Financial Data and Key Metrics Changes - The company reported a record quarterly revenue of $6.2 million for Q4 2025, compared to $4.2 million in the prior quarter and $4.7 million in Q4 2024, leading to an annualized run rate of approximately $25 million [6][26] - For the fiscal year 2025, total revenue was flat at $19.1 million compared to the previous year, masking the transition from an engineering-focused business to a manufacturing enterprise [26] - Gross margins for Q4 2025 were 13%, up from 10% in Q3 but down from 22% in Q4 2024, with annual gross margins at 18% compared to 30% in the prior year [28][29] Business Line Data and Key Metrics Changes - Production revenue reached $5.1 million in Q4 2025, up from $3.3 million in the prior quarter and $2.8 million in the year-ago quarter, while engineering revenue was $1.1 million, down from $1.9 million year-over-year [26] - The systems manufacturing business is expected to grow at least 75% in fiscal 2026, driven by the expansion of two major production programs [17][24] - Revenue from the micro-optics lab is projected to decline from $2.1 million in fiscal 2025 to $1.3 million in fiscal 2026 due to timing of a large defense customer reorder [27] Market Data and Key Metrics Changes - The company anticipates revenue for fiscal 2026 to reach approximately $25 million, driven largely by the systems manufacturing business, which is forecasted to increase from $8.3 million in fiscal 2025 to $14.5 million in fiscal 2026 [24][27] - The aerospace program's revenue increased significantly, with Q4 revenue for this program reaching nearly $2 million, and a backlog of nearly $9 million [11][12] Company Strategy and Development Direction - The company has moved its headquarters to Littleton, Massachusetts, to support growth and access a broader engineering talent pool [9][10] - Investments are being made in facilities and personnel to enhance production capabilities and address operational challenges [21][22] - The company aims for long-term gross margins of 40% and expects to recover positive adjusted EBITDA in fiscal 2026 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong production backlog and the transition of major programs from development to production [33] - The company is addressing gross margin challenges and expects substantial recovery in fiscal 2026, with improved manufacturing yields and better pass-through of tariffs [19][24] Other Important Information - The company has hired a new Chief Operating Officer with extensive experience in medical device production to enhance operational efficiency [22][23] - Tariff costs in Q4 2025 were approximately $180,000, impacting gross margins, but agreements for tariff reimbursement are being finalized with major customers [20][21] Q&A Session Summary Question: Guidance on revenue for 2026 - Management acknowledged being conservative in their revenue guidance for 2026, noting a decrease in revenue from the micro-optics lab due to timing of orders [37] Question: Medical program pricing adjustments - The customer agreed to cover higher initial production costs, with a negotiated step-down in pricing as production stabilizes [40] Question: Tariff reimbursements - Management confirmed verbal agreements for tariff reimbursements, with no risks associated with documentation [41] Question: Engineering resources and project pipeline - Engineering resources are expected to be progressively filled throughout 2026, with multiple programs lined up for production [46] Question: Challenges in the second single-use program - The second single-use program is progressing well, with lessons learned from the cystoscope program aiding in smoother ramp-up [52]