ToughBuilt Industries, Inc.

Greetings and welcome to the Tough Built Industries second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Martin Galstian, Chief Financial Operator. Thank you, Martin. You may begin.

Good afternoon, and thank you all for joining us today to discuss Tuffield's second quarter 2023 financial and operating results. Again, my name is Martin Galassian, and I am the Chief Financial Officer of Tuffield. Joining me on today's call is Michael Panossian, Tuffield's President and Chief Executive Officer. Michael will begin today's discussion by providing operational and financial highlights from the second quarter. I will then review our financial performance Michael will conclude the discussion with our growth plans for the upcoming fiscal year and beyond. Before turning the call over to Michael, I would like to remind you that forward-looking statements may be made by management during today's call and that any forward-looking statements are covered under the U.S. Private Securities Litigation Reform Act of 1995. Actual results could defer materially from what is described in those statements and are subject to the changes, risks, and uncertainties as described in our press release and in our SEC periodic and other filings. Additionally, information on risk factors that could use the results to defer is available in the company's most recent Form 10-K file with the SEC. In addition, during the course of the call, we may inadvertently use or refer to financial measures that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures used by other companies. If any non-GAAP financial measures are mentioned in today's call, the company will promptly file a form 8K with the SEC reconciling such non-GAAP numbers to GAAP. I will now turn the call to Michael.

Thank you, Martin, and thank you all for joining us today. Considering the challenging macroeconomic backdrop, the second quarter of 2023 was strong for Tough Build as revenues increased by approximately 5.5% to $18.9 million compared to the same quarter in 2022. We continue to see solid online sales through Amazon in the second quarter. with $3.6 million in gross sales, representing a 2% increase over Amazon sales in the same period in 2022. Our gross profit for the second quarter increased by 18% to $5.8 million compared to the second quarter of 2022, while gross margin improved by 330 basis points year-over-year to 31%. This increase in gross profit margin in the 2023 second quarter was primarily driven by improving product mix and select pricing adjustments. We will continue to focus on our improving gross profit margin in the quarters ahead. We also saw significant operating expense leverage in the quarter as our operating expenses declined year over year, even as we grew revenues. During the last quarter, we continued to streamline the organization and focus on driving efficiencies on our accelerated path towards profitability. These streamlining efforts will be more visible in the quarters to come. We strongly believe our 20 product lines in eight different categories provide a strong foundation to continue our growth. Even as we introduce additional new products, we believe that a significant portion of our major new design work has been completed and we can begin to reap the rewards of what we have built so far. Additionally, in line with our strategy of continuing to expand our customer reach, we were pleased to announce, subsequent to the quarter end, that we significantly expanded distribution to customers in the UK, United Kingdom, through Houdens UK and City Electric Factors, representing a combined 1,200 retail locations nationwide. We also announced recently that we have expanded distribution in the European Union through La Platforme de Batimat and ProLens, which serve a combined 600,000 plus professional customers in France and Spain. I will now turn the call back to Martin to cover our financial results in greater detail. Martin?