Good afternoon, and thank you for joining us. With me today is our interim Chief Executive Officer, David Robbins, and Alex Ryzhikov from the Board of Directors.

Our call is being recorded and will be available for playback, the details of which was in our press release issued this morning. The purpose of this call is to provide an update on Omnilight's financial performance and operations for our second quarter 2026 results, which was released this morning, August 19th.

After our marks, we will open up the line for any Q&A. If you have not received or seen a copy of our press release, which we did release this morning, you can find it on our website at www.omni-light.com or email at [email protected].

Before I get started, I would like to remind you that today's discussion will or may include forward-looking statements, including information regarding Omnilight's performance based on our views of the company's business and the environments in which we operate, our future plans, objectives, and business prospects, and anticipated financial performance. These forward-looking statements are subject to future risks and uncertainties that could cause the actual results or performance to differ materially.

We are also mindful of the risks and impacts and changes of the health of the general economy, including the effects of the U.S. financial market, U.S.

and global commercial aerospace markets, and the U.S. Department of Defense budgets.

All forward-looking statements should be considered in conjunction with the cautionary statements contained in our press release and Omnilight SEDAR+ filings. The company disclaims any obligation to update any forward-looking statements that are discussed during this call.

I'd also like to mention that in addition to reported financial results in accordance to IFRS, during our call we may also discuss or reference non-IFRS financial measures, such as adjusted EBITDA and free cash flow. Reconciliation of these metrics, if applicable, is included in our filings and press release.

Lastly, unless noted, any reference or discussion of our financial results and metrics are in U.S. dollars.

I would like to now turn the call over to David. David?

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

I'd like to make a few comments about our second quarter and year-to-date 2026 performance, followed by comments on current business. Second quarter 2026 revenue was a record for Omnilight at $4.8 million.

We saw strong revenue in the quarter driven by a combination of increases in forge fastener products and electronic components. Adjusted EBITDA for the second quarter 2026 was $926,000, with a year-to-date adjusted EBITDA of $1.8 million.

This EBITDA contribution reflects generally a good mix of continuous production versus low-volume production of forged components and electronic components business, as well as increased contribution from our casting components business. Bookings for the second quarter were $6.4 million, which represents a 1.34 book-to-bill ratio and resulted in a backlog of $10.7 million as we go into third quarter.

Bookings in the second quarter generally mirrored the climate over the last four quarters of strong demand for forge fastener components, including newer rivet components, increased demand for missile defense-related electronic components, and jet engine casting components. Our targeted new product opportunity bid visibility is in the tens of parts, which is historically healthy, and we expect to convert many in the coming quarters, which is a driver of future potential revenue 12 to 18 months out.

With that, I'd like to turn the call back over to Amy. Amy?

Thanks, David. David has addressed revenue and EBITDA, and I will make a few comments regarding our cash.

Adjusted free cash flow, which we have defined as cash flow from operations minus capital expenditures and adding back lease expense, was a source of approximately $132,000. We continue to be debt-free and maintain a strong cash balance of $3.1 million, which is up about $213,000 over a year ago today.

We do expect to continue to have a strong source of cash as we go through the year as receivables turn into cash. This does complete our prepared remarks, and we would like to open up the call now for questions.

Hi, David. Hi, Amy.

Hi, Alex.

How you doing?

With these last two earnings releases, all the work you guys are putting in is certainly showing. I wanted to talk about DP Cast a little bit, because when I look at your numbers this last quarter, Canada, at least based on the numbers in your MD&A, grew 30% sequentially and became a bigger slice of the mix, yet consolidated gross margins were pretty steady at about 33%.

That kind of suggests that DP Cast margin profile stepped up in this quarter. Is it fair to now assume that DP Cast is now reasonably profitable?

I think in May, you told us that sort of the contract re-up that we negotiated last year was back-end loaded. Can you give us a sense of kind of what DP Cast might look like in the second half once the pricing and volume fully kicks in?

Certainly directionally, Q2, DP Cast performance in in Q2 was directionally what what we had predicted for for a while. We continue to expect that with the the the contract pricing in the second half to to have, have a positive effect.

There's always, some variables around, but but I think, Q2 sort of reflected a a an increase of that is attributable to better to better pricing and and operational improvements that, are ongoing.

Okay. Just to talk about sort of the backlog a little bit, I think last quarter, we talked about the rule of thumb that roughly half the backlog turns in the next quarter's revenue plus spot, and the math worked pretty much right down the middle of that formula this quarter.

Half the $10.7 million in backlog would point to something like $5.3 million in Q3 before spot. Are DP Cast revenues or anticipated revenues also sitting in that backlog number or does that business run more than spot?

Because if the back-half loaded contract volumes aren't in that $10.7 million, then I'm guessing the second half could look reasonably better than the formula alone suggests.

No, DP Cast backlog is in there, and all the businesses run as a combination of some spot by near-term as well as some visibility. I think in my last call, I mentioned that we have a little bit more visibility than normal.

Still, that rough 50%, I'd be careful thinking that that's an exact 50%, but we're still in that zone where a lot of our backlog does convert in the next quarter. This was a pretty good bookings quarter.

It got us backlog up over 10. It does point though towards very robust revenue over the next couple quarters when we have a backlog like that.

Just talking about backlog in a little bit more detail, David, I think in the release, you talked about organic expansion and fasteners and electronics, which sounds like volume and price on the installed base. Can you talk about the qualification funnel a little bit, especially with E-Comp a year in?

I think in May, you talked about PAC-3 content, and can you talk about sort of specific new platforms you're actively qualifying on or second sourcing? I think in your prepared remarks, you talked about I think it was 10 components.

The more detail there would be better.

It's hard to, without getting into exact programs and their forecast, to really give that much more color. I would say that one of the drivers of our recent bookings, positive book-to-bill ratio, and our increasing revenue, is that, and I kind of mentioned it in my narrative here, was that it's a good mix of sort of continuous production versus low-volume production.

What that means it's more what I would call programs of record that have high demand. You mentioned PAC-3, I've mentioned that several times, so that's just one program that has some good visibility and some ongoing needs, and there's demand that's out years, right?

Then, I've mentioned forged collars, that have a particularly strong continuous production and some pretty good visibility. A year ago, if you listened to the tape, I mentioned that we had booked, at the time, it was, hundred couple hundred thousand dollars worth of new components that in a year from now could turn into some meaningful revenue, and that's what happens, right?

Usually programs, if you hit it right, they can have some more what I call continuous production. We have, I would say, several, less than 10 and more than four, that are in that zone where we're almost nearly continuous production of either a part or a family of parts.

I think my best advice is to continue to watch our bookings. As our bookings go, and if we're booking positive book-to-bill on a continuous basis or more often than not, that's the sign to look for.

The programs as a whole, is there something structural that may make the duration and the size of bookings potentially increase over time and that becomes sort of a testament to how structural some of the shifts are?

It's how good you are picking the right programs, right? Like picking a program like PAC-3, that's good call, right?

There's a lot of visibility. We have, and I've tried to mention them, I did mention rivets.

I had talked about that before as a whole new family of product in our fastener. Rivets have high demand in both military and commercial air transport.

That was a new product development similar to our blind bolts, but added a whole new element. We're enjoying that as a combination of new components that are very related, but that also is some good programs that are really running into a good space.

I mentioned missile defense because there's a lot of new program development. There's drones with sensors that need for missile defense or missile interception.

That's an area where we're on some growing programs, maybe not to the extent of PAC-3, but programs that as they turn from low rate to more production, it's sometimes difficult to time exactly, but it's been a healthy environment. If you look at maybe the last year as a benchmark.

Thanks, David. That's very helpful.

I wanted to talk about margins a little bit, because in your investor presentation, you laid out a 50% gross margin target. These last two quarters, the gross margin has been remarkably consistent.

It came in about 33%. I wanted to just talk through what gets you from here, the 33% that you've just hit to sort of 50%.

Is it mainly DP Cast operating at a more steady-state margin, or is there sort of more to the bridge? If it's DP Cast, do we get closer as time goes on?

In the press release, I mentioned pricing. Really this quarter, especially this quarter, I guess, was a predictor a little bit of where that 50% comes from.

At 50%, it means all operations have to be close to that. Certainly the pricing adjustment is reflected in DP Cast better performance as well as some improvements in productivity.

Pricing isn't necessarily only related to DP Cast. It's something ongoing that's part of a disciplined pricing approach that we take.

I think Q2 actually sort of reflects where even that 50% comes from. We're looking for to improve further.

That's still a target. That's still a target of ours is to be in that 40% to 50% gross margin role, and we're getting close.

David, if I understand that better, as we roll into Q3 and Q4, as we start seeing more pricing in DP Cast, then sort of the trajectory should sort of start looking a little better. Is that the expectation?

Certainly helping. Knowing we have more back end of properly priced parts is certainly helping, yes.

Okay. Just CapEx just a little bit.

The company has historically had very, very low CapEx, and I did notice that it's rising, and the release mentions investing in manufacturing productivity. My understanding is that your current plant can already handle materially higher revenues.

Is there a specific area you're focusing the investment in? Just wanted to sort of get a little bit more color there.

I think if you look at the actual number, yes, it's an increase over something that is sort of ridiculously low. These are very, very modest investments, but I think it's maybe just on a little bit of color.

There's been some investment on the electronics side to keep up with ongoing visibility into production environment that we don't normally see that kind of visibility. There's been some there.

I would say just modest places where we can replace out further automation. Sometimes it isn't putting a whole robotic system, but it could be a small cobot or something that sort of mechanizes a piece of something.

That's ongoing. I expect at least there'll be more of that than almost none.

We're not seeing any huge needs for material, large purchases. There can be some more of these labor-saving initiatives, but we don't see any near-term needs for major CapEx.

Okay. That's perfect.

One final question for Alex. Alex, I think this last quarter, at least in the MD&A, you could see that there's investment in people both maybe just to improve manufacturing a little bit, and there were also some consulting expenses which I associated with just the search for a CEO.

If you could just talk through that process a little bit and what you're thinking, that'd be helpful.

Sure. I think you're right.

There are multiple components. We're not going to break them down, but some of them relate to the CEO search process, which I think on the last call, I mentioned that we're going to be deliberate, we're going to take our time.

We have made progress, but it is something that we're not going to announce until we have obviously something finalized and ready to announce. The work continues, and hopefully we'll be able to announce something with everyone in the future.

As it relates to some of the additional expenses, we mentioned consulting expenses, and I think also probably on that call, I mentioned that we have brought additional resources to assist with DP Cast as well as Ceritas. Those are reflected in the P&L today.

Again, some of them will go away, pieces of them will stay there, and again to be determined with the hiring of a full-time CEO. I hope that answers it.

No, that's perfect. No, thanks so much.

All the work you guys are putting in is certainly showing. That's it for me.

Thanks very much.

Thanks, Rukun.