Good afternoon, and welcome to the Superior Group of Companies Second Quarter 2025 Conference Call. With us today are Michael Benstock, Chief Executive Officer; and Mike Koempel, Chief Financial Officer. As a reminder, this conference call is being recorded. This call may contain forward-looking statements regarding the company's plans, initiatives and strategies and the anticipated financial performance of the company, including, but not limited to, sales and profitability. Such statements are based upon management's current expectations, projections, estimates and assumptions. Words such as expect, believe, anticipate, think, outlook, hope and variations of such words and similar expressions identify such forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. Such risks and uncertainties are further disclosed in the company's periodic filings with the Securities and Exchange Commission, including, but not limited to, the company's most recent annual report on Form 10-K and the quarterly reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward- looking statements. The company does not undertake to update the forward-looking statements, except required by law. And now I'll turn the call over to Michael Benstock. Please go ahead.

Thank you for joining us today. I will begin with an overview of the current market landscape and then discuss our financial highlights for the quarter and our three business segments. After that, Mike will provide a more in-depth look at our financial results. Following his presentation, Mike, Jake Himelstein, the President of our Branded Products division, and I will be available for your questions. We have noticed some improvement in customer hesitancy related to economic factors that I previously mentioned. While many customers are still seeking more certainty regarding inflation, interest rates, and tariffs, our Branded Products segment has adeptly navigated the economic uncertainty by gaining market share, negotiating cost relief with suppliers, and utilizing a varied supply base, which helps us offer good value to our customers. However, certain government policies can negatively impact specific areas of the economy, such as one of our larger call center clients in the solar sector, which filed for bankruptcy during the second quarter. This was the last of our clients receiving significant government subsidies. I will note that our contact center pipeline remains robust, indicating that these clients will be replaced. Our diverse range across our three business units and the various industries we serve strengthens our competitive edge and serves as a buffer against macroeconomic uncertainty. During this unpredictable period of tariffs and duties, we have similarly benefited on the cost side due to our strategic sourcing diversity, which has been a priority for us. We are strategically positioning our sourcing across multiple countries based on a redundancy strategy, utilizing our factories in Haiti, adopting a comprehensive approach to vendor negotiations, and collaborating with our customers on alternative product categories. This flexibility has been advantageous over the years, and we will stay agile as international trade negotiations progress. Regardless of macro conditions, we are focused on managing our expenses. As we shared in our last call, we initiated a program to cut budgeted expenses in the second quarter, and these reductions are benefiting us now and will continue to enhance our profitability. In terms of our second quarter results, we saw consolidated revenue grow by over 9% year-over-year, even amid this uncertain economic backdrop. Our largest segment, Branded Products, saw a significant increase in the past couple of months, achieving 14% growth during the quarter, while health care apparel grew by 6%. Revenues for our contact center business decreased by 3% compared to the same period last year. On the bottom line, net income per diluted share for the second quarter was $0.10, showing strong sequential improvement from the first quarter and an increase from $0.04 per diluted share in the same quarter last year. Our enhanced profitability compared to the prior year is primarily due to stronger top-line results while maintaining a healthy gross margin and slightly improving SG&A as a percentage of sales. As Mike will elaborate, we maintained a strong balance sheet, which positions us well for strategic long-term capital decisions. We actively repurchased our own common shares in the second quarter, which we consider a valuable move. I will now summarize each of our business segments, starting with Branded Products. We observed significant growth in this segment towards the end of the quarter. Importantly, both our pipeline of business opportunities and our order backlog remain very strong. Looking ahead, our expanding sales team is acquiring new accounts and increasing our existing customers' spending, so we anticipate continuing to grow our relatively modest market share in this appealing, fragmented market. As a reminder, we are among the top 10 largest branded product providers in the country out of over 25,000 competitors. Moving on to health care apparel, we managed to increase our top-line revenues despite the economic uncertainty affecting our customers, impacting our institutional healthcare apparel and wholesale channels. We are making strategic investments to enhance both our digital channels, including wholesale and direct-to-consumer, and to boost demand for our Wink and Carhartt licensed brand products across all channels. Like Branded Products, we have a small market share in health care apparel that continues to grow within this promising long-term growth industry. In closing our discussion on business segments, our Contact Center segment has faced some recent challenges. One issue is the bankruptcy of one of TAG's largest customers in the solar industry, which negatively affected our second-quarter results and future sales. Additionally, we are experiencing slower decision-making from potential customers. Although our new sales team is progressing well with RFPs and has generated a record pipeline, the revenue growth from new clients has historically been slow. However, we are encouraged by the record number of opportunities and strong interest in nearshore outsourcing from a variety of companies and industries. Our opportunities are at different stages of customer evaluation and negotiation, and we are diligently working to close them as quickly as possible. I will now pass it to Mike for a detailed review of the second-quarter results, and then we will open the floor for questions.

Thank you, Michael, and thank you, everyone, for joining us today. On a consolidated basis, we grew top line revenues 9% in the second quarter, our strongest year-over-year growth since the third quarter of last year. Our largest business, Branded Products, grew revenues by 14%, driven by the timing of orders delivered, organic expansion with existing large enterprise accounts, including higher tariffs and revenues generated by 3 Point following its acquisition in December 2024. For Healthcare Apparel, we grew revenues by 6% over the second quarter of last year from volume increases in Wink and Carhartt products. Our contact center business saw a 3% decline in revenues versus the year ago quarter as continued macroeconomic headwinds resulted in customer downsizing and attrition outpacing new customer acquisition. While our sales activity has picked up and our sales force drove the pipeline to a record high, we are experiencing a slower pace of new customer acquisition due to the delay in decision-making from prospective customers that Michael previously mentioned. Our consolidated gross margin was about flat versus last year's second quarter at 38.4%, but up 160 basis points sequentially. SG&A at 36.3% of sales improved from 36.9% in the year ago quarter despite recognizing $1.8 million in credit loss reserves across the Branded Products and Contact Center segment during the second quarter due to customer bankruptcies. The SG&A rate improvement was driven by leverage on the 9% sales increase as well as the benefit from cost reduction actions that we disclosed in the prior quarter. Putting together our stronger revenue with steady gross margin and improved SG&A performance, we generated EBITDA of $6.1 million, up from $5.6 million in the year earlier period. Turning to performance by segment. For Branded Products, we saw a 100 basis point improvement in gross margin to 35.6%, driven by favorable customer sales mix. The SG&A rate for Branded products also improved to 27.5% versus 28.3% in the second quarter of last year, benefiting from leverage on the significant sales increase for the quarter. As a result, Branded products drove strong improvement in quarterly EBITDA to $9 million, up from $6.7 million a year earlier. As for Healthcare Apparel, our gross margin of 35.5% decreased from 38.4% a year earlier due to higher cost of goods, including the recently enacted higher tariff costs in advance of price increases to our customers. Conversely, we were able to hold the line on controllable expenses and SG&A came in at 35.7% of sales, which was 150 basis points better than the second quarter of 2024, driven by higher sales during the quarter. Overall, our healthcare apparel EBITDA of $800,000 was down modestly from $1.3 million the prior year. Moving on to contact centers. We drove a slightly higher gross margin of 52.6%, up 40 basis points year-over-year. However, the SG&A as a percentage of revenues increased to 48.4% as compared to 42.4% in the year ago quarter, primarily due to a $1.1 million credit loss reserve resulting from the solar customer bankruptcy during the quarter. Therefore, contact center EBITDA of $1.6 million was down from $3.2 million a year earlier. Turning to net interest expense. The second quarter was $1.3 million, which compares favorably to $1.5 million in the second quarter a year ago, benefiting from a lower weighted average interest rate. Putting it all together, we returned to profitability this quarter with net income of $1.6 million, up from the prior year second quarter's net income of $600,000. On a per share basis, we produced earnings per diluted share of $0.10, up from $0.04 compared to the year ago quarter. Moving on to the balance sheet. At the end of June, we had $21 million in cash and cash equivalents, up from $19 million at the beginning of the year. We continue to actively buy back our own common shares during the quarter as an attractive use of capital, repurchasing about 390,000 shares for approximately $4 million, resulting in an average purchase price of $10.26 per share. We ended the quarter with $12.3 million remaining under our current buyback authorization of $17.5 million. Taking into account our operating cash flow, share repurchases and consistent dividend, our net leverage ratio at the end of June was 2.2x trailing 12-month covenant EBITDA, consistent with the first quarter and up from 1.7x at the start of the year. We have significant liquidity to execute on our growth plans while continuing to return capital when possible to shareholders, and we remain well within our covenant requirements. I'll wrap up with our full year outlook, which is unchanged from last quarter as we still expect revenues to be in the range of $550 million to $575 million, suggesting year-over-year growth at the high end of about 2%. While our clients across all three business lines continue to face uncertainty regarding inflation, interest rates, tariff duties and other macro factors, we're well positioned to support their needs regardless of the economic environment, given our strong liquidity and the costs we've already removed from the business while continuing to invest in our own favorable growth prospects. And now operator, if you could please open the line, Michael, Jake and I would be happy to take questions.

Nice to hear you guys a lot more upbeat than you were last quarter. So congrats on the quarter. So first question, Mike, I guess this is for you. Just wanted to zero in on the SG&A a little bit. I see as a percentage of revenue that it is down nicely sequentially and year-over-year. But on a gross dollar basis, it's up, and I'm guessing it's up driven by the higher revenues. So I was just wondering if you might be able to help us kind of quantify as a percentage like what percentage of SG&A is tied to increases and decreases in sales and kind of what percentage is more kind of fixed recurring type costs?

Sure. I would like to point out that our SG&A for the quarter is $52.2 million, which includes $1.8 million in credit loss reserve charges that are more like one-time costs. Without those charges, our SG&A would represent about 35% of sales, indicating better leverage compared to the sales we achieved this quarter. Commissions, especially within the Branded Products segment, are variable and fall under G&A, along with other variable sales-related expenses. Overall, the credit loss charges this quarter hindered what would have been a much stronger improvement in G&A.

Got it. Got it. That's helpful. A lot of talk this quarter on different conference calls and different industries about the impacts of AI on business. I'm trying to understand if there are any opportunities for Superior Group to take advantage of AI, perhaps to reduce costs in some of the business lines. Could you just talk about what those opportunities might be?

Yes. It's a lengthy discussion, and I'll try to summarize it quickly. I'll focus on our contact centers first, then touch on other areas. We are integrating AI throughout our contact centers, including in talent acquisition and development, onboarding, and helping agents build confidence before they start working. In sales and marketing enablement, AI assists us in identifying valuable prospects and optimizing outreach strategies, leading to a more targeted and efficient go-to-market strategy. Our product, Guru Assist, provides real-time guidance to agents during calls, enhancing their accuracy, reducing average handling time, and increasing customer satisfaction, which our customers greatly appreciate because it streamlines their experience. Additionally, AI-driven insights and reporting have significantly improved our effectiveness. Our clients are seeing measurable enhancements in interaction quality and overall customer experience, and our already high satisfaction scores have reached new heights. Now, I'll turn it over to Jake to share updates on our branded products business.

Yes. Thanks, Michael, and nice to meet you, Dave. So what I'd say is on the branded product side, the thing that takes the longest amount of time for us to do by far is product selection, right? Someone comes to us and says, we're having a trade show, we're having an event, we're doing a holiday party, go select items for us. That is by far the most time-consuming and labor-intensive aspect of the branded products business. We're putting AI agents into our technology to allow us to basically do product selection and mockups using artificial intelligence rather than human beings. So you might ask, hey, I need a holiday gift for 500 employees and spend $100 an employee. Rather than one of our people going and going to 10 websites and finding items and marking them up, we can use an AI agent to do all of that for us and present ideas that quite honestly, are going to select better ideas than any human being can select because it's going through all the history of what you've ordered in the past, what's trending now in the marketplace. And that is better for us from an employee leverage perspective and also a better experience for the client. So that's a huge advantage for us that the rest of our industry doesn't have the technical wherewithal nor the financial capability of putting something like that in place.

That's super helpful and sounds very positive for the outlook going forward. Just if I could sneak one more in before I turn it over. You guys reiterated some revenue guidance for the year. That range looks quite reasonable given where you are here halfway through. Are you feeling a little bit better about visibility in the back half of the year? And is that giving you the confidence to reiterate that range here?

Sure. I think the message you can take from the prepared remarks is that we are experiencing mixed results and reactions to the current environment. In our Branded Products segment, we had a very strong quarter, and there was good growth in Healthcare revenues as well, but we are starting to feel some of the initial impacts of tariffs. We are comfortable with the range we have, which is why we reiterated it, but there remains a level of uncertainty. China still has the potential for changes, and the recent tariff update offers some additional certainty in other countries. Despite the uncertainty, the improved performance in the second quarter, both sequentially and year-over-year, gives us more confidence as we approach the third and fourth quarters. We are working hard to maintain that momentum into the latter half of the year.

My question is going to be on everyone's favorite topic, tariffs. I was wondering if you guys saw any customer pull forward related to tariffs this quarter? And then also what you're seeing in inventory because I see you had a little bit of a build.

Yes, Keegan, this is Jake Himelstein. I'll begin with what I'm observing in the Branded Products segment. The tariffs are creating some cost pressures and supply chain challenges for the business. However, with the recent deals between the U.S., China, and Vietnam, that pressure has eased somewhat. We have responded to these tariffs with strategic inventory purchases, leveraging our long-term relationships with suppliers, and in some cases, negotiating better pricing. The advantage of the Branded Products business is that most items are made to order, allowing us to price according to orders. If tariffs are applicable, we include those costs, which enables us to mostly pass them on to our clients. Although tariffs present a challenge, we've been proactive, turning this situation into a competitive advantage. Interestingly, our competitors have seemingly ignored the tariff issue over the last few months, while we have been aggressive in acquiring new clients and sales representatives from our competitors. Historically, when faced with challenges in difficult economic conditions, we adopt a more aggressive approach, which has proven to be very beneficial for us.

I'll add. We did encourage our customers to try to order early, particularly with merchandise that was sitting in the U.S. already from some of our suppliers that would get shipped to them. I have to tell you, I would have expected more to have jumped on that opportunity and saved a boatload of money doing it, but you'd be surprised how few did. Enough did it that it definitely helped a little bit. I wouldn't say it was significant. And then in our health care business, I don't think that happened at all. I think quite the contrary on the institutional side of the business. I think everybody is just holding off waiting to see what's going to happen. And I think they're waiting to see what's going to happen with Medicare and Medicaid reimbursements in health care, too, as well. That's on the institutional side and how they're going to spend money and what hospital censuses are going to be and what's going to be covered and what's not. But on the consumer side, we're very encouraged by what we saw. Foot traffic in retail has improved with our scrubs channel and our direct-to-consumer also was quite robust. So a little bit of a mixed bag. Obviously, the office tours were not really impacted. There was no pull forward.

Got it. And...

Keegan, did you have a question about inventory overall?

Yes, just the build there this quarter.

Yes. Okay, Rao, I'll hit that. So we did have a build in inventory primarily within our health care business. That's due as we're looking for a stronger back half pickup in trend in health care. And then last year, we did experience stockouts, particularly on the institutional side of our health care business. So filling in inventory where we felt necessary to support sales. Again, to some extent, this is, call it, seasonal or cyclical. So again, we're building in preparation for an upward trend in the back half of the year, consistent with our overall guidance. And then obviously, we would expect those inventories to normalize on the other side of those sales as we move forward.

Got it. I wanted to hear your thoughts on the outlook considering the recent weaker employment report and job revisions. Have you noticed any changes in customer order patterns?

There hasn't been a significant reduction in hiring within the health care sector. In fact, there remains a considerable shortage of health care workers, so the sector hasn't been considerably affected. On past calls, we've mentioned that many of our retail clients, especially in grocery and fast food, are focusing on automation and have been largely replacing existing workers rather than hiring new ones over the past year and a half. However, there has been some impact; it is clear that certain customers are holding back due to a slight slowdown. Grocery stores are still performing well, although many are encouraging customers to use self-checkout systems. Some have had success, while others have retreated from that approach due to excessive shrinkage from theft. Overall, I haven't observed any significant effects on our business from workforce reductions.

And Michael, one thing that I'll add to that is on the branded product side, we do quite a bit with technology companies. And with AI, there's a lot of money flying around and there's a lot of hiring. And that has been very beneficial to us where we've seen a lot of our technology clients come out of the tariff situation has maybe not fully resolved, but at least normalized. We've seen a lot more spend and decision-making open back up, which has been very beneficial for us.

I wanted to explore the strong growth in branded products and the factors contributing to it. You mentioned market share gains and the timing of orders, as well as an improvement in customer sentiment. Can you clarify if most of this growth is primarily from market share gains, particularly with competitors reducing their activity, or do you think customers are becoming more comfortable making decisions in the current environment despite some uncertainties?

Kevin, this is Jake. I'm pleased to discuss that with you. It's really a mix of several factors. Last quarter, we emphasized the strength of our pipeline and backlog. Despite the tariff situation, we anticipated those would lead to positive outcomes, which they did, and we’re very satisfied with those results. Our pipeline remains robust, and we continue to observe significant organic growth with key enterprise accounts, especially in the tech sector that I mentioned earlier. We did experience some orders pulled forward from Q2 that were expected to deliver later in the year, likely influenced by the tariff concerns. This reflects the strength of our operations team in managing these orders in the second quarter. I believe the second half of the year will be strong, with both our pipeline and backlog looking very promising. We are seeing a shift where clients, who were hesitant in the second quarter due to tariffs, are now showing positive momentum across all industries as we move into the third quarter.

Okay. Yes. And you mentioned when talking about health care, expecting a stronger second half of 2025. Again, I think you talked about better trends in I guess, retail and direct-to-consumer, is that where you're expecting the favorable trends to continue? It sounds like the institutional is still pretty slow and uncertain, but any more comment on that would be helpful.

Yes, we anticipate an increase in activity on the institutional side. There’s only a limited time they can continue using the same uniforms in their laundry before they need to replace them. They've certainly reduced their inventories, and there may be some shelf stock that hasn't been replenished adequately to meet the significant demand in their laundries. However, we believe that will improve. We expect consumer activity to be better in the second half of the year, especially with numerous holidays, including Prime Days and Black Friday, which typically boost sales. The second half also includes holiday gifting. So, we are optimistic about healthcare in that period. It’s well known that Amazon is a major customer of ours and they have opted to decrease the amount of inventory they hold on their shelves, which has been publicly acknowledged. They’ve managed to operate without ordering as much in recent quarters, but we expect that to change, leading to increased orders. Overall, the outlook for healthcare in the second half of the year is positive.

Okay. Good. Regarding contact centers, you pointed out the strong pipeline, but there has been historically slow decision-making. What do you think is needed to get that pipeline moving and converting again? Is this something your clients need to address, or can they delay it? I imagine there could be an element of efficiency or cost savings involved for them. Any thoughts on that?

That's a good question. We believe we've made progress in improving our pipeline. We're investing more in marketing than ever to attract customers organically. Our sales team is generating more opportunities than they have in the past. We are utilizing various technologies to analyze data and identify new customers across all our current verticals and even in some new ones. We are thoroughly exploring every possibility. The positive aspect is that we track the status of our pipeline, and I want to clarify that I'm referring not just to opportunity pipeline but to customers with whom we are at least 95% confident of securing a deal, as we have already exchanged contracts and agreed on pricing. We have gone back and forth on details and are very close to finalizing many deals, which will primarily affect the fourth quarter and even more so the first quarter of next year. We are very optimistic about both our backlog and our growing opportunity pipeline, which, as Mike mentioned earlier, is the largest we've ever experienced.

So Mike, you called out that $1.8 million of credit loss reserve, which would bring your SG&A down to around 35%. Is that a good metric for the end of the year? Do you think SG&A right around 35% is realistic?

I think that's a reasonable target, Jim. I mean, obviously, it depends on where we fall into that range. But I think when you take into account the cost reductions that we talked about in the first quarter call, that have begun to kick in during the second quarter. Obviously, we'll see more of a benefit of that going forward. That should enable us to get overall a little bit of leverage for the full year.

All right. And you also mentioned that the 3-point acquisition was starting to contribute to branded products. Are there other 3 points out there? And how aggressive are you at this point on the acquisition side?

I can take that one. This is Jake. Well, there are other points to consider. Yes. There are 25,000 companies in our industry that are distributors just like us, Jim. So there are quite a few other companies similar to 3 Point out there. At this point, we're opportunistic. If there’s a great opportunity, we’ll certainly consider it, but we expect to encounter many companies that aren't the right fit. We will be very selective in finding the right ones. The straightforward answer is that there are many companies similar to 3 Point with aging owners looking for an exit, and we represent a very appealing option for them.

Let me add that we have been hesitant to pursue any acquisitions due to the uncertainty surrounding us. However, I think you should understand from this call that we have moved past that. We experienced one challenging quarter this year, the worst we've had in many years, but now that we are on the right path, we are serious about partnering with the right companies and exploring the right opportunities. We will be very selective, as Jake mentioned, ensuring that any acquisitions are quickly accretive and do not hinder our organic growth, which we have demonstrated we can achieve. Ultimately, that is the best outcome for our shareholders.

Okay. And then last one for me is on tariffs. India has been in the news, I guess, the last day or so, potential tariffs there. Is India a supplier for any of your components? Could that be an issue for you?

Very, very little. And they're nonexclusive. In some cases, we could, in a moment, switch to other countries, which we will. We do a little bit of knit shirts there and a couple of other products, but very, very little. We do have an office in India, as you know, with over 400 people and it's supporting particularly branded products, but from a programming standpoint, really supporting all of our businesses, but that has not been impacted at all.

Your next question comes from Michael Kupinski from NOBLE Capital Markets.

Congratulations on your good quarter. A couple of questions. So in the last call, you indicated that there would be some mitigation efforts to offset tariffs. And I know we talked a lot about tariffs, including the prospect of manufacturers taking a portion of the tariff impact. Can you just add a little color on how those mitigation efforts went? Have all of those mitigation efforts been implemented at this point? And were there price increases already factored into the second quarter?

I'll start with the last portion of that price increases mostly kick in during the third quarter, the very end of the second quarter, some of them, most of the third quarter. As far as the mitigation activities, we were successful in what we contemplated we would be able to push back and adjusted our pricing to our customers accordingly, not trying to take unfair advantage of them. But we feel like we've landed in a really good place. And from a competitive standpoint, I don't want to get too specific about what we did. But I feel we're in very good stead. And really, I believe that going forward, we protected our margins pretty much.

And it seems like you're pretty sanguine about the outlook. But obviously, given where the trend lines are, you're still a little cautious about the second half. Is that largely because it seems at least that the tariff impact largely would fall in the second half, right? Because most lead times and shipping and things like that probably wouldn't affect the second quarter as much as it probably would like maybe the third quarter or the fourth quarter. I was just wondering if you can just discuss those mitigation efforts as it might impact the margins. And I know you talked a little bit about SG&A, but I was just wondering where is the sense of caution that you have? Is it on the margin? Or is it on the revenue side as we kind of look towards the second half?

Yes. In the first half of the third quarter this year, there was little effect on margins, except for Jake's business in branded merchandise, where we are pricing in tariffs on every ad hoc order. However, we are generally maintaining at least six months of inventory, meaning most of what we hold is still at pre-tariff pricing. We anticipate some impact in the fourth quarter, although it is usually a slower period for our uniform business as retailers focus more on driving sales rather than new uniforms. Thus, tariffs are not expected to significantly affect the second half of the year. We have increased prices as we deemed necessary and will reassess for potential further increases next year. It's a dynamic situation, and we typically provide a 90-day notice to customers for any price hikes. If we determine a need for another increase by year-end, we will proceed with that.

Got it. Regarding the call centers, could you clarify the impact from the solar company on revenue? Specifically, what was the revenue impact in the second quarter?

The revenue impact in the second quarter was relatively small. We started to pull back on that particular customer. We'll be transitioning out of that customer over time. But the impact in Q2, the biggest impact was, again, the credit loss that we had to take on prior services. But we continue to service them post petition, albeit at a smaller scale. So again, some impact, but not major. The impact will be felt more significantly from a revenue standpoint as we move forward.

Can you kind of quantify what that revenue impact might be going forward? And it seems like just from your commentary, you anticipate maybe the third quarter still to be down maybe in the fourth quarter to be up given the pipeline that you have? Or maybe you can just clarify that.

I can't provide specific revenue figures for individual customers. However, when we consider the contact center forecast for the remainder of the year, there is certainly a challenge related to the bankruptcy. As Michael mentioned, the team is focused on quickly converting what's in the pipeline. While much of that may generate revenue next year, there is also a chance that converting that pipeline could help mitigate some of the declines we expect in the third quarter and partially in the fourth quarter.

That does conclude our time for questions. I'll now hand back to Michael Benstock for closing remarks.

Thank you, operator. We certainly appreciate everyone being on the call. I want to thank our loyal customers and our dedicated employees for delivering an improved performance this quarter. Despite the ever-changing macroeconomic and political conditions, we remain focused on what we can control and ultimately achieving our goal of delivering long-term growth across our three businesses. We'll keep you updated as we move through the year, and please don't hesitate to reach out with any additional questions. Thanks again for your interest in SGC, and enjoy the evening.

Thank you. And that does conclude our conference for today. Thank you for participating. You may now disconnect.