Thank you. Good afternoon, and thank you for joining us.

With me today is our Chief Executive Officer, Dave Robbins. Our call is being recorded and will be available for playback, the details of which are in our press release issued yesterday.

The purpose of this call is to provide an update on Omni-Lite's financial performance and operations, as we filed our first quarter 2026 results yesterday, May 27th. After our remarks, we will open up the line for any Q&A.

If you have not received a copy of our press release, which was issued yesterday morning, you can find it on our website at www.omni-lite.com or email at [email protected] to request a copy. Before we get started, I would like to remind you that today's discussion will and may include forward-looking statements, including information regarding Omni-Lite's performance based on our views of the company's business and the environment in which it operates, our future plans, objectives, business prospects, and anticipated financial performance.

These forward-looking statements are subject to future risks and uncertainty and could cause our actual results or performance to differ materially. We are also mindful of the risks and impacts of changes in the health of our general economy, including the effects of the current US financial markets, US global commercial aerospace markets, and the US Defense Department.

All forward-looking statements should be considered in conjunction with the cautionary statements contained in our press release and risk factors included in Omni-Lite's SEDAR filings. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.

I will also mention that in addition to reported financial results in accordance with International Financial Reporting Standards, or IFRS, during our call, we may also discuss or reference some non-IFRS financial measures, specifically adjusted EBITDA and free cash flow. A reconciliation of these non-IFRS metrics, if applicable, is included in our filings.

Lastly, unless otherwise noted, any reference or discussion of our financial results or metrics are in US dollars. I would like to now turn the call over to Dave.

Dave?

Thanks, Amy. Good afternoon, everyone, and thanks for joining us.

I'd like to make a few comments about our first quarter 2026 performance, followed by comments on our current business. First quarter 2026 revenue of $4.4 million was an increase of 33% compared to prior-year first quarter.

The adjusted EBITDA in the quarter came in at $858,000, representing a 110% increase compared to prior-year first quarter. The strong quarterly performance resulted largely from a healthy mix of production at our electronics and forming operations, notably from their respective top customers.

Bookings for the first quarter of $4.9 million translates to 1.11 to 1 book-to-bill, our third successive positive book-to-bill, and pushes the backlog to $9.1 million, which is a record for the company. Omni-Lite metal forming bookings in the quarter were particularly strong, driven by large reorders for high-strength structural forged collars used on commercial air transport and military airframe and fuselage, as well as annual release for munition components for NATO forces.

Given the global demand for security, of which missile and drone defense and air superiority are major components, as well as strong air transport levels and expanding new build plane build rates, there's an increasing number of part qualification opportunities for both new designs and supplier replacement efforts, starting with electronics, but also for metal forming and casting components. With that, I'd like to turn the call over to Amy.

Amy?

Thanks, Dave. Dave has addressed our revenue and outlook, now I'll just make a few comments regarding our cash.

Adjusted free cash flow, as defined as cash flow from operations minus capital expenditures and any lease expenses, was a source of approximately $173,000 in the quarter, which is an increase of 18% over the prior year. We did use approximately $45,000 for capex purchases for improvements and on the manufacturing process during the quarter.

We finished the quarter with $3 million in cash and no borrowings, which is up from $2.8 million at year-end. This now completes our prepared remarks.

We would like to open the call up for questions.

Hi, Dave. Hi, Amy.

Hello. Dave, we've had quarters with similar revenue levels before, but never with margins like this.

In Q1, our gross margin was 33% versus 24% a year ago, and our EBITDA margin hit 20%, the best it's been in eight quarters by a wide margin. Can you talk through what specifically drove that this quarter, especially given that it looks like DP Cast is still losing money?

How much of it reflects the Monzite and DP Cast shipments that you've mentioned slipped from Q4 to Q1?

Ronak, you never have just a simple question, but I appreciate that. I'll get to it all.

I think if you look back at Q1 of 2024, you'll see some similar numbers and actually probably a similar performance. You're right, it's been a little bit rare, and really all that's going on there is that and I noted in the press release is that it's a pretty good proportion of mix, a lot of production, leading up to that was a lot of good booking.

I pointed to that in Q4 and then Q3, increasing backlog. It's a lot of production stuff.

We like to see a mix of new products because that's what's driving growth for future. You also like to see healthy production.

I think we also just had a quarter we're building performance parts, precision parts everywhere across the company. I think part of it was mix, good proportion of production, and we executed pretty well in the quarter.

I think combination, I don't think it's any more complex or less complex than that.

Thanks. That's helpful.

Does electronics and forging look front-end loaded this year, or are you expecting more of a steady cadence as we go through 2026?

That's the difference between 2024 and 2026. 2024 was a lot of front-end loaded, and it's different.

The cadence of bookings have been now steady for three straight quarters. My expectation from my comments and just my expectation is that that's going to continue.

That's probably the difference between 2020 the start of 2024 and where we are in 2026.

That's great. I just wanted to talk about DP Cast a little bit.

If you can talk through what the path is to break even at DP Cast and when should we expect the renegotiated pricing to show up? If you could talk through some of the operational and contract levers you have there and what margin profile should DP Cast have if it were at a steady, normalized, reasonable revenue run rate?

As we noted, it's more back-ended in the year. It just happens that a lot of the parts for that contract happen to be in the second half of the year.

We're not going to get the benefit in these first two quarters, but it's there. The level, I think I mentioned this, at least our expectation when we announced that the price increase is we didn't have total visibility, but our expectation was that at increased prices, the level of numbers of parts and quantity of parts was not going to go down as a result of the price increase.

It was either going to be flat or up. Now at that time, we didn't have any real data, but it was an expectation.

We do have an expectation now, more than an expectation. The reality is the number is healthy.

It's at least flat, from terms of quantities of parts, but that and actually a bit more. It's more, but it is back-end loaded in the year.

We won't enjoy the majority of the benefit of that until later in the year.

That's very helpful. I wanted to just talk about the backlog a little bit, because I think in Q1, we exited with a backlog of about $9.1 million, and I think the general algorithm has been, roughly half of the backlog converts to revenue the next quarter, plus the spot market, which kind of held this quarter, because last quarter the backlog was $8.8 million, and our revenue is 4.4, which is roughly half the backlog.

Applying that same math and looking forward, the $9.1 million in backlog suggests $4.5 million in Q2 revenue before spot. Is that sort of the right way to think about it, or are there longer lead time items in that current backlog?

No, that formula is still there. Of course, there's noise around that formula, but that general formula is still There's nothing really that's deteriorated or changed from that.

We have a little bit of backlog that's in '27 on a comparative basis to '25, let's say, or late part '25, but not enough to matter. That general formula is pretty good.

That's great. If we look at some of the levers to the gross margin and EBITDA margin that we saw in Q1, and given sort of what our expectations for revenue are, do you expect the same kind of throughput through plant going into Q2 that we managed to take advantage of in Q1?

I think in the same zone, when we're operating at those operating levels and with good mix, yeah, we should be. I think that was a particularly everything went well quarter.

They don't always go that well, but they're in the same zip code and region. There's no reason, I think we've got a fairly healthy mix.

Our backlog now consists of a pretty healthy mix of production versus new starts. I would expect that we can continue on our profit margin target that we're targeting, yeah.

Thanks, and just in terms of production versus new starts, it seems like the operating leverage is really showing off as the top line grows, and it seems clear that the company has the capacity to support growth. Can you talk to your sales initiatives to qualify on as many programs as you can with the primes, maybe cross-selling on new programs, positioning for second sourcing opportunities?

At least at the company, what's the push vector to try and increase as many program counts as we can from here?

It's a little bit different, each technology is slightly different, but they also have some similarities. We're putting high-performance components on high-value assets on platforms, you've got to get qualified.

That's probably not the single thing, but it is one thing that it is across the board. You don't put things on missiles and jets and different types of applications without going through an exhaustive qualification process, which means that it's all about a customer relationship.

The majority of our business, I wouldn't say exclusively, is the cycle to get more business is where you've performed, and your customer expects you're a known entity, you don't have bad quality, you're on time, that's your right to say, "Okay, let's go back for more." I would say number one, same customer, sometimes even same platform, new products, where they might be having trouble with another vendor, or a new platform itself where it needs a new part.

That's number one, our biggest funnel. Where we start to fill the funnel is where we've built that track record.

If we were making more commoditized parts and qualification wasn't such a big deal, it might be different. We were also looking strategically at new customers that have high-value platforms that we'd like to start cultivating a new customer, and we've had a few of those.

I think, two two or three quarters ago, mentioned, for example, some Inconel fasteners, a new family of Inconel fasteners. That was a new customer.

It's taken a while for that, let's say, to mature into a full production at the same kind of quantities that we're seeing with our number one customer, let's say. It's growing.

I think that where we've kind of hit at least at electronics and in fasteners, I think we've hit some level of critical mass where we have enough platform wins, enough wins that, we're sort of opening up the aperture for more product. There's less resistance, right?

Now I would say, and that's particularly strong for fasteners. With electronics, it's slightly different.

I think the opportunity is more for a brand new platform, brand new customer, because there's a lot of development going on to counter new threats that are happening, so that's an opportunity. We're aggressively visiting customers and trying to introduce our products where we have somewhat unique products in the marketplace to get on new platforms, as well as doing more, the same style of business is doing more on existing platforms.

For example, we might be on something on a PAC-3 where we're doing a certain content, and we're to expand that content. Those are the really outbound marketing efforts, but starting with our key customers.

That's where it starts. Then in casting, it's still similar.

They've got a good footprint at its number one and two customer. Again, it's look for the platforms that have the highest growth opportunity where they have a need for precision, and get in front of them with our capability.

Thanks, Dave. That's super helpful.

Final question for me and then I'll leave the floor. In the segmentation in one of the earlier filings, it looks like the Canada segment, which is DP Cast, if I understand it, had a net loss of about $252,000 this last quarter.

I'm assuming, on an EBITDA basis, that the loss is probably larger. We did sort of $858,000 in EBITDA and with a 20% margin, is the right way to think about it that if DP Cast even gets to a breakeven level by the end of the year and maybe even a little bit better than breakeven, that the incremental sort of P&L should sort of make our margins look sort of even better as we round into the end of the year going into next year, as a framework, is that the right way of thinking about it?

You've got to remember, there's some costs in Canada that aren't related specifically to DP, but I think you know that, right? It almost appeared like you answered your own question.

Yes, if they do better, that will help our margin. I don't know if I oversimplified what you were asking.

No, that's very helpful. Sometimes it's easier to have you answer the question than me answer my own question just because it gives me a little bit more confidence.

That's it for me. That's great, Dave.

Really appreciate it. Thank you much.

You got it. Once again, if you would like to ask a question at this time, please press star then the number one on your telephone keypad.

Thank you. Thank you again for joining us today.

We look forward to discussing our Q2 results in August. Thank you.

Bye-bye.

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