Thank you for joining the Educational Development Corporation's Q3 earnings call. Before beginning the call, we would like to remind you that some of the statements made today will be forward-looking and are protected under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors. We refer you to Educational Development Corporation's recent filings with the SEC for a more detailed discussion of the company's financial condition. With that, I would like to turn the call over to Craig White, the company's President and Chief Executive Officer. Thank you, and welcome everyone to the call. With me today are Randall White, our Executive Chairman of the Board, Heather Cobb, Chief Sales and Marketing Officer, and Dan O'Keefe, our Chief Financial Officer. Before I turn it over to Dan to go over the financial results, I'd like to recognize what a challenging year it's been, probably mostly from a staffing perspective. I am so proud of the team that we have here at EDC as the team just continues to get better and better. We handled most of the staffing challenges very well, predominantly in the warehouse, and really didn't miss a beat with the challenging staffing environment out there. We didn't have any outbreaks in the office. We have really had mostly a healthy and safe environment here at EDC. I wanna recognize that first. Now I'd like to turn the call over to Dan O'Keefe, our Chief Financial Officer, to provide a brief overview of the financials. Thank you, Craig. Now for a brief overview of our Q3 financials. Our net revenues for the Q3 totaled $45.1 million, a decrease of $21.7 million or 32.5% compared to $66.8 million. Or pardon me. Compared to $66.8 million reported in the Q3 of last year. Earnings before income taxes for the Q3 totaled $3.6 million, a decrease of $2.2 million or 37.9% compared to $5.8 million reported in the Q3 of fiscal 2021. Net earnings totaled $2.6 million compared to $4.3 million, a decrease of $1.7 million or 39.5% from the Q3 last year. Earnings per share totaled $0.31 compared to $0.51, down 39.2% on a fully diluted basis. That concludes the report for the Q3 financial results, and I'll now turn the call back over to Craig. Thanks, Dan. A couple of items I would like to begin with today that you may have heard from me in the last couple, quarterly calls and at conferences and whatnot. The COVID pandemic affected most businesses in the world, either positive or negative last year, and our company was no different. Fiscal 2021 was an anomaly year for us. Along with the initial surge in sales from the pandemic last summer, we experienced an increased demand for non-traditional income opportunities from parents that were looking to supplement or replace pre-COVID income streams. These factors and other pandemic-related issues drove our revenues to record levels last year. Our fiscal Q3 is typically our largest sales quarter of the year due to the seasonality of the business. This year's Q3 sales were more in line with pre-COVID years, and that's why we've presented a most current pre-COVID year comparison in today's press release. While our Q3 revenues are down significantly from the Q3 last year, they are up over pre-COVID levels, primarily due to our increased publishing division sales and the impact of our UBAM division's increased consultant count. We see both these contributors continuing to drive sales in fiscal 2022 and into fiscal 2023. In the last couple quarterly calls, I've said, you know, we had an incredible unusual year and w hile we're still facing unusual factors, the pandemic is not gone, w e've kinda had this in and out of school, in and out of work, and all those things. It's just an incredibly challenging year to compare to. Let me next turn it over to Heather Cobb, our Chief Sales and Marketing Officer, to discuss our sales. Thanks, Craig. During our Q3, we continued to experience an increase in our publishing division sales and a decrease in sales from our UBAM division when compared to last year in the throes of the pandemic. Our publishing division sales increased 44% to $3.7 million in the Q3, due primarily to the return of business from customers that were temporarily closed last year due to the guidelines published by local authorities. In addition, our publishing division has added several new customers and experienced growth with existing customers that are driving this division's sales to record levels in fiscal 2022. Our UBAM sales declined 35% to $41.4 million in the Q3 of fiscal 2022, primarily due to the anomaly that last year was. During last year, we experienced unusual growth in our active consultant count that began in the summer of 2020 and peaked at around 60,000 in November last year. This growth in active consultants drove our revenues to record levels during fiscal 2021. Throughout fiscal 2022, we've seen our active consultant count decline due to consultants returning to full-time work, as well as the drain on parents' available time navigating the issues associated with the continued pandemic and their children's returning to school. The recurring obstacles of new strains of the pandemic continue to impact our consultants' available time to run their business. While our consultant counts have declined, they are still considerably above the pre-pandemic levels that Craig mentioned, and our consultants are still having success generating sales, earning commissions, and building their business. This was evidenced during this Q3 as our active consultants generated similar sales and commissions per consultant to the Q3 of last year and the pre-pandemic Q3 of fiscal 2020. These sales and commission results give us support that our existing consultants are experiencing a consistent level of success as they achieved without benefiting from the increased demand that occurred in the early days of the pandemic, most noticeably in that Q1 and Q2 of fiscal 2021. In addition, we continue to introduce new technology-based tools to help our consultants be more successful in reaching new customers and expand their recruiting and business building efforts. We believe that this will help retain the current consultants we have, as well as recruit new people to the business. Two upcoming enhancements that we expect to roll out in the next three months include upgrades to our training platform with additional features that will improve our new consultant experience, as well as our new e-commerce platform. We delayed rolling out that e-commerce platform in the Q3 of this fiscal year because our internal team, as well as our top-level leaders, had valuable input to make that platform even better. These new technologies are expected to have a positive impact on both new consultant experience, customer experience, as well as the sales and commissions earned by those new consultants during their initial period with the company. With that, I'll turn the call back over to Craig. Thanks, Heather. One other impact you see from our recently published financials is our continued high levels of working capital. We have increased inventory levels and increased working capital borrowings. These increased levels are temporary and will rebalance as we turn inventory into cash over the next few quarters. As inventory turns to cash, we'll pay down our borrowings and expect to be back to a more normalized working capital within the next year. The good news is that the cost of carrying this inventory is less than the current replacement cost, given the unusual ocean shipping challenges that are occurring. One of the other highlights for our Q3 was our strong pre-tax profit levels. Our pre-tax profits as a percentage of net revenues totaled 8%. These pre-tax results on lower revenue levels than the Q3 of last year reflect the strength of our business model and the management's attention to cost containment. We are excited to see the rebound from certain sales channels that were negatively impacted by the pandemic, including sales through school book fairs. While this started to return this year, the new versions of the COVID-19 virus have stalled the return of this income stream, the return of booths and fair events, which also continue to be impacted by the new COVID-19 variants. These two sales channels combined for about $30 million of the business that we expect will be returning to us in future quarters. We saw evidence that they were kinda starting to come back, and then again, with this new variant, kind of shut those things back down a little bit. I can expand on any of those points, but at this point we want to open it up to questions from our investors. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask the question, press star, then the number one on your telephone keypad. Please stand by while we compile the Q&A roster. Your first question comes from the line of David Wright from Henry Investment. Your line is open. Good afternoon. Hey, David. A New Year's greetings to the team. Thank you. Is your inventory higher than you'd like it to be right now? Absolutely. No question. I'm glad you asked. Well, do you have a follow-up question, or can I answer that one? No, please do. Okay. I was asked, I've been asked every phone call with investors, every investor conference, absolutely, our inventory is a little bit high. While we didn't expect to increase sales 80% or 50% or maybe even 10%-15% this year, last Q3 was a disaster as far as inventory levels so w e ramped up our inventory levels, which we purchased in January, February, March, and we are just now receiving that in the September, October, November timeframe. We have not actively purchased any new backlist title inventory in six months. The only inventory purchases that we've made in the last six months are new title inventory, which, as people know, is the lifeblood of a sales organization. While there is some silver lining to that, as I mentioned in the script, we mostly, not completely, but we largely missed all the chaos that is the supply chain right now. We saw our container costs coming from China go from $5,000 to sometimes $35,000 a container. While we were over-inventoried, we largely missed all of that increase in cost and the delays coming from China. Yeah, we're over-inventoried. It helped us get through a tough time, but none of it is obsolete. It will all sell, and over the next four or five months, we expect that to sell down, turn it into cash, and we'll be in great shape by, you know, next summer or Q3. Right. Just looking historically, your Q4 and Q1 s, well, your Q4 is typically your slowest quarter and your Q1 is only a little better. You know, what, where would you like inventories to have been at November 30th based on current business conditions? Yeah. You know, for the current sales levels, you know, probably $45 million-$50 million would have been the more appropriate level. I think we peaked at 70 or just slightly north of 70 million. We have about $20 million-$25 million too much inventory. Again, we're not actively purchasing except for new titles, and we'll sell that down over the next couple quarters. Okay. Then the other thing that I wanted to ask here ties in with the cash flow. Cash flow from operations through the first six months was positive $12.4 million. It's now negative $7.4 million, which means it's run $19.8 million in the Q3. Do you think the Q4 is gonna generate positive cash flow from operations? Craig, do you want me to address that? Yeah, that'd be great. Okay. Yeah, David, that's a good question. You know, as you mentioned, the Q4 is typically not our biggest quarter of the year as far as sales. We don't expect to increase inventory. You know, when we look at cash flow from operations, there's really gonna be three things driving it. You're gonna have your income from the business, which is gonna be positive, and then you're gonna have your change in inventory and your change in accounts payable, which are gonna be the other two major drivers of that. We don't see inventory increasing, so that shouldn't negatively impact our cash flow from operations. AP will be coming down a little bit, though, because we do have some payables coming due. That would be the other element there that you know we're still in the Q4 and only in the first month of it, so I don't want to make a commitment that it's gonna be cash flow positive. I mean, those are the only three elements that are really gonna drive it. As you said, kind of, David, when you started your question, our Q4 is typically not the biggest of the year, so it's not gonna really see a lot of impact on inventory dropping. We see that being bigger in the Q1 of next year and, you know, the April in March, April, May quarter, because that's when we have our second largest quarter of the year that involves our, you know, the Easter holiday and we have a lot of school activities associated with that quarter of March, April and May. We expect to see a bigger dent in our inventory coming down in that first fiscal quarter and then also in the second fiscal quarter and third fiscal quarter, as Craig was saying. As Craig mentioned earlier, we're, you know, $25 million more in inventories than we would normally be had it been a more predictable last 24 months. You know, there's also some positive elements of being a little over inventoried right now, and that's the fact that the replacement cost right now is much higher than our carrying cost of inventory. We feel like we're a little heavy on inventory in our working capital position, but it will be corrected here over the next three quarters. Okay. Well, good luck there, and thanks for taking my questions. You bet, David. Thanks, Dan. It seems like an appropriate time also to mention that we have very solid relationship with our bank and their involvement and support of our business is very strong. That's a positive as well. Okay. If you would like to ask a question press star then number one on your telephone keypad. Your next question comes from the line of Randy Freed from R.L. Capital. Your line is open. Hello. I'm not sure who this question could be directed to, but it's probably either Craig or Dan. I'm looking at the table in the earnings announcement near the beginning where you talk about the average number of consultants and then the net revenue and the net earnings after-tax profit percentage and I'm trying to reconcile in my own mind some of the statements you made a little bit past that in the next paragraph or two and, a couple of statements you made on this call where you said that you're happy with the strong pre-tax profit levels and you're very happy with the cost containment. So when I'm looking at this table here for the current quarter, and I'm comparing it to the one from two years ago, I see after-tax profit margin of 5.9% versus years ago was 6.7% and I see the net earnings down just very slightly compared to the one from two years ago, even though the sales were up about 10%. That's the problem I'm having in my mind reconciling sort of what's going on. I was wondering if maybe something happened this quarter, there was an unusual expense or something. I'll be quiet and let you talk. Yeah. Craig, if it's okay, I'll take that one. Yeah, go ahead. I have some things to add to it, but go ahead. Okay. A good question, Randy. You know, the Q3 can typically our biggest quarter of the year and highest profit percentage of the year because you're spreading your fixed costs obviously over a bigger revenue base. And so the difference between pre-COVID, if you look at those profitability percentages and now, is we're really dealing with a little different freight cost on our outbound freight is the biggest impact. We have a contract with our small parcel carrier, and when COVID occurred last year, they started implementing two different layers of surcharges. One was a peak season surcharge, and the other one was a you know just an unusual holiday season on top of the peak season surcharge. We've kind of had to bear some of those costs and they've hit our bottom line here in the Q3 of this year that weren't in place pre-COVID. That's what you see. The other thing I would like to point out to you is that if you can look at the year-to-date numbers, you can see our year-to-date numbers for this current year after tax are 6.7% in the table there. The pre-COVID numbers are 5.5%. While we've had some seasonal, you know, holiday season peak surcharges this year and even last year, you know, overall the peak season surcharges haven't hurt us, and we've implemented some rate increases this year that have actually helped us generate the after-tax margin of 6.7% year to date. Yeah. Let me add to that as well. We kind of internally use pre-tax profit as a KPI. We had a very challenging September, actually, that seemed to be the most chaotic as it related to the pandemic as kids were kind of going back to school. We seemed to be coming out of the pandemic with people going back to work, so there was a little bit of chaos. September was not good. We followed that up with October with our best pre-tax profit that I remember in years. November, we did a lot of promotions with some free shipping and some things, but it was still a very solid pre-tax profit. Like we're saying, the sales and are way over Q3. They're not way over, they're over Q3 2020 and considerably lower than last Q3, but we're maintaining good pre-tax profit levels. Okay. Thank you for that. Dan, also thank you for that. I did notice what you said too about the 6.7 versus the 5.5%, but that sort of brings me to the next question. If you look at the fiscal year to date for the sales from two years ago versus this year for the first nine months, it looks like it was up about 28% from two years ago for the first three quarters added up. This year it was up about 10 or 11%. I did notice that too. It looks like, I mean, the sales are higher, but they're not as high in the whole fiscal year as it was on this. Well, that's not exactly accurate. 1.2% on the 5.5% is more like, you know, 23% or 24%. So it's not 10% or 11%. It's above 20%. No, I was talking about the sales. I'm sorry. The net revenue is what I was talking about. I'm still on that same table. Okay. I thought you were talking about the after-tax profit. I'm sorry. No, that's fine. Let me just ask one last question. Thank you very much for all that. So you're talking about strong pre-tax profit levels, et cetera. I know you really can't project this at all, but for the next fiscal year, which I guess we're talking about March 1st of this year for the 12 months after that, I mean, you've talked a lot about efficiencies and things like that. Do you have any idea or do you think the pre-tax or the after-tax profit levels are gonna be sort of consistent? If you look at this whole table here, you can see no matter what year you're talking about, they're pretty consistent, right? Between 5.5 at the worst and 6.7 at the best, just looking at this table, which I know there's different columns there, but do you sort of project that as being roughly the same or do you think that potentially could increase in the future? Well, yeah, I think you probably recognize kind of our model and we have 25% for our business. You know, we're hitting 8%-10% and maybe a little bit north of 10% on a pre-tax profit, but the chances of getting much higher than that are challenging. I think it's gonna be very consistent. What I will add is that we could have been more efficient this Q3 this year because the staffing challenges were crazy. We hired roughly 300 people and about 30 of them stuck. That took time and effort to train people for them to leave at lunch and never come back or not come back the second day or all of those factors. We could have been a little more efficient this year even, this Q3, so s till I expect them to remain very consistent. Yes. Okay. Yeah, thank you for that. That's what I was hoping you'd get into a little bit of what you just said, that you know, there was a lot of challenges this quarter and like you said, with staffing and people not coming back and then what Dan already talked about with the freight costs and the peak season surcharges. Thank you for that information. Sure. Thank you all. That's all I have. Thank you. There are no further questions at this time. Presenters, you may continue. Okay, great. While we're not ecstatic about what's been so far this year, we are encouraged and happy. We're considering ourselves still in a growth mode because we're comparing to the last normal year. We've had two very unusual non-normal years that were on a growth pattern of about 30%-40% over the same time period in calendar 2019. We have nothing but good forecast. We're looking forward to this next year. While we're not ecstatic, we're still pleased with what we've accomplished. We appreciate y'all joining us and talk to you next time. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.