Outdoor Holding Company

Welcome to the outdoor holding company second quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Michael Backel with Darrow Associates, the company's investor relations firm. Please go ahead.

Good morning, and thank you for participating in today's conference call. Joining me from Outdoor Holding Company's leadership team are Steve Irvin, Chairman and Chief Executive Officer, Paul Kozowski, Chief Financial Officer, and Jordan Christensen, Chief Legal Officer and Corporate Secretary. During this call, management will be making forward-looking statements, including statements that address outdoor holding companies' expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in outdoor holding companies' most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes non-GAAP financial measures that Outdoor Holding Company believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliation of this non-GAAP financial measure to net income or loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings release. The content of this call contains time-sensitive information that is accurate only as of today, November 10, 2025. Except as required by law, Outdoor Holding Company disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. With that said, it is now my pleasure to turn the call over to Outdoor Holding Company's Chairman and Chief Executive Officer, Steve Irvin.

Good morning, everyone. Thank you for joining us for our second quarter fiscal 2026 earnings call. I'm pleased to reinstate quarterly calls with our shareholders and hope that these communications help you better understand our progress in improving outdoor holding company. As you are aware, there were some regulatory issues that necessitated suspension of our periodic reporting and these earnings calls. Once we filed our restated and delinquent financials and held an annual meeting, We've regained full NASDAQ compliance and are prepared to resume discussing our operating performance. I look forward to these calls being a regular part of our dialogue with our investors. While there remain certain legal matters that we are unable to discuss at this time, we are committed to transparent and thoughtful communication with investors. With that being said, let's discuss what was a promising second quarter of fiscal 2026. I'm going to provide some initial thoughts, then we'll turn things over to Paul to discuss our financial performance. I'll close things out with some thoughts on where we are heading. In the quarter, net sales of just under $12 million were essentially flat year over year, outperforming broader trends in the firearm market and overall consumer spending. Our gross margin remained strong for the quarter and increased by 22 basis points to 87.1%. Growth merchandise value was relatively close to last year's quarter at almost $189 million, but we saw an improvement in our take rate, which rose to 6.34% as compared to 6.27% in last year's period. When I wrote my letter to shareholders back in August, I said our goal was to focus on being fully a streamlined e-commerce marketplace operator. In the second quarter, we began to show results from those operating expense reduction efforts. Operating expenses, except depreciation and amortization, declined significantly year-on-year by approximately $6.7 million. Some of this improvement was the result of settling litigation and reducing ongoing litigation costs, but another component was the reduction in compensation-related expenses of over $1 million. We can operate Dunbroker.com with a smaller, more streamlined team by reducing redundancies and right-sizing our headcount, match the scope of our operations. Our improved cost structure contributed to reporting net income from continuing operations in the quarter of $1,405,000 as compared to a loss of $5,868,000 in last year's period. This translated to earnings per share of one penny for the quarter versus a loss of five cents from continuing operations in fiscal 2025's second quarter. These cost improvement efforts also led OHC to generating $2.3 million in cash, primarily from operations, during the quarter. This is even after structuring costs, legal costs, dividends, and other costs, which Paul will discuss in more detail. Generating positive cash flow in the quarter was a remarkable improvement, which we hope to continue improving on in future quarters. Before I turn things over to Paul, I would like to touch on an important financial metric, adjusted EBITDA. The company has been experiencing the volume of non-recurring costs that tend to mask our underlying business performance. To help clarify our performance, we include a table detailing adjusted EBITDA in both our earnings release and 10-Q. This quarter's adjusted EBITDA number confirms our progress. as we delivered a 24% improvement in adjusted EBITDA for the quarter at $4.9 million, as opposed to $3.9 million in fiscal 2025's second quarter. I will now turn it over to Paul Kozowski, our Chief Financial Officer, to discuss the quarter's performance in greater detail.