Thank you for standing by. 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 followed by the number one on your telephone keypad. I would now like to turn the conference over to Amy Vetrano-Palmer, CFO. The floor is yours.
Thank you. Good afternoon, and thank you for joining us. With me today is our Interim Chief Executive Officer, David Robbins, and Board Director, Alex Ryzhikov. Our call is being recorded and will be available for playback, the details of which were in our press release issued yesterday. The purpose of this call is to provide an update on Omni-Lite's financial performance and operation as we filed our year-end 2025 results. After the remarks, we will open the call up for Q&A. If you have not received or seen a copy of the press release which we issued yesterday morning, you can find it on our website at www.omni-lite.com or email at d.robbins@omni-lite.com to request a copy.
Before we get started, I would like to remind you that today's discussion will or may include forward-looking statements, including information regarding Omni-Lite's performance based on our views of the company, business, and the environments in which they operate, our future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risks and uncertainties that could cause our actual results or performance to differ materially. We are also mindful of the risks and impacts and changes to the health of the general economy, including the effects on the U.S. financial market, U.S. global commercial aerospace markets, the U.S. Department of Defense budgets. All forward-looking statements should be considered in conjunction with the cautionary statements issued in our press release and the 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 would also like to 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 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, unless noted, any reference or discussion of our financial results or metrics are in U.S. dollar. I would like now to 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 fourth quarter of 2025 performance, followed by comments on current business. Fourth quarter of 2025 revenue of CAD 4.1 million was an increase of 18% compared to the prior year fourth quarter. For fiscal 2025, revenue of CAD 14.9 million was down 6% compared to FY 2024. The adjusted EBITDA in the quarter came in at CAD 61,000, representing a disappointing 1.5% margin. The weak quarterly performance resulting from operating issues at the Cerritos facility, which has since been resolved, as well as shipments at Monzite and DP Cast falling into Q1. Adjusted EBITDA for the FY 2025 was approximately CAD 890,000, which again is a disappointment compared to 2024.
Bookings for the fourth quarter of CAD 5.5 million, however, resulting in a backlog of CAD 8.8 million, is a record for the company. Monzite bookings in the quarter were particularly strong, driven by largely by reorders for electronic components used on Eurofighter and a mobile ground-based missile and drone tracking radar program. The strong bookings trend outlook and pipeline for fasteners and electronics continues into 2026. With that, I'd like to turn the call over to Am y. Amy?
Thanks, Dave. Dave has addressed our revenue and outlook, I'd like to take a few minutes to comment regards to cash. Adjusted free cash flow, defined as free cash flow from operations minus capital expenditures, was a source of approximately CAD 451,000 in the quarter as compared to a source of CAD 248,000 in the prior year. Year to date, free cash flow was a source of CAD 1.1 million, which was down compared to 2024 of CAD 1.8 million. We did use approximately CAD 55,000 of CapEx improvements during the year. We also acquired Electronic Components or eComp with an acquisition net cost cash usage of CAD 272,000. We finished the year with over CAD 2.8 million in cash and no debt, which is a slight decrease over 2024.
I would like to now turn the call over to Alex. Alex?
Thank you, Amy. Before we move to Q&A, I'd like to take a moment on behalf of the board to thank Dave for his leadership and contributions since becoming CEO of Omni-Lite in 2018. As we have previously announced, once we retain a full-time CEO, Dave will turn his focus to our Monzite business. There's a significant potential there, and I'm excited to see the progress Dave can make as he dedicates his full attention to realizing that opportunity. With that, Morgan, we're now ready to open the call for questions.
Thank you. We will now begin the question and an swer session. If you would like to ask a question, please press star, then the number one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your fi rst question comes from Rukun Duggal with Chandern. Your line is open.
Hi, Dave. Hi, Alex. Hi, Amy.
Hi, Rukun.
Dave, you're moving to a president of Monzite, you know, which tells us that you think that there is growth opportunity there. Can you tell us what pieces you need to put in place to generate much higher profitable revenue growth at Monzite?
Pieces to put in place. You know, we are c urrently operating at a pretty high margin. We expect the backlog at Monzite is high. I, as I mentioned on this call that the bookings forecast we're expecting and have already, you know, received a lot of strong demand. That's the thing that needs to put in place is the orders to come through, but we've got a pretty big backlog, so it's falling into place with the orders coming through and a high expectation for strong book to bill in 2026. Though that's the single biggest driver, you know, as well as the rest of the company. Specifically, it's backlog driven. If backlog's up, the orders and the profitability follow.
Thanks, Dave. That's helpful. Just to put some numbers around that, should we expect Monzite's performance in 2026 to look more like 2024 or will it look more like 2025? I guess if you could split it out, how much of the CAD 8.8 million backlog sits in Monzite?
Well, we're probably not prepared at this moment to have an exact number for you, but it's a healthy proportion of the backlog is Monzite. You know, I'm glad of the way that you referenced 2024. If you look at the progression of revenue from 2024 to 2025 now to expectations in 2026, there was a lot of, you know, I would call front-end loading of revenue in 2024 from Monzite. Prior to the election, prior to changes in administration. There were some delays in orders in 2025, which you don't get the order, you can't, you know, you can't deliver.
Strong bookings for three successive quarters, four successive quarters at Monzite, my talking about expectations in 2026 for that to continue, you know, points towards, you know, more like 2024, but not as a more driven with continued need and not maybe a front-end loading a little bit that happened in 2024. You know, the reason I mentioned drone programs and missile programs is that they have a lot of legs. They're very evident today in today's world. It's a good positioning that we feel in those programs.
Thanks, Dave. That's helpful. I just had a question for Alex as well. Alex, if we move from Monzite and we look at some of the other business units, I was trying to get a sense of sort of the growth levers at the other business units. Q4 results showed sort of organic growth in fasteners and castings, and you've renegotiated pricing at DP Cast. What pieces do you need to put in place to generate much higher profitable revenue growth at, you know, forging fasteners at DP Cast and even eComp?
Maybe I'll touch on DP Cast first. I think in the past, we talked about the meaningful, you know, contract that was renegotiated and priced in there. You know, inherently, DP is a lumpy business. I would say on quarterly basis, occasionally you will not see the full benefit of this new pricing translated into better results. I would say as we look at 2026, we still continue to expect significant improvement in DP Cast. I think Cerritos, we addressed the operational issues that we saw in the quarter. We stated those have been addressed, you should expect sequentially to see improvement in that business.
I think as in any business, you do need, you know, increased demand and, you know, I would say you can see that in terms of underlying end markets, that the demand remains healthy. There are some additional resources that we've already brought to both DP and Cerritos that we expect to translate into improved operating results. Not necessarily, you know, immediately, but over time. I would say those are initial elements. Obviously, you know, as we, you know, look for a full-time CEO, that's gonna be a large part of their responsibility as well, in finding the right resources to grow both of those assets where I think the growth potential, you know, is significant. That's how I'd describe it now, and then for eComp, I'll let Dave comment on that.
Yeah. Specifically with eComp, it's a very targeted, program by program. You know, the investment thesis there was that they had a position, eComp had a position, quasi-qualified supplier at several divisions of General Dynamics and at Raytheon. We're looking to leverage that on a program basis. We've made announcements about opportunities on couple of particular programs, one including Aegis, which, you know, is a named program that has a lot of future. You know, as largely a sales organization, marketing, it's all about being in the right, you know, being on the right, as an approved supplier on the right programs. We're well-positioned there, just by the nature of approval and ability to support, you know, these key programs.
That's perfect. Thanks very much, David. One last one for me, and then I'll leave the floor. Alex , you've retained an executive search firm for the CEO role to lead the next chapter of growth here. Can you give us a sense of, you know, the profile that you're looking for? Is this someone with M&A and roll-up experience? Can you give a sense of where you are in the process? Do you expect to have someone seated by a particular point this year?
If I had to distill it, I would say we're looking for a really strong operator above everything else. We believe our metal working businesses that you referenced in DP and Cerritos have significantly higher earning potential than what we've demonstrated historically. We want someone who knows what great looks like and can drive organization to that level. You know, we don't have a specific timeline. We're not in a rush. As I mentioned in my remarks to your earlier questions, we have already brought additional resources to assist DP Cast and Cerritos. The business is moving forward as we're conducting the search process, and our objective is to find the right person for that next leg of transformation. No specific dates set, we'll take our time, but we're not just sitting around waiting.
We're, you know, we're putting pieces in place, as we search for a full-time CEO.
Thanks very much, Alex. Those are all my questions. Thank you.
Thanks.
Your next question comes from Emmanuel Kramer, a private investor. Your line is open.
Yes. Rob and Dave, can you answer how does the oil price rise affect you? Can you do something to increase your sales price due to the cost of oil getting higher?
Well, energy, you know, probably has the biggest impact, you know, at our DP Cast facility. Energy isn't a big part of. Well, maybe a bit at in our fastener production too. Well, it's not a huge, you know, a part of our business. We're pretty efficient operators. Having said that, on your pricing, you know, we are looking to, you know, given our positioning with our customers that. You know, generally, if we're not sole source, we're a small one of two or one of three sources.
You know, we're looking to try in this, in this environment where costs are rising everywhere, whether it's the price of gold, whether it's the price of material, you know, we're looking to at least extract our value that we're bringing in anticipation of higher costs of materials, reflecting that in our, in our, in our prices to our customers. It's something we've particularly spent a lot of time, but especially in light of these events in the last 90 days even looking at again. You know, pricing is right up at the top of our agenda as we bid to our customers. Energy is just one of many. You know, prices of other commodities is another. Labor costs, it's right in the mix.
Also, Are you doing anything about AI to reduce cost of labor?
You know, there's pockets, especially on the administration side of things. Sales help. We're incorporating some CRM tools that utilize AI to help us reach our customers in our footprint. On the operational side, I can't really point to too much that we're doing there, but more on the front end and sales and admin side.
Okay. Thanks very much.
That concludes our Q&A session. I will now turn the conference back over to Amy Vetrano-Palmer, CFO, for closing remarks.
Thank you again, everyone, for joining us today. We look forward to posting Q1 financial results here shortly. Thank you again. Bye-bye.
This concludes today's call. Thank you for attending. You may now disconnect and have a wonderful rest of your day.