Thank you, and welcome to the PetMed Express Fiscal First Quarter 2027 Earnings Conference Call. With us on the call today are Leslie Campbell, PetMed's Chairman and Interim CEO and President, and Doug Krulik, Interim Principal Financial Officer and Chief Accounting Officer. Certain information included during this call may contain forward-looking statements within the meaning of the Pratt Litigation Reform Act of 1995 and the Securities Exchange Act of 1934, as amended, that may involve a number of risks and uncertainties. These statements are based on our beliefs, as well as assumptions we've used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions. Actual results could differ materially from those projected. There could be no assurance that any forward-looking results will occur or be realized. And nothing contained in this presentation is or should be relied upon as a representation or warranty as to any future matter, including any matter in respect of the operations or business or financial condition of PETMEDS. PETMEDS undertakes no obligation to update publicly these forward-looking statements based on subsequent events, except as may be required by applicable law, regulation, or other competent legal authority. We have identified various risk factors associated with our operations in our most recent annual report on Form 10-K and other filings for the Securities and Exchange Commission. Now, let me turn the call over to Leslie Campbell, Petman's Chairman and Interim CEO and President.
Thank you, Reed, and welcome to everyone joining our call this afternoon. Following my opening remarks, Doug will provide a detailed overview of our financial results. In this first quarter, we continued to build on the operational and financial foundation we began transforming last year, with a significant focus on enhancing shareholder value, optimizing our capital allocation, streamlining our cost structure, developing new revenue streams, improving our customer retention while efficiently gaining access to new customers, modernizing our technology infrastructure, enhancing our customer service capabilities, and speeding up deliveries to our customers. While the direct-to-consumer pet health landscape remains intensely competitive, our focus is single-minded, driving long-term shareholder value and establishing a direct, clear path back to sustainable profitability. To that end, our board continues to evaluate all capital allocation and strategic priorities with complete discipline. While we believe we are implementing the strategy and taking the actions necessary to enhance shareholder value, our board and management team remain open to considering any opportunities that have the potential to enhance value for all Petmen shareholders. With respect to revenue growth and customer acquisition initiatives, we are diversifying our customer acquisition funnel beyond relying on traditional advertising and media channels, which continue to become more expensive. For example, key strategic initiatives, such as our first white-label pharmacy offering, are reaching in-store shoppers and bringing them online. leveraging the technology and infrastructure work we completed during q4 and into the current quarter we believe we're beginning to see the benefits of these investments show up in our day-to-day operations our new call center platform launched in june has helped us handle customer inquiries and sales more efficiently, and our new fraud prevention system, launched in Q4, continues to protect the business as order volumes evolve. During Q1, we completed a comprehensive process to upgrade our enterprise resource planning system, our ERP system, and in May, we successfully rolled out SAP as our ERP system enterprise-wide, further modernizing and strengthening our financial systems and reporting processes, and representing the completion of one of the largest elements of our technology transformation initiative as we continue to replace legacy platforms. We also recently entered into a new freight agreement that both mitigates proposed cost increases from a previous carrier, and provides faster and more trackable service, especially to our West Coast customers, who may now receive their orders up to two days faster. We believe that speeding up deliveries to our customers will significantly enhance their customer experience and customer satisfaction and lead to higher customer retention rates. All these ongoing technology and operational initiatives are creating a stronger foundation for a more scalable, efficient organization going forward. Before we move on to the first quarter results, I'd like to update you on two current topics. First, in a press release that we issued on June 30th, we acknowledged receipt of an unsolicited non-binding and conditional proposal from SilverCape Investments to acquire all the outstanding shares of the company's stock for $3 per share in cash. Based on communications to date with SilverCAPE, the board has not yet reached any determination regarding SilverCAPE's proposal, and there is no assurance that any transaction will result. As stated in our June 30, 2026 press release, the company does not intend to comment further unless and until it determines that additional disclosure is appropriate or required. Secondly, regarding the search for a permanent CEO, the board is continuing this search with the assistance of a global executive search firm. Recruiting for this role a person firmly committed to driving long-term shareholder value and establishing a direct, clear path back to sustainable profitability remains a high priority for our board. Turning now to first quarter results. In Q1, we're pleased to see that sales have stabilized sequentially over the past several quarters, although the year-over-year decline of 19.9% in first quarter net sales reflects continued softness in prescription medication sales. Our net loss for the first quarter narrowed significantly to $6.1 million, compared to a net loss of $34.2 million in the same period last year, reflecting our disciplined focus on managing operating costs as well as the absence of a non-cash goodwill impairment charge. General and administrative expenses declined nearly 14% year-over-year, reflecting lower professional fees, and advertising expenses declined 30%, reflecting lower gross media spend and the selective elimination of several unproductive, high-cost programs. At the same time, our recurring net sales, which include auto-ship and membership-related revenue, grew to 61.5% of total gross sales, up from 57.6% a year ago, underscoring the strength of our subscription-driven customer base. I also want to call out our continued improvement around customer acquisition. During the first quarter, we acquired approximately 70,000 new customers, and this metric has been trending upward over the past several quarters. In addition, we reduced our cost of acquiring a new customer by 15% in the first quarter to $60, compared to $71 in the same period last year. This meaningful improvement was driven by our ongoing advertising and media spend optimization, including the selective elimination of unproductive media spend and other strategic reductions in marketing costs. We see this improvement as an encouraging sign that our marketing investments are becoming more efficient, even as the broader advertising environment remains competitive. As we continue to focus on improving our customer acquisition and lowering our customer acquisition costs, I'm also pleased to share that in July, we officially launched our new co-branded online pharmacy offering with Rural King, giving Rural Kings customers, across more than 150 stores in 17 states, convenient access to pet medications, prescription food, preventatives, and auto-ship services through a platform powered by pet meds. This partnership, which we announced in April, represents our first large-scale white-label pharmacy program, And we believe it is an important proof point for our strategy to efficiently grow our customer acquisition reach, including by converting in-store shoppers into online customers and developing new revenue streams by putting our pharmacy infrastructure, licensed pharmacists, e-commerce capabilities, and 30 years of expertise to work for our partners. In Rural King's case, particularly in the rural communities that they serve, where access to veterinary care and pet medications can be limited. We're proud of what this partnership represents in terms of future opportunities to efficiently gain access to new customers and develop new revenue streams, and we look forward to announcing the extension of our white-label offering to additional partners in the near future. Turning to capital allocation, on July 23rd, we announced that we had entered into a definitive agreement for a sale leaseback of our headquarters and distribution center buildings here in Delray Beach, Florida, for an aggregate purchase price of $37 million. Under the agreement, we will lease back the portion of the property housing our offices in Florida Distribution Center under a 10-year lease with subsequent renewal options, allowing us to continue operating out of the headquarters that has been home to Petments for the past decade. We expect this transaction to close within approximately 120 days from the date of the definitive agreement, subject to a due diligence period, negotiation of the definitive lease agreement, and other customary closing conditions. See this transaction as a strategic next step in our ongoing commitment to sharpen our focus on our core pharmacy business, strengthen our balance sheet, and optimize our asset base by unlocking the value of our real estate, in turn, providing us with additional financial flexibility to continue investing in the initiatives with the greatest potential to drive shareholder returns. Looking ahead, the financial, operational, commercial, and cultural improvements we have implemented over the past 12 months, our strategic initiatives and partnerships, and our more disciplined approach to expense management and capital allocation have dramatically improved our foundation, and they position us well for the future as we seek to drive long-term shareholder value and establish a direct, clear path back to sustainable profitability. We will continue to focus on operational excellence as a competitive pillar and core driver for sustainable long-term results and delivering value for shareholders. By leveraging our modernized technology and other operational initiatives, we can build on our exceptional service levels and improve customer retention. In addition, we continue leaning into our pet pharmacy expertise and infrastructure to expand B2B relationships through membership programs and our white-label fulfillment services to extend our reach to more customers. We remain deeply committed to our mission of ensuring pets live longer, healthier, and happier lives, and we are focused on delivering value for our shareholders through this disciplined execution of our strategic priorities. With that, I'll turn the call over to Doug Krulik for a more detailed review of our financial results for the first quarter.
Thank you, Leslie. Net sales for the first quarter were $41 million compared to $51.2 million in the same period last year, representing a third consecutive quarter of revenue stabilization above $40 million, although a 19.9% year-over-year decline, primarily driven by decline in prescription medication sales, partially offset by lower consumer promotional usage. Gross profit was $11.3 million, compared to $14.4 million last year. As a percent of sales, gross profit this year was 27.6%, compared to 28.1% in the prior year, primarily reflecting lower manufacturer rebates as a percentage of sales, partially offset by lower freight costs per order. General administrative expenses were $11.2 million, compared to $12.9 million last year, a 13.5% decrease. This year-over-year improvement was driven by lower professional fees, share-based compensation, and severance costs. Advertising expenses were $4.2 million, compared to $6 million last year, a decrease of 30.2%, reflecting lower gross media spend and the elimination of unproductive media. Depreciation and amortization was $2.1 million, compared to $2.3 million in the prior year period. Net loss for the first quarter was $6.1 million, or $0.28 per diluted share, compared to a net loss of $34.2 million, or $1.65 per diluted share for the same period last year. This decrease in net loss was primarily driven by the absence of last year's goodwill and trade name impairment charge, and to a lesser extent, lower general and administrative and advertising expenses, partially offset by lower gross profit resulting from decreased net sales. The adjusted EBIT loss was $3.4 million compared to a loss of $2.7 million in the prior year period. Turning to our balance sheet, as of June 30, 2026, we had $13.1 million in cash and cash equivalent to no debt. With that, I'll turn the call back to Leslie for closing remarks.
