Syntec Optics (US:OPTX)2025-11-14 02:05Financial Performance - Net sales decreased by $0.9 million, or 11%, to $6.95 million for the three months ended September 30, 2025, compared to $7.87 million for the same period in 2024[73] - Gross profit for the three months ended September 30, 2025, was $854,359, representing 12% of net sales, down from $1,833,720, or 23% of net sales, in the same period of 2024[73] - The net loss for the three months ended September 30, 2025, was $1,429,133, or 21% of net sales, compared to a net loss of $13,289, or 0% of net sales, in the same period of 2024[73] - For the nine months ended September 30, 2025, net sales were $20,578,717, a decrease from $21,128,263 in the same period of 2024[74] - Net sales decreased by approximately $0.5 million, or 3%, to $20.6 million for the nine months ended September 30, 2025, compared to $21.1 million for the same period in 2024[76] - Gross profit decreased by 54%, to $0.9 million for the three months ended September 30, 2025, compared to $1.8 million for the same period in 2024[78] - Net loss increased by $1.4 million to $1.4 million for the three months ended September 30, 2025, compared to a net income of $0.0 million for the same period in 2024[82] - For the nine months ended September 30, 2025, net loss increased by $0.5 million to $1.4 million compared to a net loss of $0.9 million in 2024[83] Expenses - General and administrative expenses increased to $2,072,962, accounting for 30% of net sales in Q3 2025, compared to 22% in Q3 2024[73] - General and administrative expenses increased by $0.3 million, or 20%, to $2.1 million for the three months ended September 30, 2025, compared to $1.7 million for the same period in 2024[79] - Cost of revenue increased by $0.1 million to $6.1 million for the three months ended September 30, 2025, compared to $6.0 million for the same period in 2024[77] - Other expenses for the nine months ended September 30, 2025, increased by $0.4 million to $0.6 million due to a reduction of other income attributed to the sale of an asset in 2024[80] Cash Flow and Financing - As of September 30, 2025, the company had cash totaling $0.6 million and a line of credit with $0.7 million available[99] - Net cash provided by operating activities was $676,529 for the nine months ended September 30, 2025, compared to a net cash used of $1,566,598 for the same period in 2024[105] - Net cash used in investing activities increased to $643,808 for the nine months ended September 30, 2025, from $319,229 in 2024, primarily due to a one-time asset disposal in 2024[107] - Net cash used in financing activities was $53,584 for the nine months ended September 30, 2025, compared to net cash provided of $204,366 in 2024, driven by a decrease in debt borrowings[108] - The Company obtained approximately $1.5 million in financing from a related party to facilitate required paydowns under the waiver[102] Compliance and Risks - As of September 30, 2025, the Company was not in compliance with financial covenants, but received a waiver from M&T Bank, requiring repayment of approximately $1.3 million in loans and reducing the revolving credit line from $8.0 million to $7.5 million[101] - The Company expects to maintain compliance with all amended covenants through the remainder of 2025, strengthening its liquidity position[103] - Significant risks affecting liquidity include economic consequences of global pandemics, geopolitical conflicts, and supply chain disruptions[104] - The primary market risk exposure for the Company is interest rate sensitivity, with no material changes reported during the nine months ended September 30, 2025[109] Business Development - The company plans to grow into new end markets of communications and sensing, having entered the communications market in 2023[59] - In 2023, the company launched several new products, including low weight night vision optics and biomedical mirrors for the medical market[55] - The company has expanded its manufacturing facility to nearly 90,000 square feet, enhancing production capacity and advanced manufacturing processes[53] - The company relies on U.S.-based suppliers for specialized components, which has helped mitigate supply chain disruptions and inflation-related costs[60] Taxation - Income tax expense decreased by $0.1 million to zero for the three months ended September 30, 2025, compared to a tax benefit of ($0.1) million for the same period in 2024[81] - Adjusted EBITDA for the nine months ended September 30, 2025, was $(1.4) million compared to $(0.9) million in 2024[95]