Good day, and thank you for standing by. Welcome to the first quarter fiscal 2022 earnings conference call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randall White, CEO and President. Please go ahead.

Okay. Thank you very much. Okay. We welcome [indiscernible] and he's here on the call with us. We got some nice -- earnings reports ago. So firstly, just kind of like Dan give us the quarterly highlights.

All right. Thank you, Randall. And so for the first quarter results, our net revenues for the first quarter of fiscal 2022 were approximately $40.8 million, an increase of $2.5 million or 7% from approximately $38.3 million reported in the first quarter of fiscal 2021. Pretax profit increased $2.1 million from approximately $2.6 million to $4.7 million, representing an increase of approximately 81%. Net earnings in the first quarter of fiscal 2022 totaled $3.4 million compared to $1.9 million last year, representing an increase of $1.5 million or 79%. Earnings per share on a fully diluted basis for the quarter totaled $0.41 per share compared to 21 -- or $0.23 per share, we put it in the first quarter last year, an increase of 78%. This concludes the earnings results, and I'll pass the call back over to Randall.

Okay, Dan. Thanks. Well, first quarter is pretty solid. Revenue is up only 7%. I just said, it's not the greatest, but that's up almost 10% of the [indiscernible] So you guys [indiscernible] we made [indiscernible] And the fourth quarter last year was really strong because we started to get COVID issues. But those are kind of comes on to date in our sales and earnings are not really totally given but pretty much [indiscernible] in the quarter because when you think in the fourth quarter [indiscernible] earnings skyrocket because of the internal [indiscernible] cost optimizations [indiscernible] enhancement. So again, decent quarter, and [indiscernible] I'm going to pass the phone over to Craig to give us some exciting things we got coming up.

Okay. Thanks, Randall. Just to give you a little update on operations and IT. As you may have heard in previous quarter investor calls, we have a CapEx project in the warehouse to basically double our picking and packing and shipping capacity. Line 7 and 8 are operational, fully tested. We're just waiting for the final stages to be done before we start using it. So we will shift to those lines in the next few weeks. They are much more efficient with higher output and lower labor requirements. So adding these 2 lines will basically double our shipping capacity, which will keep us on one shift for the foreseeable future, which is much more efficient than second and third shifts. So again, that's going to be up and running here in the next couple of weeks, and we're very excited about that. As far as an IT update, we're moving into the testing phase for our new e-commerce version. We've been working on this for what seems like a while, but we're in the very final stages of development and moving into testing. This new e-commerce platform improves the customer online shopping experience. It's mobile-friendly and basically takes us to the state of the market. We expect increased shopping cart closures and increased return in customer activity with this new e-commerce platform. We can send marketing e-mails and abandoned cart e-mails, and it's really state of the market. So again, we're going out with that in the next 6 to 8 weeks. So -- We're gearing up for the fall selling season operationally and IT-wise. So we're looking forward to the next few months, our heaviest time of the year. With that, I'll give it back to you, Randall.

Okay. Yes. Thanks. I think we feel we're pretty excited about what's happened in [indiscernible] Because of COVID, we missed out on [indiscernible] I tried to explain this in the -- more importantly maybe got or confusing. [indiscernible] We missed out on about $30 million of revenue last year because not [indiscernible] or face-to-face. Every weekend, normally we'll have a booth. 1 of our consultants will have a [indiscernible] And the combination of [indiscernible] is probably $30 million. So those are coming back again. We're obviously seeing resurgence in our school sales and also people having clues. So we're -- we think that this -- it could be in a pretty good year. So that's historical, current information. I think we had a pretty good quarter. But I think now we'll just open up to questions from investors.

[Operator Instructions] Your first question comes from the line of Bobby [ Mahara ].

Okay. First question should be quite obvious. Q2 trading, how has it gone so far? So we've got 5 or 6 weeks?

How is the quarter we're in going so far? Is that what you're saying?

Yes, the current quarter. So we've got results for Q1. How's Q2 started?

Well, now you know this [indiscernible]

Randall, I apologize. I think your line keeps cutting out. So I don't -- I can't hear everything you say.

Okay. What I'm saying is we're restricted by what we can say. We haven't released the [indiscernible] financials yet. But I will tell you that we are facing a tough quarter. The second quarter last year was the biggest one ever. And it was huge. And we're likely -- I don't know. We're probably not going to exceed that sales, but I will tell you the way our forecast this morning, we feel like by the end of the year, we will make up for this strong second quarter and be up for the year. And that's just the forecast, the way we feel here by the way things are going so far. I wish I'd give you a more definitive answer but I will tell you. So our sales are lower than the second quarter last year so far, but we're encouraged by how they're picking up. We had our first $1 million shipping day for the first time in a while. It's coming in. So we're happy with where it's going, considering we have a tough quarter to compare to.

Okay. Yes, yes. So definitely, last year was a very good Q2. So the -- I've got a few other questions, so I'll just carry on with them.

Sure.

Okay. So I'm going to switch back to what I said there shortly. But my next thing I want to ask about is sales agents. So now just -- I think we're 57,600 by the end of last year, and then that's slipped down now to 55,100. And you've previously said that the more sales agents, the more sales basically. So 2 parts to it. How is that -- has that carried on slipping? And then how will that affect both sales and earnings per share.

Well, I'll tell you -- I try to tell you guys every time. That number is a soft number. We know when we sign up a start, we don't know when they quit, but I will tell you, certainly, the more salespeople we have, we should have more sales. That doesn't necessarily mean when we drop a couple of thousand out of 55,000, that our sales are going to be affected by that much because you have people who join and get all excited about it sometimes never sell anything. And that's okay because we don't lose any money on new kits. So to answer your question, the -- and it's also seasonal and cyclical, and this, Rob, so far isn't alarming to us. It may seem like a few says, "Oh, my gosh, that's a trend." There's no trend here yet. You'll see a trend if we had any more in the October, November, December. And so -- but I will tell you one more thing. Last year, when we grew so much, Bobby, we didn't do one thing about recruiting new people for the office. We didn't provide any incentives. We didn't run any contest. We didn't do anything to try to get a shift out the door. And so now, as things start to level out, we started with incentives to get more recruits. It's just a normal business cycle, and I'll tell you, it's going to happen, but we haven't done anything in years, but it's cranked up again to increase our headcount in sales people.

Randall, let me add a little bit to that, Bobby. So the summer is the natural attrition time. We count active consultants if they have had sales in the last 6 months. So now we're reaching people that made it through the easy Christmas selling time and maybe haven't done anything in the last several months. So we're -- this is the natural time for people to drop off, 6 months after our biggest selling season.

Okay. So basically...

Bobby, let me add one more thing. We dropped them off, it doesn't mean they're not still consultants. We just don't count them for you. So you guys know we're not heading in with people who don't sell anything. If they sell something next month, they're on back active again. So -- and that will happen, by the way.

Correct. Okay.

Yes, that's fine. I think I understood that last bit as well. And that's why I was asking you guys because I didn't -- I'm not well equipped to make the decision. I can see that the numbers are down, but I didn't know how alarming or not it is. And to you, it's certainly -- what I'm hearing is it sounds -- it's very normal at this time of the year. So you're not even -- you're barely worried at all about it. Or were you not all worried? You think your sales will carry on, hopefully going up anyhow. Is that correct?

Yes. That's right.

And then earnings per share as well, like I'll just touch upon it here. Actually, with your reduced shipping costs and your reduced publishing costs. And now you've got this line 7 and 8 working as well, you would expect your actual margins to be high enough that your earnings, your profits will actually rise even if your sales are flat or slightly down in Q2. Does that sound correct?

That's the way we think because there's -- and there's some other things that are coming. But a flat sales quarter, we will have increased earnings. Yes, that's true.

Yes. Cool. All right. Good. That's all I understood. So that all sounds good. And also just touching up on something related. But do you ever -- so I don't have a big history with the company. But do you ever resort to -- do you have a lot of offers ever? Do you discount books? And is that something that you're doing a lot less of more recently? Or is that just something that you don't ever need to do anyhow?

I think about way we feel -- I'm not talking -- but the way we feel about this is our bookshelves are very fairly priced, doing direct sales, and in most direct sales companies, the products are prices -- to be inflated and this thing could be. None of my business. I'll bet you our printing with the price on the back, and the price you pay in the direct sales division is the same price you pay at Barnes & Noble, and that's fair. Now some people run specials and discount them. We discourage that. But again, we don't control everything, but there's -- discourage discounting because the books are reasonably priced at this point. The average cost per book is about $10. And so we think they're fairly priced now and don't need discounting.

That's cool. That's good. So no difference to normal at all, which is still quite nice. Okay. And then you touched upon the, I think, the main website, just now -- your colleague did just now. So saying within probably 8 weeks, you hope to get that live. And then you've also got an investor website as well that you're revamping. Do you have any indication of when that's going to go live?

Yes. Yes, our main focus is our e-commerce site. We do have a few of the junior developers working on that. I actually didn't get enough data before coming in here, but we expect that in around the same time frame in the next 6 weeks or so.

Okay. Cool. All right. Good.

Let me make some comments there. I think one of the biggest single things that's going to affect this company is that new website. You go online because we have very impatient millennials now, not just in our country but everywhere, and they expect the latest in technology. And we -- I think this new e-commerce site, and it rolls out, which will be mobile-friendly. We're very encouraged about the positive impact that's going to have.

Yes, that's cool. So I mean -- yes, it's something I noticed when I first ever looked to your website is, compared to some of the, I want to call more modern websites or the companies that keep their websites more up to date, there was quite a difference. So yes, I think you're right. I think there's a few things that could be improved, and it sounds like you're on the right track there as well. Okay.

Bobby, let me say one more thing. You probably got on our core website, which we pay very little attention to, although since the last call, [indiscernible] we look kind of [indiscernible] more with an order website, but we don't do any business on it. We try to concentrate 99% of our efforts towards income-producing activity, which are the e-commerce sites for the sales consultant. But I do see the need to be a little more professional in our corporate website, and we're working on that, too.

Right, okay. Okay. Yes, that's fine. I mean -- okay, that's good. I think you've answered the questions I had, and it all sounds like, again, going in the right direction.

[Operator Instructions] And your next question comes from the line of Joseph [Ford].

About on the sales consultant question. So my understanding was that the large increase in sales consultants was at least to some extent, due to -- during the pandemic, people didn't have jobs and so on, so people were looking for some supplementary income. And thus, I would have expected, as people go back to work, you would get some natural drop-off due to that also. I guess your answer to the last question, I didn't sense that you were sort of expecting necessarily a drop off through that? Am I incorrect in those assumptions?

No, you could. We're not taking a drop off. This funny thing, I say -- you see it. People have been furloughed, they've working from home. Now they don't want to go back, which is kind of interesting. And also, they're seeing that maybe their job wasn't as stable as they thought. So they may hang on for just part-time. A good portion of our people are part time and actually have full-time jobs, but we were competing with a lot of things. So there's a whole thing going on in the country today about employment and whatever, and we're adjusting to it. But I will tell you that we paid $80 million in commissions last year to our salespeople. I can't be more proud of that. These are moms who are home with their children and are putting their family first and can make a living that will allow them to stay home. Very proud of that. And so I think on a go-forward basis, that's going to be as big an impact as any, that people have learned that they can make significant income doing this without having to give up [indiscernible]. So we'll just see as it goes along. But I'll tell you, we've got a core nucleus of some number that like how much money they make, and don't want to make less. So we'll see how that develops. And -- it's a good question. We're now looking forward to bringing in more people because you always have turnover. So that's -- I hope I have answered your question.

Joseph, also, our consultants these days and age, these millennials are always looking for multiple income streams. So they may be doing other things alongside our business as well. And to add to your -- to answer your question a little bit more, we don't know why they sign up with us. We don't know why they stop. So -- we don't anticipate any major drop off though.

That was a good point. I'll tell you these young people and also the use of the Internet, and the way they do it. Some of our people are involved in 2, 3 companies. And the easier we make it, the more they will drift or stay with our product as opposed to others because of this -- we have a lot of -- when they go on the site to buy something, they leave a cart open, and we're not sure why. So all these things we're trying to address to make it easy to check out, [indiscernible] IT is going to be the biggest impact on this company in the next 2, 3 years. It's all about IT. Our products are the best in the world. Now we've got to make the program the easiest in the world to use. So that's what we're addressing.

[Operator Instructions] And your next question comes from the line of Ron [van Wachem.]

I'm just looking at your website and your -- I think that 1 thing that's lacking there is that there is -- your independent agents need to -- when you get on to the main page to be -- to kind of tell what you're all about, you just said $80 million revenue from moms selling books. I think a little bit of marketing on your website might help that. I also noticed when you download -- the turning download the publishing credit app, it just goes to a file or directory error. That should get fixed. But like you said, I think you got some major potential if you kind of hype up your web page a little bit into the independent sellers that you're looking for?

Yes, I couldn't agree more, and we are addressing it. I will tell you that, of course, the #1 income-producing website are the consultants, which you don't have access to, you have access to ours, and we have ignored it and [indiscernible] report, and I would reserve that and are working on that because that's a good marketing team tool or it turns people off . So we definitely agree with that, and I appreciate your comments, by the way.

Ron, I think you were looking at the corporate site, the edcpub.com. The site our sales force uses is myubam.com.

What? Sorry.

Myubam, M-Y-U-B-A-M dot com. Okay? That's it.

And there are no other questions at this time.

Okay. All right, Timmy, then I guess we can wrap up.

This concludes today's conference call. Thank you for participating. You may now disconnect.