Core Viewpoint - LightPath Technologies has secured an $18.2 million purchase order for advanced infrared camera systems, with expectations of additional orders totaling up to $22 million for future products, indicating strong growth potential in the defense sector [1][2][3]. Group 1: Purchase Orders and Agreements - The company has received an $18.2 million purchase order for the supply of advanced infrared camera systems to be delivered in calendar year 2026 [1]. - An agreement is in place that anticipates future purchase orders totaling up to $22 million for a second tranche of products to be delivered in calendar year 2027 [2]. - The total expected growth in the defense and government backlog is projected to be up to $40 million over the course of calendar years 2026 and 2027 [3]. Group 2: Market Position and Industry Trends - The company is experiencing momentum driven by strong geopolitical tailwinds in the defense industry, as its products are increasingly vital to western defense contractors [4]. - Export restrictions on Germanium from China are prompting a shift away from this material, positioning the company favorably with its proprietary BlackDiamond™ glass [4]. - The company is transitioning from a components manufacturer to a vertically integrated camera solutions provider, enhancing its market position [3]. Group 3: Company Overview - LightPath Technologies is a leading provider of next-generation optics and imaging systems for both defense and commercial applications, with a manufacturing footprint in multiple locations including Orlando, Florida, and facilities in Texas, New Hampshire, Latvia, and China [5]. - The company offers a range of custom solutions, including proprietary materials and complete infrared optical systems [5].

Summary of LightPath Technologies (LPTH) FY Conference Call - August 13, 2025 Company Overview - **Industry**: Photonics and Optics, specifically focusing on infrared and thermal imaging [2][3] - **Business Transition**: Shift from component supplier to complete camera systems provider, with a strong emphasis on defense applications [3][5] Core Points and Arguments - **Market Positioning**: LightPath is positioning itself as a leader in infrared imaging, particularly in defense, moving away from telecom and commercial markets [3][14] - **Revenue Shift**: - Defense revenue has increased from 8% to 60% of total revenue over five years, while revenue from China has decreased from 35% to less than 5% [14][17] - The U.S. now accounts for over 70% of total revenue, indicating a significant strategic pivot towards defense [17][18] - **Vertical Integration**: - LightPath has developed a unique value proposition by owning the supply of optical materials, particularly Black Diamond glass, which replaces germanium [6][7] - This vertical integration secures supply chains and differentiates LightPath's products from competitors [8][9] Product Innovations - **Black Diamond Glass**: - Developed from materials originally designed at the Naval Research Laboratories, offering significant advantages over germanium, including reduced weight, size, and cost [9][10][11] - Capable of multispectral imaging, allowing for the combination of multiple camera functions into fewer units, enhancing performance in defense applications [12][13] - **Counter UAS Market**: - LightPath has seen approximately $10 million in new orders for cameras specifically designed for counter UAS applications, highlighting a growing market opportunity [19][20] Strategic Partnerships and Contracts - **Exclusive Licensing**: LightPath holds an exclusive license for Black Diamond glass from the U.S. Navy, which includes rights for future materials [22][23] - **SPEAR Program Contract**: - A significant contract to install infrared cameras on naval vessels, expected to generate $10 million to $20 million annually over the program's lifetime [26][27] Financial Outlook - **Cash Position**: The company is currently in a strong cash position, with plans to double in size post-G5 acquisition, and does not foresee immediate cash needs [37][40] - **Capital Expenditure**: - Scaling up production for cameras requires minimal investment, estimated at $250,000 to $500,000 for doubling production capacity [52][53] - Investment in glass production may require $2 million to $3 million, but overall capital needs are manageable compared to previous models [53][54] Additional Insights - **Technological Advantages**: Black Diamond glass offers superior optomechanical performance, particularly in varying temperature conditions, which is critical for airborne systems [33][35][36] - **Cultural Fit in Acquisitions**: The acquisition of G5 was driven by a strong cultural fit and shared vision, facilitating smoother integration and collaboration [41][42] This summary encapsulates the key points discussed during the LightPath Technologies FY conference call, highlighting the company's strategic direction, product innovations, and financial outlook.

Core Insights - LightPath Technologies has appointed Dr. Stephen L. Mielke as Vice President of Engineering to lead the company's transition from a component supplier to a system supplier in optics and imaging systems [1][4]. Company Overview - LightPath Technologies, Inc. is a leading provider of next-generation optics and imaging systems for defense and commercial applications, with a vertically integrated approach that includes in-house engineering design support [5]. - The company specializes in custom solutions, including proprietary BlackDiamond™ chalcogenide-based glass materials and complete infrared optical systems [5]. Leadership and Experience - Dr. Mielke brings over 20 years of experience in the photonics industry, with expertise in electro-optical systems and technologies across various applications, including automotive LiDAR and optical metrology [2][3]. - His previous roles include Optical System Architect at Luminar Technologies and Director of Engineering at Zygo Corporation, where he led teams in developing advanced optical tools [3]. Strategic Direction - The appointment of Dr. Mielke is seen as pivotal for accelerating the development and deployment of new products, particularly in cameras and optics, as the company aims to enhance its product offerings [4]. - The company is focused on leveraging its in-house capabilities to become a leading provider of integrated optical systems, targeting a diverse market including defense and government sectors [4].

Core Viewpoint - LightPath Technologies, Inc. is poised for growth in the defense sector, driven by geopolitical factors and the recent acquisition of G5 Infrared, with a focus on their innovative Germanium-free BlackDiamond™ glass technology [3][4]. Company Overview - LightPath Technologies, Inc. is a leading provider of next-generation optics and imaging systems for defense and commercial applications, with a vertically integrated approach and in-house engineering design support [4]. - The company offers a range of custom solutions, including proprietary BlackDiamond™ chalcogenide-based glass materials, and has manufacturing facilities in Orlando, Florida, Texas, New Hampshire, Latvia, and China [4]. Upcoming Event - The company will present at the Canaccord Genuity 45th Annual Growth Conference on August 13, 2025, at 3:00 p.m. Eastern time, at the InterContinental Boston Hotel [3]. - Sam Rubin, President and CEO, will lead the presentation and one-on-one meetings, emphasizing the company's strong momentum and strategic alignment for long-term growth [2][3].

Core Viewpoint - LightPath Technologies has initiated production of two high-end cooled infrared camera products utilizing proprietary BlackDiamond™ Glass instead of Germanium, marking a strategic shift towards a broader range of Germanium-free products due to supply chain challenges [1][2][3]. Group 1: Product Development - The company’s subsidiary G5 Infrared has redesigned select entry-level camera models to incorporate BlackDiamond™ Glass, eliminating the reliance on Germanium, which is affected by export restrictions from China [2]. - The new Germanium-free camera models are designed as drop-in replacements for existing Germanium models, requiring no redesign of the systems they will be integrated into [3]. Group 2: Strategic Positioning - The vertical integration of LightPath's proprietary BlackDiamond™ glass with G5's products is expected to drive strong growth and enhance value for a wider customer base while ensuring supply chain reliability [3]. - G5 has a significant pipeline of new business opportunities, with plans to offer additional Germanium-free options in the near future [3]. Group 3: Company Overview - LightPath Technologies is recognized as a leading provider of next-generation optics and imaging systems for defense and commercial applications, with a manufacturing footprint in multiple locations including Orlando, Florida, and facilities in Texas, New Hampshire, Latvia, and China [4].

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[Part I - Financial Information](index=3&type=section&id=Part%20I%20Financial%20Information) This section presents the company's financial performance and position, including statements, notes, and management's analysis [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended March 31, 2025, reflect significant changes primarily due to the acquisition of G5 Infrared, impacting assets, liabilities, and net loss [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $81.4 million, primarily driven by the G5 Infrared acquisition, while total liabilities and preferred stock also rose significantly Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total current assets | $28,081 | $15,537 | +80.7% | | Intangible assets, net | $21,476 | $3,651 | +488.2% | | Goodwill | $9,741 | $6,764 | +44.0% | | **Total assets** | **$81,421** | **$48,087** | **+69.3%** | | **Liabilities & Equity** | | | | | Total current liabilities | $12,231 | $8,036 | +52.2% | | Warrant liability | $3,961 | $0 | N/A | | **Total liabilities** | **$31,297** | **$17,887** | **+75.0%** | | Series G Convertible Preferred Stock | $34,400 | $0 | N/A | | **Total stockholders' equity** | **$15,724** | **$30,200** | **-47.9%** | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) For Q3 FY2025, revenue increased 19% year-over-year to $9.2 million, but the net loss widened to $3.6 million due to higher operating expenses despite improved gross profit Statement of Comprehensive Income (Loss) Highlights (in thousands, except per share data) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $9,168 | $7,699 | $24,993 | $23,092 | | Gross Profit | $2,664 | $1,606 | $7,439 | $6,106 | | Operating Loss | $(3,323) | $(2,583) | $(7,184) | $(5,617) | | Net Loss | $(3,582) | $(2,598) | $(7,817) | $(5,654) | | Loss per share (basic & diluted) | $(0.09) | $(0.07) | $(0.19) | $(0.15) | [Unaudited Condensed Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2025, cash flow from operations shifted to a $5.7 million use, while financing activities provided $29.6 million, primarily for the G5 Infrared acquisition Cash Flow Summary (Nine Months Ended March 31) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(5,681) | $456 | | Net cash used in investing activities | $(20,820) | $(2,375) | | Net cash provided by (used in) financing activities | $29,572 | $(2,070) | | **Change in cash and cash equivalents** | **$2,999** | **$(3,986)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the February 2025 acquisition of G5 Infrared for approximately $27.6 million, its financing, revenue growth drivers, and risks from China's Germanium export restrictions - In February 2025, the Company acquired G5 Infrared for aggregate consideration of approximately **$27.6 million**, consisting of **$20.25 million** in cash, **1,972,501 shares** of common stock, and potential earnout payments[43](index=43&type=chunk)[47](index=47&type=chunk) - The G5 acquisition was funded in part by issuing approximately **24,956 shares** of Series G Convertible Preferred Stock, warrants to purchase **4.35 million shares** of Class A Common Stock, and **$5.2 million** in senior secured promissory notes[57](index=57&type=chunk) Revenue by Product Group (Nine Months Ended March 31) | Product Group | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Infrared components | $9,363 | $11,046 | -15% | | Visible components | $8,901 | $8,056 | +10% | | Assemblies and modules | $3,803 | $3,078 | +24% | | Engineering services | $2,925 | $912 | +221% | | **Total revenue** | **$24,993** | **$23,092** | **+8%** | - The company highlights significant risks from China's export restrictions on Germanium, a key raw material, which has disrupted supply and increased costs, prompting redesign efforts with proprietary BlackDiamond materials[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic shift to imaging subsystems, Q3 FY2025 financial performance, liquidity, operational strategy, and non-GAAP measures, highlighting acquisition impacts and Germanium export risks [Results of Operations](index=28&type=section&id=Results%20of%20Operations) In Q3 FY2025, revenue increased 19% year-over-year to $9.2 million, driven by acquisitions and higher-margin services, but the net loss widened to $3.6 million due to increased operating expenses - Q3 FY2025 revenue increased **19% YoY** to **$9.2 million**, driven by a **123% increase** in Assemblies & Modules revenue (including **$0.9 million** from G5 Infrared) and a **54% increase** in Engineering Services revenue[162](index=162&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Gross margin for Q3 FY2025 improved to **29%** from **21%** in the prior-year quarter, attributed to a more favorable product mix with higher-margin assemblies and engineering services[172](index=172&type=chunk) - SG&A costs for Q3 FY2025 increased by **40% YoY**, primarily due to **$0.7 million** in due diligence and other costs related to the G5 Infrared acquisition[175](index=175&type=chunk) - Net loss for Q3 FY2025 was **$3.6 million**, an increase from **$2.6 million** in Q3 FY2024, mainly due to higher SG&A, interest expense, and amortization, despite higher gross profit[184](index=184&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had $15.9 million in working capital and $6.5 million in cash, significantly bolstered by $29.3 million in financing activities for the G5 Infrared acquisition - As of March 31, 2025, the company had working capital of approximately **$15.9 million** and cash and cash equivalents of **$6.5 million**[192](index=192&type=chunk) - For the nine months ended March 31, 2025, net cash provided by financing activities was **$29.3 million**, primarily from the strategic financing for the G5 acquisition, which included proceeds from preferred stock and loans[202](index=202&type=chunk) - Cash used in operations for the first nine months of fiscal 2025 was **$5.4 million**, compared to cash provided by operations of **$0.5 million** in the prior year period[200](index=200&type=chunk) [How We Operate](index=33&type=section&id=How%20We%20Operate) The company's operational strategy focuses on securing long-term 'design wins' and 'engineered solutions' to create stable revenue, with the total sales backlog growing 25% year-over-year to $27.4 million - The company's strategy is to create an annuity revenue stream by securing 'design wins' through customer product development and providing 'engineered solutions'[204](index=204&type=chunk) Total Sales Backlog Trend | Quarter | Total Backlog ($ thousands) | Change From Prior Year End | Change From Prior Quarter End | | :--- | :--- | :--- | :--- | | Q3 2024 | $21,967 | 1% | 4% | | Q4 2024 | $19,268 | (11)% | (12)% | | Q1 2025 | $20,542 | 7% | 7% | | Q2 2025 | $19,767 | 3% | (4)% | | Q3 2025 | $27,423 | 42% | 39% | - The acquisition of G5 Infrared added **$5.6 million** to the backlog, with the backlog for G5 Infrared products reaching **$9.9 million** as of March 31, 2025[210](index=210&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA to evaluate core operating performance, with Adjusted EBITDA for Q3 FY2025 showing a loss of $2.0 million, primarily due to acquisition-related expenses Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(3,582) | $(2,598) | $(7,817) | $(5,654) | | EBITDA | $(1,532) | $(1,511) | $(3,495) | $(2,397) | | **Adjusted EBITDA** | **$(1,984)** | **$(1,511)** | **$(3,947)** | **$(2,397)** | - The decrease in Adjusted EBITDA in Q3 FY2025 was primarily attributable to increased SG&A, which included **$0.7 million** of non-recurring expenses related to the G5 Infrared acquisition[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a 'smaller reporting company,' the registrant is not required to provide the information for this item - As a 'smaller reporting company,' the registrant is not required to provide the information required by this Item[231](index=231&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no significant changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[232](index=232&type=chunk) - There have not been any significant changes in internal control over financial reporting during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[233](index=233&type=chunk) [Part II - Other Information](index=38&type=section&id=Part%20II%20Other%20Information) This section covers legal proceedings, updated risk factors, unregistered sales of equity securities, defaults, and other disclosures [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any pending legal proceedings expected to have a material adverse effect on its financial condition or results of operations - The Company is not involved in any pending legal proceeding that it believes would reasonably be expected to have a material adverse effect on its financial condition or results of operations[234](index=234&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company highlights elevated risks from geopolitical tensions and international trade policies, including China's Germanium export restrictions, which could impact its supply chain and costs - A key updated risk factor is the material adverse impact from elevated geopolitical tensions and volatile international trade policies, including tariffs and export controls[236](index=236&type=chunk) - China's export limitations on rare earth minerals like Germanium are specifically cited as a risk that could impair manufacturing, increase costs, and disadvantage the company in international markets[236](index=236&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) There were no unregistered sales of equity securities during the period - None[237](index=237&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[238](index=238&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) During the third quarter of fiscal 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[239](index=239&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including agreements related to the G5 Infrared acquisition and financing, as well as CEO and CFO certifications

Company Performance - LightPath Technologies reported a quarterly loss of $0.10 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, and compared to a loss of $0.07 per share a year ago, indicating an earnings surprise of -100% [1] - The company posted revenues of $9.17 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.21%, and this represents an increase from year-ago revenues of $7.7 million [2] - Over the last four quarters, LightPath Technologies has surpassed consensus EPS estimates only once [2] Stock Performance - LightPath Technologies shares have declined approximately 24.9% since the beginning of the year, while the S&P 500 has gained 0.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.03 on revenues of $12.93 million, and for the current fiscal year, it is -$0.18 on revenues of $38.04 million [7] Industry Outlook - The Electronics - Miscellaneous Components industry, to which LightPath Technologies belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LightPath Technologies' stock performance [5]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 19.1% to $9.2 million compared to $7.7 million in the same quarter last year [28] - Gross profit rose by 66% to $2.7 million, representing 29.1% of total revenues, up from 20.9% in the prior year [29] - Operating expenses increased by 44% to $6 million, primarily due to higher legal consulting fees and costs associated with the G5 acquisition [29] - Net loss for the quarter totaled $3.6 million, compared to a loss of $2.6 million in the same quarter last year [30] - Cash and cash equivalents as of March 31, 2025, totaled $6.5 million, up from $3.5 million as of June 30, 2024 [30] Business Line Data and Key Metrics Changes - Revenue from infrared components was $3.6 million (40% of total revenue), visible components at $2.8 million (31%), assemblies and modules at $1.9 million (20%), and engineering services at $800,000 (9%) [28] - The new direction of the company, including optical assemblies and cameras, now constitutes roughly 50% of total revenue, with the other half from optical components [7] Market Data and Key Metrics Changes - The company has seen significant growth in demand for its proprietary Black Diamond materials, leading to the need for increased manufacturing capacity [15] - The company has reduced its exposure to risks associated with tariffs and recessions in China, with 45% of headcount and 56% of footprint now in the U.S. [18][19] Company Strategy and Development Direction - The company is transitioning from a pure component supplier to a vertically integrated global solution provider for infrared imaging technologies [4] - Recent acquisitions, including G5 infrared, are expected to enhance the company's capabilities in high-margin, high-ASP products, particularly in defense [35] - The company aims to achieve long-term goals of 15% EBITDA margins and sustained growth [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing geopolitical tensions and new product launches as key drivers [4] - The company is focused on optimizing internal supply chains and engaging with customers regarding supply chain resilience [20] - Management acknowledged potential challenges related to the supply of germanium but noted that redesigns using Black Diamond materials are progressing well [22][23] Other Important Information - The G5 acquisition is expected to generate $51 million in revenue over the twelve months following the acquisition [33] - The company has booked over $19 million in new orders in the 90 days following the G5 acquisition [16] Q&A Session Summary Question: Can you discuss the delays related to the Apache program? - Management indicated that delays were due to taking on a challenging project and capacity issues, but they do not foresee any permanent problems [40][41] Question: What is the outlook for gross margins in the next quarter? - Management expects gross margins to increase due to a full quarter of higher-margin assemblies and modules from G5 [49] Question: What is the current backlog number? - The backlog as of March was reported at $27.4 million [28] Question: Is the $51 million revenue expectation for G5 a downshift from previous estimates? - Management clarified that the $51 million figure pertains to a different timeframe than previously discussed [53] Question: What is the status of the Navy and border security contracts? - The Navy contract has been awarded, while the border security contract is more complex and involves multiple suppliers [95][96] Question: How is the integration of sales teams progressing post-acquisition? - Management confirmed that the sales teams are working closely together, despite a recent resignation in the sales leadership [80][82]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 19.1% to $9.2 million compared to $7.7 million in the same quarter of the previous year [31] - Gross profit rose by 66% to $2.7 million, representing 29.1% of total revenues, up from 20.9% in the same quarter last year [32] - Operating expenses increased by 44% to $6 million, primarily due to higher legal consulting fees and costs associated with the G5 acquisition [32] - Net loss for the quarter totaled $3.6 million, compared to a loss of $2.6 million in the same quarter last year [33] - Cash and cash equivalents as of March 31, 2025, totaled $6.5 million, up from $3.5 million as of June 30, 2024 [33] Business Line Data and Key Metrics Changes - Revenue from infrared components was $3.6 million (40% of total revenue), visible components at $2.8 million (31%), assemblies and modules at $1.9 million (20%), and engineering services at $800,000 (9%) [31] - The new direction of the company, including optical assemblies and cameras, now accounts for roughly 50% of revenue, with the other half from optical components [7][8] Market Data and Key Metrics Changes - The company has seen strong growth in demand for its proprietary Black Diamond materials, leading to the need for increased manufacturing capacity [16] - The company has reduced its exposure to risks associated with tariffs and recession in China, with 45% of headcount and 56% of footprint now in the U.S. [20][21] Company Strategy and Development Direction - The company is transitioning from a pure component supplier to a vertically integrated global solution provider for infrared imaging technologies [5] - Recent acquisitions, including G5 infrared, are expected to enhance the company's product offerings and revenue potential, particularly in defense applications [35] - The company aims to achieve long-term goals of 15% EBITDA margins and sustained growth [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, driven by geopolitical tensions and new product launches [5][39] - The company is focused on optimizing internal supply chains and engaging with customers regarding supply chain resilience [22] - Management acknowledged potential challenges related to supply chain and material availability but remains optimistic about the company's positioning [23][24] Other Important Information - The G5 acquisition is expected to generate $51 million in revenue in the twelve months following the acquisition, with new bookings of $13 million since the acquisition [35] - The company is integrating G5 and leveraging its expertise to maximize revenues and earnings [34] Q&A Session Summary Question: Can you discuss the delays related to the Apache program? - Delays were due to the complexity of the project and unexpected demand in other areas, not due to customer issues [41][42] Question: What is the status of the new fast-paced project related to BD glass? - The project is progressing quickly with government support, and it is expected to generate significant revenue once in production [44][45] Question: What is the outlook for gross margins in the next quarter? - Gross margins are expected to increase due to a full quarter of higher-margin products from G5 [48][49] Question: What is the backlog number as of March? - The backlog totaled $27.4 million [52] Question: What is the status of the Navy and border security contracts? - The Navy contract has been awarded, while the border security contract is more complex and involves multiple suppliers [99][100] Question: How is G5 tracking towards its revenue targets? - G5 is on course to meet its revenue targets, with no red flags observed so far [111][112]