Financial Data and Key Metrics Changes - The company reported a record quarterly revenue of $6.2 million for Q4 2025, up from $4.2 million in the previous quarter and $4.7 million in Q4 2024, leading to an annualized run rate of approximately $25 million [5][22] - For the fiscal year 2025, total revenue was flat at $19.1 million compared to the prior year, masking the transition from an engineering-focused business to a manufacturing enterprise [22][24] - Gross margins for Q4 2025 were 13%, compared to 10% in the prior quarter and 22% in Q4 2024, with annual gross margins at 18%, down from 30% in the previous year [24][27] 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 decreased to $1.1 million from $1.9 million year-over-year [22][24] - The systems manufacturing business is expected to grow at least 75% in fiscal 2026, driven by the expansion of two major production programs [14][21] - Revenue from the micro-optics lab is projected to drop from $2.1 million in fiscal 2025 to $1.3 million in fiscal 2026 due to timing of a large defense customer reorder [24] Market Data and Key Metrics Changes - The company anticipates fiscal 2026 revenues to reach approximately $25 million, an increase of over 30% compared to $19 million in 2025, primarily driven by the systems manufacturing business [21][22] - The backlog for the aerospace program has reached nearly $9 million, indicating strong demand and future revenue potential [10] Company Strategy and Development Direction - The company is focusing on transitioning programs from development to production, with expectations of two to three programs moving to production each year over the next two years [14][15] - Investments have been made in facilities and talent to support growth, including relocating headquarters to Littleton, Massachusetts, and hiring new operational staff [7][19] - The long-term margin goal remains at 40%, with expectations of improved gross margins in fiscal 2026 due to better manufacturing yields and reduced low-margin revenue [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong production backlog and the sustainability of higher revenue levels [29] - The company is addressing gross margin challenges and expects significant recovery in fiscal 2026, with gross margins projected at approximately 30% [21][24] - Management highlighted the importance of learning from production challenges and improving operational efficiency as the company matures [29] Other Important Information - The company has recently hired a new Chief Operating Officer with extensive experience in medical device production to enhance operational performance [20] - Tariff reimbursement agreements are in progress, which are expected to positively impact margins [18][41] 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 [34][35] Question: Medical program pricing adjustments - The client has agreed to cover higher costs due to initial production difficulties, with a plan to ramp down prices as issues are resolved [39][40] Question: Tariff reimbursements - Management confirmed verbal agreements on tariff reimbursements, with documentation pending [41][42] Question: Engineering resources and project pipeline - Engineering resources are expected to be progressively filled throughout 2026, with several programs already lined up for development [48][49] 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 [61][63]