Okay. Good afternoon, everyone. Welcome to Sidoti's August Micro-Cap Conference. It's my pleasure to welcome back to our conference, Brilliant Earth Group, ticker BRLT. The company's Chief Financial Officer, Jeff Kuo, is here to lead us through a presentation. As a point of reference, we also have the company's VP of Strategy and Business Development, Colin Bourland, here, in case you have any questions afterwards. We're gonna give Jeff and the company about 20 minutes to go through the presentation, after which time I'm gonna open it up for Q&A for about 10 minutes. If you do have any questions at any point during the presentation, please feel free to type them into the box, and time permitting, I'll get to as many as I can. Please join me in welcoming Brilliant Earth Group, and with that, Jeff, I'll hand it over to you. Thanks, Daniel, and thank you, everyone. It's a pleasure to be here at the Sidoti Micro-Cap Conference, and we appreciate you taking the time to hear from us. I'm Jeff Kuo. I'm the CFO of Brilliant Earth, as Daniel mentioned, and I've been with the company since 2015. Then, before we proceed, we'd just like to highlight our safe harbor language regarding forward-looking statements and non-GAAP financial measures. You can also read these in the presentation that has been posted to our investor relations website. Brilliant Earth is the next-generation jeweler for today's consumer. We were founded in 2005 with a mission to create more transparent, sustainable, and compassionate jewelry industry. We're transforming the industry with a combination of our authentic, mission-driven brand, beautifully designed, trend-leading proprietary products, a seamless omnichannel experience that goes across our 37 showrooms and our digital platform, as well as an asset-light and a data-driven business model. This is all translated into an ability to profitably grow, gain share in the large and fragmented $300 billion jewelry industry. This next page walks you through some of the highlights of our company history, and it showcases our leadership in areas like product innovation, media engagement, and partnerships, including our recently announced partnership with Jane Goodall, as well as some of our financial milestones and examples of how we have given back to our communities. There are a number of points I'd like to highlight about Brilliant Earth, including that we operate in a vast industry that's ripe for disruption and very fragmented. We've got an agile, data-driven business model that can swiftly adapt and is also not burdened by holding excess inventory. We've got an omnichannel shopping experience that really provides this joyful, seamless shopping experience that allows customers to shop where they want, when they want, and an authentic set of values that really resonate with our customers. In terms of what that's translated into in terms of financial performance, if you look back at the last four full reported fiscal years, we reached $446 million in 2023 net sales, with accompanying significant increases in gross margin, reaching a gross margin of 58% in 2023. We've been able to do this while delivering positive adjusted EBITDA, so we've been balancing making investments in both near and long-term growth with driving efficiencies and profitability. I'd like to go through some of our highlights from our recent Q2 earnings call. We delivered $105 million in net sales in the second quarter, which was down 4% year-over-year within our guidance range. We were glad to drive 4% total order growth and an even higher 17% year-over-year order growth in repeat orders, and that really demonstrates the resonance that our brand and our product have with consumers. We've been doing this by, you know, focusing on quality orders. You can see this in our average selling price, or ASP, that was up year-over-year across our product lines, including engagement rings, wedding bands, and fine jewelry. I think this really speaks to the premium nature of the brand, how we are not discount-oriented, and how we've been able to drive increases in ASPs in each of those, each of those areas. We also delivered a very strong gross margin of 60.8% in the second quarter, which is up 320 basis points year-over-year. Then also a slight 20 basis point leverage in marketing expense as a percentage of net sales compared to Q2 of last year. We've been thoughtful in terms of how we're managing for strong gross margins, as well as disciplined and balanced in how we're managing our operating expenses. This is all translated into an adjusted EBITDA of $5.5 million in the second quarter, and this exceeded our guidance range and was our 12th consecutive quarter of positive adjusted EBITDA as a public company. On the balance sheet and working capital side, we do have inventory turns that are significantly higher than the industry average, and this allows us to be very agile in terms of how we manage to meet demand. Also a year-over-year increase of $2.6 million in our cash balance, and this is even after making capital investments and reducing our debt principal balance. So you can see how our data-driven and disciplined approach has translated into strong performance, both on the P&L as well as on the balance sheet. I'll just cover most of these data points already that we can probably go to slide 11. And here we see some of the AOV and order trends, both for the second quarter as well as the first six months. I think there's one point here that I'd like to highlight, that I spoke about our ASPs being up year-over-year in Q2. Our AOV, or average order value, was down year-over-year, and this is as we've diversified our product mix, including in fine jewelry, which has a lower price point than our overall products. We do expect AOV moderation as fine jewelry becomes a bigger part of the product mix over time, and we diversify our product assortment. And this is something that is strategic to us. The growth in fine jewelry is strategic to us and also allows us to capture additional opportunities in areas like gifting, self-purchase. It's beneficial in terms of driving repeat purchase behavior, so that's just a bit of commentary around some of the AOV trends that we've seen. This talks about some of the continued brand success that we're having. So I spoke previously about the Jane Goodall and Our Future Is Brilliant campaign, and we're very honored to be partnering with her in this and delivering upon our shared values. We also have been executing campaigns like this VIP Bride campaign, highlighting here with Brooke Hyland, as well as continued red carpet success with celebrities wanting to wear Brilliant Earth jewelry on the red carpet. Touching briefly upon our products, we have and continue to innovate and differentiate with our finely crafted jewelry across engagement rings, wedding and anniversary bands, and fine jewelry. We saw in the second quarter, outside bookings growth of 6% year-over-year in engagement ring designs, the unique to Brilliant Earth in our Signature Collection. We also had a strong fine jewelry quarter in Q2, with fine jewelry performance and bookings up 29% year-over-year in the second quarter. And we had double-digit year-over-year bookings growth in wedding and anniversary bands, and a very strong 32% year-over-year bookings for our men's wedding bands in Q2. And we also launched our Brilliant Earth Fairmined Bridal Collection, which really promotes economic development and environmental protections in small-scale mining communities, so aligning our products with our mission-driven values. I'll touch here briefly about our business model and what makes it so powerful. So we have very strong inventory turns that are higher than the rest of the industry overall, and negative working capital. So just to give you a little bit of insight in how this works, our design your own model, which leverages things like our virtual inventory of diamonds, allows us to have a very efficient working capital cycle. So if you think about an engagement ring purchase, we have an order that will come in from our customers with some amount of payment. Then we know that we have that order. We can then initiate production on the ring, bring in the diamond from our diversified supplier network, produce that, and then when it's ready, it may sit on our balance sheet for just a brief period of time before it's fulfilled to a customer or they come and pick it up. And then on the back end of that, we have payment terms from our suppliers. And so you can see how that leads to a very, favorable, working capital cycle and drives inventory turns that are a lot higher than the industry average. And you can also see the discipline in our inventory management in that on a year-over-year basis for Q2, we ended with lower inventory by about 3%, even as we've grown the showroom footprint and grown in areas like fine jewelry. And this all translated to a quarter-end cash of $152 million, which was, as I mentioned earlier, $2.6 million higher year-over-year, and this is even after factoring in that we expanded the showroom footprint by about 15% year-over-year, and we reduced our debt principal balance. And so I think this is just another area where our operating model really differentiates us from the rest of the industry. Touching briefly also on our omni-channel model. So this is a considered purchase and, you know, something that we, you know, is a, an omni-channel sale. Customers will often engage with us across our digital platforms, in our showrooms, or contact and work with our jewelry consultants in other, you know, in other ways. And so we've really tried to create a seamless and integrated experience where-... wherever you're shopping with us, you can, you know, have a unified experience that our jewelry consultants can understand the customer journey in an integrative way, and that we can really help guide customers through this considered purchase in a very thoughtful and premium manner. And this is true across our digital platforms, this is true in our showrooms, and then we see that our showrooms really drive benefits in terms of bookings growth. We continue to see strong post-opening metro uplift in our showrooms. So looking at the performance of an entire metro after a showroom opening and compelling four-wall economics. And so we've got 37 showrooms right now, and we're on track to open three additional showrooms by the end of this year, with two more in Boston and our first street-level location in New York City. Just briefly on our 2024 priorities. We are continuing on our path to become the premier global jewelry brand for today's and tomorrow's consumer, continuing to expand and refine our distinctive product offerings, expanding and elevating the omnichannel experience, and investing, but always in a balanced way, in our operational efficiencies and driving long-term sustainable growth. And doing that, again, in a balanced way, being cognizant of ROI and efficiency, while making the appropriate investments for growth, both in the near and in the long term. Moving on a bit to our outlook for Q3 and for the year. So as we look ahead to the second half, we are seeing a weaker-than-expected consumer environment and headwinds in bridal and e-commerce that are somewhat greater than what we observed earlier in the year. For Q3, we have had a softer start in engagement rings. We'll continue to have solid growth in fine jewelry and wedding and anniversary bands, and we also continue to see strong repeat purchase behavior. So this translates into, for Q3, our expectation for net sales to be down 11%-14% year-over-year in light of current market conditions. And then for Q3, we expect adjusted EBITDA margin to be from break-even to low single digits as a percentage of net sales, as we dynamically manage our operating expenses, including marketing spend, to deliver profitability while making strategic investments in the business for the long term. We do expect that Q4 will be a stronger quarter than Q3 from a top-line perspective, even though we do anticipate some headwinds in bridal and e-commerce in the fourth quarter. And as we've discussed previously, we expect that engagements will continue on their gradual path to normalization. We also expect that some other key drivers of our Q4 performance will include realizing uplift from our showrooms, the continued strong performance of fine jewelry, and also the fact that seasonally, Q4 is the biggest quarter for fine jewelry sales. And then we also have our ongoing brand-building efforts, including during the holidays, and so we expect these to be some of the key drivers of Q4 performance. And so for the year, our expectation is that net sales will be in the range of $410 million-$425 million, and our adjusted EBITDA will be in the range of $12 million-$16 million as we continue to manage the business for profitability, even in the face of industry headwinds. Moving to our medium-term targets. These are targets that we've talked about. We look a little bit further out beyond the year. For net sales, we anticipate, net sales growth accelerating to a low teens growth rate in 2027. We expect this to be driven by gradual normalization of engagements over the next few years, growth from our showrooms, continued outperformance in fine jewelry and other non-engagement assortments, as well as growth of our brand awareness. For a gross margin, we expect that to remain in the high 50s% through 2027. Then on the expense side, from 2025 to 2027, we're targeting driving leverage in marketing costs compared to 2024, and we expect that growing brand awareness, conversion from our showrooms, and continued success in fine jewelry are all going to contribute to driving leverage in marketing costs. We anticipate that these factors will drive us towards an adjusted EBITDA margin reaching double digits in 2027. Really, if we were to tie this together, our premium brand, our differentiated business model, including our data-driven decision-making, our seamless omnichannel platform, and our asset-light structure, demonstrate our ability to deliver profitability and to achieve our strategic and financial objectives in a variety of different environments. We'd like to thank you all for taking the time to hear from us today, and I would be glad to answer questions. Great. Jeff, Colin, thank you both so much. We've got a good amount of time, so as a reminder, please feel free to type in your questions, and we should be able to get to all of them. Jeff, we've had quite a few come in, but I just wanted to kick it off by asking, and you and I were talking previously, you've had 12 consecutive quarters of profitability, and you obviously have what seems like a pretty decent advantage in the market. I know you touched on the omni-channel strategy as well as kind of the net working capital model, but could you just give us a little bit more information on both those, and how you see that as, as an advantage moving forward and differentiating you from others? Yeah. So first, starting on the omni-channel, omni-channel model. I think this really allows us to offer a seamless and integrated experience that caters to customers where they wanna shop and when they wanna shop. This is a considered purchase within the thousands of dollars, often, and this is one where, you know, customers will want, you know, to be able to shop in a way that suits how they want to be, how they wanna be thinking about this purchase. And so for some, that could be, you know, interacting with viewers in a showroom, meeting with a jewelry consultant, being able to see those products. You know, for others, they will wanna spend more of their journey digitally and on our... Using one of our tools, you know, online, whether that's, you know, virtual try-on, a skin tone visualization, being able to see stacking, stacking rings. So this, this all really gives customers a lot of different options in terms of how they, how they engage with us, and that's how today's consumer is shopping. I think the omnichannel experience and how we've delivered excellence, you know, across the different ways that you can engage with us, really differentiates us. Then in terms of the working capital model, I think this differentiates us in a number of ways. One, it keeps our, our balance sheet efficient. It also allows us to more closely match when we're—when and what we're bringing in from an inventory perspective to what demand trends there are. And if you contrast that with a traditional jeweler that might be looking at something that's more like 1x, 1x turns versus, you know, our turns, our turns that are, you know, more than 4.5x, I think that's something that really, you know, that it just really allows us to be a lot more agile. So the traditional jeweler may have to be taking bigger bets earlier on with longer lead times at a certain price point, and then there's the risk associated with if that inventory doesn't sell or doesn't sell at the expected prices, there's just more risk associated with that. And we can more closely tailor to what we're seeing in terms of demand, reduce our exposure in terms of inventory, and then also scale up to capture demand as we see that. And so I think both of those really allow us... And just maybe one additional point on the inventory, I think that couples well with our price optimization engine, where we're able to, on an ongoing basis, look at what's the optimum pricing based on factors including consumer demand, input costs, market conditions, seasonality. And so these things couple well together and allow us to be agile and dynamic, and meet demand where we see it. Perfect. Then with the inventory, is there an internal target that the company has in terms of a turnover ratio? Obviously, where you are compared to the industry is impressive, but, do you think there's maybe room for improvement, or are you guys, you know, from a target perspective, you're happy where you are? Yeah, we haven't communicated in a particular inventory turn target. I would say that we aim to keep inventory turns and working capital efficient. We recognize that as we open new showrooms and grow in areas like fine jewelry, you know, the inventory model, we need to adapt a bit in terms of having inventory to support those. But I think even as we've expanded the showroom footprint and grown in fine jewelry, can see that we've been able to keep a close handle on inventory, and I think that speaks to the disciplined and data-driven approach that we take to things like inventory management, and we aim to continue to have very strong and industry-leading inventory turns. Perfect. And then you mentioned that you're opening a few new stores. I believe you said two in Boston and maybe one in New York City, that's a ground-level store. What does that look like from a CapEx investment for the company for a new store? And then how do you think about a payback period? Yeah. So in terms of a couple of these, we haven't. I would say that we think about our capital investment and our investment in showroom openings to try and keep that efficient. And so I think this manifests in a number of different ways, and I think our showrooms tend to be destinations. And so that's something that it allows us to be strategic in where we're putting our showrooms. This isn't thousands of showrooms type of strategy, where we think that we can achieve coverage across the country with an efficient showroom footprint. On things like the inventory requirements for our showrooms, we can do things like leverage virtual inventory of diamonds. We can balance inventory across different locations so that we can use that pooling to have more efficient inventory and not have the same levels per showroom as a traditional jeweler might need. And I think that also from an operating perspective, our staff can serve people across different channels as based on where the demand is. So they don't have to be just standing in the showroom waiting for someone to come in. While they're not meeting with customers in appointments or walk-ins, they can also serve customers in other channels, such as phone or email, and that's something that allows us to be very dynamic, and our team to really operate in an efficient way, and really to help us be efficient, both from an OpEx perspective, from an inventory perspective, and from a capital investment perspective in our showrooms. Perfect. Had a few questions come in regarding margins, and wondering if there are any notable differences among the various product lines from a margin profile. It looks like, in particular, people are interested in knowing how fine jewelry, the margins there may compare to other products. So we haven't provided a specific breakout of margin by, margin by different product types. You know, I'd say that there is, there is opportunity, you know, to optimize for gross margin, and maybe I could touch on some of the areas overall about how we think about managing, managing gross margin. I think one is continuing to focus on the premium brand, and that's really underpinning our ability to participate in this gross margin, this gross margin space. Our price optimization engine, which, which we've talked about, procurement efficiencies, things like vendor mix optimization and terms, as well as our enhanced extended warranty program, and that's true across engagement rings, wedding bands, and, and fine jewelry, and that contributes to us participating in this gross margin, area that we're currently in, and we think that, that's... Those are areas that we'll continue to manage, in the future. Great. I'm gonna ask one last one, but it's got a few parts to it. But a few questions have come in on your marketing strategy. Can you touch on that a little bit, and then maybe more importantly, how that strategy has evolved over time as you've opened up new showrooms, and you partnered with influencers and also, you know, come to market with new collections? Yeah. So first, with our, with our showrooms, I think we, we view the showrooms as really an ability to unlock and uplift demand that is there, in, in the markets, as we do have an e-commerce presence across the country, so we do have awareness and demand even before we open the showrooms. And the showrooms are a way to unlock and capture some of this demand and be accretive to our overall marketing efficiencies. And so that's how we think about showrooms, is we're already we already have spend in, in those areas, and awareness and demand, and the showrooms allow us to unlock and capture efficiencies in marketing. And then in terms of engaging with influencers, that's definitely an important part of our strategy. We highlighted some of those during the presentation, and I would say that, you know, we, on an ongoing basis, partner with influencers that are aligned in terms of products, in terms of our values, and we think that this is an important way that we reach our consumers or potential consumers, and we're appreciative of the partnerships that we do have with our influencers. Great. Well, Jeff, on behalf of Sidoti and everybody that attended the conference today, thank you so much for being here. It was nice to see the company again and review the story one more time. For those of you in the audience, thank you for attending, thank you for the questions, and again, please join me in thanking Brilliant Earth Group and Jeff, and as well, Colin as well, for being here this afternoon. Thanks very much, Daniel. We really appreciate it and really appreciate everybody taking the time this afternoon to hear from us. Wonderful. Thank you, everyone.