AXIL Brands, Inc.

Greetings and welcome to the Axel Brands Fiscal Year 2026 Financial Results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, you must be dialed in and you must press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to Peter Salzberg, Vice President, Investor Relations. Thank you, Peter. You may begin.

Good afternoon, and thank you for joining us for Axel Brands' fourth quarter and fiscal year 2026 financial update and earnings conference call. I'm Peter Seltzberg, working with the team here at Axel, and we're all indeed quite pleased to take the next step with our disclosure and engagement platform in launching quarterly conference calls for our shareholders. Presenting on behalf of management today are Jeff Toghraie, Axel's Chief Executive Officer, and Jeff Brown, Axel's Chief Financial Officer. Before we begin, I'd like to remind everyone that certain statements made during today's call may constitute forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our filings with the SEC for discussion of these risks. and other important factors, as well as an explanation of any non-GAAP items that we may refer to in today's press release and on this call. Without further ado, I'll turn the call over to Jeff. Go ahead, please.

Thanks, Peter. Good afternoon, everyone. Today, I'm pleased to welcome you to Axel's first public quarterly earnings conference call. Consistent with our increased engagement with the investment community over the past year, we are holding this call and plan to do so each quarter going forward. With the scale and visibility we have now reached, we believe these updates will be of benefit to our shareholders, potential investors, and all stakeholders. We hope that these calls will give us an opportunity to communicate what's driving our success and help stakeholders better understand our progress, strategy, and the milestones that lie ahead. We are working towards building a world-class brand and product platform that we believe offers a unique growth opportunity for investors in our company. From a strategic standpoint, we have continued to our efforts to transition our business pursuant to our growth strategy from what was predominantly a direct-to-consumer e-commerce business into a true multi-channel consumer products platform. Among other things, we have announced new distribution agreements with large retailers, including some of the most recognizable names in consumer retail. With that in mind, I'll begin with the highlights of our fourth quarter and full year results, followed by a review of the operational progress we made. Jeff Brown, our Chief Financial Officer, will then provide a more detailed discussion of our financial position, followed by an outlook on our objectives for the year ahead, and we'll close with a Q&A session. BISCOL 2026 was an exciting year of growth for us. In the fourth quarter, net revenues increased 48.9% year-over-year to $8.6 million, up from $5.8 million in the prior year period, which was within our guidance range. Gross margin expanded to 72% from 70%, which exceeded our guidance range. Full-year sales were up 17.5% and surpassed the $30 million mark, a record for Axil. Income from operations for the quarter rose to $1.4 million compared with just $46,000 a year ago and adjusted EBITDA reached $1.7 million or 20.3% of net revenues up from $0.4 million or 6.1% of revenues in the prior year quarter. Based largely on the orders that we have been receiving from new retail partners, we achieved a strong finish to the year and reported net income of $1.5 million or $0.21 per basic share and $0.18 per diluted share for the quarter. This compared to a net loss of $0.2 million or $0.04 loss per diluted share in the fourth quarter of fiscal 25. These outstanding results reflect the cumulative impact of the investments we've made over the past 18 months in distribution, product development, and operational infrastructure. For the full fiscal year, net income was $2.7 million compared to $855,000 in fiscal 25, representing a gain of over 216%. This translates to 33 cents in diluted EPS compared to just 10 cents in fiscal 25 and indicates a steep acceleration at the bottom line that we believe is very exciting for our investors. We believe that we can continue to realize similar results going forward, and Jeff Brown will discuss the drivers of our financial performance shortly. Moving to operational highlights, this year we introduced the GS Extreme 3.0 lanyard earbuds, the MX2 over-the-ear hearing protection platform, the X-Series filtered earplugs, and the CRX digital hearing protection platform. Our expanded product offering and operational readiness supported the expansion of our retail channel, which was the primary driver of revenue growth in the fourth quarter. These included the MX Pro and MX Passive earmuffs, now available in approximately 1,250 Walmart locations nationwide, and the previously announced rollout of our X-Series earplugs across 3,700 stores. We've now expanded our total store count to approximately 6,000 locations, up from roughly 1,800 at the end of the prior fiscal year, representing more than a 200% increase in a single year. That growth spans big box, specialty, and military channels, which we believe reflects the broadening appeal of the Axil brand and the expanding product use cases, which is a key priority for us. While we have publicly named some of our larger customers in our filings, including CrossPro, Walmart, and Home Depot, many of our relationships remain in the early stages. Separately, we have expanded our product offerings in the public safety and security markets with the introduction of the CRX product platform. We see a meaningful opportunity here to raise the standard on what's currently available by delivering clearer situational awareness, stronger protection, and modular connectivity that better meets real-world demands. On the innovation front, we continue to invest in a portfolio centered on smaller form factors with higher functionality and performance, particularly our GSX-Lanyard earbuds and the X-Core wireless platform. Although our over-the-year products or earmuffs have gained solid traction with the introduction of the MX2, and we see significant potential in that segment going forward, from a revenue standpoint, X-Core remains our best-selling platform. At the same time, X-Core is now entering its third year without a major upgrade, which makes the next-generation X-Core especially important in terms of our future growth. We are now on track to release the next generation of our flagship X-Core wireless earbud line, the X-Core 2, in September, coinciding with the start of our second quarter. This is a highly anticipated launch with our retail and distribution partners and will be our most significant product introduction of the year. We believe X-Core 2 will further differentiate us in both the consumer and professional channels and help drive velocity as we expand our retail footprint. Turning to our financial position, we ended the year with $4.5 million in cash, generally in line with the end of fiscal 25. Higher retail orders affected the timing of cash flows related to accounts receivable and customer return allowances. As of August 14, our cash position stands at $7.4 million, and we're comfortable with our overall financial position. Our push into retail has strengthened operating income, and we believe we can continue funding these initiatives internally. We enter fiscal 2027 with no outstanding borrowings, a clean balance sheet, and the financial flexibility to continue investing in our growth. I'll turn it over to Jeff Brown for a more detailed discussion on the financial side of the business.