Outdoor Holding Company

Good morning and welcome to the Outdoor Holding Company's fourth quarter FY2026 earnings call. All participants are in listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to the company's investor relations representative, Michael Backel. Thank you. 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 Urban, Chairman and Chief Executive Officer, Paul Kozlowski, Chief Financial Officer, and Jordan Christensen, Chief Legal Officer and Corporate Secretary. During this call, management will be making forward-looking statements within the meaning of the federal securities laws. including statements that address outdoor holding companies' expectations, strategy, future performance, operational results, margins, cost structure, legal matters, capital allocation, and other matters. Forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such statements. For more information about these risks and uncertainties, please refer to the risk factors and other cautionary statements described in Outdoor Holding Company's most recently filed annual report on Form 10-K and periodic reports on Form 10-Q and the company's earnings press release issued in advance of this call. Today's conference call includes non-GAAP financial measures that Outdoor Holding Company believes can be useful in evaluating its performance. These measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the reconciliation table located in the company's earnings press release. The information discussed on this call is current as of today, June 22nd, 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. Before we begin, please note that certain non-GAAP financial measures discussed on today's call, including adjusted EBITDA, are reconciled in the most directly comparable GAAP measures in the company's earnings materials. Reconciliations for the first, second, and third quarters of the fiscal year are available in the applicable quarterly earnings releases posted on the investor relations section of the company's website. It is now my pleasure to turn the call over to Outdoor Holding Company's Chairman and Chief Executive Officer, Steve Urban.

Good morning, everyone. Thank you for joining us for our fiscal fourth quarter and full year 2026 earnings call. After just over a year as CEO, I'm excited to report that annual results reflect remarkable improvement for the company. I'm extremely proud of the tremendous progress we have made. Fiscal 2026 was a year of meaningful improvement across the business, and the fourth quarter gave us a strong finish with continued operating momentum, stronger cash generation, growing profitability, and clear progress exceeding the profitability goals I laid out last August. First, I will review our quarterly results. Then Paul will review our financial performance in greater detail before I recap our accomplishments in fiscal 2026 and our priorities for fiscal 2027. In the fourth quarter, net sales were $13.9 million, an increase of over 10% or almost $1.3 million compared with prior year periods. despite a cautious consumer spending environment. Gross margin remained strong for the quarter at 87.6 percent. Gross merchandise value, or GMV, increased to $229 million from approximately $205 million in last year's period. Due to sales mix of increasing firearms GMV versus non-firearms GMV, we experienced a modest decline in our take rate to 6.06% from 6.15% in last year's period. We continue to execute our strategy of operating as a streamlined pure play e-commerce marketplace. In the fourth quarter, we made further progress reducing operating expenses. Total operating expenses declined significantly year over year to the tune of $23 million. During the quarter, the company resolved an open litigation item with a $4.4 million payment to fully and finally settle the DCP matter. We inherited numerous litigation matters and have been working hard to resolve these matters, as evident by many successful resolutions in the fiscal 2026 year. We continue to demonstrate that gunbreaker.com can be operated effectively as a smaller, more streamlined organization by reducing redundancies and right-sizing our personnel to match the scope of our operations. Even after absorbing the one-time $4.4 million settlement expense in the DCP matter, we dramatically reduced our net loss from continuing operations in the quarter to $2.7 million compared to a loss of $27 million in the same period last year. This translated to a loss from continuing operations per share of 2 cents for the quarter versus a loss from continuing operations of 23 cents for the prior year period. Importantly, the significant cost improvements, once again, drove strong cash generation for the quarter, despite restructuring costs, share purchases, legal expenses, and other costs upsetting these cash gains for the quarter, which Paul will discuss in more detail. We view this continued recurring contribution of cash flow from operations as one of the clearest indicators of the underlying health of the business. The fourth quarter results reflect a continuation of the trends we've seen in the last few quarters. For fiscal 2026, net sales and gross margins grew from fiscal 2025 levels. More importantly, we have been executing on our cost reduction efforts and curtailment of legal expenses, resulting in significantly lower year-over-year operating expenses. The net result was a dramatic reduction in operating losses from continuing operations. and positive cash flow from operations for the year. That positive cash generation is a milestone worth underscoring, as it's a direct result of the concerted efforts our team has put in place to increase operational efficiency. Before I turn things over to Paul, I would like to touch on a key metric we use to evaluate real-world performance, adjusted EBITDA. We believe this non-GAAP metric provides helpful insight into the underlying performance of the business given the level of non-recurring items impacting reporting results. To help clarify our performance results and identify adjustments, we include a table detailing adjusted EBITDA in both our earnings release and Form 10-K. This quarter's adjusted EBITDA demonstrates our progress as we delivered more than double the adjusted EBITDA in the quarter of 7.7 million compared to 2.9 million in the fiscal 2025 fourth quarter. Just as encouraging is the trajectory for the year. Quarterly adjusted EBITDA grew from 3.1 million to 4.9 million to 6.6 million to 7.7 million from the first to fourth quarters respectively. For the full year, adjusted EBITDA improved to $22.3 million from $15.3 million in fiscal 2025. We are outperforming the run rate of $25 million adjusted EBITDA that I set as a goal just 10 months ago. I'm especially proud of the tremendous work our team undertook during fiscal 2026 to overhaul and strengthen our financial reporting infrastructure, culminating in the successful remediation of all previously identified material weaknesses in our internal control over financial reporting by year end. I will now turn it over to Paul Kaczewski, our Chief Financial Officer, to discuss the quarter and year's performance in greater detail.