Outdoor Holding Company

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the outdoor holding company's fiscal third quarter 2026 earnings call. At this time, all participants are 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 and then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. I would now like to turn the call over to Michael Backel of Darrow Associates, the company's investor relations firm. Please go ahead, sir.

Good morning, and thank you for participating in today's conference call. Joining me from Outdoor Holding Company's leadership team are Steve Ervin, 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 a 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 press release. The information discussed on this call is current as of today, February 9th, 2026. 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. It is now my pleasure to turn the call over to Outdoor Holding Company's Chairman and Chief Executive Officer, Steve Erdem.

Good morning, everyone. Thank you for joining us for our third quarter fiscal 2026 earnings call. We believe these communications help you better understand our progress in moving and improving the company's performance. We look forward to this quarterly dialogue, and we remain committed to transparent and thoughtful communication with investors. Turning to the quarterly results, fiscal Q3 2026, There's a strong period operationally and financially. I'm going to provide some initial thoughts, then we'll turn things over to Paul to discuss our financial performance. I will close things out with some thoughts on where we are headed. Net sales were $13.4 million, an increase of 7% or about $900,000, outperforming broader trends in a restrained consumer spending environment. Gross margin remained strong for the quarter at 87%. Gross merchandise value increased to nearly $216 million, and we experienced a modest improvement in our take rate to 6.2% from 6.17% in last year's period. We continue to execute our strategy to operate as a streamlined, pure play e-commerce marketplace. In the third quarter, we continue to make significant progress reducing operating expenses, including depreciation and amortization Operating expenses declined significantly year over year, down about $22 million, with our operating expenses being the largest component with a reduction of approximately $21 million. A closer look at this expense reduction shows that a significant portion of this improvement reflects lower litigation-related costs, but importantly, recurring ordinary course Corporate operating expenses declined by approximately $1.4 million, driven primarily by reductions in corporate headcount, legal spend, and facilities cost. As I've said before, GunBroker.com can be operated effectively with a smaller, more streamlined organization by reducing redundancies and right-sizing our personnel to match the scope of our operations. Our actions over the past several quarters reflect that view. These cost reductions contributed to net income before discontinued operations in the quarter of $1,465,000 compared to a loss of $21,177,000 in the same period last year. This translated to earnings per share of one penny for the quarter versus a loss of 18 cents from continuing operations in 2025's third quarter. The significant cost improvements drove strong cash generation of over $4 million from operations during the quarter, even after restructuring costs, legal costs, dividends, and other costs, which Paul will discuss in more detail. Before I turn things over to Paul, I would like to touch on our most important financial metric, adjusted EBITDA, which we believe provides helpful insights into the underlying performance of the business. given the level of non-recurring items impacting reporting results. To help clarify our performance, we include a table detailing adjusted EBITDA in both our earnings release and 10Q. This quarter's adjusted EBITDA number confirms our progress, as we delivered a 54% increase in adjusted EBITDA for the quarter to $6.5 million, compared to $4.3 million in 2025's third quarter. I will now turn it over to Paul Kozowski, our Chief Financial Officer, to discuss the quarter's performance in greater detail.