0001437749-26-017110
SEC filingRevenue was $102.9M (-3.8%) Gross Profit was $34.6M (-1.6%) Operating Income was -$2.0M (-196.0%) Net Income was -$2.4M (-115.4%)
Revenue for the second quarter of fiscal 2026 was $102.9 million, a decrease of 3.8% compared to $107.0 million in the same period last year. The decline was primarily driven by lower retail and contractor sales due to continued headwinds in the new-home construction and home-refurbishment markets, which particularly impacted the Retail-Flooring and Flooring Manufacturing segments.
Net cash provided by operating activities was $7.1 million, down from $9.6 million in the prior year. The decrease was primarily driven by an increase in inventory levels to support operational demand, which represented a use of cash compared to the prior period. Capital expenditures were $3.3 million, resulting in free cash flow of $3.8 million. PMW defaulted on its credit facility covenant; however, the company entered into a forbearance agreement that extends through June 15, 2026, and expects to refinance the debt.
While overall revenue declined, the Retail-Entertainment segment demonstrated strong performance, with revenue growth driven by consumer demand. The segment's operating income increased, supported by improved gross margins and lower operating expenses from cost-reduction initiatives.
Management's outlook highlights continued headwinds in the new-home construction and home-refurbishment markets, which are expected to pressure Retail-Flooring and Flooring Manufacturing. The PMW covenant default and refinancing requirement represent a near-term risk, though the forbearance agreement provides a path to resolution. Cost-reduction initiatives implemented in fiscal 2025 are expected to continue benefiting operating expenses. The company's strong cash position and available credit provide a buffer, but the ability to refinance PMW's debt by June 15 is a critical milestone to monitor.