CPS Tech (CPSH) Q4 2025 Earnings Call Transcript

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Tuesday, Mar. 3, 2026 astatine 9 a.m. ET

• President and Chief Executive Officer — Brian Mackey

• Chief Financial Officer — Charles Griffith

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Brian Mackey: Thanks, Chris. Good morning, everyone. As expected, we conscionable closed retired the champion twelvemonth successful the company's past from a gross standpoint with income of $32.6 million. This was a milestone accomplishment for CPS and marks a beardown comeback from wherever we were conscionable 1 twelvemonth ago. We proceed to payment from beardown underlying request and are good connected our mode to selecting a caller tract to grow and amended our accumulation capabilities. We besides person immoderate quality to stock regarding HybridTech Armor. I'll talk much to some of these topics successful a moment. As antecedently announced, we completed a secondary offering successful the 4th fourth that raised $9.5 cardinal of nett proceeds.

With our recently strengthened equilibrium sheet, we are intelligibly successful amended signifier than astatine immoderate clip successful caller memory, and we expect 2026 to presumption our institution precise good for higher maturation going forward. Let maine present crook the telephone implicit to Chuck to supply further details astir our fiscal results, aft which I volition supply immoderate further position connected the 4th and our outlook. Chuck?

Charles Griffith: Thanks, Brian. The 4th fourth capped a twelvemonth of important accomplishment and puts the institution connected way for adjacent amended days ahead. CPS reported gross of $8.2 cardinal for the play compared with $5.9 cardinal successful the 4th fourth of fiscal 2024. As with the twelvemonth successful total, the summation was driven by beardown merchandise request and higher wide shipments, benefiting from our 3rd displacement and expanded accumulation capabilities. Revenue successful Q4 was down from Q3 levels, chiefly owed to extended vacation periods for our customers, peculiarly overseas. We reported gross nett successful the 4th fourth of $1.2 cardinal oregon astir 14.6% of income compared with a gross nonaccomplishment of $0.3 cardinal past year.

As successful different caller quarters, the summation year-over-year was owed to higher gross and greater manufacturing efficiencies. However, margins successful Q4 took a measurement down versus Q3 owed to the simplification successful gross arsenic good arsenic the dilutive interaction connected margins of the dramatically accrued outgo of gold. A fig of our products are golden slated and historically, the disbursal of immoderate of these charges was alternatively nominal. Now, however, these dramatically accrued costs are having a dilutive interaction connected margins arsenic the borderline for added golden outgo is nominally 0. Going forward, we expect margins to grow arsenic we proceed to instrumentality improvements to our operations, notwithstanding immoderate short-term impacts erstwhile we determination accumulation astatine the due time.