Financial Data and Key Metrics Changes - Consolidated revenues for Q4 and the fiscal year were $23.5 million and $96.5 million, respectively, both down 10% from the prior year periods [10][11] - Gross profits for Q4 and the fiscal year were $8.4 million and $33.4 million, with gross margins of 35.8% and 34.6%, respectively, compared to 35.1% and 33.8% in the prior year [11][12] - Loss from continuing operations for Q4 was $613,000 or negative $0.01 per diluted share, and for the fiscal year, it was $34.7 million or negative $0.32 per diluted share [14][15] - Non-GAAP adjusted EBITDA was negative $306,000 for Q4 and negative $1.2 million for the fiscal year, showing improvement compared to the prior year [15][16] Business Line Data and Key Metrics Changes - Professional contract staffing services revenues for Q4 and the fiscal year were $20.4 million and $84.7 million, both down 11% from the prior year [10][11] - Direct hire revenues for Q4 and the fiscal year were $3.1 million and $11.8 million, down 9% and 3%, respectively, compared to the prior year [10][11] Market Data and Key Metrics Changes - The hiring environment for staffing services has been challenging since the second half of 2023, with many businesses implementing layoffs and hiring freezes [3][4] - The impact of macroeconomic uncertainty, interest rate volatility, and inflation has led to a cooling effect on U.S. employment [3][4] Company Strategy and Development Direction - The company is focusing on streamlining core operations and improving productivity to match lower business volumes, with a goal to restore profitability in fiscal 2026 [7][13] - There is a renewed focus on VMS and MSP sourced business, including the integration of AI technology into recruiting and sales processes [7][13] - The company aims to pursue acquisition opportunities, particularly in AI consulting, cybersecurity, and IT consulting [16][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in being positioned to meet increased demand from existing customers and win new business as economic uncertainty subsides [8][9] - The company has paused share repurchases and is focused on restoring growth and profitability [8][9] Other Important Information - The company has a strong balance sheet with $21.4 million in cash and no outstanding borrowings, indicating substantial liquidity [15][16] - The company has consolidated or closed about six offices in response to lower demand [25][26] Q&A Session Summary Question: What is the company's timeline for achieving your goal of $1 billion in revenue per year? - The timeline is uncertain due to changes in the market and the pandemic, but the company is committed to returning to growth [20] Question: What changes are going to be made to raise the stock price? - The first step is to return to profitability, followed by pivoting the business to grow despite current challenges [21] Question: Are you consolidating offices given lower demand? - Yes, the company has consolidated or closed about six offices over the last two to three years [25] Question: Will you consider initiating a buyback once you have visibility into achieving profitability again? - This option is evaluated at every board meeting, and restoring profitability will influence this decision [27] Question: Can you elaborate on why there is such a focus on growing the company via acquisitions versus increasing future earnings per share? - The focus on acquisitions is to position the company for better growth and profitability rather than immediate buybacks [28]

Financial Data and Key Metrics Changes - Consolidated revenues for Q4 and the fiscal year were $23.5 million and $96.5 million, respectively, both down 10% from the prior year periods [10][11] - Gross profits for Q4 and the fiscal year were $8.4 million and $33.4 million, with gross margins of 35.8% and 34.6%, respectively, compared to 35.1% and 33.8% in the prior year [11][12] - Loss from continuing operations for Q4 was $613,000 or negative $0.01 per diluted share, and for the fiscal year, it was $34.7 million or negative $0.32 per diluted share [14][15] - Non-GAAP adjusted EBITDA was negative $306,000 for Q4 and negative $1.2 million for the fiscal year, showing improvement compared to the prior year [15][16] Business Line Data and Key Metrics Changes - Professional contract staffing services revenues for Q4 and the fiscal year were $20.4 million and $84.7 million, both down 11% from the prior year [10][11] - Direct hire revenues for Q4 and the fiscal year were $3.1 million and $11.8 million, down 9% and 3%, respectively, compared to the prior year [10][11] Market Data and Key Metrics Changes - The company continues to face challenging conditions in the hiring environment, with many client initiatives on hold and a focus on layoffs and hiring freezes [4][5] - The staffing industry is experiencing a cooling effect due to macroeconomic uncertainties, interest rate volatility, and inflation [3][4] Company Strategy and Development Direction - The company aims to restore profitability and growth by focusing on cost reduction, streamlining operations, and integrating AI technology into processes [7][16] - There is a commitment to pursuing acquisition opportunities, particularly in AI consulting, cybersecurity, and IT consulting [16][30] - The company has paused share repurchases and is considering them as a future capital allocation strategy once profitability is restored [8][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet increased demand as economic conditions improve [8][17] - The focus remains on returning to profitability as soon as possible, with a goal set for mid-fiscal 2026 [13][16] Other Important Information - The company has a strong liquidity position with $21.4 million in cash and no outstanding borrowings [15] - The working capital ratio as of September 30, 2025, was 4.1 to 1, indicating a solid financial position [15] Q&A Session Summary Question: What is the company's timeline for achieving your goal of $1 billion in revenue per year? - The timeline is uncertain due to changes in the market and the pandemic, but the company is committed to returning to growth [20] Question: What changes are going to be made to raise the stock price? - The first step is to return to profitability, followed by a pivot in the business to grow despite current challenges [21] Question: Are you consolidating offices given lower demand? - Yes, the company has consolidated or closed about 6 offices over the last two to three years [25] Question: Will you consider initiating a buyback once you have visibility into achieving profitability again? - This is a strategic option that is evaluated regularly at the board level [27] Question: Can you elaborate on why there is such a focus on growing the company via acquisitions versus increasing future earnings per share? - The focus on acquisitions is to position the company for better growth and profitability rather than immediate buybacks [28] Question: What multiples do you realistically want to buy at for acquisitions? - Multiples range from six to ten times EBITDA, depending on the growth rate of the business [29] Question: Is the company committed to leveraging offshore or international sales and recruiting? - Yes, the company currently has an offshore team in India and aims to expand its utilization [31]

Integra Resources (NYSEAM:ITRG) DeLamar Project 2025 Feasibility Study Results Summary Company Overview - **Company**: Integra Resources - **Project**: DeLamar Heap Leach Project - **Date of Call**: December 18, 2025 Key Industry and Company Insights - **Industry**: Precious Metals Mining - **Project Type**: Oxide gold-silver heap leach project Core Findings from the Feasibility Study - The feasibility study indicates that DeLamar is a large-scale, low-cost oxide heap leach project with robust economics, rapid payback, and a simplified financial development plan [4][5] - At base case metal prices of $3,000 per ounce gold and $35 per ounce silver, the project delivers an after-tax NPV of $774 million and an after-tax IRR of 46%, with a payback period of just 1.8 years [4] - Current spot prices could increase NPV to approximately $1.7 billion and IRR to nearly 90% [4] - The study reflects a material reduction in development risk, with a simpler flow sheet and mine plan designed for strong early cash flow [5][6] Project Development and Risk Mitigation - Significant work has been done to de-risk the project since 2017, including detailed environmental studies and resource upgrades [6] - Key changes in the study include: - Transition to an oxide-only development case - Adoption of a two-heap leach configuration - Improved water management and reduced surface disturbance [7][8] - The project is positioned favorably within the U.S. regulatory environment, benefiting from supportive political conditions [6][9] Mineral Resources and Reserves - The feasibility study includes an updated mineral resource estimate, incorporating historical stockpiles into the mine plan [14] - Reserves are limited to oxide and heap-leachable material to streamline permitting and reduce capital intensity [14] - The project has significant future upside potential, including over 2.4 million ounces of gold equivalent in sulfide resources excluded from the current economic analysis [26][27] Economic Metrics and Production Profile - Total capital costs are estimated at approximately $750 million, with a total site operating cost of $10.29 per ton of ore processed [21][22] - The project is expected to produce an average of 119,000 gold equivalent ounces annually in the first five years, with all-in sustaining costs well below the industry average [22][23] - The project is projected to generate approximately $165 million in annual after-tax free cash flow during the first five years [24] Community and Stakeholder Engagement - The project is expected to support over 300 direct long-term jobs and contribute significantly to the local economy through taxes and royalties [27][28] - There has been extensive stakeholder engagement over the past seven years, shaping the mine design and ensuring community interests are reflected [28] Future Plans and Permitting - The company plans to provide guidance on the permitting timeline in Q1 2026, with expectations for a shorter timeline than the previous 2-3 years [32][39] - The company is also exploring M&A opportunities to fill growth gaps before DeLamar's production begins [33] Conclusion - The feasibility study positions DeLamar as a project with strong economics and a simplified development plan, ready to advance through permitting and into construction [29][30]

Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million for fiscal year 2024 [15] - Gross profit grew by 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024, with gross profit margin increasing to 30.9% from 27.3% [16][19] - FC&A expenses as a percentage of net sales decreased to 31.4% in fiscal year 2025 from 32.2% in fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sales increases were noted in both enterprise and specialty markets during fiscal year 2025 [15] - In the fourth quarter of fiscal year 2025, consolidated net sales increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [16] Market Data and Key Metrics Changes - The sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million compared to $5.7 million as of October 31, 2024 [15] - The company is optimistic about growth opportunities in the data center market, particularly due to the demand for cloud computing and artificial intelligence applications [8][12] Company Strategy and Development Direction - The company entered into a strategic collaboration with Lyttera to expand product offerings and solutions, particularly for the data center and enterprise sectors [9][10] - OCC aims to leverage its core strengths and capabilities to drive long-term value for shareholders, focusing on expanding its presence in targeted market sectors [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for future growth in fiscal year 2026, driven by successful execution of growth strategies [5][13] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [21][23] Other Important Information - OCC recorded a net loss of $1.5 million for fiscal year 2025, an improvement from a net loss of $4.2 million in fiscal year 2024 [19] - SG&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024 [17] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations of revenue growth in fiscal year 2026 [21] Question: Improvements in OCC and markets - OCC continues to see strength in most targeted market sectors, with some project delays but no significant negative impact on growth [22] Question: Potential sales for 2026 and 2027 - Management is optimistic about potential increases in sales based on expected opportunities in fiscal 2026, particularly in the second half [25] Question: Focus on tier two data centers - OCC's products are best suited for tier two or multi-tenant data centers, with significant growth opportunities expected in this segment [29] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [30] Question: Hiring and operational expenses - OCC has open positions primarily in manufacturing, with no significant increase in operating expenses expected [31] Question: Progress of the Lyttera collaboration - The collaboration is going well, with expectations of growing opportunities in fiscal year 2026 [32] Question: Lyttera's investment and demand for OCC - OCC cannot comment on Lyttera's specific business plans or announcements [33]

Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million for fiscal year 2024 [14] - Gross profit grew by 24.1% to $22.6 million in fiscal 2025 compared to $18.2 million for fiscal 2024, with gross profit margin increasing to 30.9% from 27.3% [15][16] - SG&A expenses increased to $23 million in fiscal year 2025 compared to $21.5 million in fiscal year 2024, but as a percentage of net sales, it decreased to 31.4% from 32.2% [17] Business Line Data and Key Metrics Changes - Sales increases were noted in both enterprise and specialty markets during fiscal year 2025 [14] - In the fourth quarter of fiscal year 2025, net sales increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [15] Market Data and Key Metrics Changes - The sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million compared to $5.7 million as of October 31, 2024, indicating growth opportunities [14] Company Strategy and Development Direction - The company entered into a strategic collaboration with Lyttera to expand product offerings, particularly for the data center and enterprise sectors [5][9] - OCC is focusing on expanding its presence in targeted market sectors and enhancing product solutions, especially in response to the growing demand for cloud computing and AI applications [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in fiscal year 2026, driven by the successful execution of growth strategies and strong positioning in target markets [4][12] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [21][25] Other Important Information - OCC recorded a net loss of $1.5 million for fiscal year 2025, an improvement from a net loss of $4.2 million in fiscal year 2024 [18] - The company noted that gross profit margin percentages are heavily dependent on product mix and may vary based on changes in product mix [16] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations for impact in fiscal year 2026 [21] Question: Improvements in OCC and markets - OCC continues to see strength in most targeted market sectors, with some project delays but no significant negative impact on growth [22] Question: Potential sales for 2026 and 2027 - Management does not provide forward-looking guidance but is optimistic about potential increases in sales based on expected opportunities [27] Question: Financial metrics behind operational leverage - Management stated that operating leverage results from fixed costs being spread over higher sales, but no specific formula can be provided [29] Question: Seasonality expectations for 2026 - Management confirmed that seasonality impacts are expected in the first and second quarters, although larger orders could alter this [31] Question: Focus on tier 2 data centers - OCC's products are best suited for tier 2 or multi-tenant data centers, with significant growth opportunities anticipated in this segment [32] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [33] Question: Recent hiring and operational expenses - Management noted ongoing hiring efforts, primarily in manufacturing, without significant increases in operating expenses expected [34] Question: Progress of the Lyttera collaboration - The collaboration is progressing well, with expectations for growing opportunities in fiscal year 2026 [36] Question: Lyttera's investment and demand for OCC - OCC cannot comment on Lyttera's specific business plans or announcements [37]

Financial Data and Key Metrics Changes - Consolidated revenues for Q4 2025 were $23.5 million, down 10% from the prior year, and $96.5 million for the fiscal year, also down 10% [11][12] - Gross profits for Q4 were $8.4 million with a gross margin of 35.8%, while for the fiscal year, gross profits were $33.4 million with a gross margin of 34.6% [5][12] - Loss from continuing operations for Q4 was $613,000 or $0.01 per diluted share, and for the fiscal year, it was $34.7 million or $0.32 per diluted share [6][16] - Non-GAAP adjusted EBITDA was negative $306,000 for Q4 and negative $1.2 million for the fiscal year, showing improvement compared to the prior year [5][17] - The company had a working capital ratio of 4.1 to 1 and positive free cash flow of $533,000 for the fiscal year [17] Business Line Data and Key Metrics Changes - Professional contract staffing services revenues for Q4 were $20.4 million, down 11%, and for the fiscal year, $84.7 million, also down 11% [11][12] - Direct hire revenues for Q4 were $3.1 million, down 9%, and for the fiscal year, $11.8 million, down 3% [11][12] - The decrease in gross profit dollars was mainly due to lower volumes in professional contract staffing services, while gross margins improved due to a higher mix of direct hire placements [12] Market Data and Key Metrics Changes - The staffing industry continues to face challenges due to macroeconomic uncertainties, interest rate volatility, and inflation, leading to a cooling effect on U.S. employment [3][4] - Many businesses have implemented layoffs and hiring freezes, impacting job orders for both contract and direct hire placements [4][5] Company Strategy and Development Direction - The company aims to restore profitability and growth by focusing on cost reduction, streamlining operations, and integrating AI technology into recruiting and sales processes [8][15] - The acquisition of Hornet Staffing is seen as a strategic move to enhance growth and profitability, with plans for further acquisitions in AI consulting and IT sectors [10][18] - The company is exploring opportunities in offshore and nearshore recruiting to expand its capabilities [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet increased demand as economic conditions stabilize [9] - The focus remains on returning to profitability as soon as possible, with expectations for improvements in mid-fiscal 2026 [15][18] - Management acknowledged the importance of AI in both reducing workforce needs and enhancing business growth [40] Other Important Information - The company has paused share repurchases and is considering them as a future capital allocation strategy once profitability is restored [9][30] - The liquidity position remains strong with $21.4 million in cash and no outstanding borrowings [17] Q&A Session Summary Question: What is the company's timeline for achieving your goal of $1 billion in revenue per year? - The timeline is uncertain due to changes in the market and the pandemic, but the company is committed to returning to growth [22] Question: What changes are going to be made to raise the stock price? - The first step is to return to profitability, followed by a pivot in the business to leverage AI and automation [23] Question: Are you consolidating offices given lower demand? - Yes, the company has closed about 6 offices over the past two to three years [28] Question: Would you consider initiating a buyback once you have visibility into achieving profitability again? - This is a strategic option evaluated at every board meeting, but profitability must be restored first [30] Question: Can you elaborate on why there is such a focus on growing the company via acquisitions versus increasing future earnings per share? - The focus on acquisitions is to enhance growth and profitability, which is seen as a better return than stock buybacks at this time [31]

Financial Data and Key Metrics Changes - Consolidated net sales for fiscal year 2025 increased by 9.5% to $73 million compared to $66.7 million in fiscal year 2024 [14] - Gross profit grew by 24.1% to $22.6 million in fiscal year 2025, with gross profit margin increasing to 30.9% from 27.3% in fiscal year 2024 [15][16] - The company recorded a net loss of $1.5 million or $0.18 per share for fiscal year 2025, an improvement from a net loss of $4.2 million or $0.54 per share in fiscal year 2024 [18] Business Line Data and Key Metrics Changes - Sales order backlog and forward load at the end of fiscal year 2025 was $7.3 million, up from $5.7 million as of October 31, 2024 [14] - Net sales for the fourth quarter of fiscal year 2025 increased by 1.8% to $19.8 million compared to $19.5 million for the same period in the prior year [14] Market Data and Key Metrics Changes - The company experienced sales increases in both enterprise and specialty markets during the fourth quarter of fiscal year 2025 compared to the same period in fiscal year 2024 [15] - The demand for cloud computing and artificial intelligence applications is expected to drive growth in the data center market, which OCC is targeting [8][20] Company Strategy and Development Direction - OCC entered into a strategic collaboration with Lyttera to expand product offerings and solutions, particularly for the data center and enterprise sectors [9][10] - The company aims to leverage its core strengths and capabilities to drive long-term value for shareholders, focusing on expanding its presence in targeted market sectors [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in fiscal year 2026, driven by the successful execution of growth strategies and strong positioning in target markets [5][12] - The company anticipates that the data center market will provide significant revenue growth opportunities in fiscal year 2026 [20][23] Other Important Information - OCC's FC&A expenses as a percentage of net sales decreased to 31.4% in fiscal year 2025 from 32.2% in fiscal year 2024, indicating improved operational efficiency [17] - The company has a broad geographic footprint, selling into approximately 50 countries annually, which supports its market presence [11] Q&A Session Summary Question: Update on the data center opportunity - Management believes the data center markets are strong and will continue to grow, with expectations for revenue growth in fiscal year 2026 [20] Question: Improvements in OCC and market trends - OCC continues to see strength in most targeted market sectors, with some project delays not expected to negatively impact growth [22] Question: Hyperscale data center opportunities - OCC's product solutions are best suited for multi-tenant and enterprise data centers, with significant growth opportunities anticipated in these segments [23] Question: Financial metrics behind operational leverage - Management indicated that operating leverage results from fixed costs being spread over higher sales, but specific formulas were not provided [27] Question: Seasonality expectations for 2026 - OCC expects to see typical seasonality impacts in the first and second quarters of fiscal year 2026 [28] Question: Capacity constraints - OCC believes it has the capacity to capture expected growth opportunities in fiscal year 2026 [30] Question: Hiring and operational expenses - OCC has open positions primarily in manufacturing, with no significant increase in operating expenses expected [31] Question: Progress of the Lyttera collaboration - The collaboration is progressing well, with expectations for growing opportunities in fiscal year 2026 [32] Question: Lyttera's investment and demand for OCC - OCC refrained from commenting on Lyttera's specific business plans or announcements [34]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 45% year-over-year to $22 million, with full-year revenue reaching $84 million, up nearly 80% from the previous year [5][6] - Fourth quarter net income was $7.1 million, or $0.39 per diluted share, compared to $3.2 million, or $0.18 per diluted share, in the prior year [25] - Adjusted EBITDA for the fourth quarter was $9.6 million, a 71% increase from $5.6 million in the previous year, while full-year adjusted EBITDA was $25 million, up just over 80% [6][25] Business Line Data and Key Metrics Changes - Product sales in the fourth quarter were $14.3 million, up from $9.8 million, driven by strong demand in the air transport sector [22] - Service revenue was $7.9 million, including $300,000 from the F-16 program and an increase of $1.3 million in non-recurring engineering services [22] - Gross profit for the fourth quarter was $14.1 million, up from $8.5 million, resulting in a gross margin of 63.2%, compared to 55.4% in the same period last year [23] Market Data and Key Metrics Changes - New orders in the fourth quarter were approximately $27 million, with a backlog of about $77 million as of September 30, 2025 [25][26] - The company expects to return to normal production levels for the F-16 in the first half of Fiscal 2026, following a pause in production during the transition to the Exton facility [22] Company Strategy and Development Direction - The company rebranded to Innovative Aerosystems to reflect its focus on advanced avionics solutions for various aviation markets [4] - The strategic framework includes a long-term target of $250 million in revenue with adjusted EBITDA margins of 25%-30%, driven by organic and inorganic growth [7][19] - Key growth initiatives include new product development, cross-selling, and expansion of military capabilities, particularly with the F-16 program [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to benefit from foundational investments made in recent years, with favorable end-market trends and a solid financial position [19] - The outlook for Fiscal 2026 anticipates organic revenue growth to be more modest due to the pull forward of revenues related to the F-16 platform [29][30] Other Important Information - The company completed a new five-year $100 million credit agreement, providing additional liquidity to support growth and acquisitions [17] - The engineering team has expanded significantly, representing a third of the total headcount, which is critical for achieving long-term growth objectives [12][13] Q&A Session Summary Question: Is the strength in sales driven by the F-16 or other military programs? - Management clarified that the sales strength is not solely related to the F-16, with approximately $2 million in revenue from the C-130 and other Boeing programs [32][33] Question: What are the assumptions underpinning the 2029 revenue targets? - The $250 million revenue target assumes high single-digit organic growth, supported by a disciplined acquisition strategy [34][35] Question: What are the expectations for gross margins moving forward? - Management projected EBITDA margins in the range of 25%-30%, driven by growth and investments in R&D [36][37] Question: What feedback was received on the Liberty Flight Deck? - Customers appreciated the customizable design and the ability to meet specific needs without significant non-recurring engineering costs [40][41] Question: What is the expected trajectory of revenue in the next four quarters? - Management refrained from providing specific forward-looking guidance but emphasized the focus on achieving the $250 million revenue target [57]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 45% year over year to $22 million, with full year revenue reaching $84 million, up nearly 80% from the previous year [5][6] - Fourth quarter net income was $7.1 million or $0.39 per diluted share, compared to $3.2 million or $0.18 per diluted share in the prior year [25] - Adjusted EBITDA for the fourth quarter was $9.6 million, a 71% increase from the previous year, while full year adjusted EBITDA was $25 million, up just over 80% [6][7] Business Line Data and Key Metrics Changes - Product sales in the fourth quarter were $14.3 million, up from $9.8 million in the same period last year, driven by strong demand in the air transport sector [22] - Service revenue was $7.9 million, including $300,000 from the F-16 program and an increase of $1.3 million in non-recurring engineering services [22] - Gross profit for the fourth quarter was $14.1 million, up from $8.5 million, resulting in a gross margin of 63.2%, up from 55.4% in the prior year [23] Market Data and Key Metrics Changes - The company reported a backlog of approximately $77 million as of September 30, 2025, with new orders in the fourth quarter totaling around $27 million [25][26] - The air transport market and business aviation sectors contributed significantly to revenue growth, with increased demand noted in the retrofit market [47] Company Strategy and Development Direction - The company rebranded to Innovative Aerosystems to better reflect its focus on advanced avionics solutions for various aviation markets [4] - The strategic framework includes a long-term target of $250 million in revenue with adjusted EBITDA margins of 25% to 30%, driven by both organic and inorganic growth [7][18] - Key growth initiatives include new product development, cross-selling, and expansion of military capabilities, particularly with the F-16 program [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to benefit from foundational investments made in recent years, with expectations for continued profitable growth [19] - The outlook for Fiscal 2026 anticipates organic revenue growth to be more modest due to the pull forward of revenues related to the F-16 platform [29][30] - The company plans to drive growth through market share gains, new product development, and disciplined organic growth strategies [30] Other Important Information - The company completed a five-year $100 million credit agreement, providing improved liquidity and flexibility for strategic initiatives [17] - Significant investments were made in engineering and infrastructure to support growth, including the expansion of the Exton facility [15][16] Q&A Session Summary Question: Is the strength in sales driven by military programs related to the F-16? - Management clarified that the strength is not solely from the F-16, with contributions also from the C-130 and other Boeing programs [32][33] Question: What are the assumptions underpinning the $250 million revenue target? - The target assumes high single-digit organic growth, supported by a disciplined acquisition strategy [35] Question: What did customers like most about the Liberty Flight Deck? - Customers appreciated the customizable design and the ability to meet specific needs without significant non-recurring engineering costs [40][41] Question: What should be expected in terms of capital expenditures in the next year? - Management indicated that major shifts in capital expenditures are not expected following the completion of the Exton facility expansion [60]

Financial Data and Key Metrics Changes - Total revenue for the second quarter grew by 9.3% to $2.8 billion, with an organic growth rate of 8.6% [4][6] - Operating income increased to $655.7 million, reflecting a 10.9% growth year-over-year [4][11] - Diluted EPS rose by 11% to $1.21 compared to the previous year [5][12] - Gross margin as a percentage of revenue was 50.4%, a 60 basis point increase from the prior year [4][11] Business Line Data and Key Metrics Changes - Organic growth by business segments: - Uniform Rental and Facility Services: 7.8% - First Aid and Safety Services: 14.1% - Fire Protection Services: 11.5% - Uniform Direct Sale: 2% [7][8] - Gross margin percentages by business: - Uniform Rental and Facility Services: 49.8% - First Aid and Safety Services: 57.7% - Fire Protection Services: 48.2% - Uniform Direct Sale: 41.9% [8] Market Data and Key Metrics Changes - The company continues to experience strong demand in key verticals such as healthcare, hospitality, education, and state and local governments, which are showing positive employment trends [24][25] - Retention rates are at all-time highs, indicating strong customer loyalty and satisfaction [7][43] Company Strategy and Development Direction - The company is focused on leveraging investments to sustain positive momentum and deliver exceptional customer service [15] - Strategic acquisitions are part of the growth strategy, with $85.6 million spent on acquisitions in the second quarter [12][65] - The company aims to grow in multiples of job growth and GDP, emphasizing its ability to thrive in various economic conditions [9][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current economic uncertainty but remains optimistic about the company's ability to grow due to its strong value proposition [70] - The company has raised its Fiscal 2026 financial guidance, expecting revenue between $11.15 billion and $11.22 billion, reflecting a growth rate of 7.8% to 8.5% [6][71] Other Important Information - Free cash flow for the second quarter was $425 million, an increase of 23.8% over the prior year [12] - The company has returned $1.24 billion in capital to shareholders through dividends and share buybacks in the first six months of Fiscal 2026 [12][13] Q&A Session Summary Question: Changes in employment levels across customer base - Management noted that while there are pressures in the labor market, their targeted verticals like healthcare and education are performing well, and they do not rely solely on job growth for their business [24][25] Question: Downturn playbook for maintaining growth - The company has multiple growth levers, including new business acquisition and cross-selling to existing customers, which provide flexibility during downturns [30][31] Question: Year-over-year add stops and acquisition impact - Current customer growth is stable and slightly positive, with acquisitions contributing about 70 basis points to growth in the second quarter [37][38] Question: Retention rates in uncertain economic times - High retention rates are attributed to strong execution and value provided to customers, supported by a robust company culture [42][43] Question: Sourcing costs and tariffs - The company is managing sourcing costs effectively and has not seen significant deviations from expected tariff impacts [51][52] Question: Competitive environment and pricing strategy - The company focuses on providing value rather than solely adjusting prices, maintaining a competitive edge through service quality [60][91] Question: Technology initiatives and their returns - Investments in technology, including AI, are ongoing, with expectations of future benefits in efficiency and service delivery [85][86] Question: Growth in verticals and dispensers - Healthcare is the largest vertical, representing about 8% of total revenue, with all targeted verticals growing faster than the overall company [105][106]