MPTI Q3 2026 earnings call transcript, November 12, 2026

Thank you for joining us and welcome to the Emtron earnings call for Q&A.

Review 3, 2026. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference call over to Linda Biles, EVP of Finance. Linda, please go ahead.

Good afternoon, everyone.

Thank you for joining.

We are recording our 2026 Emtron Q3 earnings call. Please note that this call will be recorded and we will make the recording available on our investor relations website, ir.emtron.com, shortly after the. Call this morning we released our earnings for the third fiscal quarter of 2026. Before getting underway, we are required to advise you that the following discussion should be taken in conjunction with our most recent financial statements and notes is contained within our 2025 10k. which was filed on March 26, 2026 with the SEC. This discussion may contain forward-looking statements within the meaning of 27A of the Securities Act of 1933 and Section 21E of the Securities Act and Exchange Act of 1934. These forward-looking statements contain known and unknown risks and uncertainties, which are detailed in our filings with the SEC. Although the company believes that the forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there are no assurances that the company's actual results will not differ materially from any result expressed or implied by the company's forward-looking statement. The company undertakes no obligations to publicly update or revise any forward-looking statement, whether as the results of new information, future events, or otherwise. Readers are cautioned that any forward-looking statements are not guaranteed a future performance. With that, I will now turn the call over to our CEO, Cameron Fork. Okay. Well, thank you, Linda, and good afternoon, everyone.

Thank you for attending our third quarter earnings call and your interest in Emtron. We had a little unusual earnings release and call scheduled today just due to the veterans holiday. So I appreciate all of your flexibility. We are very pleased to discuss our strong results for the first nine months of the 2026 fiscal year. As a reminder, Emtron Designs and Manufacturers highly engineered RF solutions, including electronic components and subassemblies, used to control the frequency and timing of signals and electronic circuits. We're a global company with three manufacturing sites, two of them in the United States and one in India. The company's primary markets include the defense. in aerospace markets, commercial avionics, industrials, and space. So we're pleased to report that the company continues to perform well with continued strength in our 2026 Q3 sales and backlog. Our revenues continue to be driven by defense-related orders. However, we saw growth this quarter in other areas as well. With consistent operating performance, we've been able to continue to make strategic investments in research and development in our manufacturing capabilities and capacity, continue to improve the market profile of the company, and prime the pump for- for future growth. This morning, we reported the following Q3 fiscal year 26 results. Total revenues for the third quarter were $15.7 million and 11.1% increase-

And allow the first question. We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press star one to raise your hand to withdraw your. question. Press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

There are no further questions at this time. Anya, if you. I'd like to raise your hand. You may ask another question.

Hi, can you also just elaborate on this defense program? that you are talking about maybe coming into 2027 and what to expect like in terms of the defense budget? Yeah. Can Anya just want to make sure I understood the question. Was it about the current programs or the ones we anticipate closing early in the year? The ones that you are bidding on. Yes. Okay. So, yeah, I mean, obviously the defense budget is definitely in a state of flux right now. And the administration has been divided into three components using different mechanisms to get the various pieces approved. We have, though, seen some of these framework agreements, which were designed to give the industry seven years visibility. Into future orders now be contracted. So especially in September, you know, I think over $100 billion of missile contracts were awarded, and the vast majority of them were five-year contracts. So they have very specific growth rates and requirements in those contracts. We have been engaged with a number of people in the industry, both the leaders, traditional leaders, as well as some of the new. Newer vendors, providing slightly less expensive programs than the exquisite missiles that I highlighted earlier. And we've been bidding on those and providing the feedback that they've requested. And we do anticipate. Winning our fair share of those engagements. And we think we'll see those POs early in the coming year. So after the new Congress is seated. And then I do anticipate that those will be multi-year contracts.

I mean, they are still in a state of flux. So we'll find out at the end of the year exactly how they'll look. But I do anticipate that our backlog will go up significantly at that point in time. And that we'll also finally have a lot more visibility. And to the growth rate that this will drive for the company. But I do think we're at an inflection point. And it's kind of well recognized that this replenishment cycle needs to go forward no matter who's managing. Congress or is in the White House. And is that mostly U.S. driven or do you see a demand also from Europe or NATO? No, it's primarily U.S. driven. But, you know, some of the. The current sales that we do are sanctioned and reformed military sales and do go overseas.

Okay, thank you. And then you mentioned you hired a corporate development to the team. There. What can you tell us more about what you're looking for and how imminent like are you, are you close to something or yeah. No, thank you for asking. So yeah, we've been looking for quite a while but we also all have day jobs. So we've been, we do have one deal that we're trying to get announced before the end of the year, which would be really wide up our alley in terms of the products and the markets it serves. And would be well understood in terms of how it's manufactured. So it's, it's an RF product. And, but we are looking, you know, further at additional RF companies that are maybe a little bit larger. Or a little farther afield than what we currently do. So we'll take a little bit more analysis. And then we also are pretty regularly engaged with larger companies looking to do corporate spinouts. So some of those that are in the market now are in the RF area. Some of them are more systems oriented, and we'd like to take a look at all those. So we do think that we have a very strong platform to expand the business, both in the RF space as well as additional kind of A&D types of.

Okay, thank you. And then in terms of CapEx, that's a bit elevated this year due to investment in the growth and expansion. But how should we think about that for the coming years? Right. So yeah, this year, you're right, it was elevated. It was over $4 million. So it's probably roughly 78% of revenue, which is about double of what we've been doing over the past couple years. And that was directly in relation to actual demand we had to produce products. So we had to set up some new production lines. And I think the coming year, I think will still be also a strong year of CapEx growth. What we're trying to understand that really is that based on some of these potential missile contracts, whether we'll need to set up, you know, a new facility at some point in time. And, you know, just if so, how far out. So that could radically change our thinking. But right now, we're currently intending to expand the capacity. I see in our plant in Orlando. And that is well underway. Is it an opportunity for you to expand actually footprint in Orlando? Would you need to add a new facility? I think right now, the next year or so, we're fine in Orlando. But if... If some of these purchase orders come in at the growth rate that has been discussed, at least in the press, that could lead to us having to create a new facility, either Orlando or somewhere else in the country. You know, just kind of meet the demand in years, like 29, 30, so.

Okay, thank you. That was all for me.

There are no further questions at this time. We'll now turn the call back to Cameron Foer for closing remarks.

Thanks again.

This concludes today's call.

Thank you for attending.

You may now disconnect.