Financial Data and Key Metrics Changes - Q1 2026 revenue increased by 6.2% to $5.6 million, driven by the delivery of a custom cinema project and other client work [17] - Gross profit rose by 22% to $1.7 million, with an improved gross margin of 30% compared to 26.1% in Q1 2025 [17] - Operating expenses decreased by 8% to $1.32 million in Q1 2026, down from $1.44 million in Q1 2025 [17] - Operating income improved to $350,000 from an operating loss of $68,000 in the same period last year [18] - Net income for Q1 2026 was $509,000 or $0.05 per share, compared to a net loss of $25,000 in Q1 2025 [18] - Working capital rose by 12% to $4.8 million at the close of Q1 2026 [19] Business Line Data and Key Metrics Changes - The company achieved profitability in Q1 2026 due to higher revenue and lower operating expenses, reflecting solid operational execution [4][7] - The acquisition of the DCS Cinema loudspeaker line is expected to enhance the company's product offerings and market position [10][12] Market Data and Key Metrics Changes - Domestic box office receipts for Q3 were approximately $2.4 billion, nearly matching the previous year, indicating a stable exhibition industry [5] - The company anticipates Q2 2026 revenue of approximately $3.4 million, reflecting the impact of the holiday season on capital spending [20] Company Strategy and Development Direction - The company aims to build on its value proposition with new products and capabilities, particularly through the acquisition of DCS Cinema [5][12] - Focus on improving operational and financial performance while expanding capabilities to support customer needs in cinema technology [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the exhibition industry outlook, citing improved domestic box office trends and a stronger release calendar [14] - The company believes that the aging of legacy cinema systems will provide increasing opportunities for growth [14] Other Important Information - The acquisition of DCS Cinema was completed for $1.5 million in cash, expected to be accretive to the bottom line within two to three years [11][19] - The company has no long-term debt and maintains a solid cash position to support its operations and growth initiatives [19] Q&A Session Summary Question: Insights on DCS speaker line and revenue potential - The company intends to recoup the $1.5 million purchase cost of the DCS speaker line within two to three years [24] - The DCS line is well-respected and has significant potential that the previous owners may not have fully realized [25][26] Question: Compatibility with LEA power amplifiers - There are synergies between the DCS line and LEA power amplifiers, which could accelerate market acceptance [27] Question: Revenue opportunity for DCS speakers in theaters - Specific figures regarding revenue opportunities for outfitting theaters with DCS speakers were not available during the call [28] Question: International market approach and game plan - A clearer picture of the international market strategy will emerge after the onboarding process of the DCS business is completed [29]

Financial Data and Key Metrics Changes - Q4 2025 revenue declined 7.3% to $5.88 million compared to $6.35 million in Q4 2024 due to reduced customer project activity [13] - Gross profit decreased to $1.2 million in Q4 2025 from $1.43 million in Q4 2024, with a gross margin of 20.4% versus 22.5% in Q4 2024 [13] - Fiscal year 2025 revenue declined 9.9% to $18.15 million from $20.14 million in 2024, with an improved gross margin percentage of 25.2% compared to 23.3% in 2024 [15] - The company recorded a net loss of $948,000 or minus $0.10 per share in 2025, improving from a net loss of $1.372 million or minus $0.13 per share in 2024 [15] Business Line Data and Key Metrics Changes - The company experienced a solid sequential improvement in Q4 2025 revenue from $3.57 million in Q3 2025 [10] - Operating expenses were reduced by 26.5% to $1.39 million in Q4 2025 compared to $1.89 million in Q4 2024, achieved through headcount reduction and efficiency improvements [14] Market Data and Key Metrics Changes - The domestic box office revenue saw a 37% increase year-over-year, reaching approximately $2.6 billion in the June quarter, indicating a rebound in consumer demand [4] - The total domestic revenue for 2025 is expected to be approximately $9.4 billion, supported by major year-end releases [4] Company Strategy and Development Direction - The company aims to reduce exposure to business cycles in the cinema equipment industry and seeks to build a more predictable and recurring revenue base [5] - There is a focus on expanding international channels and evaluating complementary products or services to enhance business scope and geographical reach [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about new business opportunities driven by box office strength and customer commitment to upgrading theater technologies [3][5] - The company anticipates that revenue in the second half of 2026 will be stronger than in the first half, with an expected revenue of approximately $4.9 million in Q1 2026 [16] Other Important Information - The company has grown its net cash position to $5.7 million at the close of 2025, with no long-term debt [15] - The company is actively pursuing opportunities outside the U.S. but has not provided specific timelines for revenue generation from these efforts [28][29] Q&A Session Summary Question: Size of the funnel of new opportunities compared to the beginning of the year - The funnel of new opportunities continues to grow and evolve, with a positive outlook as customer activity increases [20] Question: Update on LEA professional power amplifiers - Management remains optimistic about LEA amplifiers, noting that the sales process involves lengthy testing before operational approval [21] Question: Status of bids for large sports venues - The company is still actively bidding on various projects related to large sports venues [22] Question: Details on annual recurring revenue base - The recurring revenue base of $8 to $9 million consists of operational items and is expected to grow as the customer base expands [24] Question: Margins on recurring revenue - Margins on recurring revenue are customer-specific and product-specific, generally aligning with the corporate average [25] Question: Opportunities outside the U.S. - The company is exploring both partnerships and potential employee placements outside the U.S. but has not provided specific timelines for revenue generation [27][29]