Financial Data and Key Metrics Changes - The company reported an adjusted EPS of $0.45 per share, reflecting a $0.03 increase from the prior quarter [8] - Pre-provision net revenue (PPNR) grew by $4 million from the first quarter, primarily driven by a $10 million increase in net interest income [8][9] - Total expenses, excluding deferred compensation, increased by only $4 million from the last quarter [16] Business Line Data and Key Metrics Changes - The loan portfolio increased by 2% quarter over quarter, with significant growth in loans to mortgage companies, which rose by $689 million [13] - Fee income decreased by $3 million from the prior quarter, with fixed income performance declining slightly [14] - Non-interest bearing deposits increased by $57 million, supported by successful seasonal marketing promotions [12] Market Data and Key Metrics Changes - Period end balances for both loans and deposits finished 2% higher quarter over quarter [10] - The average rate paid on interest-bearing deposits increased to 2.76%, up from 2.72% in the first quarter [12] - The charge-off ratio remained stable at 22 basis points, in line with expectations [17] Company Strategy and Development Direction - The company aims to achieve a 15% plus return on tangible common equity (ROTCE) over the next two to three years [20] - Focus remains on organic loan growth and enhancing client relationships to drive profitability [20][22] - The company is committed to maintaining capital levels in line with a near-term target of 11% CET1 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic fundamentals in their southern footprint, expecting stability through 2025 and into 2026 [7] - There is a recognition of increased deposit pressure and competition, but the company remains focused on expense and pricing discipline [8] - Management noted that borrowers are showing resilience and optimism, with expectations for improved activity in the latter half of the year [28] Other Important Information - The company retained approximately 95% of balances associated with clients who had a repricing event in the quarter [12] - The company has a strong credit culture, with years of disciplined underwriting providing stability across economic cycles [17] - The company is exploring opportunities to grow PPNR by $100 million or more through synergies and deepening client relationships [20][78] Q&A Session Summary Question: Client health and loan growth outlook - Management noted that borrowers are resilient and optimistic, with expectations for improved activity as tariff questions settle [28] Question: CET1 target and buyback appetite - Management indicated that they are comfortable with the current CET1 target and will evaluate capital levels based on growth opportunities [30][32] Question: Deposit repricing opportunities - Management acknowledged potential deposit repricing opportunities but noted that competition is heating up, leading to a zigzag pattern in deposit pricing [38] Question: Signs of stress in credit sectors - Management highlighted consumer-facing industries like trucking and auto finance as areas to watch closely for stress [42] Question: Expectations for mortgage warehouse balances - Management expects mortgage warehouse balances to remain stable or increase, depending on the mortgage industry's trends [48] Question: Fee income trends and expense guidance - Management indicated that fee income is under pressure, but they do not expect expenses to exceed a 2% increase [66] Question: Regulatory developments and capital deployment - Management is optimistic about regulatory changes that may allow for greater capital flexibility in the future [100] Question: Trends in loan repricing and spread compression - Management noted increased competition on both deposit and lending sides, with expectations for continued competitive pressures [106]

Financial Data and Key Metrics Changes - The company reported an adjusted EPS of $0.45 per share, reflecting a $0.03 increase from the prior quarter [7] - Pre-provision net revenue (PPNR) grew by $4 million from the first quarter, primarily driven by a $10 million increase in net interest income [7][8] - Total expenses, excluding deferred compensation, increased by only $4 million from the last quarter [15] Business Line Data and Key Metrics Changes - The loan portfolio saw a 2% increase quarter over quarter, with significant growth in loans to mortgage companies, which rose by $689 million [13] - The commercial and industrial (C&I) portfolio also grew, with period-end balances up $316 million quarter over quarter [13] - Fee income performance decreased by $3 million from the prior quarter, with fixed income performance declining slightly [14] Market Data and Key Metrics Changes - Period-end deposit balances increased by $1.4 billion compared to the prior quarter, driven by a $1.6 billion increase in brokered CDs [12] - The average rate paid on interest-bearing deposits increased to 2.76%, up from 2.72% in the first quarter [12] - The charge-off ratio remained stable at 22 basis points, consistent with expectations for the year [16] Company Strategy and Development Direction - The company aims to achieve a return on tangible common equity (ROTCE) of over 15% in the next two to three years, focusing on operational efficiency and profitability [19][22] - There is a strong emphasis on organic loan growth and enhancing client relationships to drive pre-provision net revenue [19][22] - The company is committed to maintaining capital levels in line with a near-term target of 11% CET1, with ongoing discussions about potential adjustments [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic fundamentals in their southern footprint, expecting stability through the latter half of 2025 and into 2026 [6] - There is a recognition of increased competition and deposit pressure, but the company remains focused on profitability and sustainable growth [6][7] - Management noted that borrowers are showing resilience and optimism, which is expected to lead to improved activity in the second half of the year [27] Other Important Information - The company retained over half of its $1 billion share repurchase authorization, using $9 million in the second quarter [17] - The company is seeing opportunities to grow PPNR by $100 million or more over the coming years through synergies and deepening client relationships [19][22] Q&A Session Summary Question: Client health and loan growth outlook - Management noted that borrowers are resilient and optimistic, with expectations for improved activity as tariff questions are settled [27] Question: CET1 target and buyback appetite - Management indicated that they are comfortable with the current CET1 target and will evaluate capital deployment based on loan growth opportunities [30][31] Question: Deposit repricing opportunities - Management sees potential for deposit repricing but expects fluctuations based on market conditions and competition [36][38] Question: Signs of stress in credit sectors - Management highlighted consumer-facing industries like trucking and auto finance as areas to watch closely for stress [42] Question: Expectations for mortgage warehouse balances - Management expects mortgage warehouse balances to remain stable or increase, depending on mortgage industry trends [50] Question: Expense guidance and fee income trends - Management confirmed that the high end of the expense guidance is not expected to exceed 2%, with a focus on maintaining cost discipline [95] Question: Regulatory developments and capital deployment - Management is optimistic about potential regulatory changes that could facilitate M&A opportunities but remains focused on organic growth [102] Question: Trends in loan repricing and margin - Management noted increased competition on both deposit and lending sides, with expectations for continued competitive pressures [106][108]

Financial Data and Key Metrics Changes - The company reported net revenues of $14.6 billion for the second quarter, with earnings per share of $10.91 and a return on equity (ROE) of 12.8%, resulting in an ROE of 14.8% for the first half of the year [3][16] - The advisory backlog increased significantly compared to year-end 2024 levels, indicating strong future revenue potential [5][6] - The company returned $4 billion to shareholders, including a 33% increase in the quarterly dividend to $4 per share, reflecting confidence in the firm's durability [12][26] Business Line Data and Key Metrics Changes - Investment Banking revenues reached $1.2 billion, up 71% year-over-year, driven by strength in The Americas and EMEA [18] - Equity underwriting revenues were flat year-over-year at $428 million, while debt underwriting revenues fell 5% to $589 million due to lower leverage finance activity [18] - Asset and Wealth Management revenues totaled $3.8 billion, with management and other fees up 11% year-over-year to $2.8 billion [21] Market Data and Key Metrics Changes - M&A volumes for the year to date are 30% higher year-over-year and 15% greater than the comparable five-year average, indicating a resilient deal-making environment [4][61] - The company priced 11 IPOs during the quarter, which performed well in the secondary market [5] - Total assets under supervision reached a record $3.3 trillion, with long-term net inflows of $17 billion in alternatives and equity [23] Company Strategy and Development Direction - The company is focused on driving growth in financing and maximizing wallet share, ranking in the top three with 125 of the top 150 clients globally, up from 77 in 2019 [7][11] - The formation of the Capital Solutions Group positions the company to meet increasing demand related to AI infrastructure and financing needs [9][10] - The company emphasizes a disciplined approach to risk management while exploring opportunities for capital deployment and shareholder returns [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the investment banking outlook despite ongoing uncertainties, particularly in trade-sensitive industries [5][13] - The company is committed to maintaining a strong capital position while advocating for regulatory clarity to support growth [12][92] - Management highlighted the importance of AI in driving operational efficiency and revenue growth, viewing it as a significant opportunity [54] Other Important Information - The company achieved a record in fixed financing revenues of $1 billion, driven by strong performance in mortgages and structured lending [19] - The effective tax rate for the first half of 2025 was 20.2%, with an expected full-year rate of approximately 22% [25] - The company reduced its historical principal investments by about 10% in the quarter, now standing at approximately $8 billion [34][36] Q&A Session Summary Question: What will the company do with excess capital? - Management indicated that the first priority for excess capital is to deploy it toward client franchise activities that produce accretive returns, with a focus on M&A and financing opportunities [30][31] Question: How does the company view the current M&A environment? - Management noted an increase in dialogue and activity in M&A, with a backlog indicating higher future activity levels, despite ongoing uncertainties [58][61] Question: What is the target CET1 ratio moving forward? - The company aims to maintain a CET1 ratio with a buffer of approximately 50 to 100 basis points above the regulatory minimum, allowing flexibility for client support and capital deployment [40][41] Question: How does the company plan to grow its dividend? - Management emphasized a commitment to consistently raise the dividend, with the recent increase reflecting confidence in the firm's revenue durability and growth potential [50][51] Question: What are the implications of AI for the company's efficiency? - Management highlighted AI as a significant opportunity for automating processes and enhancing productivity, which could lead to both cost savings and revenue growth [52][54]

Financial Data and Key Metrics Changes - The company reported net revenues of $14.6 billion and earnings per share of $10.91 for the second quarter, with a return on equity (ROE) of 12.8% [4][17] - The ROE for the first half of the year was 14.8%, reflecting strong performance amid shifting market dynamics [4] - The advisory backlog increased significantly compared to year-end 2024 levels, indicating robust future activity [6][18] Business Line Data and Key Metrics Changes - Investment Banking revenues reached $1.2 billion, a 71% increase year-over-year, driven by strength in The Americas and EMEA [18] - Equity underwriting revenues were flat year-over-year at $428 million, while debt underwriting revenues fell 5% to $589 million due to lower leverage finance activity [18] - FICC net revenues were $3.5 billion, up 9% year-over-year, with strong performance in currencies, credit, and interest rate products [19] - Equities net revenues reached a record $4.3 billion, with intermediation revenues rising 45% year-over-year [20] - Asset and wealth management revenues totaled $3.8 billion, with management and other fees up 11% year-over-year [21] Market Data and Key Metrics Changes - Announced M&A volumes for the year to date are 30% higher year-over-year and 15% greater than the five-year average, indicating a resilient deal-making environment [5][59] - The company priced 11 IPOs during the quarter, which performed well in the secondary market [6] - Total assets under supervision reached a record $3.3 trillion, with $115 billion of market appreciation and $17 billion of long-term net inflows [23] Company Strategy and Development Direction - The company is focused on driving growth in financing and maximizing wallet share, ranking in the top three with 125 of the top 150 clients globally, up from 77 in 2019 [8][30] - The formation of the Capital Solutions Group positions the company to meet increasing demand related to AI infrastructure and financing needs [9] - The company is committed to returning capital to shareholders, including a 33% increase in the quarterly dividend to $4 per share [12][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the investment banking outlook despite ongoing uncertainties, particularly in industries sensitive to trade policy [6][13] - The company remains focused on risk discipline while navigating a complex operating backdrop [15] - Management highlighted the importance of transparency in regulatory processes to better plan capital allocation [71][90] Other Important Information - The company has made significant investments in AI to enhance operational efficiency and client service [10][51] - The effective tax rate for the first half of 2025 was 20.2%, with an expected full-year rate of approximately 22% [25] Q&A Session Summary Question: What will the company do with excess capital? - Management indicated that the primary focus will be on deploying capital to support client activity and producing accretive returns, with a commitment to returning capital to shareholders [29][31] Question: What is the current strategy regarding historical principal investments? - Management confirmed a commitment to reducing historical principal investments, which have been reduced by about 10% in the quarter, while remaining focused on co-investing with clients [34][36] Question: What is the target CET1 ratio moving forward? - Management expects to maintain a CET1 ratio with a buffer of approximately 50 to 100 basis points above the new regulatory minimum [41][88] Question: How does the company view potential inorganic acquisitions? - Management stated that while they are always looking for opportunities to accelerate growth, the bar for significant acquisitions remains very high [42][60] Question: How does the company plan to capitalize on alternative fundraising opportunities? - Management is actively building third-party wealth distribution partnerships to capitalize on the growing interest in alternative assets [96]

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 15.1% compared to the same quarter last year, adjusted EPS rose by 22.7%, and tangible book value per share grew by 10.9% year-over-year [6][7][10] - The company has achieved double-digit compound annual growth rates (CAGRs) over the last decade in revenue, EPS, and tangible book value per share, significantly outperforming peers [7][10] Business Line Data and Key Metrics Changes - End of period loans increased by 10.7% on a linked quarter annualized basis, driven by new markets and relationship managers [17] - Deposit growth was recorded at 4.7% linked quarter annualized, with an estimated total deposit growth rate maintained at 7% to 10% for 2025 [19][20] - Net interest margin (NIM) finished up two basis points at 3.23%, with expectations for a flat to slightly up NIM in the upcoming quarters [21] Market Data and Key Metrics Changes - Core deposit growth was 13%, significantly outpacing the peer median during a challenging economic environment [10] - The company has adjusted its loan growth outlook to a range of 9% to 11% for the year, reflecting a strong pipeline despite macroeconomic uncertainties [18] Company Strategy and Development Direction - The company employs a market share takeaway strategy, focusing on recruiting experienced revenue producers from competitors to drive growth [11][12] - The focus remains on organic growth rather than mergers and acquisitions, with a strong emphasis on hiring and developing talent within existing markets [35][36] - The company is optimistic about deepening its presence in current markets, particularly in Florida and Texas, while continuing to hire across its existing footprint [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the current economic environment, noting that clients are in a cautious state but showing underlying optimism for future growth [46][47] - The company anticipates a strong year in 2025, supported by investments in new markets and successful hiring strategies [28][26] Other Important Information - The company has raised its earnings estimate for Bankers Healthcare Group (BHG) from 20% growth to approximately 40% growth for 2025, driven by lower operating costs and improved credit performance [25] - The total expense outlook for the year has been modified to a range of $1,145 million to $1,155 million, reflecting a more positive outlook [27] Q&A Session Summary Question: Clarification on the expected asset growth from new hires - Management confirmed that the cohort of hires from 2020 to 2024 is expected to yield approximately $19 billion in organic asset growth through 2029 [30][31] Question: Appetite for M&A given organic growth success - Management reiterated a preference for organic growth over M&A, citing the ability to produce outsized growth through hiring rather than taking on integration risks [35][36] Question: Customer sentiment and appetite for growth - Management indicated that existing customers are currently cautious but optimistic about future opportunities, with a focus on maintaining credit quality [45][46] Question: Update on BHG's performance and outlook - Management noted that BHG's strong performance is driven by both production growth and improved credit quality, with expectations for continued strength in the second half of the year [56] Question: Future deposit costs and beta expectations - Management expects to maintain current deposit costs and beta levels, with a focus on managing through potential future rate cuts [105][106] Question: Regulatory developments and their impact - Management observed a more positive regulatory environment, which is not expected to alter the company's operational plans significantly [88][89]

Financial Data and Key Metrics Changes - In fiscal 2024, the company reported over $40 million in revenue and $15 million in EBITDA, with expectations for higher numbers in the current year as operations transition to higher-grade ore [5][6]. - Q3 financial results showed revenue of $12.5 million, gross profit of approximately $4.5 million (35% margin), and adjusted EBITDA of $4 million, all improved relative to the prior period [20][21]. - The company produced just under 4,700 ounces in Q3, significantly more than in Q2, benefiting from record gold prices, realizing over $3,100 per ounce [20][21]. Business Line Data and Key Metrics Changes - The company is currently processing at a capacity of 2,000 tonnes per day, with plans to expand to 3,000 tonnes per day as part of the PEA roadmap [6][12]. - The cash cost in the PEA study is projected at $1,000 per ounce, with an all-in sustaining cost (AISC) of around $1,200 per ounce, which is comparable to current operations [6][7]. Market Data and Key Metrics Changes - The company entered negotiations with the Bank of Tanzania to sell a minimum of 20% of local gold production, benefiting from a reduced royalty rate of 4% on domestic sales compared to 7.3% on exports [23][24]. - The agreement with the Bank of Tanzania allows the company to use local currency for operating costs, enhancing cash flow and working capital [24][25]. Company Strategy and Development Direction - The company aims to self-fund growth through cash flow generated from operations, with a straightforward business plan focused on expanding the plant and developing the underground mine [15][42]. - The PEA outlines a scalable business plan, with significant blue-sky potential for increasing plant capacity and discovering higher-grade ounces [10][16]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational ramp-up and the potential for significant value creation, emphasizing the importance of returning to drilling activities in fiscal 2026 [16][62]. - The company is focused on rightsizing its working capital ratio to improve financial metrics and align with market comparables [26][59]. Other Important Information - The company has successfully expanded its processing capacity three times in three years and is currently operating at full capacity [31]. - The management team is experienced and has a proven track record in executing business plans effectively [62]. Q&A Session Summary Question: What is the expected trend for the oxide and sulfide mix in throughput? - Management indicated that the current mix is 25% oxide and 75% sulfide, with plans to transition to 100% sulfide by the end of the calendar year [64][65]. Question: What are the expected recovery improvements and timelines? - Recovery improvements are anticipated with the installation of a pre-leach thickener by the end of the year, aiming for a low 80% recovery rate in the next couple of quarters and high 80s to low 90s over the next eighteen months [70][74]. Question: How does the company plan to handle surface material and oxidized material? - Management is assessing opportunities for oxidized material while prioritizing sulfide processing, indicating potential for additional production from oxidized sources if economically viable [82][85].

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 15.1% compared to the same quarter last year, adjusted EPS rose by 22.7%, and tangible book value per share grew by 10.9% year-over-year [8][9][11] - The company has achieved double-digit compound annual growth rates (CAGRs) over the last decade in revenue, EPS, and tangible book value per share, significantly outperforming peers [9][10] Business Line Data and Key Metrics Changes - End-of-period loans increased by 10.7% on a linked quarter annualized basis, driven by new markets and relationship managers [19] - Deposit growth was recorded at 4.7% linked quarter annualized, with an estimated total deposit growth rate maintained at 7% to 10% for 2025 [21][22] - Net interest margin (NIM) finished up two basis points at 3.23%, with expectations for a flat to slightly up NIM in the upcoming quarters [23] Market Data and Key Metrics Changes - Core deposit growth was reported at 13%, significantly higher than the peer median, indicating strong market performance despite a challenging economic environment [11] - The company is focusing on deepening its presence in existing markets rather than expanding into new geographies, with potential opportunities identified in Florida and Texas [43][44] Company Strategy and Development Direction - The company employs a market share takeaway strategy, targeting the largest market share leaders in its footprint to capitalize on their vulnerabilities [12] - The hiring strategy focuses on experienced revenue producers, with an average of 18 years of experience, which is expected to yield approximately $19 billion in organic asset growth through 2029 [14][15] - The company aims to maintain organic growth as its primary strategy, with limited appetite for mergers and acquisitions due to the successful hiring model [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, noting that while clients are currently cautious, there is underlying optimism for future growth [51][52] - The company anticipates a strong year in 2025, supported by investments in new markets and successful hiring practices [30][28] Other Important Information - The company has adjusted its net interest income growth outlook to a range of 12% to 13% for 2025, reflecting a positive outlook despite potential rate cuts [24] - The company is increasing its guidance for fee growth from 8%-10% to 12%-15% for the year, driven by strong performance in banking fees and wealth management [28] Q&A Session Summary Question: Clarification on the expected asset growth from new hires - Management confirmed that the cohort of hires from 2020 to 2024 is expected to yield approximately $19 billion in organic asset growth, focusing on relationship managers [35][36] Question: Appetite for M&A given the organic growth model - Management reiterated a strong preference for organic growth over M&A, citing the ability to produce outsized growth through hiring rather than taking on integration risks [39][40] Question: Customer sentiment and appetite for growth - Management indicated that existing customers are currently cautious but optimistic about future opportunities, with a focus on maintaining credit quality [50][52] Question: Update on the BHG business and its contribution to earnings - Management noted that BHG's earnings contribution has increased, with expectations for continued strong performance driven by better credit quality and origination growth [62][63] Question: Future deposit costs and beta expectations - Management expects to maintain current deposit costs and beta levels, with a focus on optimizing margins in response to potential rate cuts [107][108]

Financial Data and Key Metrics Changes - In Q2 2025, total net sales reached €7.7 billion, at the upper end of guidance, primarily due to the revenue recognition of one High NA system and additional upgrade business [5] - Net system sales were €5.6 billion, with €2.7 billion from EUV sales and €2.9 billion from non-EUV sales, driven by Logic at 69% and Memory at 31% [5] - Gross margin for the quarter was 53.7%, above guidance, driven by an increase in upgrade business and lower costs [6] - Net income in Q2 was €2.3 billion, representing 29.8% of total net sales, resulting in earnings per share of €5.9 [6] - Q2 net system bookings were €5.5 billion, with €2.3 billion from EUV and €3.2 billion from non-EUV, weighted towards Logic at 84% [7] Business Line Data and Key Metrics Changes - Installed base management sales for the quarter were €2.1 billion, above guidance [6] - The upgrade business has been strong, with expectations for installed base management revenue to grow more than 20% over last year [11] - The company expects overall EUV revenue growth of around 30% in 2025 compared to 2024 [11] Market Data and Key Metrics Changes - Revenue from China is expected to account for over 25% of total revenue in 2025, reflecting its proportion in the backlog [10] - The company anticipates strong demand related to AI for both logic and memory, with system revenue expected to increase in 2025 compared to 2024 [9][12] Company Strategy and Development Direction - The company continues to focus on advancing its EUV technology and building a comprehensive EUV portfolio to meet customer needs [15] - The strategy includes transitioning customers to advanced nodes and increasing the number of EUV layers, which is expected to drive growth [18] - The company is preparing for a potential growth year in 2026, but acknowledges uncertainties due to macroeconomic and geopolitical factors [12][56] Management's Comments on Operating Environment and Future Outlook - Management highlighted that while demand remains strong, uncertainties related to macroeconomic and geopolitical developments are affecting customer capital expenditure decisions [12][56] - The company expects Q3 total net sales to be between €7.4 billion and €7.9 billion, with a gross margin between 50-52% [14] - Management remains optimistic about long-term growth driven by AI, despite short-term uncertainties [18][88] Other Important Information - The company paid a final dividend of €1.84 per ordinary share, with a total dividend for 2024 of €6.4 per ordinary share [7] - Share buybacks totaled around €1.4 billion in Q2 2025, bringing the total for the buyback program to €5.8 billion [8] Q&A Session Summary Question: Can you elaborate on the EUV capacity and revenue expectations? - Management confirmed that EUV growth is expected to be about 30%, with the delta attributed to the strong performance of the installed base business [24][26] Question: How does the pricing strategy relate to tool value? - Management stated that the ability to increase tool prices is linked to improvements in productivity and performance, which enhances customer value [32] Question: What is the outlook for the DUV business? - Management indicated that the DUV business is expected to remain stable, with China showing stronger demand than previously anticipated [27][44] Question: What has changed in customer conversations regarding 2026? - Management noted increased customer caution due to tariff discussions and geopolitical uncertainties, impacting their investment decisions [56][76] Question: Can you provide insights on memory trends and HBM driven by AI? - Management confirmed that memory revenue remains strong, driven by HBM demand, and expects continued growth in this segment [102]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $6.4 million, essentially flat compared to the prior period [21] - Product sales decreased to $4.7 million from $5.3 million last year, while franchise and royalty fees increased to $1.7 million from $1.1 million [21] - Total product and retail gross profit improved to $300,000 from a negative $300,000, driven by pricing adjustments and operational efficiencies [22] - Costs and expenses decreased to $6.5 million from $8 million last year, primarily due to lower G&A costs [22] - Net loss was $300,000 or negative $0.04 per share, compared to a net loss of $1.7 million or negative $0.26 per share [22] - EBITDA for the quarter was $2 million, compared to a negative $1.4 million last year [22] Business Line Data and Key Metrics Changes - The company waived all freight charges for franchisees to drive volume and improve product freshness [7] - A flat monthly fee program for freight delivery was implemented to encourage more frequent store orders [7] - The adoption of the new POS system accelerated, enhancing visibility into operations and decision-making [9] Market Data and Key Metrics Changes - The company opened a new store in Charleston, South Carolina, featuring a refreshed brand identity [11] - Construction is expected to begin shortly on a new location in Downtown Chicago, targeting an opening ahead of the holiday season [11] Company Strategy and Development Direction - The company is focused on stabilizing the business and transitioning from a rebuilding mode to an execution mode [5] - A new consumer packaging and e-commerce platform are set to launch, aimed at enhancing brand presentation and online conversions [17] - The company is actively building a development pipeline for new units while seeking capable franchise operators [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made in operational improvements and the potential for continued margin improvement [20] - The company believes it is in a better position to execute its strategy than in many years, with a focus on generating profit and returning to growth [20] Other Important Information - The company hired a new VP of operations with significant experience in manufacturing and logistics [10] - The refreshed website will include a section for new franchisees, making it more intuitive for potential operators [19] Q&A Session Summary Question: What early indicators are being watched to evaluate the impact of waived freight charges? - Management noted that order frequency has improved, encouraging franchisees to order more frequently [25] Question: What processes or decisions are expected to change with stabilized ERP data? - Management highlighted that the ERP data provides insights into manufacturing efficiencies and profitability, which will inform decision-making across departments [26] Question: How does the online strategy differ with the upcoming e-commerce relaunch? - Management emphasized the improved user interface and contemporary design of the new website, expecting positive results from the refresh [27][28] Question: What operational levers are expected to drive continued EBITDA expansion? - Management attributed positive EBITDA to improved pricing, SG&A discipline, and factory efficiencies, expecting these to continue [29] Question: What are the capital needs for expansion and improvements? - Management indicated that discussions regarding capital needs are ongoing, with no immediate plans to raise capital [35][36] Question: How is the growth strategy for new franchisees being developed? - Management stated that existing franchisees are prioritized for expansion, and new franchisees are being sourced through a network of referrals [43]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $6.4 million, essentially flat compared to the prior period [23] - Product sales decreased to $4.7 million from $5.3 million year-over-year, while franchise and royalty fees increased to $1.7 million from $1.1 million [23] - Total product and retail gross profit improved to $300,000 from a negative $300,000, driven by pricing adjustments and operational efficiencies [24] - Costs and expenses decreased to $6.5 million from $8 million year-over-year, primarily due to lower general and administrative costs [24] - Net loss was $300,000 or negative $0.04 per share, compared to a net loss of $1.7 million or negative $0.26 per share [24] - EBITDA for the quarter was $2 million, compared to a negative $1.4 million last year [24] Business Line Data and Key Metrics Changes - The company waived all freight charges for franchisees to drive volume and improve product freshness [8] - A flat monthly fee program for freight delivery was implemented to encourage more frequent store orders [8] - The adoption of the new POS system accelerated, enhancing visibility into operations and decision-making [11] Market Data and Key Metrics Changes - The company opened a new store in Charleston, South Carolina, featuring a refreshed brand identity [13] - Construction is expected to begin shortly on a new location in Downtown Chicago, targeting an opening ahead of the holiday season [13] Company Strategy and Development Direction - The company is focused on stabilizing the business and transitioning from a rebuilding mode to an execution mode [5][6] - A new consumer packaging and e-commerce platform are set to launch, aimed at enhancing brand presentation and online conversions [18] - The company is actively building a development pipeline for new units while seeking capable franchise operators [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made and the discipline applied across the business [7] - The first quarter demonstrated foundational investments and operational improvements beginning to produce desired results, with expectations for continued growth throughout the year [22] - The company believes it is in a better position to execute its strategy than in many years, aiming for sustainable growth and long-term value creation [22] Other Important Information - The company hired a new VP of operations with significant experience in manufacturing and logistics [12] - The refreshed website will include a section for new franchisees, making it more intuitive for potential operators [21] Q&A Session Summary Question: What early indicators are being watched to evaluate the impact of the flat freight charge? - The company is monitoring order frequency, which has improved since waiving the fee, encouraging franchisees to order more frequently [28] Question: What processes or decisions are expected to change with the ERP data stabilization? - The ERP data provides insights into manufacturing efficiencies and profitability, which will inform decision-making across departments [29] Question: How does the online strategy differ with the e-commerce relaunch? - The new website features a contemporary user interface and is positioned as a core brand experience, with results expected to be reported in the future [30][31] Question: What operational levers are expected to drive continued EBITDA expansion? - Continued improvements in pricing, SG&A discipline, and factory efficiencies are anticipated to drive EBITDA growth [32] Question: What are the capital needs for expansion? - Currently, the company is not planning to raise capital but is in ongoing discussions with the board regarding future needs [39][40] Question: How is the growth strategy for new franchisees being developed? - The company is focusing on existing franchisees for expansion and employing business consultants to improve store performance [46][47]