Operator: Good day, everyone, and welcome to the American Outdoor Brands Inc. Fourth Quarter and Full Year Fiscal 26 Financial Results Conference Call. This call is being recorded. At this time, I would like to turn the conference over to Ms. Liz Sharp, Vice President of Investor Relations. Please go ahead, ma'am.
Elizabeth A. Sharp: Thank you, and good afternoon. Our comments today may contain predictions, estimates, and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, should, could, indicate, suggest, believe, and other similar expressions, is intended to identify those forward-looking statements. Forward looking statements also include statements regarding our product development, focus, objectives, strategies, and vision, our strategic evolution, our market share, and market demand for our product, market, and inventory conditions related to our product, and in our industry in general, and growth opportunities, and trends. Our forward-looking statements represent our current judgment about the future, and they are subject to various risks and uncertainties. Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings. You can find those documents as well as a replay of this call on our website at aob.com. Today's call contains time sensitive information that is accurate only as of this time, and we assume no obligation to update any forward looking statement. Our actual results could differ materially from our statements today. A few important items to note about our comments on today's call. First, we reference certain non GAAP financial measures. Our non GAAP results exclude amortization of acquired intangible assets, stock compensation, emerging growth transition costs, non-recurring inventory reserve adjustments, impairment of assets held for sale, other costs and income tax adjustments. The reconciliation of GAAP financial measures to non GAAP financial measures, whether they are discussed on today's call, can be found in our filings as well as today's earnings press release which are posted on our website. Also, when we reference EPS, we are always referencing fully diluted EPS. Joining us on today's call is Brian Daniel Murphy, President; and Andy Fulmer, CFO. And with that, I will turn the call over to Brian.
Brian Daniel Murphy: Thanks, Liz, and thanks, everyone for joining us today. I am very proud of what our team accomplished during fiscal 26. In a year shaped by tariff uncertainty, uneven retailer ordering patterns, and continued pressure across portions of the consumer marketplace. Our team remained focused on innovation, execution, and serving our consumers and retail partners. As a result, we continued to strengthen our brands, expand distribution of our products, optimize our portfolio, and position the company for future growth in fiscal 27 and beyond. With that, let's take a look at the year. While our reported net sales declined during fiscal 26, the underlying performance of our business was much stronger than the reported results suggest. A meaningful portion of the year over year decline was attributable to approximately $10 million in orders that retailers accelerated into the final 2 weeks of fiscal 25. As we said at the time, that acceleration was not only a bid by retailers to get ahead of impending tariffs, but it was also a tremendous endorsement of our most popular and innovative brands. Nevertheless, that acceleration created a tough comp for our fourth quarter and full year, that we believe is masking excellent performance across our business. In fact, excluding that impact, net sales declined just 5% for the year. A solid result given the environment. And we viewed the 5% decline as nominal. And driven by 2 elements that were persistent throughout the year. The first is an inventory reset at our largest e-comm retailer, and the second is extended softness in the aiming solutions category within the personal protection market. Despite those impacts, our key brands continue to perform, You will recall that last quarter we defined these key growth brands as BOG, Bubba, Caldwell, Grilla, and MEAT!YourMaker. On a combined basis, and again, adjusting for the acceleration, this group delivered positive year over year net sales growth as well as positive POS growth for fiscal 26. This is a great result. Because what matters most is what happens when consumers encounter our brands at retail. And our POS results tell us that consumer demand for our products remained healthy throughout fiscal 26. We delivered POS growth of approximately 4% representing our fourth consecutive quarter of positive year over year POS growth. In our outdoor lifestyle category, POS increased by 7%, And in our shooting sports category, which tends to align more closely with Nick's background check results, POS increased by 1%. Innovation remains 1 of the most important drivers of our business. New products represented approximately 29% of fiscal 26 net sales, continuing a consistent track record of innovation across our portfolio. Today, we have more than 440 issued and pending patents the largest number in our company's history. And the impact of those patents is profound. In fiscal 26, products that are protected by 1 or more patents generated roughly 54% of our net sales for the year. Compared to just 28% at our spin off. That demonstrates the deep moat created by our intellectual property. Our patents help protect the market positions we have earned defend future revenue streams, and create meaningful barriers to entry for competitors. Just as importantly, they enable us to continue taking share by bringing differentiated products and technologies to market that competitors simply cannot replicate. While others are often focused on protecting the past, we remain focused on building the future. Behind our innovation engine is a talented team of designers, engineers, sourcing specialists, software developers, and category experts who continually mind the depths of our brand portfolio for new opportunities. They identify where our brands have permission to play, develop multiyear innovation road maps, and create differentiated products and technologies that generate new revenue streams protected by intellectual property. Each innovation strengthens our competitive position expands the reach of our brands, and further widens the moat around our business. More recently, for a number of our key growth brands, these efforts have expanded beyond individual products and into a new frontier for the outdoor industry. Connected, ecosystems. These ecosystems combine innovative hardware software, and digital engagement to create experiences that simply did not exist before. The result is deeper consumer engagement, differentiated offerings for retailers, and new opportunities to drive category growth. All of which are reflected in the strong POS performance we are seeing with our largest retail partners. A great example is Caldwell. During the year, we expanded our Claycopter and Claymore lines for shotgun enthusiasts. Who numbered nearly 19 million in America. With the Claymore Connect, and the Claycopter Surface to Air, a revolutionary wireless ground launcher that integrates with our Caldwell CLAYS app. And makes Caldwell the only brand that can connect to and simultaneously control up to 10 Claymore Connect or Claycopter surface to air launchers. Allowing the combination of traditional clays and clay copter targets on a single course. Together, these products create a connected experience that brings new levels of engagement, competition, and excitement to shotgun enthusiasts while reinforcing Caldwell's leadership position in the category. And we are taking that connected experience into the recreational fishing market as well where nearly 58 million Americans participate. During the year, our Bubba brand partnered with Major League Fishing to introduce ScoreTracker Live. A transformative platform for competitive fishing professionals and everyday anglers that delivers real time tournament management, scoring, spectating, and excitement via our Bubba app and SmartFish scales. Our partnership with MLF is important, because it significantly expands the visibility of our Bubba brand through 1 of the largest and most engaged audiences. The 30 million Americans who participate in bass fishing. It allows us to bring the excitement previously reserved for professional tournament fishing to everyday anglers. Whether competing in a local fishing league, on a college team, in a regional event, or simply among friends and family, anglers will now have access to the same experiences that have helped make professional tournament fishing so compelling. In a few weeks, we will head to Florida for ICAST, the world's largest sport fishing expo where we will join MLF to officially launch ScoreTracker live for consumers. Lastly, as I think about innovation, I am reminded that the most powerful innovations are often those that penetrate and shake up large sleepy markets. Changing consumer behavior and creating value long after their introduction. BOG is a great example. Several years ago, we introduced the death grip. A truly innovative shooting rest that solved the fundamental trade off between portability, and stability for hunters. And what made Deathgrip successful was simple. Once consumers discovered it, they recognized it as an authentic solution to a real challenge. That drove adoption, strengthened the brand, and displaced competitors. What began as a single product evolved into a category defining platform that helped establish BOG as a leader in hunting rests, and made it indispensable for both consumers and retailers. Today, although we do not often talk about BOG, it remains 1 of the most consistent top performers in our growth brand portfolio. We see that same potential in the innovative platforms we are building with Bubba, and Caldwell today. Beyond innovation, we continue to strengthen our company throughout fiscal 26. We took steps to optimize our brand portfolio, including the planned divestiture of an underperforming brand, We remain disciplined in how we allocate resources across the business, and we successfully navigated a rapidly evolving tariff environment. Enhancing the flexibility and responsiveness of our supply chain, while preserving our rights to potential tariff refunds and maintaining continuity for our customers, and consumers. Andy will cover these topics in more detail during his remarks. As we enter fiscal 27, we are mindful of the uncertainties that continue to affect the consumer marketplace. At the same time, we are encouraged by several trends we believe are important. First, consumer demand for our products remained favorable. As reflected in our POS performance. Second, ordering patterns with our largest e-comm retailer appear to have stabilized as fiscal 26 progressed. Third, retail inventory conditions and foot traffic patterns at several of our retailers were trending favorably as we exited fiscal 26. And fourth, retailers continue to respond positively. To our innovation pipeline. Expanding distribution opportunities for our brands. Taken together, these factors reinforce our belief that our long term model remains intact. We believe our brands are well positioned, Our innovation pipeline is exceptionally strong. Our operating model remains agile, and the foundation we have built over the past several years positions us well to return to growth in fiscal 27. With that, I will turn the call over to Andy to review our financial results and outlook.
H. Andrew Fulmer: Thanks, Brian. Fiscal 26 was a year marked by disciplined execution and our continued focus on maintaining strong financial fundamentals. Despite the uncertainty of tariffs and macroeconomics that persisted across the landscape Throughout the year, we managed the business with a balanced approach carefully controlling costs, while continuing to invest in innovation that supports our long term strategy. We ended the year in a great position. Let me walk you through the details. Net sales for fiscal 26 were $190.5 million a decrease of 14.3% compared to fiscal 25. Brian outlined the acceleration by our retailers so I will not walk through that in detail. Adjusting for that acceleration, the decline in net sales for fiscal 26 was just 5.4%. Solid performance given the environment, and largely in line with expectations we set in our second quarter. Because we believe this result is more reflective of our underlying performance for the year, I will reference it a few times throughout my remarks today. Our outdoor lifestyle category which consists of products relating to hunting, fishing, meat processing, outdoor cooking, and rugged outdoor activities, represented approximately 58% of fiscal 26 net sales. Up from 46% at our spin off in fiscal 20. This evolution reflects our focus on large, attractive, outdoor recreation markets. Where innovation can drive consumer engagement distribution expansion, and long term growth. Our outdoor lifestyle net sales for the fiscal year decreased 13.1% compared to last year. Adjusting for the acceleration, net sales in outdoor lifestyle decreased 1.6%. In our shooting sports category, which includes solutions for target shooting, aiming, safe storage, cleaning and maintenance, and personal protection. Net sales for the year declined 15.9% compared to last year. Driven mainly by a decrease in aiming solutions. Adjusting for the acceleration, shooting sports net sales declined by 10.4%. Turning to our distribution channels. Our traditional channel net sales decreased by 13.5% in fiscal 26. Adjusting for the acceleration, traditional net sales actually increased by about 1%. Consistent with our comments throughout fiscal 26, our largest e-comm retailer, continued to reset its inventory. Which we believe was in response to tariffs. Accordingly, our ecommerce net sales decreased by 15.6% fiscal 26. That said, we were encouraged to see an improvement in that reset activity as the year progressed. Our domestic channel which generated approximately 94% of our net sales in the year, decreased by 13.4% while our international channel, which represented 6% of our annual net sales, decreased by 26.7% compared to last year. Largely the result of US trade policy uncertainty. On a quarterly basis, net sales in Q4 decreased 24% compared to Q4 last year. Adjusting for the acceleration, net sales decreased $4.8 million or 9.2% compared to Q4 last year. The decline driven almost entirely by the weakness in aiming solutions. Turning to gross margin. Fiscal 2026 gross margin increased 10 basis points to 44.7%. The increase was due to the timing of pricing actions to offset higher tariff costs, as well as a higher percentage of new product sales. Which typically generate higher gross margins. Those increases were somewhat offset by sales of slower moving inventory increased depreciation, and higher inbound freight and tariff costs. We are pleased with this result which is consistent with our long term target for gross margins in the mid forties. Now speaking to the topic of tariffs. Following the Supreme Court's February 2026 ruling, that IEPA based tariffs were unlawfully imposed, we have taken the steps to file for a refund of duties paid under those tariff orders. In Q4 of fiscal 26, we filed a refund claim related to IEPA tariffs in the amount of $15.2 million and we recorded a receivable for that refund in other current assets. Of that $15.2 million, we reduced our inventory carrying value by $10.8 million and the balance of the $4.4 million reduced our cost of goods sold to offset IEPA tariffs amortized in Q3 and Q4. Turning now to operating expenses. For the full year, GAAP operating expenses totaled $94.2 million a decrease of $5.2 million compared to fiscal 25. The decrease was driven by a reduction in intangible amortization lower sales volume related expenses, decreases in variable compensation and depreciation, and careful cost management that resulted in reduced costs across the business. These decreases were offset by increased public company costs as we emerge from EGC status and a $3.4 million noncash impairment charge related to the divestiture of our UST brand which we discussed on our last call. On a non GAAP basis, operating expenses decreased $6.6 million in fiscal 26, to $80.3 million Non GAAP operating expenses exclude the noncash impairment intangible amortization, stock compensation, and certain nonrecurring expenses as they occur. I believe the OpEx result in fiscal 26 reflects our disciplined approach to consistently avoiding unnecessary expenses. This philosophy helps us maintain a lean, agile, and asset light model that can adapt to change without requiring abrupt cost cuts. Especially in the uncertain macro environment we faced in fiscal 26. GAAP EPS for fiscal 26 was a loss of $0.73 compared to a loss of $0.01 in the prior year. While non GAAP EPS in fiscal 26 was a positive $0.28, compared to $0.76 in fiscal 25. Our fiscal 26 figures are based on our fully diluted share count of approximately 12.9 million shares. For fiscal 27, we expect our fully diluted share count will be about 13.2 million shares outside of any share buybacks that may occur. Full year adjusted EBITDA in fiscal 26 was $10.2 million compared to $17.7 million last year. Turning to the balance sheet and cash flow. We finished fiscal 26 with a very strong balance sheet. Ending the year with cash of $21.4 million and no debt. After repurchasing approximately $5.1 million of our common stock. As we have discussed before, our business is seasonal. With the highest quarterly net sales typically occurring in Q2 and Q3. This pattern generally results in operating cash outflows in the first half of the fiscal year, followed by cash inflows in the second half as the receivables are collected and inventory levels decline. This seasonal pattern played out as expected. And we generated $21.3 million in operating cash in the second half of the year. We ended the year with inventory of $91.9 million a decrease of $9.4 million compared to the prior fiscal year end. The decrease included a reduction in capitalized tariffs, as well as the move of UST inventory to assets held for sale, and a planned reduction in overall inventory levels. Turning to capital expenditures. We ended the year with CapEx of $2.5 million compared to $3.9 million last year. For fiscal 27, we expect to spend $3.5 million to $4 million on tooling and patent costs consistent with our asset light operating model of CapEx at less than 2% of net sales. Our balance sheet remains strong and debt free, We ended the year with no balance on our $75 million line of credit, so we entered fiscal 27 with a total available capital of over $110 million. Lastly, we continue to return capital to our shareholders through our share repurchase program. During fiscal 26, we repurchased roughly 551 thousand shares of common stock at an average price of $9.24 per share. And at year end, we still had roughly $8.1 million of availability remaining on our $10 million share repurchase program which runs through September of this year. Now turning to our outlook. In fiscal 27, we plan to grow net sales and profitability by leveraging what has long been our greatest competitive advantage. Innovation. While the macroeconomic environment remained uncertain, and external factors such as inflation, interest rates, geopolitical developments, evolving consumer spending patterns may continue to fluctuate, we believe that periods of change often create the greatest opportunities for companies like ours. That can innovate and adapt quickly. As we move through the year, will continue to closely monitor economic and market developments adapting where prudent as conditions evolve. Based upon the trends that we saw at the end of fiscal 26 that Brian outlined, we expect net sales for fiscal 27 in the range of $200 million to $210 million which at the midpoint would represent growth of 7.5% over fiscal 26 reported net sales. As we think about the flow of net sales over the year, we expect to see our typical seasonal pattern play out in fiscal 27. With Q1 coming in as our lowest net sales quarter Q2 and Q3 as our highest net sales quarters, We expect Q1 net sales to be approximately And Q4 coming in with higher net sales than Q1. 20% higher than reported net sales for Q1 of fiscal 26. We estimate that approximately $6 million of the $10 million of accelerated orders into fiscal 25 came from Q1 in fiscal 26. And the remainder from Q2 and Q3 in fiscal 26. This implies we expect Q1 net sales in fiscal 27 to be roughly flat to up slightly year over year on a normalized basis. Based on our net sales volume in Q1, we expect adjusted EBITDA to be slightly negative. Turning back to the full year, We expect gross margins for fiscal 27 to consistent with our long term target range in the mid-40s. Turning to OpEx. We expect fiscal 27 operating expenses to increase slightly due primarily to variable costs associated with higher net sales. Partially offset by lower intangible asset amortization. We remain committed to disciplined expense management and will continue to align our cost structure with business activity, while preserving flexibility to respond to changing market conditions. Lastly, based on all the factors I have discussed, we expect adjusted EBITDA for fiscal 27 to be in the range of 6.5 to 7.5% of net sales. At the midpoint, this would represent an increase in adjusted EBITDA of over 40% compared to fiscal 26. This level of profitability is consistent with our long term operating model, which targets EBITDA contribution of 25% to 30% on net sales above $200 million We have demonstrated this level of performance in the past, And as our brands continue to introduce innovative and compelling products, we remain confident in our ability to drive sustained profitability over time. 1 note on income taxes. We ended fiscal 26 with net operating loss carryforwards of approximately $21 million Therefore, because of this benefit this provides us, we expect a minimal amount of GAAP income tax in fiscal 27. With that, operator, please open the call for questions from our analysts.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. And our first question for today will come from Matthew Koranda with Roth Capital. Please go ahead.
Matt Koranda: Hey, guys. Good evening. Make sure I understand the gross margin commentary for the quarter from the fourth quarter. Seems like there was a, I think, a benefit from IEPA I think Andy may have called out, like, $4.4 million from the IEPA tariffs that was recognized as a cogs item in the fourth quarter. Can you just run us through that And then are you building that into the margin outlook for fiscal 27, or is the margin outlook for 2027 excluding benefit from future IPA rebates?
H. Andrew Fulmer: Yes. Matthew, you are correct. So the $4.4 million was recorded all in Q4 in COGS. That was really If you remember, we disclosed $1.7 million hit in Q3. So that $1.7 million really benefited Q4 as part of that 04/2004. And then going forward, yeah. So our guidance for fiscal 27 really has everything all the all the tariffs that are effective as of today are baked into our guidance. So you have section 32, Right now, since February, we have had a 22 that kind of replaced IEPA for a little while. And then TBD on what happens with Section 301 tariffs going forward.
Matt Koranda: Okay. Alright. Got it. But just making sure the I guess, we are not building in future contra-COGS items from any additional tariff rebates for fiscal 2027?
H. Andrew Fulmer: Correct. Yeah. Okay.
Matt Koranda: Gotcha. And then on I guess, the sell-through commentary from Brian, Just curious how to kind of foot the 1% sell-through overall, and I think you said 7% in outdoor lifestyle. It sounds like those are running positive and look good, but I guess the outlook suggests something like, you know, the high single digit growth for fiscal 27. So are we counting on some sell in on new products? Is this just factoring in a higher theoretical baseline from 2026 because of the $10 million of orders that were pulled forward in the 2025. I mean, just help us level set to make sure we understand the disconnect on sort of what the outlook implies versus sort of the sell through that you are seeing right now.
Brian Daniel Murphy: Yep. Yeah. Happy to. So the way the way that I think about it is you have to also consider the acceleration piece that Andy pointed out earlier in the script. So we have that acceleration, obviously, that came in Q4 of last year. In FY 25. Which kind of set us up for some declines in the first quarter And $10 million was really split Right? Most of it hitting into Q1. I think we said, like, 60% or so. That we have that hindsight and the data to support it, with the rest of that occurring in Q2 largely, Probably a little bit in Q3. So when we look at the POS trends we saw in FY 26, which were positive. Right? I think net, like 4% over the course of the year. Is when you take into account that the adjustment for the acceleration which is candidly how we are assessing the health of our business internally. it is actually very consistent with those trends. So we do not see a shift towards higher growth when you take into account that normalization. The trends are actually pretty consistent. The headwind you know, you might say, well, what is the delta then between you know, the POS trends and what you are seeing on the sort of normalization side? It really comes down to the 2 factors that we discussed. Which is aiming solution softness, which we are seeing some improvement and our largest ecommerce retailer, again, seeing improvement there, especially coming out the end of last fiscal year. So we are not seeing any trends right now on our dashboard. That would lead us to believe that the increases that we are proposing here are unrealistic. We actually are seeing quite a bit of support that those increases are going to be more likely than not. Yeah.
Matt Koranda: Okay. Alright. That helps kind of square it for us, Brian. Thank you. Maybe back to Andy. On the margin guidance, So if we were to bridge from the commentary that you made and then using the midpoint of the EBITDA margin guide, like, 170 basis points, I think, of EBITDA margin improvement. Embedded in the guidance. Sounded like you said gross margin relatively consistent. In 2027 versus 2026, mid sort of mid 40% range. So the bulk of the improvement in EBITDA margin should be coming from operating leverage. Correct me if I am wrong in that thinking, I guess, and then maybe just call out some of the items where you think you are getting some leverage on the operating side.
H. Andrew Fulmer: Yeah. So, I think, you know, your math is right. We are kind of targeting those long term gross margins kind of in the mid forties. So, you know, a bit of improvement from 2026 to 2027. And then overall, I mean, the EBITDA guide, we feel comfortable because it is right within our long term, you know, EBITDA contribution model of the 25 to 30%. We have been there before when you look historically. So we are really comfortable with that. So as net sales grow, we are going to be, we are going to be leveraging the fixed costs that are kind of embedded in the OpEx number. Okay.
Matt Koranda: Alright. Understood. Maybe on the, cash deployment side of things, you talk about what you expect to collect at least seasonally on tariff rebates over the course of the next couple of quarters. And then just maybe a little bit on deployment of that cash. Balance sheet is obviously in a great spot. How are we thinking about deployment there? I know you guys have been consistent on the buyback. It seems like that is sort of been the priority outside of organic investment in the business. Where your needs are relatively met in the near term. Is that still the posture we have, or is there anything percolating on the M&A side? That we should be thinking about in terms of cash deployment as you bring on additional cash from the rebates?
Brian Daniel Murphy: Yeah. Hey, Matthew. it is Brian. I will start, and then Andy, feel free to chime in. So the way that we are thinking about the refund is overall, the refund is really offsetting, in many ways, the residual tariff burden from the replacement tariff. Right? Section 22, although it is temporary, Section 32 on steel and aluminum, TBD on 301, if there are going to be additional changes there. So we do not view the tariff refund as a discrete windfall in any sort of way. We really see it as a way to offset some of these other costs that have crept in throughout the year while also just being more disciplined on OpEx, so we can maintain that long term model that Andy alluded to. And then you but look. If there we do not know the timing of when we are gonna receive these things. I think most people expect that it would take a while. In reality, we started getting some refunds sooner than we expected. So timing is unknown overall. But let's just assume that they come sooner. Right? What would we do? First, we would like to offset any additional costs because that is a real factor. But then, secondly, we already have a strong balance sheet, I think if you would have told me last year all of the things that would occur in the macro environment and the tariffs, everything. That we would be able to execute in the year with over $20 million of cash clean you know, no debt, I would have asked how you did it because that I am I am very pleased with how the team has responded to this and taking a long term view. What I am trying to say is we have set ourselves up very, very well to outside of any tariff refund, again, because we are going to allocate that appropriately. That we are in a tremendous position to be an acquirer of choice I have to give a shout-out to Kyle Carter who recently joined our team. I am sure you know Kyle, Matthew, but just brings incredible analytical horsepower relationships. And frankly, a pipeline that is additive to the work that we were already doing. And although he is been here for a short time, the work with the team has really accelerated our efforts and made us more impactful in pursuing acquisition targets, especially those that are not, quote, unquote, for sale. So be aggressive on that front. And, you know, we will see where the refunds shake out relative to other capital allocation priorities.
Matt Koranda: Alright. Very comprehensive. I will turn it over. Thank you. Thanks, guys.
Operator: The next question will come from Mark Smith with Lake Street Capital. Please go ahead.
Mark Smith: Hey, guys. I want to stay on M&A here for a second. And just kind of how you are thinking about that with the addition of Kyle. Versus organic growth, you know, R&D. We have not seen much of an uptick in spending there, but you guys have been driving strong new product sales. I am just kind of curious how you rate growth from each of those segments.
Brian Daniel Murphy: Sure. Hey, Mark. I can go first. This is Brian. it is funny how we get over the course of the years people wonder why we are not spending more in R&D. And I think that is a real testament to how vertically integrated this team is when it comes to developing new products. So in a prior life, you know, before the spin, we did outsource certain elements of that, which led to a higher cost. In our efforts to be more nimble, agile, coming to market more quickly, be more disruptive, We decided to rely more on internal resource And what that is allowed us to do is to spend less but get a much higher return on that investment. So I think I think we are well positioned there with our spend and the talent that we have today. When it comes to, as I kind of alluded to, buy versus build, is when Kyle first came here, in the last month or so, last 2 months, the first thing we did as a team was sit down, and this includes the entire executive team, and getting him up to speed on our philosophy because at the end of the day, innovation is probably getting tired of us talking about it, but that is what we do and that is who we are. And that leads everything. So even when we look at acquisitions, we look at it through the lens of innovation. Is there a brand here that has a highly enthusiastic base of consumers that we can tap into Do they have a strong brand? And, ultimately, does this become a vessel for us to now insert some of our new innovation. We have got tons of new products that we have created and ideas. That we believe we do not have the right brand today. And, ultimately, that helps give Kyle and our team a road map for these are the brands that we believe are going to be the most strategic for us. I think a lot of companies can fall into the trap Certainly, I have been at companies like this where you become more reactive. Right? And it is opportunistic. Can we buy this company for a low multiple carve out costs and get multiple arbitrage? Or sales synergies. All that is great, and that absolutely factors into how we look at acquisitions. But it really comes down to what is how is this gonna help us overall and the company and our employees and most importantly, our shareholders truly harness the power of this sustainable competitive advantage of ours. And so that is really what he is tasked with right now is cultivating that pipeline that will allow us to do that. While also there is an element of being opportunistic. While also assessing acquisitions that are being brought to market, which there are more. But then seeing what is the strategic angle here for us. So we can continue to leverage this And that will conclude our question and answer session.
Operator: Would like to turn the conference back over to our CEO, Brian Daniel Murphy, for any closing remarks. Please go ahead.
Brian Daniel Murphy: Thank you, operator. In closing, I want to sincerely thank our employees. For their dedication and their commitment throughout fiscal 26. Truly, thank you for sticking with us, taking a long term perspective, We have built a tremendous call here, and you are absolutely a big part of that. In addition, your passion for innovation and focus on execution continued to strengthen our company. And ultimately advance our long term vision. I also want to thank our shareholders, our customers, and our business partners for their continued support. We look forward to updating you on our progress throughout fiscal 27. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.