Financial Data and Key Metrics Changes - Consolidated net sales for Q1 of fiscal 2026 increased by 4.4% to $16.4 million compared to $15.7 million for the same period last year [7] - Gross profit increased by 16.1% to $5.4 million in Q1 of fiscal 2026 compared to $4.6 million for the same period last year, with gross profit margin rising to 32.7% from 29.4% [9][10] - Sales order backlog and forward load increased more than 50% to $10.4 million as of the end of Q1 compared to $6.6 million for the same period last year [5][9] Business Line Data and Key Metrics Changes - Net sales in both enterprise and specialty markets increased compared to the same period last year, with net sales to customers outside the United States rising by 18% [8] - SG&A expenses increased to $5.6 million in Q1 of fiscal 2026, compared to $5.5 million for the same period last year, but as a percentage of net sales, it decreased to 33.8% from 34.7% [10] Market Data and Key Metrics Changes - The company experienced growth in the data center market, with significant activity and customer requests for quotes particularly noted in January [13] - The overall market improvements in the industry were reflected in the sales growth, particularly in the severe-duty market [8][16] Company Strategy and Development Direction - The company is focused on disciplined execution to drive value for customers and shareholders, with a strong emphasis on growth in targeted markets, especially the data center sector [5][14] - The strategic collaboration with Lightera is expected to enhance product offerings and generate additional revenue opportunities [17][23] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about potential sales growth for fiscal year 2026, citing increased sales order backlog and forward load as positive indicators [14][28] - The company expects the second half of fiscal 2026 to show further growth, building on the momentum from the first quarter [27] Other Important Information - The company is currently hiring in manufacturing operations to meet anticipated personnel needs for fiscal year 2026 [22] - Management noted that the collaboration with Lightera has already begun to generate more opportunities, contributing to revenue growth [23] Q&A Session Summary Question: Update on project delays - Management indicated that there are currently no significant project delays impacting results [33] Question: Backlog growth not translating into revenue growth - Management explained that backlog is a measurement at a point in time and noted that sales increased by 9.5% in total during fiscal year 2025, with strong sales in Q3 and Q4 [35]

During the first quarter, we delivered net sales and gross profit growth, largely driven by increased demand across our enterprise and specialty markets and the positive impact of our operating leverage. During the first quarter of 2026, net sales increased 4.4% and gross profit increased 16.1% compared to the same period last fiscal year, and gross profit margin increased to 32.7%. Additionally, our sales order backlog and forward load increased more than 50% to $10,400,000 as of the end of the first quart ...