Oct 27, 2026 earnings call — Tariff refund and business updates
Net sales were $58 million, an 18% increase versus third quarter 2025.
Revenue $0.1B (est $0.1B) · EPS $0.80 (est $0.73)
Key quotes
"We received a tariff refund of $6 million, of which $4 million was brought into income, offset by reserves for closure of our small DMT facility and variable compensation."
"We will close the plant during the fourth quarter and have reserved $1 million. Savings are expected to be over $1 million annually, beginning in January 2027."
"It provides increased capacity that has resulted in growth of approximately 34% this year."
Analyst Q&A 3
tariff refund and plant closure
Q (Jim Marrone · Singular): He asked how the tariff refund is calculated and why the Marlborough plant was closed and moved overseas. He also asked whether growth will be organic or via acquisitions, and which product side will be the focus.
A: Management said the tariff refund is calculated by totaling tariffs paid on invoices and customs payments and submitting that total to IEEPA for refunds. They said Marlborough was a small plant (less than 20 people) and production moved to China when it was much cheaper, while they reinvested in a larger U.S. plant for Spill Magic. On growth, they said it will be a mix of organic growth and selective acquisitions, and First Aid is likely to have greater long-term organic growth as it is 70% of the business.
"You total all those up, and you come up with a number, and then you submit it to IEEPA refunds, and then it happens." — Walter Johnsen (CEO·CHAIR)
Westcott back-to-school performance
Q (Georgy Vashchenko · Freedom Broker): He asked how Westcott performed in back-to-school relative to the strong second quarter. He wanted reasons for the strength.
A: Management said last year's tariffs delayed promotional activity, so this year's comparisons were easier because promotions returned. They also said their new product innovation helped sales and that the innovations worked well.
"So we had a combination of easy comparisons, to be frank, but second, we really did a good job with our innovation, and it worked." — Walter Johnsen (CEO·CHAIR)
receivables, inventory and seasonality
Q (Tim Call · Capital Management Corporation): He asked about higher accounts receivable (about 20%) and inventories (about 15%) and whether those balances can be reduced over the next 12 months without acquisitions. He also asked if seasonality and promotions have normalized.
A: Management said accounts receivable rose because sales increased 18%. They said they consciously increased inventory by about $8 million-$10 million as insurance against supply shocks after the war with Iran, noting freight costs from China tripled and the marginal interest rate is about 6%. They said they expect to convert that inventory back into cash during 2027 but remain cautious; on seasonality, Westcott should see normal promotions next year if the tariff environment stays steady, with the caveat that consumer stress could affect demand.
"The accounts receivable is a function of the sales increase." — Paul Driscoll (CFO)