Financial Data and Key Metrics Changes - The company reported a record quarterly revenue of $6.2 million for Q4 2025, compared to $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][23] - Gross margins for Q4 2025 were 13%, up from 10% in Q3 2025 but down from 22% in Q4 2024, with annual gross margins at 18% compared to 30% in the prior year [25][28] - The company expects fiscal 2026 revenue to reach approximately $25 million, a 30% increase from $19 million in 2025, with gross margins projected to improve to around 30% [21][25] Business Line Data and Key Metrics Changes - Production revenue for Q4 2025 was $5.1 million, up from $3.3 million in the prior quarter and $2.8 million in the year-ago quarter, while engineering revenue was $1.1 million, down from $1.9 million year-over-year [23] - 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 decline 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 has seen a significant increase in production demand from its aerospace and surgical robotics customers, with a backlog for the aerospace program reaching nearly $9 million [10][24] - The transition of the single-use cystoscope program to production has faced challenges but is expected to improve profitability through design updates and pricing renegotiations [12][13] Company Strategy and Development Direction - The company is focusing on expanding its production capabilities and has invested in new facilities to support growth, including a move to a new headquarters in Littleton, Massachusetts [7][8] - The management emphasizes the importance of advancing multiple products from the development pipeline into production, with expectations of two to three programs transitioning to production each year [14][15] - The company aims for long-term gross margins of 40% and is working on improving operational efficiencies and production yields [21][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing high growth expectations for the production business and confidence in the visibility of ongoing programs [30] - The company acknowledges challenges faced in gross margins during fiscal 2025 but expects substantial recovery in fiscal 2026 as production scales up [15][21] - Management highlighted the importance of addressing operational challenges and building internal capacity to support long-term business results [30][19] Other Important Information - The company has recently hired key personnel, including a new Chief Operating Officer, to enhance operational performance [20][19] - Adjusted EBITDA for fiscal 2025 was negative $3.7 million, compared to negative $1.6 million in fiscal 2024, with cash at approximately $1.8 million and debt below $1.9 million [28][29] Q&A Session Summary Question: Guidance on revenue for 2026 - Management acknowledged being conservative in their guidance, noting a decline in revenue from the micro-optics lab and the impact of tooling and fixturing revenue on gross margins [35][36] Question: Medical program pricing and reimbursement - Management confirmed that the client agreed to cover higher costs due to initial production difficulties, with a negotiated step-down in pricing expected as issues are resolved [40][41] Question: Tariff reimbursements - Management stated that verbal agreements for tariff reimbursements are in place, with documentation pending [42][43] Question: Engineering resources and project pipeline - Management indicated that engineering resources will be progressively filled throughout 2026, with several programs already lined up for development [49][50] Question: Challenges with the second single-use program - Management reported that the second single-use program is progressing well, learning from the challenges faced with the cystoscope program [62][64] Question: Future gross margin expectations - Management confirmed that gross margins are expected to improve significantly in the latter half of fiscal 2026, driven by operational improvements [66]

Financial Data and Key Metrics Changes - The company reported a record quarterly revenue of $6.2 million for Q4 2025, compared to $4.2 million in the prior quarter and $4.7 million in Q4 2024, leading to an annualized run rate of approximately $25 million [6][26] - For the fiscal year 2025, total revenue was flat at $19.1 million compared to the previous year, masking the transition from an engineering-focused business to a manufacturing enterprise [26] - Gross margins for Q4 2025 were 13%, up from 10% in Q3 but down from 22% in Q4 2024, with annual gross margins at 18% compared to 30% in the prior year [28][29] 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 was $1.1 million, down from $1.9 million year-over-year [26] - The systems manufacturing business is expected to grow at least 75% in fiscal 2026, driven by the expansion of two major production programs [17][24] - Revenue from the micro-optics lab is projected to decline from $2.1 million in fiscal 2025 to $1.3 million in fiscal 2026 due to timing of a large defense customer reorder [27] Market Data and Key Metrics Changes - The company anticipates revenue for fiscal 2026 to reach approximately $25 million, driven largely by the systems manufacturing business, which is forecasted to increase from $8.3 million in fiscal 2025 to $14.5 million in fiscal 2026 [24][27] - The aerospace program's revenue increased significantly, with Q4 revenue for this program reaching nearly $2 million, and a backlog of nearly $9 million [11][12] Company Strategy and Development Direction - The company has moved its headquarters to Littleton, Massachusetts, to support growth and access a broader engineering talent pool [9][10] - Investments are being made in facilities and personnel to enhance production capabilities and address operational challenges [21][22] - The company aims for long-term gross margins of 40% and expects to recover positive adjusted EBITDA in fiscal 2026 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a strong production backlog and the transition of major programs from development to production [33] - The company is addressing gross margin challenges and expects substantial recovery in fiscal 2026, with improved manufacturing yields and better pass-through of tariffs [19][24] Other Important Information - The company has hired a new Chief Operating Officer with extensive experience in medical device production to enhance operational efficiency [22][23] - Tariff costs in Q4 2025 were approximately $180,000, impacting gross margins, but agreements for tariff reimbursement are being finalized with major customers [20][21] 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 [37] Question: Medical program pricing adjustments - The customer agreed to cover higher initial production costs, with a negotiated step-down in pricing as production stabilizes [40] Question: Tariff reimbursements - Management confirmed verbal agreements for tariff reimbursements, with no risks associated with documentation [41] Question: Engineering resources and project pipeline - Engineering resources are expected to be progressively filled throughout 2026, with multiple programs lined up for production [46] 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 [52]

Financial Data and Key Metrics Changes - For Q2 2025, revenue was $4.5 million, down from $4.8 million in Q2 2024, slightly below the expected $5 million [38] - Gross margins decreased to 24% from 30% year-over-year [39] - Net loss for the quarter was $910,000 compared to a net loss of $704,000 in the previous year [42] - Adjusted EBITDA was negative $555,000, worsening from a negative adjusted EBITDA of $269,000 last year [42] Business Line Data and Key Metrics Changes - Manufacturing revenue increased by 42% from Q1 to Q2, marking the largest quarter-over-quarter production increase in many years [11] - The single-use cystoscope program and defense aerospace program are driving production increases, with multimillion-dollar backlogs for both [26][27] - The Ross Optical components business has stabilized at approximately $1 million per quarter due to short-term market forces [32] Market Data and Key Metrics Changes - The single-use endoscope market is projected to grow at annual rates of up to 20% [14] - The company is positioned to benefit from the transition to CMOS-based endoscope systems, which are increasingly favored in the market [8][14] Company Strategy and Development Direction - The launch of the Unity imaging platform is expected to enhance the company's competitive position and accelerate time to market for new products [19][21] - The strategy involves leveraging existing designs to create baseline platforms that can be customized for specific customer needs, reducing development risks [18][19] - The company plans to double production capacity for key programs by expanding clean room space and increasing workforce [85][87] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in Q3 and Q4, driven by strong backlogs and the return of normalized engineering operations [46][49] - The company anticipates achieving record production revenue levels in Q3 and Q4, with forecasts of $5 million in Q3 and $6 million in Q4 [43][49] - Management acknowledged capacity limitations as a challenge but emphasized robust plans to address these requirements [34][81] Other Important Information - The Unity platform was launched at major trade shows, receiving positive feedback and generating new development opportunities [24][25] - The company is finalizing facility plans to support growth and expand manufacturing capabilities [44] Q&A Session Summary Question: Update on defense contracts with specification problems - The company has two significant defense aerospace programs, one running steadily at $2 million to $2.5 million annually, and the other has resumed production after resolving measurement errors [55][56][59] Question: Details on the Unity platform - The Unity platform allows for accelerated development timelines by using baseline designs that can be quickly customized for customer needs, potentially reducing time to market by 6 to 12 months [60][70] Question: Reasons for lower-than-expected revenue in Q2 - The product development group faced delays due to the Unity launch and customer-related events that postponed activities, but these are expected to resolve in Q3 [72][76] Question: Plans to increase capacity - The company is expanding clean room capacity and increasing workforce by approximately 80% to meet the substantial backlog in production [84][87]