Operator: Greetings. Welcome to the IDW Media Holdings Second Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] Davidi Jonas, CEO; and Andrew DeBaker, CFO, will be available to answer questions and provide company insight. Please note, this conference is being recorded. Before we begin, I'd like to read you the company's abbreviated safe harbor statement. I'd like to remind you that statements made during this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. I now turn it over to Andrew DeBaker, CFO, for opening remarks.
Andrew DeBaker: Hello, and thank you for joining today's call. Yes, I am Andrew DeBaker, CFO of IDW Media Holdings. Looking back over the past 3 years really highlights an incredible turnaround for our company. I am proud to report a net income of $450,000 this year, year-to-date through July. This compares to a net loss of nearly $1.5 million at this time last year, a $1 million net loss in 2024 and a $5.4 million net loss in 2023. Hard work and dedication across IDW over these past 3 years is clearly reflected in our financial results, and we are excited to maintain this momentum. We truly believe that we have the best team in comics. Revenue this year has grown by nearly $1 million year-over-year, an 11% increase, driven by broad-based strength, particularly in comics sales. Teenage Mutant Ninja Turtles #20, marking our 300th Turtles issue since the franchise launched 15 years ago, sold over 25,000 copies in July. The core Turtles series, led by writer Jason Aaron, continues to exceed expectations, while crossover titles like Teenage Mutant Ninja Turtles vs. Godzilla and Sonic the Hedgehog vs. Godzilla both launched with exceptional strength. On the book side, the Teenage Mutant Ninja Turtles: The Last Ronin box set continues to outperform projections, while perennial favorites like March and They Called Us Enemy remain strong performers, especially across schools and libraries. Our smaller On-the-Go book format is resonating well with consumers, bringing renewed traction to legacy storylines from Teenage Mutant Ninja Turtles: Saturday Morning Adventures and Sonic the Hedgehog, as well as top-shelf titles like Johnny Boo. In fact, Sonic the Hedgehog Volume 1 On-the-Go recently entered its third printing to satisfy demand. Our direct-to-consumer, digital and licensing channels remain robust. Additionally, we are seeing steady growth in creative services as we assist partner publishers in accessing book and comic retail channels, including our new partner, White Ash Comics, which begins distribution next year. Gross margin holds steady at 43%, supported by strong backlist performance that has effectively offset the temporary impact of inventory cleanup as we dispose of slower-moving legacy stock. And we remain disciplined on cost control. Operating expenses are down nearly 100% compared to last year after normalizing for last year's Q1 Diamond Comic Distributors bankruptcy impact. While ongoing geopolitical instability keeps shipping costs elevated and broader inflationary pressures impact expenses like travel, we have successfully offset these headwinds with reductions in legal fees, IT infrastructure costs and rent and utilities. All of these actions have driven our year-to-date net income to, again, $457,000 through July, positioning us for one of our strongest performances in recent memory. And we're nowhere near done. We're excited to join some of you at New York Comic Con coming up next month, where we will make some major announcements for some of our licenses such as Teenage Mutant Ninja Turtles and Star Trek, the expansion of our IDW Dark imprint and the acquisition of a new high-profile license we're incredibly excited to share. And I just wanted to correct one little thing on operating costs, we are down nearly $100,000 compared to last year, not 100%, my apologies. But again, thank you for your continued partnership and confidence in IDW Media Holdings. It's an exciting time to be here at IDW. And with that, I will turn the call back to the operator to open the line for questions.
Operator: [Operator Instructions] Our first question comes from [Paul Sachin] with -- he's a private investor.
Unknown Attendee: Again, great that you've turned it around. We've been talking for many years. Just wanted to give you a shout-out for that. On the OTC Pink move, I guess that is going to be not Pink Limited. Do you still plan on reporting on a quarterly basis and continuing to have conference calls?
David Jonas: I don't think that we anticipate reporting on a quarterly basis. I think we'll report unaudited on an annual basis. As far as conference calls, I think we're open to continuing. I think it's -- if there's interest from investors to stay engaged and continue the conversation, I think we're happy to do so. For us, it's just an efficiency. And that's the reason why we'll -- it's easier to do a conference call and get together for an hour than prepare the quarterly earnings, which is more labor-intensive. So I think we'd just limit that to annual.
Unknown Attendee: Okay. So you're going to be going to Pink Limited. And you're only going to be reporting on an annual basis going forward?
David Jonas: I'm not sure. Am I missing something? Yes, I think we're only going to be reporting unaudited on an annual basis. And Andrew, am I speaking out of turn or am I?
Andrew DeBaker: That is correct. That is the current assumption, yes.
Unknown Attendee: Okay. Okay. And then I guess the public float was down quite a bit during Q3. And I was just wondering, are those open-market purchases or private transactions?
David Jonas: I would assume private transactions just based on the reported public liquidity. I mean I haven't seen enough public liquidity in the stock, at least what's reported on the OTC, to have any meaningful impact and change in the public float. So I assume those would be private-market transactions.
Unknown Attendee: Okay. And I guess I'm assuming that because the company isn't repurchasing shares, that is members of the family.
David Jonas: I couldn't say one way or the other. I don't have -- I know at some point, members of the family were looking to buy shares. I just don't know if and when and how those were consummated. So I think it's -- that would be my guess too. I just don't know to give you an answer.
Andrew DeBaker: Well, I guess…
Unknown Attendee: Sorry.
Andrew DeBaker: The company is not currently buying back shares, the company itself.
Unknown Attendee: Yes. Yes, I was going to say, if you look on the cash flow statement, there weren't any share repurchases. How much do you expect to save on an annual basis from not reporting on a quarterly basis?
David Jonas: I mean it's sort of a pot of different elements that come to the aggregate number. I'd say it's close to probably around $200,000-plus. I think it could be more, it could be -- in theory, it could be a little less, but I just -- I couldn't give you a final number because we haven't realized the savings, but that's our -- that's the ballpark of what we're estimating the savings will be. I think it will be more meaningful. So I think I'm giving you a conservative guesstimate.
Unknown Attendee: Okay. And I guess, is there any -- in terms of capital allocation, like is the company looking to repurchase shares or making any acquisitions?
David Jonas: I mean we're always looking at opportunities. I wouldn't say there's anything active at the moment that there's a high likelihood of any immediate acquisition or merger or anything like that. But we are looking, as we've looked in the past. In terms of share repurchase, I don't think that there's going to be anything as like in connection with the move to the Pink just because that would complicate the move itself. But I do believe at some point in the future, it might be worthwhile for the company. And if not the company, then certainly individuals, I know, would have interest and appetite to buy shares in private transactions.
Unknown Attendee: And has there been any discussions about redomiciling? Or can you commit that you're going to stay in Delaware and not move to somewhere like Nevada?
David Jonas: I can say, to my knowledge, I don't recall any conversations like that happening. So I couldn't say that it won't happen. I mean since inception, you just put the idea in my head. But...
Unknown Attendee: I can't imagine you haven't thought of it before.
David Jonas: There are no plans to do so and no active conversations that...
Operator: [Operator Instructions] We have a question coming from Damien Palmer, private investor.
Unknown Attendee: I had a question. I know that the situation with Paramount and the Last Ronin movie didn't go through. But I was wondering, is it possible for IDW to fund it or at least like try to get funding for a movie to happen? Or a series?
David Jonas: Funding for what? Is it possible for IDW to fund what with Paramount?
Unknown Attendee: I know that they, in fact, go a different direction and not move any more on it. But obviously, and want to try to figure out other ways that this happens still.
David Jonas: I mean the media associated with Ninja Turtles obviously reside with Paramount. And they -- I think that their considerations for how to create content around Ninja Turtles and other offerings around Ninja Turtles are, I think, more complex and sort of internationally considered and multi-market, omni-market considerations for them. So I don't know that our readiness or willingness to finance a Ronin movie would have been -- would be the gating factor. Frankly, I don't think it would be. I think if they -- if they decide to change course or push the movie out or -- I think that, that is less of a capital restriction from their end, I think it's more strategic.
Unknown Attendee: That's understandable. I know the whole thing with Avatar, the movie after movie where they were released in theaters and just straight streaming and then everybody who I talked to was disappointed, was very confused and like people want this to happen. We want to see an adult-oriented movie happen and not getting it in theaters is, like, bad. And I mean they released it on streaming and then they saw the numbers. And they were -- I think they were considering actually doing a release afterwards.
David Jonas: Look, we would love for there to be a Ronin movie, adult and otherwise. But that's a decision that resides with Paramount. And I'm sure that they have meaningful considerations and strategic considerations for when and how and if that will get made. In the meantime, we're excited about continuing to publish titles in The Last Roninverse. Obviously, Training Day, which came out around Comic-Con, Last Ronin, the last installation, which we're excited, hopefully, to be coming out in the future as well as we know that Paramount has announced a video game related to The Last Ronin. So fans of The Last Ronin certainly have opportunities to engage with the title. And as with all things, I think that the owners of the rights, I'm sure, are looking for the best return on investment. And if there's broader demonstration of interest and more engagement and more social engagement that fans demonstrate, hopefully, that has an influence. But again, not -- so while it would benefit IDW certainly, we recognize and appreciate that our partners at Paramount have broader considerations, and I'm sure that they'll make a wise choice on that.
Operator: Okay. We have no further questions in the queue. We have reached the end of the question-and-answer session. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
