Educational Development Corporation

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Educational Development Corporation's financial and operating results for its fiscal 2026 third quarter and year-to-date results. As a reminder, this conference is being recorded. On the call today are Craig White, President and Chief Executive Officer, Heather Cobb, Chief Sales and Marketing Officer, and Dan O'Keefe. Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the fiscal 2026 third quarter and year-to-date results. The release will be available later today on the company's website at www.edcpub.com. Before turning to the prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and are protected under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors. We refer you to Educational Development Corporation's recent filings with the SEC for a more detailed discussion of the company's financial condition. I would like to turn the call over to Craig White, the company's president and chief executive officer. Craig?

Thank you, Alan, and welcome everyone to the call. We appreciate your continued interest. I will start today's call with some general comments regarding the quarter, then I will pass the call over to Dan to run through the financials, after which Heather will provide an update on our sales and marketing, and then I will provide an update on our plans for fiscal 2027. During the third quarter, we completed the sale of our healthy complex, which was a big achievement for the company and our shareholders. Selling the complex paves the way for us to move forward into fiscal year 2027 with no bank restrictions, which allows us to execute our strategy to return to growth and profitability. Our plan is not an overnight change with expected immediate results, but a carefully developed strategy for long-term growth. With that, I'll now turn the call over to Dan O'Keefe to provide a brief overview of the financials.

Thank you, Craig. Third quarter financial summary compared to the prior year third quarter, net revenues were $7 million compared to $11.1 million. Average active brand partners for the quarter totaled $5,100 compared to $12,400. Earnings before income taxes were $10.6 million compared to a loss of $1.1 million in the third quarter last year. Excluding the building gains from the sale of $12.2 million, our loss before income taxes would have been $1.6 million. Net earnings totaled $7.8 million for the quarter compared to an $800,000 loss in the third quarter last year. Earnings per share totaled $0.91 compared to a loss of $0.10 on a fully diluted basis. Year-to-date summaries compared to the prior year are net revenues of $18.7 million compared to $27.6 million. Average active brand partners totaled $6,200 compared to $13,300. Our earnings before income taxes totaled $7.4 million compared to a loss of $5.3 million last year, excluding the building Sale gain of $12.2 million. Our loss before income taxes were $4.8 million. Net earnings totaled $5.4 million compared to $3.9 million loss last year. Earnings per share totaled $0.63 compared to a loss last year of $0.47 on a fully diluted basis. Now for an update on our working capital. Inventory levels decreased from 44.7 million at the beginning of fiscal year 2026 to 39.1 million at the end of November, generating 5.6 million of cash flows from inventory reductions. This cash flow has been used to pay down vendors, reduce our bank debts, and fund our operational losses. In October, following the building sale, we paid off our line of credit, our term loans, with our bank, Bank of Oklahoma. At the end of the quarter, we had $3.4 million of cash, 800,000 receivables, $39.1 million of inventory, and $2.0 million of accounts payable and $0 owed to our bank. That concludes the financial update. Now I'll turn the call over to Heather Cobb for a sales and marketing update. Heather?