 million, contributing to a total of CAD 103 million generated in the second half of 2025 [9] Q&A Session Summary Question: Can you provide more details on the total bid pipeline and its geographical distribution? - The total bid pipeline is CAD 12.6 billion, involving various projects including defense spending and water projects in the U.S. [24][25] Question: Is there any risk of additional costs for the Fargo job, and are those included in the 2026 guidance? - Management sees limited risk in the remaining 15% of the project and does not expect significant additional costs to impact the 2026 guidance [26][32] Question: Can you comment on the strategic review in the oil sands and the outlook for margins? - The oil sands market remains strong, with opportunities for margin improvements through increased equipment utilization [33] Question: What is the status of the IMC acquisition and its impact on guidance? - The acquisition is delayed due to regulatory review but is expected to close in Q2 2026 without significant changes to guidance [38][39] Question: How do you plan to manage operational costs and workforce in Australia? - The company aims for 3%-5% savings by reducing subcontractors and rightsizing the workforce [51] Question: What is the expected contribution from nation-building projects in Canada? - Any contributions from these projects are expected to materialize in 2027 and beyond [92] Question: Can you provide an update on inventory integration and ERP implementation post-IMC closing? - There is minimal integration risk with IMC, and the company is prepared for day one operations [94]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $21.5 million, a 20% increase year-over-year, marking the second consecutive quarter of over 20% growth [5][12] - Adjusted EBITDA increased by 78% year-over-year to $4.7 million in Q4 2025, with an adjusted EBITDA margin of 22%, up from 14.9% in the prior year [6][17] - Non-GAAP fully diluted adjusted EPS reached $1.17, up from $0.61 in Q4 2024, while GAAP net income for the full year 2025 was $13.5 million, or $3.44 per diluted share [6][15] Business Line Data and Key Metrics Changes - The BKR Series radios significantly contributed to revenue growth, with a notable increase in orders from state and local agencies, particularly for the BKR9000 model [5][10] - Gross margin for Q4 2025 expanded to 50.4%, up from 41.2% in Q4 2024, driven by a favorable product mix and increased adoption of the higher-margin BKR9000 [6][12] Market Data and Key Metrics Changes - Full-year revenue for 2025 was $86.1 million, reflecting a 12.5% increase, exceeding guidance expectations [12] - The company reported a record cash position of $22.8 million at year-end 2025, significantly up from $7.1 million at the end of 2024, indicating strong cash-generating capabilities [19] Company Strategy and Development Direction - The company is transitioning from Vision 2025 to Vision 2030, aiming to double revenue to $170 million and achieve a gross margin of 60% by 2030 [24][25] - Strategic focus includes expanding market share beyond wildland fire into structured fire, law enforcement, and everyday mission-critical communications [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to achieve Vision 2030 objectives, emphasizing the importance of customer satisfaction and shareholder value creation [20][24] - The company anticipates continued revenue growth and margin expansion in 2026, with guidance set for at least $90 million in revenue and a gross margin of 50% or greater [21] Other Important Information - The company has established a stock repurchase program and repurchased approximately 19,000 shares during the quarter [19] - Future development costs for the BKR9500 radio will be expensed rather than capitalized, impacting reported EPS but enhancing financial transparency [22] Q&A Session Summary Question: Insights on BKR9000 sales cycle and customer feedback - Management noted that expansion is primarily from new orders, with positive feedback on the radio's quality and ergonomics, and no significant pushback from customers [28] Question: Contribution of BKR9500 to revenue growth - Management expects substantial revenue from the BKR9500, but anticipates even more from continued penetration of the BKR9000 [30] Question: Capital allocation plans and priorities - The company prioritizes investing in its core portfolio and may consider acquisitions that enhance radio adoption, with shareholder returns as a secondary priority [31][32] Question: Long-term pricing strategy - Management aims to increase market share before considering price increases, with a focus on maintaining competitive pricing while managing costs [38][39]

Financial Data and Key Metrics Changes - In 2025, the company achieved sales of over $110 million for MirrorEye, representing approximately 70% growth compared to the prior year [5] - Adjusted EBITDA for the full year was $28.6 million, or 3.3% of sales, reflecting a 60 basis point decline compared to the prior year [14] - Positive free cash flow of approximately $19 million was driven by a significant improvement in inventory balances of $18.7 million [7][15] Business Line Data and Key Metrics Changes - MirrorEye OEM revenue grew by 84% compared to the prior year, with total sales of $111 million in 2025 [13][33] - Electronics full-year sales reached $551 million, outperforming weighted average OEM end markets by approximately 430 basis points [33] - Stoneridge Brazil experienced full-year sales growth of $15 million, or approximately 30%, primarily driven by incremental OEM sales [34] Market Data and Key Metrics Changes - The weighted average OEM end markets declined by almost 7% in 2025 compared to initial expectations of flat conditions [37] - North American OEM production is forecast to improve by 9.8% in 2026, while European production is expected to improve by 6.6% [38] - The company expects a recovery in the commercial vehicle market, with anticipated growth of 7.1% in 2026 [38] Company Strategy and Development Direction - The company completed the sale of its Control Devices segment, allowing a focus on high-growth, high-return businesses and reducing organizational complexity [8][20] - The strategic vision includes leveraging a global footprint to serve customers and investing in advanced technologies aligned with industry trends [21][23] - The company aims to drive market outperformance, margin expansion, and cash flow conversion to create long-term value for stakeholders [28][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing favorable market tailwinds and sustained momentum from growth products [10][52] - The company is cautious about geopolitical volatility but remains confident in its ability to recover from past challenges [10][38] - Management highlighted a commitment to improving quality processes and operational efficiency to drive long-term performance [30][44] Other Important Information - Natalia Noblet has been appointed as the new President and CEO, effective April 1, 2026, succeeding Jim Zizelman [9][16] - The company expects to realize at least $5 million in structural cost reductions in 2026 [43] - The company anticipates revenue growth of approximately 4.2% in 2026, primarily driven by continued MirrorEye growth [42] Q&A Session Summary Question: Legacy warranty costs related to Control Devices business - Management clarified that warranty costs related to Control Devices were passed to the new buyer, and the legacy warranty issues mentioned pertain to electronics products [57][60] Question: Revenue breakdown by product category - Management indicated that while specific product category breakdowns are not provided, the connectivity business is more global than others, with Brazil showing significant growth [61][66] Question: Impact of MirrorEye sales on overall business - Management acknowledged that while MirrorEye sales increased significantly, the overall decline in vehicle production impacted other product areas, particularly in North America [71][72]

Financial Data and Key Metrics Changes - Total revenues for fiscal 2025 reached $529.8 million, representing a 6.7% increase year-over-year, marking the highest revenue in the company's history [24][16] - Pre-tax income was $67.2 million, slightly impacted by approximately $11 million in tariff-related costs, with earnings per share at $3.99, reflecting a 5% growth for the year [24][19] - Gross margin for Q4 was 55.2%, down 140 basis points compared to the previous year, primarily due to tariffs [22] Business Line Data and Key Metrics Changes - Net retail sales for Q4 were $139.5 million, essentially flat year-over-year, while e-commerce demand decreased by 13.6% for the quarter [20][21] - Commercial revenue, which includes wholesale sales, increased by 42.2% for the quarter and 23.4% for the year, indicating strong growth in this segment [22] Market Data and Key Metrics Changes - The company expanded its international footprint significantly, entering eight new countries in 2025, doubling its international presence to 36 countries [7][4] - The U.S. market remains a stronghold, with the company planning to open at least 50 new experience locations in 2026, primarily in international partner-operated formats [10][25] Company Strategy and Development Direction - The company focuses on three strategic initiatives: expanding experiential retail locations, advancing digital transformation, and leveraging brand equity for new revenue streams [5][11] - The new CEO, Chris Hurt, aims to continue the company's growth by optimizing the omni-channel model and expanding the global footprint through various business models [34][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from tariffs and supply chain disruptions but expressed confidence in the company's resilience and ability to execute long-term strategies [5][16] - The outlook for 2026 anticipates mid-single-digit revenue growth, with pre-tax income expected to range from a decline to low single-digit growth due to ongoing tariff impacts [25][26] Other Important Information - The company launched a new animated series, Kabu, which has already garnered over 1 million views, showcasing its efforts to build a proprietary IP ecosystem [15][14] - The transition of leadership from Sharon John to Chris Hurt is part of a planned succession process aimed at sustaining the company's growth trajectory [3][29] Q&A Session Summary Question: Discussion on expansion and personalization opportunities - Management highlighted the importance of in-store personalization and customization, particularly in tourist locations, and plans to roll out these features more broadly [49][50] Question: Inventory management and tariff impacts - The CFO discussed elevated inventory levels due to tariffs and investments for growth, emphasizing proactive management strategies to mitigate impacts [51][53] Question: Long-term investments in digital and operations - Management confirmed ongoing strategic investments in digital capabilities and operations, with a focus on long-term growth despite short-term challenges [58][60] Question: International expansion and new partners - The company opened in eight new countries and plans to continue expanding with both new and existing partners, particularly in markets like Italy and Germany [63][64] Question: Pre-tax margin guidance and influencing factors - The CFO explained the expected impact of tariffs on pre-tax margins, with a range reflecting both costs and strategic investments for future growth [67][68]

Financial Data and Key Metrics Changes - Retail volume declined by 22.1% year-over-year, attributed to capital structure constraints rather than demand [4][14] - Total revenue decreased to $286.8 million, down 12% year-over-year, while average retail sales price increased by 7.1% to $20,634 [14] - Interest income rose to $64.2 million, up 3.1% year-over-year, despite lower volumes [14][25] - Gross profit per retail unit sold increased by 8.8%, indicating improved cost discipline [14] Business Line Data and Key Metrics Changes - The company rationalized 18 locations, reducing the active store count to 136, which is expected to yield financial benefits in the fourth quarter [10][19] - The "Pay Your Way" platform saw a 250% increase in customers enrolled in automatic recurring payments, with 65% of payment transactions made remotely [16] Market Data and Key Metrics Changes - Website traffic increased by 4% year-over-year, indicating sustained customer interest despite volume challenges [5] - The subprime auto capital markets have been operating in a more measured environment since last fall, following disruptions from several subprime lenders [6] Company Strategy and Development Direction - The company is focused on securing a revolving warehouse facility to enhance capital deployment and inventory purchasing capabilities [9][10] - Ongoing operational improvements include SG&A cost control measures and consolidating resources to strengthen performance at top locations [10][19] - The company aims to align its cost structure with its volume and receivables base, actively managing expenses in response to market conditions [20][36] Management's Comments on Operating Environment and Future Outlook - Management emphasized that the volume decline was due to capital structure issues, not a lack of demand, and expressed confidence in resolving financing constraints [31][32] - The company is preparing for tax season demand, with early indicators showing improved deal structures and collections [44][66] - Management acknowledged the broader economic challenges, including inflation and geopolitical risks, but remains focused on building a resilient business model [36][37] Other Important Information - The company completed a $161.3 million asset-backed securitization transaction, which was a significant milestone in a challenging market [6][9] - The allowance for credit losses increased to 25.53%, reflecting portfolio dynamics and macroeconomic pressures, despite improved realized credit performance [25][26] Q&A Session Summary Question: What are the sticking points in the warehouse negotiations? - Management indicated that the timing is structural and requires simultaneous agreement across multiple stakeholders, which complicates the process [40][41] Question: Are you seeing effects from tax refunds this year? - Early indicators show improved deal structures and collections, with tax seasonal payments being collected at a high rate [44] Question: How would you allocate the 22% unit decline among the three factors? - Management stated that inventory levels were the primary driver of the decline, followed by the impact of Winter Storm Fern [49][50] Question: How have delinquencies trended absent the storm? - By mid-February, delinquencies had significantly decreased, indicating a return to expected ranges [54][55] Question: What is the expected SG&A run rate moving forward? - Management expects to see the full impact of cost savings from store consolidations starting in Q4, with a target SG&A of $45-$46 million [57][58]

Financial Data and Key Metrics Changes - As of December 31, 2025, the loan portfolio principal totaled approximately $411 million across 26 portfolio companies, with a weighted average yield to maturity of 16.3%, down from 16.5% in the third quarter [12] - Net interest income for the fourth quarter was $14.2 million, a 4% increase from $13.7 million in the third quarter, primarily due to the collection of past due interest [18] - Total leverage was 32% of book equity as of December 31, compared to 33% as of September 30 [16] Business Line Data and Key Metrics Changes - Gross originations during the fourth quarter were approximately $19 million, with $5 million advanced to a new borrower and $14 million to existing borrowers [12] - The portfolio consisted of 37.6% fixed-rate loans and 62.4% floating-rate loans, with only 9% exposed to further rate declines [13][14] Market Data and Key Metrics Changes - The current pipeline stands at $616 million, indicating strong demand for debt capital in the cannabis sector [9] - The company has not experienced an over-allocation of capital, which is leading to compressed yields in other sectors of private credit [9] Company Strategy and Development Direction - The company focuses on the cannabis sector, leveraging its expertise to make debt investments in an industry with limited sources of debt capital [5] - The strategy is built on a disciplined focus on credit and collateral, with a strong emphasis on risk management [9] - The company aims to maintain a dividend payout ratio based on distributable earnings per share of 90%-100% for the 2026 tax year [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current environment, noting a strong pipeline and the potential for improved industry economics due to recent policy changes [10] - The company underwrites every investment assuming no regulatory-driven credit improvements, maintaining a conservative approach to risk [11] Other Important Information - The company has distributed $8.47 per common share in dividends since inception, representing an annualized yield on cost of approximately 12.4% [20] - The company received a total of $40.4 million in loan repayments, including early prepayments [21] Q&A Session Summary Question: Can you provide insight into the pipeline and potential net portfolio growth? - Management indicated confidence in achieving net portfolio growth, although liquidity is currently constrained relative to the pipeline [25] Question: How has rescheduling impacted current yields and underwriting? - Rescheduling has increased demand for debt capital but has not changed pricing or underwriting standards [27] Question: Are the new non-accrual loans in Arizona related to the same sponsor? - Yes, the loans are related to the same sponsor, who is navigating a challenging pricing environment [33] Question: Can you explain the logic behind lending more to a troubled borrower? - The company supported the borrower through a recapitalization and acquisition of additional dispensaries, improving cash flow and allowing the borrower to become current on interest [37] Question: What were the reasons for early repayments on certain loans? - Loan number 1 was refinanced with a new credit facility, while loan number 27 was paid off without pursuing refinancing due to various considerations [43]

Financial Data and Key Metrics Changes - Gold production increased by 22% year-over-year, with gold prices rising by 48%, resulting in gold revenue of $909 million, up 82% from $499 million in 2024 [3][6] - Adjusted EBITDA reached $464 million, a 185% increase from $163 million in 2024, demonstrating significant leverage to higher gold prices [6][3] - Adjusted net earnings were $241 million or $1.28 per share, up from $56 million or $0.35 per share in 2024, reflecting a 265% increase [3][6] - The company generated $127 million in free cash flow, with a cash balance of $392 million at year-end, up from $252 million in 2024 [7][9] Business Line Data and Key Metrics Changes - Segovia produced 228,000 ounces of gold in 2025, a 21% increase compared to 188,000 ounces in 2024, driven by a 17% increase in milling rates [10][11] - Marmato performed steadily and exceeded guidance, with construction of the CIP plant and development in the bulk mining zone ahead of schedule [16][19] - Segovia's all-in sustaining cost (AISC) was $1,534 per ounce, up 3% year-over-year, while total AISC was $1,705 per ounce, up 13% from 2024 [13][14] Market Data and Key Metrics Changes - The company expects production guidance for 2026 to be between 300,000 and 350,000 ounces, representing over 25% growth year-over-year [4] - At $4,400 gold, Segovia is projected to generate $650 million in all-in sustaining margin for the year [5] Company Strategy and Development Direction - The company aims to grow production to 500,000 ounces in the near term, with plans to advance Toroparu and Soto Norte to potentially reach 1 million ounces per year [24] - The transition to the main board of the New York Stock Exchange is expected to enhance visibility among institutional investors and improve trading liquidity [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ramp-up of operations, with expectations to achieve a steady-state run rate of 3,000 tons per day by Q4 2026 [27][28] - The company remains optimistic about achieving milestones for the Marmato project, with a total capital budget of $220 million for 2026 [39][40] Other Important Information - The company completed the Segovia processing plant expansion on time and on budget, and acquired the remaining 49% of Soto Norte for $80 million [24] - The company reported a decrease in total leverage to 1x, which is 2x lower compared to Q4 2024, indicating a strong balance sheet to support growth [23] Q&A Session Summary Question: Update on Segovia ramp-up and throughput expectations - Management indicated that the ramp-up is going well, with expectations to reach a steady-state of 3,000 tons per day by Q4 2026, dependent on underground development [27][28] Question: Guidance for Q1 production - The company is running around 2,600 tons per day at the end of Q4 and expects similar throughput in Q1 [28] Question: Contractor mining partner margin expectations - The company expects contractor mining margins to remain steady, with guidance indicating about 35% contractor mining in the mix [30] Question: Remaining capital expenditures for Marmato - The total capital budget for Marmato in 2026 is $220 million, bringing the total project cost to approximately $400 million [39][40] Question: Optimism about ramp-up of the CIP plant - Management expressed confidence that the milestones for the ramp-up are realistic and achievable [40]

Financial Data and Key Metrics Changes - Fourth quarter revenues were $22 million, a 9.4% decline compared to the prior year, driven by lower billable hours and weak demand due to cost pressures on property management companies [11] - Gross profit in the fourth quarter was $7.7 million, down from $8.7 million in the prior year, with a gross profit margin of 35% [11] - Adjusted EBITDA for the fourth quarter was a loss of $947 thousand, an improvement from a loss of $1.6 million in the prior year [12] - The company reported a GAAP net loss from continuing operations of $0.11 per diluted share, compared to a non-GAAP adjusted EPS loss of $0.09 per share [13] Business Line Data and Key Metrics Changes - The company is focused on resizing general administrative expenses to align with its standalone property staffing business, estimating ongoing G&A costs to be around $12 million [5] - SG&A expenses for the fourth quarter were $9.3 million, down from $10.5 million in the prior year, despite including strategic review costs [12] Market Data and Key Metrics Changes - Customer feedback indicates a more optimistic sentiment this year compared to the previous year, with a willingness to spend on staffing and PropTech support services [26] - Top-line sales through the first two months of the current year are slightly ahead of 2025, indicating a solid start [31] Company Strategy and Development Direction - The company is transitioning its website to BGStaffing.com to improve SEO performance and brand positioning [7] - A key opportunity identified is the expansion into the PropTech support market, with a partnership announced with Yardi, a leading property management technology platform [8][9] - The company is leveraging technology and AI investments to enhance client and candidate experiences, aiming for operational performance improvements [10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, noting a greater propensity for customers to spend compared to the previous year [26] - The company expects full-year sales in 2026 to be over 2025, projecting mid-single-digit growth [33] Other Important Information - The company has retired all outstanding debt and returned capital to shareholders via a $2 per share special dividend and a $5 million share buyback [4] - The company is focused on executing strategic priorities while managing transitional work related to the sale of the professional division [14] Q&A Session Summary Question: Can you walk us through the Yardi relationship and its implications for the business? - The Yardi partnership allows the company to fill gaps in implementation and training for property management customers, serving as a referral base for independent consultants [16][17] Question: What is the potential size of the Yardi business? - The potential is significant as Yardi is widely used in the property management space, with opportunities at both corporate and on-site levels [19][20] Question: How do you characterize the overall market environment today compared to last year? - There is a more optimistic sentiment this year, with customers planning to leverage staffing and PropTech support services [26] Question: What are the ongoing SG&A costs expected to be? - Ongoing G&A costs are estimated to be around $12 million, with the fourth quarter SG&A number being higher due to transitional support costs [21][22] Question: How do you expect growth to unfold in 2026? - The company expects growth in every quarter of 2026, driven by both market conditions and improved execution [57][62]

Financial Data and Key Metrics Changes - Net sales for the third quarter were $48 million, down from $52.3 million in the prior year period, reflecting a decrease of approximately 4.4% [34] - Consolidated gross profit was $5.3 million or 11.1% of sales, compared to $6.3 million or 12.1% of sales in the prior year period, indicating a decline in profitability [35] - The net loss for the third quarter was $3.4 million or $0.27 per diluted share, an improvement of approximately 20% sequentially from the second quarter and a 17% decrease compared to a net loss of $4.1 million or $0.33 per diluted share for the prior year period [36] Business Segment Data and Key Metrics Changes - Bedding segment sales were $27.3 million, down approximately 5% compared to the prior year, with gross profit of $2 million or 7.2% of sales, down from 9.6% in the prior year [38] - Upholstery segment sales were $20.7 million, down approximately 12% compared to the prior year, with gross profit of $3.4 million or 16.3% of sales, down from 17.9% in the prior year [39] Market Data and Key Metrics Changes - The prolonged low demand environment in the home furnishings industry continues to pressure top-line growth, compounded by severe weather impacting shipping [5][7] - The company noted a historical deficit in overall industry units, indicating potential for a product replacement cycle that could energize sales [7] Company Strategy and Development Direction - The company is focused on integrating and restructuring initiatives to enhance efficiency and reduce costs, with over $20 million in annualized cost savings generated from recent restructuring efforts [25][26] - The strategic focus includes diversifying into higher-end customer segments while maintaining a market-leading position in mid and lower-tier segments [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that industry conditions will eventually stabilize, particularly in core bedding and furniture markets, despite current challenges [6][16] - The company anticipates sequential sales growth in the fourth quarter, particularly in the bedding segment, while managing liquidity and capital expenditures [43][45] Other Important Information - The company is actively pursuing refunds related to IEEPA tariffs, estimating potential recoveries of $6 million to $7 million, which could offset previous losses [21][56] - The company has consolidated its North American operations to a single facility in Stokesdale, North Carolina, enhancing operational efficiency [24] Q&A Session Summary Question: Can you expand on the green shoots seen on the bedding side and the programs with major customers? - Management noted that despite a challenging market, they were on pace to outpace the industry in bedding sales until impacted by severe weather, and they are optimistic about future opportunities with major customers [53] Question: What are the next steps regarding the tariff recovery? - Management confirmed that they have filed protests and a lawsuit for tariff refunds and are closely monitoring the situation for updates on the timeline for potential refunds [66] Question: How does the company plan to work off excess inventory? - Management stated they are focused on selling excess inventory at good margins and have set aggressive internal goals to reduce inventory levels over the next quarters [72][74] Question: Are the sales lost due to weather expected to be pushed into the next quarter? - Management confirmed that the sales lost due to severe weather are expected to be recovered in the following quarter, indicating a positive outlook for sequential growth [76] Question: Is the company considering a sale-leaseback of its headquarters facility? - Management acknowledged that while they have considered this option, they believe the facility is integral to future value creation and are not focusing on it at this time [86]