Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Omni-Lite Industries Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Amy Vetrano-Palmer, CFO. Please go ahead.
Good morning, 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 on Monday. The purpose of this call is to provide an update on Omni-Lite's financial performance and operations as we filed our third quarter results on November 10th. After our remarks, we will open up for any Q&A. If you have not received a copy of our press release, which was issued, you can find it on our website at www.omnilite.com or email d.robbins@omnilite.com to request a copy.
Before I get started, I would like to remind you that today's discussion will or may include some forward-looking statements, including information regarding Omni-Lite's performance based on our views of the company's business and the environments in which we operate, our future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risk and uncertainties that could cause our actual results or performance to differ materially. We are also mindful of the risks and impacts and changes in the health of our general economy, including the effects of the current U.S. financial market, U.S. global commercial aerospace market, and the U.S. defense budgets. All forward-looking statements should be considered in conjunction with the cautionary statements contained in our press release and the risk factors included in Omni-Lite's SEDAR filings.
The company dismisses any obligation to update any forward-looking statements that may be 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 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 SEDAR filings and press releases. Lastly, and less noted, all reference or discussion of our financial results or metrics are in U.S. dollars. I would like to now turn the call over to Dave. Dave?
Thanks, Amy. Good morning, everyone, and thanks for joining us. I'd like to make a few comments about our third quarter and year-to-date 2025 performance, followed by comments on the current business. Third quarter 2025 revenue was $4 million, which marks an increase of 7% from fiscal year 2024. Year-to-date nine-month revenue of $10.8 million is a decrease from $12.4 million nine-month revenue in 2024. Adjusted EBITDA for the third quarter 2025 was $325,000, with a year-to-date adjusted EBITDA of $828,000. While at the surface, the numbers show down revenue and down EBITDA on a year-over-year comparative nine-month basis, the underlying story is there were some delays in bookings of major programs for electronic products to start the year. The bookings and backlog trend over the past six quarters has been strong.
This, coupled with an expectation of a favorably repriced long-term agreement for castings to start 2026, points to growth in the profit profile with a look to 2026. Additionally, we expect the strong bookings to continue, with needs for domestic producers of engineered fasteners, complex castings, and high-performance electronics for aerospace and defense needs, given the climate of strong air travel and national security missile defense priorities. We are and remain active in our pursuit of aerospace and defense manufacturing businesses to acquire and look to expand our efforts in order to create a pipeline of acquisition opportunities that fit our return objectives and platform expansion themes. With that, I'd like to turn the call back over to Amy. Amy?
Thanks, Dave. Dave addressed our revenue and EBITDA, so I will make a few comments in regards to cash. Adjusted free cash flow, which is defined as cash flow from operations minus any capital expenditures, was approximately $161,000 in the quarter. This resulted in a balance of $3 million U.S. We currently remain debt-free and do have a continued strong balance sheet, which does contain an investment of approximately $1.9 million in CALNANO stock. With a strong positive EBITDA and strong revenue we have had all year, we do expect to continue to see a source of cash as we close out the remainder of 2025. This completes our prepared remarks, and we would like to open up the call for any questions.
We will now begin the question-and-answer session. In order to ask a question, simply press star one on your telephone keypad. Again, that is star one for any questions. Our first question will come from the line of Roogan Dougal with Chandron LP. Please go ahead.
Hi, Dave. It's been good to see Omni-Lite continue to steadily improve. I think in the past and in presentations, you mentioned that you see the company as a mini TransDigm, which ties to the long-term revenue growth goals and margin goals that you've laid out. I think you mentioned sort of an acquisition strategy as well towards the end of your prepared remarks. Do you think you now have access to the capital, and does the company have the operating bench to accelerate that mini TransDigm strategy? Thank you.
Short term, I think we definitely have the team and the capacity to execute on one or two acquisitions. I think as we move forward to be a serial acquirer, we would look to add depth to the team to effectuate that. Certainly, short term, we have the team. I think from my comments, looking to expand also the breadth in what we're looking at, expand that pipeline, put the effort into generating a whole pipeline because acquisitions, while sometimes can happen quickly, very often they take some time to mature. Having an active and a more robust pipeline increases the chance that we can do an acquisition that meets our objectives.
I think like a TransDigm or HEICO or others that have been successful, it's about having a disciplined approach to having an approach to buying and what basis you buy and what your return objectives and need to stay disciplined to that. Having a larger array of targets increases that likelihood. We're pretty optimistic. The landscape has a lot of targets out there. I think with a lot of private companies that have aging out owners over the next 10 years, it's a fertile landscape of these target acquisitions.
Once again, for any questions, simply press star, followed by the number one on your telephone keypad. That is star one for any questions. We'll take our next question from the line of Peter Imhoff, a private investor. Please go ahead.
Hi, David. Just in terms of that question on the acquisitions, can you maybe elaborate just in terms of size of acquisitions or what would be maybe too big and what kind of multiples? The second question, just on the castings business, and you guys alluded to the contract being renegotiated. Is that already being renegotiated, and we should just start to see that flow through, or are you guys still in the midst of working on that contract?
We have not made an announcement that it has been done, but I have alluded to it, so we feel very optimistic that we will near-term sign that contract. We have not been able to make that announcement, but feel very confident it will happen soon and take effect at the start of 2026. On the second part, our acquisition targets, the theme is, if you want to think of it on a size, a $2 million-$10 million revenue kind of range, a $1 million-$5 million on an EBITDA is generally a range that we are looking at. They are digestible. At least at this stage, they are digestible, and we think the likelihood in that range, it is a company that we can buy right and improve.
It's the type of company that ideally we look for, companies that have some profit profile and have a legacy serving aerospace and defense manufacturing needs but suffer sometimes from not understanding pricing profile or really how to grow their business and leverage their business. That's a type of acquisition target where we can buy it at a multiple that can give us our 15% return on invested capital kind of return rate, but that we can improve and add to the portfolio of our current products.
Okay. And then just another question, just in terms of tariffs and FX, how has that had any effect on you? I mean, I've been on a few conference calls, and some of the smaller companies saying it hasn't really had much effect at this point in time because you've got manufacturing here in Canada as well. Maybe if you can just expand on that.
It's had a couple of small effects. It all comes down to, or at least our interpretation at this point, it comes down to how your commodity is coded, and you have to be really careful about making sure you got the right codes on it. The fact that the majority of what we're making gets exemption because of its military or aerospace exemption or the fact that it's not a raw material, that a particular raw material doesn't have a tariff on it, we've had some small tariff implications, but so de minimis it's probably not worth commenting on. It's something we're looking forward to because these things are changing. Our expectation is because of the profile of what we're manufacturing and the commodities we're making that we expect at most the impact to be small.
Okay. Okay. That's it for me. Thanks.
Our next question will come from the line of Emmanuel Kramer, a private investor. Please go ahead.
Hi, Dave. The questions have been on acquisitions. I'll take the other thing. Recently, TriMas sold the division for a large multiple. Would you be engaged to, if you get the right price, selling the fasteners division since your multiples are much bigger on the defense side?
That's an interesting question. I think that Omni-Lite is we're not for sale, but we're not not for sale. We would look at any inbound like that with the idea is, is it a good return for our investment, for our investors? I wouldn't necessarily expect that. We're still small on a comparative basis to all of TriMas, although we're a very important supplier into TriMas. On one hand, yes, I could see us being the target because of that. On the other hand, we're still small and growing. If there was an inbound, we would look at it. We're pretty bullish on the outlook and our growth prospects as we sit here. It would have to be a pretty exciting multiple to cross that threshold.
Okay. Thank you.
Our next question is a follow-up from the line of Roogan Dougal with Chandron LP. Please go ahead.
Hi, Dave. Just a quick follow-up. Dave, are there any large programs or platforms that we're working to qualify on where we're kind of in the design phase? If we are, if you could just give me a sense of sort of which of the three segments you're seeing a whole lot of activity in, whether it's Omni-Lite or casting or the like.
I think on the metalworking side, so on both the casting side and on metal forging in the fastener area, which both serve aerospace and defense, both commercial air transport and defense applications for castings in the jet engines at this point and the fasteners for more structural parts of both military and commercial air transport, there's ongoing needs driven. It's not so much a particular program, but ongoing needs for very precision kind of fastener components or casting components that are very hard to produce and generally produced by very large companies, billion-dollar companies, certainly much larger footprint than we have. It may not be to a particular program, but it's, let's say, a particular fastener type that is used on aircraft that have high composition of composite materials, for example. There really is a shortage of suppliers for that.
Our growth is coming from new products on a variety of platforms, but in family of engineered fasteners, let's say, in both materials for, let's say, titanium, Inconel, and the stainlesses where they're in high demand. The growth this year in revenue that we've mentioned for fasteners is coming directly from some new products within a family of engineered fasteners. We expect that trend to continue because the competition has very, very long lead times. We're winning on our ability to design in months and maybe close to a year, but that's far faster than our competition. On the castings, the same thing. We haven't pushed the envelope for getting qualified on as many parts on a basis compared to fasteners.
The priority has been more on making improvements in our manufacturability and our profit profile from that group before really pressing for more new product. We are seeing, and we have taken some orders for some castings that are similar to what we're currently doing at Pratt & Whitney for some U.S. based companies doing similar applications. For electronics, it is about programs. Probably the single biggest area that we're getting qualified on is on this, and as I've made some references on some GaN drivers that are part of a missile defense or drone interdiction and tracking. These are either on an airborne platform or ground-based tracking. Probably the most notable program is the CCA program within Durrell that is in this space.
There are other smaller companies and large companies that are also in that space, including Kratos and Raytheon and others that are looking to utilize GaN as a technology, especially in radar where its range and its ability to track multiple objects at high speed faster. Really, probably the one name program is the CCA program, but there are others in that space of radar tracking.
Thanks, Dave. That's super helpful. Just one quick follow-up on that. I think in the release, you'd mentioned the eComp business. And you'd said, I think you'd used a word. You'd said meaningful bookings from our newly acquired eComp business have yet to materialize. Can you give me a sense of what meaningful means?
Meaningful means material, right? For us, sort of a level of materiality is a few hundred thousand dollars. I think that is really to kind of quantify that. The space that eComp operates in is on sourcing hard-to-find components for the military-industrial complex, both for airborne platforms and naval platforms. Specifically, that comment was around, and I made some disclosure around the fact that there are some ongoing needs for existing programs for system modernization. It is a major effort on several fronts. We think that there is going to be some business there on that systems modernization area.
That's terrific. Thank you so much, Dave.
That will conclude our question-and-answer session and our call today. Thank you all for joining. You may now disconnect.