Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $153 million, representing a 7% year-over-year increase, while EPS was $0.33, up 22% year-over-year [4][11] - Cash from operations was $29 million, exceeding the midpoint of the guidance range [4][11] - Year-to-date revenue growth was 5% and EPS growth was 15% year-over-year [8] Business Line Data and Key Metrics Changes - MedTech and specialty audio revenue was $65 million, up 2% year-over-year, with gross margins at 53% [5][11] - Precision Devices segment revenue was $88 million, up 12% year-over-year, with gross margins at 41.5% [5][12] - The company expects MedTech and specialty audio revenue growth to be in the range of 2%-4% for 2025, while Precision Devices is expected to grow at the high end of 6%-8% [5][7] Market Data and Key Metrics Changes - The defense market showed particularly strong growth, with design wins outpacing other end markets [6][12] - Channel inventories are now at normalized levels, matching orders to end market demand [7] Company Strategy and Development Direction - The company is focused on leveraging unique technologies to design custom-engineered solutions and deliver them at scale [4][10] - There is a strong emphasis on organic growth, with expectations for growth rates at the high end of 4%-6% for the total company in 2026 [8][9] - The company is pursuing synergistic acquisitions while maintaining a disciplined approach to M&A [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue growing revenue in the fourth quarter and beyond, supported by a healthy backlog of orders [8][9] - The company anticipates strong revenue and EPS growth in the second half of 2025, driven by new design wins and robust demand across all markets [8][9] Other Important Information - The company purchased $20 million in shares and reduced outstanding bank borrowings by $15 million during the quarter [9][13] - The net leverage ratio based on trailing 12 months adjusted EBITDA was 0.6 times, with liquidity exceeding $350 million [14] Q&A Session Summary Question: Update on specialty film capacity and demand outlook - Management indicated that specialty film revenue is expected to be in the $25 million-$30 million range this year, with potential growth to $55 million-$60 million next year due to increased capacity [20][21] Question: Design activity and growth expectations - Management expects MedTech and specialty audio growth in 2026 to be in the 2%-4% range, while Precision Devices may exceed the high end of the 6%-8% growth range [23][24] Question: M&A environment and opportunities - The M&A environment has improved, with more assets available and lower interest rate expectations, but the company remains disciplined in its approach [33][34] Question: Impact of palladium prices on gross margins - Management has pre-buys in place to mitigate the impact of rising palladium prices, and does not foresee a negative impact on gross margins at this time [38][39] Question: Specialty film gross margin improvements - Management expects sequential improvement in specialty film gross margins, with significant benefits anticipated by late Q2 2026 as production ramps up [45][46]

Financial Data and Key Metrics Changes - Q1 sales were $191 million, slightly lower sequentially, primarily due to foreign exchange rate changes and seasonality in the portable electronics market [8][22] - Gross margin for Q1 was 29.9%, a decrease of 220 basis points from the previous quarter, attributed to utilization headwinds and unfavorable product mix [24] - Adjusted EPS decreased to $0.27 from $0.46 in Q4, reflecting lower gross margin [22] Business Line Data and Key Metrics Changes - Advanced Electronic Solutions (AES) revenue increased by 2% to $104 million, driven by higher ADAS and aerospace and defense sales [23] - Electronic Materials Solutions (EMS) revenue decreased by approximately 4% to $83 million, impacted by lower portable electronics, EVHEV, and aerospace and defense sales [23] - Sales in the ADAS and industrial markets increased, while EVHEV sales declined in both AES and EMS business units [11][12] Market Data and Key Metrics Changes - The company noted a meaningful increase in opportunities with Chinese OEMs in the ceramic power substrate market [9] - Portable electronics sales declined sequentially due to normal seasonality [14] - The company expects Q2 sales to range between $190 million and $205 million, indicating a 4% increase from Q1 [29] Company Strategy and Development Direction - The company is focused on securing new design wins and improving operational efficiency while navigating the challenges posed by tariffs [31] - A local for local strategy is being implemented to mitigate tariff impacts, with plans to manage inventories and source materials from other countries [16][31] - The company is also prioritizing capital return to shareholders and exploring synergistic M&A opportunities [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market challenges due to a strong balance sheet and global manufacturing footprint [7][31] - There is uncertainty regarding the impact of tariffs on sales in the second half of the year, but management remains optimistic about long-term growth in the EVHEV market [17][52] - Customer conversations have been constructive, with a focus on collaboration to mitigate potential tariff impacts [45][46] Other Important Information - The company has implemented significant cost improvements, expecting net savings of $25 million in 2025 [20] - Cash at the end of Q1 was $176 million, an increase of $16 million from Q4 [26] - The company plans to reduce capital expenditures to between $30 million and $40 million for the full year [27] Q&A Session Summary Question: How much of the $25 million cost savings is in the Q2 guidance? - Most savings in Q2 are associated with the reduction force and are expected to be around $3 million [36][38] Question: Expectations for Q3 performance? - Improvement in Q3 is anticipated, contingent on portable electronics ramping and inventory issues in the power module market abating [39][40] Question: Customer sentiment regarding tariffs? - Customers are feeling resilient and are open to collaboration to mitigate potential tariff impacts [45][46] Question: Update on the ceramic opportunity pipeline in China? - The company is making good progress with the Kramer facility and has several design wins in the pipeline [50][52] Question: Insights on gross margin expansion in Q2? - Gross margin expansion is expected due to improved mix and ongoing cost management efforts [53][56]

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $14,400,000, consistent with targets and the same as Q1 2024 [8][23] - Gross profit was $4,400,000, representing a gross margin of 30.3%, up from $4,100,000 and 28.5% in Q1 2024 [24] - Operating loss decreased to $2,400,000 from $2,700,000 year-over-year, while net loss improved to $2,100,000 from $2,400,000 [25] Business Line Data and Key Metrics Changes - The company reported significant design win momentum, with three new design wins in 2025, including contracts with cybersecurity leaders and a global network test equipment company [10][12][15] - The focus on core product lines and deep customer relationships has created a solid pipeline for future growth [9][16] Market Data and Key Metrics Changes - Geographical revenue breakdown showed North America at 70.8%, Europe and Israel at 14%, and the Far East and Rest of the World at 8% [23] - The top 210%+ customers accounted for about 24% of revenues over the last twelve months [23] Company Strategy and Development Direction - The company aims for a return to solid double-digit growth rates starting in 2026, with long-term financial goals of achieving EPS above $3 based on revenues between $150,000,000 and $160,000,000 [9][20] - A robust pipeline of opportunities across various product lines is expected to drive future growth, with a focus on building long-term relationships with customers [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating revenue growth in 2026 and beyond, supported by a strong balance sheet and no debt [8][21] - The company anticipates low single-digit growth for 2025, with double-digit growth expected for 2026 [19] Other Important Information - The company has a strong balance sheet with $119,000,000 in working capital and marketable securities, including $77,000,000 in cash [8][25] - The share buyback program saw the purchase of nearly 100,000 shares in Q1 2025, with about $8,000,000 remaining in the program [44][48] Q&A Session Summary Question: What milestones are tracked for design wins? - Management outlined milestones including customization development, shipping samples, and mass production readiness [28][29][30] Question: Is there increased demand for FPGA-based products? - Management confirmed strong demand across all product lines, including FPGA, and highlighted a recent strategic partnership for cybersecurity solutions [31][32] Question: What is the impact of tariffs? - Currently, the company's products are exempt from tariffs, and management is monitoring the situation closely [33][34][36] Question: Update on share buyback program? - The company purchased nearly 100,000 shares in Q1 2025, with over $8,000,000 remaining in the buyback program [44][48] Question: Are major customers reordering after excess inventory? - Management noted some relief in excess inventory issues, with some customers beginning to reorder, but the situation varies by customer [50][51][52]