Financial Data and Key Metrics Changes - The company reported a record quarterly revenue of $6.2 million for Q4 of fiscal 2025, compared to $4.2 million in the previous quarter and $4.7 million in Q4 of fiscal 2024, leading to an annualized run rate of approximately $25 million [5][23] - Gross margins for Q4 were 13%, up from 10% in the prior quarter but down from 22% in the same quarter last year, 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, an increase of over 30% from $19 million in fiscal 2025, with gross margins projected to improve to around 30% [21][25] Business Line Data and Key Metrics Changes - Production revenue for Q4 was $5.1 million, up from $3.3 million in the previous 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 two major programs from development to production has provided increased visibility and confidence in future revenue growth [6][7] 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 is optimistic about the future, citing a strong backlog and the potential for substantial growth as production programs expand [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges with gross margins in Q3 and Q4 of fiscal 2025 but expressed confidence in recovery and improvement in fiscal 2026 [15][21] - The company is taking steps to address production yield issues and has renegotiated pricing with customers to improve profitability [12][13] Other Important Information - The company has hired new manufacturing and quality engineers to strengthen its operations team and improve manufacturing efficiency [19][20] - The company expects to recover positive adjusted EBITDA in the range of half a million dollars for fiscal 2026 [21] 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 but expecting higher margin production revenue to replace lower margin tooling and fixturing revenue [35][37] Question: Medical program pricing adjustments - Management explained that they have negotiated higher costs with their medical program customer to cover initial production difficulties, with a plan to ramp down prices as issues are resolved [40][41] Question: Tariff reimbursements - Management confirmed they are in verbal agreements for tariff reimbursements and are finalizing documentation [42][43] Question: Engineering resources and project pipeline - Management indicated that engineering resources will be progressively filled throughout 2026, with multiple programs lined up for production [49][50] Question: Challenges with the second single-use program - Management reported that the second single-use program is progressing well, learning from challenges faced in the cystoscope program, and expects a smoother ramp-up [62]

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]