Financial Data and Key Metrics Changes - For Q4 2025, the company reported sales of $137 million, a 9% increase year-over-year, with diversified end markets growing 16% [4][21] - Full-year sales reached $541 million, up 5% from $515 million in 2024, with diversified end market sales accounting for 59% of overall revenue in Q4 [4][22] - The adjusted diluted earnings per share for Q4 were $0.62, up from $0.50 in Q4 2024, while full-year adjusted diluted earnings were $2.23, compared to $2.12 in 2024 [6][23] Business Line Data and Key Metrics Changes - Medical end market sales increased by 41% in Q4 compared to the prior year, with full-year sales at $85 million, up 21% from $70 million in 2024 [7][22] - Aerospace and defense sales for 2025 were $83 million, a 20% increase from $69 million in 2024, although Q4 sales were down 4% year-over-year [9][22] - Industrial end market sales rose 16% in Q4 compared to the prior year, with full-year sales at $140 million, up 12% from $125 million in 2024 [11][22] Market Data and Key Metrics Changes - The transportation market faced challenges, with sales of $234 million in 2025, down 7% from $250 million in 2024, and Q4 sales were essentially flat at $56 million [14][22] - The North American light vehicle market is expected to be in the $15-$16 million unit range, while European production is forecasted at $16-$17 million, and China volumes are expected to be around $32 million [17] Company Strategy and Development Direction - The company is focused on diversification to drive growth and margin expansion, with an emphasis on vehicle powertrain-agnostic solutions [59] - The strategic initiative "Evolution 2030" aims to enhance growth, operational rigor, and community engagement [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth momentum across diversified markets, with expectations for solid demand in medical and industrial sectors [16][18] - For 2026, the company anticipates sales in the range of $550-$580 million and adjusted diluted EPS between $2.30 and $2.45, assuming current market conditions persist [18] Other Important Information - The company generated $29 million in operating cash flow for Q4 and $102 million for the full year, maintaining a strong balance sheet with a cash balance of $82 million [23] - The company repurchased approximately 1.4 million shares totaling $57 million in 2025, returning $62 million to shareholders through dividends and buybacks [24] Q&A Session Summary Question: Insights on smart actuator customer preferences - Management confirmed ongoing development on both legacy and new platforms, with enhancements in cost-production efforts expected [30][31] Question: New product expectations for 2026 - Management highlighted approximately $100 million in new business awards and advancements in current sensing technologies [32] Question: Revenue impact from SyQwest and government funding - Management noted that revenue was lighter than expected due to timing of government funding but anticipates normalization in 2026 [38] Question: Visibility in industrial opportunities - Management indicated improving visibility and steady growth in industrial bookings, with a book-to-bill ratio of 1.11 [41] Question: Assessment of the transportation market - Management expressed a conservative outlook, suggesting the market may be bottoming out, with expectations for a mixed performance in light vehicle sales [42][43] Question: M&A market opportunities - Management is actively working on the M&A pipeline, focusing on diversification and niche technologies, but noted that valuations remain high [46] Question: Market assessment outside transportation - Management reported good momentum across diversified markets, with no significant concerns in any regions [48]

Financial Data and Key Metrics Changes - The company reported sales of $143 million for Q3 2025, an increase of 8% from $132 million in Q3 2024 [4] - Adjusted diluted EPS for Q3 2025 was $0.60, down from $0.61 in Q3 2024, primarily due to unfavorable impacts from recent U.S. tax legislation [5][16] - Adjusted gross margin improved to 38.9%, up 66 basis points year-over-year [15] - Operating cash flow for Q3 2025 was $29 million, compared to $35 million in Q3 2024 [17] Business Line Data and Key Metrics Changes - Diversified end market sales increased by 22% year-over-year, accounting for 59% of overall company revenue [4][5] - Transportation sales decreased by 7% compared to the same period last year, totaling $58.5 million [10] - SideQuest revenues rose to $8.8 million, with bookings up 29% from the prior year [8][15] Market Data and Key Metrics Changes - Aerospace and defense sales increased by 23% year-over-year [7] - Medical end market sales were up 22% compared to Q3 2024, with bookings increasing by 8% [5][6] - Industrial market sales improved by 21% year-over-year, with a 9% sequential increase [9] Company Strategy and Development Direction - The company aims to transition from a component supplier to a supplier of sensors, transducers, and subsystems, as evidenced by recent naval defense contract awards [8] - The focus remains on strong cash generation, appropriate capital allocation, and supporting organic growth and strategic acquisitions [17] - The company is monitoring the tariff environment and adapting to cost and price adjustments in collaboration with customers and suppliers [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for medical, aerospace, and defense markets, despite mixed signals from the transportation sector [25][48] - The company anticipates continued strength in therapeutic products, while diagnostic ultrasound demand remains soft [11][50] - Future revenue guidance was narrowed to a range of $535 to $545 million, with adjusted diluted EPS expected between $2.20 and $2.25 [14] Other Important Information - The company repurchased 400,000 shares for approximately $17 million during the quarter, returning a total of $44 million to shareholders through dividends and buybacks year-to-date [17] - The balance sheet remains strong with a cash balance of $110 million and long-term debt of $91 million [17] Q&A Session Summary Question: Guidance on revenue and EPS - Management raised the midpoint of revenue guidance while lowering EPS guidance due to tax impacts and mixed market signals [22][24] Question: Transportation customers' production rates for 2026 - The transportation market outlook is mixed, with some OEMs optimistic and others cautious, but solid bookings were noted [25] Question: Gross margin contribution by end markets - Margins are good across diversified end markets, with medical, industrial, aerospace, and defense performing well, while transportation lags [26][27] Question: Tax impact in 2026 - The adverse tax impact from U.S. legislation is expected to continue into 2026, with a projected tax rate in the low 20% range [37][38] Question: SideQuest revenue contribution - SideQuest is expected to show seasonal revenue patterns, with a positive outlook for future awards and revenue growth [42] Question: Operating expenses increase - The increase in operating expenses is primarily due to a $4.2 million reserve increase and higher equity-based compensation [43]